Commercial Real Estate Funds Still Forming - Housing Tracker

Commercial Real Estate and Real Estate Investment Trusts (REITs)

Research Firm Offers Outlook For Dallas-Fort Worth Commercial Real Estate. Texas: “Josh Scoville, director of strategic research for Property & Portfolio Research Inc.: Dallas-Fort Worth area outlook: Office: This is the most robust market. Demand has slowed, but will grow in 2009-2010. Retail: Demand isn’t expected to pick up until late 2009. Warehouse: Demand is down this year. Apartments: An oversupply of apartments will last through 2009 and level out by 2012. Hotels: Many new hotels will come onto the market this year and next. Foreign tourists taking advantage of the weak dollar will help fill new rooms, but room rate growth will slow in the near term.” (Dallas Morning News, Apr. 23rd)

Dallas Investor Buys Fort Worth Property For Commercial, Residential Use. “Sheelin McSharry Texas L.P., an affiliate of Dallas-based Defeaseit LLC has purchased 1,170 acres in North Fort Worth that will be used for residential and commercial development. The property is bordered by Peden Road, Bonds Ranch Road and Boat Club Road. Terms of the transaction were not disclosed… The buyers describe the acquisition as one of the largest land purchases in North Texas in 2008.” (Dallas Morning News, Apr. 23rd)

US Commercial Real Estate Prices Up in February. “Moody’s/REAL Commercial Property Price Indices [CPPI] stood at 191.24 in February, an increase of 2.1% over January, 4.2% over February 2007, and 12.9% over two years. Moody’s noted that the index measures the change in prices of completed transactions and does not represent or track market sentiment... Moody’s: “Originators, investment advisors, and brokers who depend on transaction fees see a horrible market - because there are fewer deals… The fact that there are very few distressed assets in the marketplace is an indication of few compelled sellers.” [There’s] an increasing number of deals where negotiations were started but never completed.” (Research Recap in Seeking Alpha, Apr. 23rd)

Goldman Sachs, L&M Launch Investment Fund for Urban Housing Projects. “GSLM Capital Partners L.L.C., an investment entity involving Goldman Sachs' Urban Investment Group (GS) and L&M Development Partners Inc., has been created for the launching of a new investment fund that will target mixed-income housing projects in various well-populated and ethnically diverse markets across the U.S. Of particular interest to GSLM will be Metropolitan New York, the Northeast, the Mid-Atlantic and California, where the fund will invest in mixed-income, affordable and workforce housing, as well as community-serving retail developments. Equity totaling from $2M-$20 million will be allocated for various endeavors.” (Commercial Property News, Apr. 23rd)

Chicago's State Street Office Tower for Sale. “The 622,500-square-foot 515 N. State Street building in Chicago, also known as the AMA Building after its lead tenant, is for sale. The property is just north of Chicago's Loop and west of North Michigan Ave… The building has 29 stories of office space and is about 94% occupied… Jamie Fink, managing director at the Chicago office of Holliday Fenoglio Fowler L.P., which has been tasked to sell the property: Potential buyers from various parts of the world had expressed interest. The building is currently owned by a group of German investors.” (CPN, Apr. 23rd)

Morgan Stanley RE Closes Third Phase of $5.9B Fund. “Morgan Stanley Real Estate (MS) has announced the closing of the third offering for its Special Situations Fund III; the offering raised $2.5 billion of equity commitments, bringing the fund to a total of $5.9B. In all, 63% of the third offering came from investors based outside the U.S… MS itself represents 23% of the total commitments… As of the end of 2007, the fund had committed approximately $4.8B of equity, with investments in China, Australia, India, Russia, Poland, Brazil, Mexico, the U.S., Japan, Western Europe and other areas.” (CPN, Apr. 23rd)

Morgan Stanley Raises $2.5 Billion for Real Estate. “Morgan Stanley: About half of the new money in the Special Situations Fund III will be spent in the U.S., Spain and the U.K., as well as other developed markets in Europe and Asia… The rest will be invested in emerging markets. Morgan Stanley, like Blackstone Group LP and Lone Star Funds, is raising money to take advantage of a drop in asset prices following the collapse of the U.S. subprime mortgage market. The second-biggest U.S. securities firm plans to invest $30M-$100 million of equity per investment, mainly in commercial property assets including offices, hotels, stores and industrial buildings.” (Bloomberg, Apr. 23rd)

GE Buys $2.5B Loan Book From Capmark Europe. “With capital markets worldwide reaching for firmer footing, GE Real Estate (GE) has struck its second Pan-European mega-deal in five months for a commercial property loan book. The £1.22-billion [$2.51B] acquisition of senior and whole loans is secured by 39 performing retail and office properties, predominately in Germany. GE Real Estate bought the Pan-European portfolio, which includes UK and Swiss assets, from Capmark Bank Europe plc, a… subsidiary of Capmark Financial Group Inc. GE RE UK: The loans average "just over five years" in term, with the mix 75% retail and including "a mall or two.” (Globe St., Apr. 23rd)

Crescent/Cobalt JV Develops Shiloh 400 Business Center. “Crescent Resources LLC, of Charlotte, NC, teamed up with Dallas, TX-based Cobalt Capital Partners to develop Shiloh 400 Business Center in Alpharetta, GA. The partnership started construction on Phase I of the 240,000-square-foot business park in Forsyth County. The 18-acre park is part of The Meadows, off Georgia 400 at the McFarland Road exit. The three-building industrial development will include an 84,000-square-foot Building I, a 72,000-square-foot Building II and an 80,000-square-foot Building III.” (CoStar Group, Apr. 23rd)

Mackenzie Commercial Trying To Profit On Coldwell Banker's Office Business. “MacKenzie Commercial Real Estate Services LLC has taken over the leasing of 15 Baltimore buildings from another downtown firm, a move that could help the Lutherville brokerage gain more work from other landlords trying to find tenants. The portfolio -- including high-profile buildings like the M&T Bank Tower, the Candler Building and 1 N. Charles St. -- comes from Coldwell Banker Commercial NRT's former downtown Baltimore office… Coldwell Banker Commercial closed its downtown Baltimore branch in mid-November.” (Baltimore Business Journal, Apr. 23rd)

New Developer Comes Aboard Master-Planned Community in Colorado. “Meritage Development Group has taken over the reigns for RimRock at Rifle, a 350-acre master-planned community on tap for Rifle, Colo… acquiring the project from Littlestar Ranch L.L.P. RimRock [is] about three hours west of Denver and less than two hours from Utah's border. Plans for RimRock call for the development to be divided into mini-villages that together will encompass as many as 1,500 residential residences in the form of single-family homes and multi-family units, and 110,000 square feet of commercial space. Additionally, space will be allotted for at least one school site on the property.” (Commercial Property News, Apr. 22nd)

Commercial Mortgage Securities Delinquencies Rise Slightly. “Fitch Ratings' monthly index: Delinquencies among commercial mortgage-backed securities increased slightly in March… to 0.33% from 0.3% in February. Mortgages on multifamily properties, such as apartment buildings, were the main contributor to the slight increase. Office, retail, hotel, manufactured housing and mixed-use properties also saw upticks in delinquency rates in March. Mortgages for industrial, health care, self storage and other sectors declined during the month, Fitch said.” (BusinessWeek, Apr. 21st)

Eaton Vance Buys Miami Property. Florida: “Eaton Vance Management's real estate investment group announced Monday it has acquired an office building in Miami. The building is valued at about $50 million, and was purchased on behalf of an investment fund Eaton Vance manages. The 147,895-square-foot property is leased on a long-term basis to two U.S. Government agencies. Eaton Vance Management is a subsidiary of Eaton Vance Corp. (EV), which has $152.9 billion under management as of Jan. 31, 2008.” (Boston Business Journal, Apr. 21st)

Q & A: Mcgarvey CEO Strives For Quality Work. “John McGarvey is CEO of Fort Myers-based McGarvey Development, which has been part of Lee County's residential and commercial construction scenes since 1996: “If you look at Lee County's demographics, it's pretty much a service, homebuilding, residential base of growth. Everything revolves around residential. When there's a downturn in the housing market, it hurts because everything's tied to it. We've had major tenants who've been hurt. (WCI), Beazer (BZH), D.R. Horton (DHI), they were all tenants in my multitenant buildings. With the slowdown, they've definitely taken a hit."(Florida News Press, Apr. 20th)

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