Commercial Real Estate Showing Signs Of Life - Housing Tracker

Quote of the Day

"It's not all doom and gloom. There is real money out there chasing real deals." - Thomas Dennard, CEO of Grandbridge Real Estate Capital, participating in a panel discussion of the National Association of Industrial Office Properties. (Jacksonville Business Journal, May 14th)

Commercial Real Estate, Real Estate Investment Trusts [REITs] and Real Estate ETFs

Commercial Real Estate: Showing Signs Of Life. Michigan: “Despite a slow market for commercial and industrial properties, some real estate professionals say Q1’08 is an indicator this may be a good year after all. Michael J. Keenan, owner of DeGroat Keenan Commercial in Saginaw. "The first quarter of '08 has been a significant upturn for us." DeGroat said commercial properties are moving well in Kochville Township, north of Fashion Square Mall… adding that he is closing deals on other commercial properties that have been vacant for several months, including one that was vacant for two years.” (MLive, May 14th)

Cap Rates Tipping Up. “The credit crunch and economic slowdown are significantly lowering purchase prices for Manhattan office properties, while rents have so far stayed mostly flat. These factors are contributing to a climate of rising cap rates. Cap rates increased by 50 basis points in H2’07, according to investment sales brokers and market analysts, and rates are likely to rise another 50-100 basis points this year. PriceWaterhouseCoopers Korpacz Real Estate Investor Survey: Average cap rates for Manhattan office properties ticked up slightly to 5.52% in Q1, after falling fairly steadily from 9.33% in early 2003. Dan Fasulo, managing director at Real Capital Analytics: "The market is not discriminating by property type or market. Everybody is up." (The Real Deal, May 14th)

Treeline Sells Nassau County Office Building for $65M. New York: “The Treeline Cos. has sold One Old Country Road in Carle Place, N.Y., for $65 million. The buyer was CLK/HP One Old Country L.L.C. and a team composed of Jeffrey Dunne, Steven Bardsley and Rikki Lawrence of CB Richard Ellis Inc.'s New York institutional group and Bruce Nelson of CBRE’s Long Island office represented the seller and procured the buyer. “We divested ourselves of this property because it no longer was part of our strategic plan,” Frances Schor, president of the Treeline Cos., said in a prepared statement. “The property had fully matured and no longer fit our investment criteria.” (Commercial Property News, May 13th)

Simon to Sell $1.5B in Senior Notes. “Retail property giant Simon Property Group (SPG) unveiled plans today to sell $1.5 billion of senior notes of its majority-owned partnership subsidiary, Simon Property Group L.P… Last month, industrial property specialist ProLogis (PLD) announced its intention to sell a total of $700 million worth of convertible senior notes and fixed-rate senior notes… The offering consists of $700M of 5.3% notes due 2013 and $800 million of 6.125% notes due 2018… Simon [says] it will use net proceeds from the offering to reduce the outstanding balance on its corporate credit facility, (CPN, May 13th)

Westcore Expands in Europe, Plans to Spend $100M. “California-based Westcore Properties said this week it is allocating $100 million of capital there to acquire, develop and operate regional airports and other commercial real estate projects associated with airports. The privately-held company has opened Airport Development Partners SA, an affiliate that will… have its main office in Lausanne, Switzerland, where Westcore has its European headquarters, and a project office in Poland. Zbig Labaj, an airport industry expert, will run the Central and European operations from the Polish office.” (CPN, May 13th)

$145M Construction Loan Set for Denver Tower. “Colorado: Holliday Fenoglio Fowler L.P. has announced that it arranged a $140 million construction loan for… a 496,000-square-foot Class A, Platinum LEED pre-certified office development in Denver, Colo. The 22-story office tower is slated for completion in 2010. It is approximately 70% pre-leased to tenants... HFF [and] Westfield Development Partners secured the 42-month, adjustable-rate loan through Wachovia Bank. Westfield Development Partners is the development arm of Denver-based Frederick Ross Company.” (CPN, May 13th)

ProLogis Plans 2M-SF Industrial Development. Virginia: “ProLogis is planning to develop 2.1 million sf of class A, high-bay warehouse buildings in the Northgate Commerce Park here. The company has just acquired 83 acres of industrially zoned land for $4.2 million in commercial real estate development as the first step. Specifically, it acquired 14 acres from the City of Suffolk Economic Development Authority and 69 acres from Upton Farms… Northgate Commerce Park is less than eight miles from the new APM Terminals Virginia facility in Portsmouth. PLD: “It is part of the company’s overall strategy of going to the port markets.” (Globe St., May 13th)

Wells REIT II Acquires AT&T Office Campus. Georgia: “Wells Real Estate Funds has acquired a five-building office campus in the city’s prestigious Buckhead area in a sale-leaseback transaction from AT&T Corp. The value of the purchase by Wells Real Estate Investment Trust II was not disclosed. Totaling a million-sf of class A space in the Lenox Park office complex near Interstate 85 and Peachtree Road… All five buildings are fully leased to AT&T Services Inc. under terms ranging from 10-15 years.” (Globe St., May 13th)

MTA Tosses Tishman, Looks For New Hudson Yards Suitors. “NY Metropolitan Transit Authority statement: “The MTA met today with Tishman Speyer. Despite the best efforts of both sides, a final agreement could not be reached. The MTA has now re-entered discussions with other interested developers and remains committed to timely development of these unique and valuable parcels of land on Manhattan's Far West Side”… Yesterday, the NY Sun suggested that the remaining bidders might have significantly lower bids, since the MTA has to reopen bidding.” (Gothamist, May 13th)

State Street Starts Real Estate, Mid-Cap Etfs. “State Street Global Advisors on Tuesday launched an exchange-traded fund that invests in global real estate and another that invests in international small-cap stocks. The SPDR DJ Wilshire Global Real Estate ETF RWO.A and the SPDR S&P International Mid Cap ETF MDD.A have their primary listing on the American Stock Exchange. State Street Global Advisors said the real estate ETF is based on an index including more than 240 commercial and residential real estate companies located in 23 countries, including the U.S. The Mid-Cap ETF is based on an index of more than 850 companies with market capitalizations between $2B-$5 billion. The companies are located in 25 countries outside the U.S.” (Reuters, May 13th)

Real Estate Tucson's Recent Commercial Sales And Leases. Arizona: “Tosi Ventures LLC has leased 3,856-sf at 6601 E. Grant Road from C2D2 Associates Inc… M-3 Engineering & Technology Corp. has leased 600-sf at Ruthrauff Commerce Center, 2470 W. Ruthrauff Road, from Presson Scottsdale LLC… T-Mobile has leased 2,400-sf at Mariposa Mall, 359 W. Mariposa Road, Nogales, from Delta Properties. (AZ Starnet, May 13th)

Downtown Development Fundraiser: 35 Cents on the Dollar. “Downtown landowner Meruelo Maddux is getting rid of a number of its 50 properties--at 35 cents on the dollar. No word on whether that includes the recently opened Union Lofts or 717 West Ninth in South Park, but completion of the latter is "threatened," according to Bloomberg. More: "'It sure looks like a cheap way to play the downtown L.A. market,' said Mike McGarr, a portfolio manager at $2.4 billion Becker Capital Management in Portland, Oregon..." Last year the company's co-founder and CEO Richard Meruelo said he plans to break ground on a new residential tower every six months.” (Curbed LA, May 12th)

Real Estate Roundup: NBS Real Estate Capital Makes 33rd Investment. “Oregon: NBS Real Estate Capital LLC acquired the Mayhew Tech Center, a 68,639-square-foot flex and office complex in Sacramento, for $9 million. The transaction was funded with cash and the assumption of $7.4 million of debt at a fixed rate of 6 percent, with more than eight years remaining. It is the 33rd transaction by Portland-based NBS Real Estate Capital on behalf of its Morrison Street series of private equity funds.” (Portland Business Journal, May 12th)

JPmorgan: 1 Million Sq Ft Of Office Space 'Will Be Eliminated' “Bloomberg: JPMorgan to Cut 1 Million Square Feet of Office Space: “We've already identified a million feet that will be eliminated,'' [CEO] Dimon said. “The other small piece of good news here is that it stops us from having to spend $3 billion to build an investment banking headquarters downtown.'' Manhattan office vacancies rose to 6.1% in Q1, the highest in more than a year as financial firms were beset by mortgage losses cut jobs, Cushman & Wakefield Inc. said in a report last month.” This should help the vacancy rate in New York!” (Calculated Risk, May 12th)

Cantor Fitzgerald Launches Real Estate Investment Company. “Cantor Fitzgerald is launching Cantor Real Estate, a real estate investment company, and has hired Andrew Stark as its head. Cantor Real Estate is launching a fund that will target development and re-development projects on the Eastern seaboard. It hopes to raise $300M-$350 million.” (Real Estate Finance & Investment, May 12th)

Starwood Going Green With Element Hotels. “Starwood Hotels and Resorts Worldwide is introducing Element Hotels, a green hotel chain, scheduled to open this July in Lexington, Mass., and later in Irving, Texas, the New York Times reports.” (Environmental Leader, May 11th)

Dear Readers: Read anything you liked on this subject and didn't see it here? Why not post a link or a quote from the article in our comments section. Share the wealth! - Ed.

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Comments

[User 130076]

This sounds like good news, there is one little problem the Banks are turning down good credit investors. The banks are now having to much fun just slushing money around the world with each other. Does anybody care in D.C., hell no.