National Commercial Real Estate News

Randall Zisler: Commercial Property Prices May Fall 20% More

noreply@blogger.com (Deal Junkie) — Sat, 14 Nov 2009 07:48:29 -0800

Randall Zisler is CEO of Zisler Capital Partners LLC.

Square Feet | The 30-Minute Interview: Robert Gladstone

Fri, 13 Nov 2009 21:22:39 -0800

Mr. Gladstone is the chief executive of Madison Equities, which has developed a wide range of buildings in Manhattan.

Commercial Real Estate Market Continues to Suffer From Credit Crunch

Fri, 13 Nov 2009 17:23:00 -0800

SAN DIEGO, CA--(Marketwire - November 13, 2009) - A severe ongoing credit crunch in commercial real estate lending is hampering recovery, according to a commercial market update at the 2009 REALTORS® Conference & Expo. NAR Chief Economist Lawrence Yun shared insights into the commercial markets and the current lending environment during the "Economic Issues and Commercial Real Estate Business Trends Forum" here today.

Yun said the recent severe economic downturn and high unemployment continue to impact commercial real estate markets. "The commercial real estate market continues to struggle in this difficult economy, with rising vacancy rates and falling rents," said Yun. "Commercial transactions and sales are down across the country from the virtual lack of available credit -- banks are not lending and mortgage-backed securities are virtually nonexistent. The government needs to take action to relieve some of the lending pressure."

CPS 3rd Quarter Update and Thoughts on Leasing Activity

Fri, 13 Nov 2009 16:16:16 -0800

CPS emailed us their 3rd quarter Silicon Valley update. It’s a pretty good report that is a bit different than the typical quarterly report which just puts up vacancy and rental rates for each sub-market in that it stratifies the supply in the market, and also goes a bit beyond just a table of rents [...]

Commercial sales plummeted 79% in S.F.

Fri, 13 Nov 2009 14:44:03 -0800

San Francisco commercial property sales activity dropped 79 percent in the 12 months that ended Sept. 30, according to a report from LoopNet.

Costco Takes Manhattan; Banks Shake Off Toxic Loans (Friday’s News & Notes)

Fri, 13 Nov 2009 13:09:03 -0800

It was a mixed bag today in terms of news for the retail real estat industry. Costco’s announcement of its first store in Manhattan was encouraging. Wal-Mart’s warning that we might be in for a lackluster holiday shopping season was not.

For some landlords, the break-down in leasing fundamentals is proving to be a blessing in disguise. Bloomberg reports that warehouse club Costco opened its first store in Manhattan , in East Harlem. Costco has been looking for a location in the city for years, but was finally able to close the deal because of a deep discount on the rent.

Those in the retail real estate industry, however, should brace themselves for the possibility that this downturn might last a while. When reporting its sales results today, Wal-Mart warned its customers still worry about spending money, according to The New York Post. That means the holiday shopping season isn’t likely to be great for the retailers.

In addition, it seems the string of liquidations in the retail sector is not over yet. This week, ink seller InkStop filed for Chapter 7 bankruptcy, reports Cleveland.com.

Meanwhile, Forbes published a story criticizing private equity firm Kohlberg Kravis Roberts for getting too greedy on the Dollar General deal. KKR reportedly took millions of dollars in fees from the retailer’s coffers before its IPO.

The encouraging news is that there is finally some movement on the real estate front. CoStar reports that institutional investors are beginning to buy class-A commercial assets. You can read Retail Chatr’s reaction to some of the points the story makes here .

At the same time, some banks have begun to dispose of the most toxic real estate loans on their balance sheets, according to Money CNN. In a market where many lenders still prefer to “pretend and extend,” that’s a sign of a breakthrough.

In the Region | Westchester: The Use Changes; the Look Stays

Fri, 13 Nov 2009 13:02:09 -0800

Thanks to a $4.6 million renovation, the boarded-up Ossining National Bank on Main Street is being recycled into street-floor commercial space with 12 income-restricted condominiums above.

Fewer Americans See Hard Evidence of Global Warming

Fri, 13 Nov 2009 12:59:00 -0800

Fewer Americans See Hard Evidence of Global Warming

Cold Storage Facility Generates 73% of Its Energy Needs

Fri, 13 Nov 2009 12:56:00 -0800

Cold Storage Facility Generates 73% of Its Energy Needs

Seattle Mixed-Use Project Awarded LEED Gold

Fri, 13 Nov 2009 12:53:00 -0800

Seattle Mixed-Use Project Awarded LEED Gold

Local commercial brokers see bright spots

Fri, 13 Nov 2009 12:52:57 -0800

The news wasn’t all bad Friday morning, as local commercial real estate professionals gathered for the annual CCIM/NAIOP Market Review.

Doubling Down on Green

Fri, 13 Nov 2009 12:46:00 -0800

Doubling Down on Green

Hotels Risk Losing Holiday Inn Brand

Fri, 13 Nov 2009 07:11:10 -0800

InterContinental Hotels is ready to strip its Holiday Inn brand from as many as 300 hotels owned by franchisees in North America if those properties don't renovate.

Steve Lieberman, co-chair of The Retail Connection, honored by North Texas Commercial Association of Realtors

Fri, 13 Nov 2009 06:52:18 -0800

The fourth time was the charm for Steve Lieberman, CEO and co-chairman of The Retail Connection, who received the North Texas commercial real estate industry’s biggest honor in a ceremony Thursday night.

Retail IPO’s Gaining Attention

Fri, 13 Nov 2009 04:08:25 -0800

Yesterday retailers Dollar General and Rue21 both went public. Last month Vitamin Shoppe did the same. In general initial public offerings are making a comeback. But these three companies are particularly attractive to investors because they all represent value to a consumer that is strapped by the recession. Dollar General, of course, operates a massive chain of [...]

William Blair Extends 324,700-SF Lease Through 2017

Laurie Forbes — Fri, 13 Nov 2009 01:06:00 -0800

In one of the largest office leases in Chicago this year, William Blair & Co., an investment firm, inked a 324,700-square-foot lease extension that will keep it at the Franklin Center through August 2017. A joint venture that includes the Australia...

How You Keep the 8% Growth Going

Thu, 12 Nov 2009 15:56:11 -0800

Business Insider has a video up on a city in China that has been built, but there is little activity. This really underscores a lot of what is happening in China right now. They are growing at a brisk pace, but an increasingly large amount of the growth stems from real estate. Since the government [...]

ULI Fall Meeting Overview in 60 Seconds

Thu, 12 Nov 2009 15:19:13 -0800

Joe Stampone, a blogger out of NY provides a good overview of the ULI Fall Meeting that took place in San Francisco last week in sound bites which will take about a minute to read. A few of them are below. You can read the rest on Joe’s blog. Ken Rosen: Lock in these extraordinary low [...]

Green Building Jobs Projected to Skyrocket

Thu, 12 Nov 2009 15:10:00 -0800

Green Building Jobs Projected to Skyrocket

CRE Dominoes: 8000 Marina Blvd Defaults

Thu, 12 Nov 2009 14:53:12 -0800

8000 Marina Blvd, the 193,519 square feet Class A office project in Brisbane has gone into default. The building was acquired by Broadway Partners in 2006 for approximately $54M ($280 psf). Broadway, on its website is reporting that it disposed of the asset in August of 2007 though we’re not quite sure to who. The [...]

Video: LeFrak on Commercial Real Estate

Thu, 12 Nov 2009 11:59:09 -0800

Richard LeFrak is the billionaire head of The LeFrak Organization, a group with investments in thousands of apartment units, millions of square feet of office space, and hotels and other assets, with a concentration in New York. On banks… Death by a thousand cuts On CRE problems… in 2nd or 3rd inning

Square Feet: Removing a Barrier

Thu, 12 Nov 2009 09:06:24 -0800

Providence, R.I., is freeing up 39 acres by moving the old I-195 highway, 20 of which will be marketed for development.

Sam Zell Optimistic on Economy

Thu, 12 Nov 2009 08:36:09 -0800

Sam Zell, of Equity Office fame, has come out indicating that the commercial real estate calamity is overblown. He is basing his premise on two things, one the workouts and other programs in place that are keeping a lot of deals from being sold, though one could argue on life support. The other is that [...]

Las Vegas Sands to Resume Macau Plans

Thu, 12 Nov 2009 08:30:48 -0800

A casino-and-hotel building boom on Macau's once-barren Cotai area stalled by the global financial crisis is back on track, bringing the dream of recreating the Las Vegas Strip in mainland China's backyard closer to reality.

HP Buys 3Com, SEC Has No Comment

Thu, 12 Nov 2009 08:12:32 -0800

If you haven’t heard, Hewlett Packard is taking over 3Com for $2.7B. What’s interesting from this story is that options volume spiked just before the deal was announced, with the most active issues being call options in November and December. Volume in contracts to buy shares of the Marlborough, Massachusetts-based company surged to the highest level [...]

Harris Stratex Takes Down 128K In Santa Clara

Thu, 12 Nov 2009 07:51:29 -0800

Harris Stratex Networks (HSTX: 6.15 +2.50%) has leased the vacant 128,000 square foot Great American Place building. The company is moving its facilities from 120 Rose Orchard in San Jose. The Great American Place/Plaza is a 3-story project sitting at 2903-2933 Bunker Hill and 5200 Great America Parkway (where Harris Stratex is going). The total project [...]

Players Shun Faded Pontiac Silverdome

Thu, 12 Nov 2009 07:25:27 -0800

The empty Pontiac Silverdome, an 80,000-seat municipal stadium that once was home to the Detroit Lions, is up for auction -- and it is possible no one will bite.

Report: Boston law firms shedding space

Thu, 12 Nov 2009 06:12:41 -0800

The recession has caused law firms across the country to shed excess office space after unprecedented layoffs. Across the United States there is more than 6 million square feet of available built-out law firm space, according to a new report from Jones Lang LaSalle.

Will Walmart’s Black Friday Crowd Control Work?

Thu, 12 Nov 2009 05:34:40 -0800

After the tragic Black Friday death last year of a seasonal employee at a Walmart on Long Island, NY, the retailer is launching new a crowd control program this holiday season. To avoid the long lines and major rush on Friday morning, Walmart is keeping stores open 24 hours on Thanksgiving. The retailer also says [...]

$84M Gets Volkswagen the Potamkin General Motors Building in Manhattan

Sasha M Pardy — Thu, 12 Nov 2009 00:47:48 -0800

The Volkswagen Group of America has closed on its acquisition of the Potamkin General Motors building and car dealership, located at 798-804 11th Avenue in Manhattan, for $84 million, according to CB Richard Ellis. According to CoStar Property, the...

Employment Demand Outlook: Need To Survive the Next Three Months

Mark Heschmeyer — Wed, 11 Nov 2009 19:17:09 -0800

If landlords across the country can make it through the coming layoff season, (November - January), they may begin to see some stabilization in demand from commercial tenants for space. Looking out 12 to 24 months, business owners say they expect their...

CIT Group's Care Investment Trust Considering Sale or Merger

Mark Heschmeyer — Wed, 11 Nov 2009 19:15:25 -0800

Care Investment Trust Inc., a New York-based health care REIT managed by CIT Healthcare, a subsidiary of CIT Group Inc., is nearing completion of a review of its strategic alternatives and expects to make a decision regarding its future over the next...

Worst May Be Over for Hotels

Mark Heschmeyer — Wed, 11 Nov 2009 19:13:16 -0800

While occupancy levels and average daily rates (ADR) in the last quarter of 2009 are expected to remain below levels from one year ago, resulting in a 16.4% decrease in room revenue per available room (RevPAR) in 2009, PricewaterhouseCoopers expects hotel...

Bank Watch: Small Business Banks Floundering

Mark Heschmeyer — Wed, 11 Nov 2009 19:11:24 -0800

It's a tough time being a small business lender these days. This week, Advanta Corp. joined CIT Group Inc. as a filer for reorganization under Chapter 11 of the U.S. Bankruptcy Code. Although Advanta Corp. has close to $100 million in cash and equivalents...

Real Money (Nov. 12, 2009): Capital Raisings, Property Financings

Mark Heschmeyer — Wed, 11 Nov 2009 19:09:33 -0800

CBL & Associates Properties Inc. closed the extension and modification of its $560 million credit facility, maintaining 100% lending capacity. The facility was scheduled to mature in August 2011 (assuming exercise of the remaining extension option) and...

Tranche Warfare; Evaluations of TALF; Banks Adopt New Rules (Wednesday’s News & Notes)

Wed, 11 Nov 2009 13:28:40 -0800

Here are some recent news and notes about retail and retail real estate.

Ready for tranche warfare? FinCriAdviser takes a good look at the brewing tensions building between senior and junior bondholders of CMBS debt. The story predicts we’ll see a fair number of lawsuits stemming from conflicts over how to restructure and resolve troubled commercial mortgages. Senior holders may not want to go along with restructuring these loans because they stand to get paid back regardless.

PREIT shed some light on its refinancing efforts. Citybiz showcased the relevant details in a recent SEC filing from the REIT.

The latest locale for an Apple Store? Underneath the Louvre. We’ve heard some of their stores referred to as great pieces of retail architecture. So why not?

Sam Zell spoke out against the idea that commercial real estate is facing an armageddon. He’s not brushing off the troubles the sector faces. But he does think the crisis facing the sector has been “greatly exaggerated.”

The CRE Review raised some interesting criticisms of the Fed’s TALF program in part sparked by a post on the Anonymous Banker blog. CRE Review points out that to date all the action in regards to TALF has been in the Legacy CMBS program. It has done little to actually get new lending going and both posts wonder if it will be effective in getting securitization markets working again.

Both posts were partly in response to the recent deal involving Developers Diversified Realty and TALF. There are a lot of details about that at FT Alphaville. DDR’s success or failure could set the stage for more REITs to try and line up financing this way.

Meanwhile, a piece in the Wall Street Journal looks at how banks are rushing to adopt new rules allowing them to reclassify nonperforming loans as something else, which would mean banks would have to absorb fewer losses on bad mortgages. Mike Shedlock, at Mish’s Global Economic Trend Analysis had some choice comments about the new rules. Shedlock wrote, “These kind of reporting games do not really help anyone. All the pretending does is prolong the agony. Banks know the true score even if investors don’t. Thus, such measures to free up capital for banks to lend will not work here anymore than the same shell games encouraged lending in Japan.”

Tishman Poised for Paris Deal

Wed, 11 Nov 2009 12:08:03 -0800

Tishman is expected to announce that one of its investment funds had acquired the AXA's Paris headquarters for roughly $95 million.

Banks Quick to Adopt New Loan Rules

Wed, 11 Nov 2009 12:07:52 -0800

Banks are moving quickly to restructure commercial mortgages under new guidelines that are more forgiving of battered property values.

Sale to Test German Risk Appetite

Wed, 11 Nov 2009 12:07:52 -0800

The Gubbay family of the U.K. made a nice profit in 2007 when its company, Prime Commercial Properties, sold a German shopping center it had purchased one year earlier.

Huawei makes Plano expansion official

Wed, 11 Nov 2009 08:30:50 -0800

Telecommunications equipment maker Huawei Technologies (USA) has signed a lease for 103,331 square feet of office space in Legacy Place II in Plano to serve as the company’s sales and marketing headquarters for North America.

Sunrise Faces Vacancies, Pile of Debt

Wed, 11 Nov 2009 06:51:25 -0800

Sunrise Senior Living, an operator of senior housing, is struggling to cope with higher vacancy rates and increasing debt, amid disappointing third-quarter results.

William Mack: Commercial Real Estate: An Orderly Massacre?

noreply@blogger.com (Deal Junkie) — Wed, 11 Nov 2009 06:40:04 -0800

Retail Vacancies on the Rise

Wed, 11 Nov 2009 05:48:02 -0800

U.S. shopping centers are expected to reach 12.9% vacancy rate in next year's fourth quarter, up from 12.2% in this year's third quarter.

USGBC: 7.9 Million Jobs Tied to Green Construction Over Next Four Years

Tim Trainor — Wed, 11 Nov 2009 03:39:34 -0800

As the green building movement convenes this week at the annual Greenbuild International Conference & Expo in Phoenix, the U.S. Green Building Council (USGBC) issued a report providing 7.9 million reasons to support green building -- jobs. The report...

Institutional Investors Throwing Big Money Around Class A Quality Retail Property

Sasha M Pardy — Wed, 11 Nov 2009 03:13:31 -0800

After what's seemed like an eternity of little or no action in the retail property investment arena, several major retail investment transactions north of $100 million have surfaced since October. Considering that news of retail property sale transactions...

Huawei Moves to Legacy Place II, Promises 600 Jobs

Andrew Deichler — Wed, 11 Nov 2009 02:18:11 -0800

Huawei Technologies has signed a 103,331-square-foot lease at Legacy Place II in Plano, TX. The building will serve as the global communications company's new sales and marketing headquarters in North America. The six-story, 150,000-square-foot office...

Lease Up/Lease Down (Nov. 8-14): Layoffs: A Sprint to the Bottom Line

Andrew Deichler — Wed, 11 Nov 2009 00:48:33 -0800

News of corporate expansions, relocations, extensions, closures, layoffs, lease cancellations and mergers has been consolidated into Lease Up/Lease Down. Look to Lease Up/Lease Down every week for valuable information that can be used as a source...

Tenants Take Upper Hand in Office Leasing as Rents, Occupancies Slip

Randyl Drummer — Wed, 11 Nov 2009 00:08:10 -0800

So this is what the "new normal" looks like in U.S. office leasing markets. Building revenues flat line as tenants, now more willing and sometimes able to find larger and better-quality space for their leasing dollar, begin flexing their muscles at the...

Square Feet: A Cheap Nest for Fledgling Firms

Tue, 10 Nov 2009 22:53:57 -0800

The business incubator in SoHo houses 27 fledgling companies in fields including information technology, real estate and film.

A Morgan Stanley Real Estate Star Falls in China

noreply@blogger.com (Deal Junkie) — Tue, 10 Nov 2009 19:04:53 -0800

Reuters has an excellent piece on the fall of Garth Peterson, the former Managing Director at Morgan Stanley Real Estate in China, who was fired last December due to suspicions that he had violated the U.S. Foreign Corrupt Practices Act:

In the end, Garth Peterson, a rising star at Morgan Stanley in China, was undone by his pursuit of "guanxi."

A central concept in Chinese society, guanxi loosely translates as "connections" and relationships." But to Chinese people, it means much more than that: Guanxi equals power.

"Sometimes, money cannot buy you guanxi. But if you have guanxi, you will definitely have money," according to a Chinese saying.

When Peterson, an American then in his early 30s, joined Morgan Stanley's (MS.N) real estate investment operation in China about eight years ago, he had not yet accumulated much guanxi. But he would soon possess a surplus, fueling his rapid ascent at the bank.

Go read the whole thing.