MAY 18, 2011 Cushman Fills 2 Top Posts With Buy-Side Pros Cushman & Wakefield 10 FUND-PERFORMANCE SCORECARD Moving to rebuild its capital-markets operation, has filled two top management posts with veterans from buy-side firms — an unusual move 3 TA Pitching Big Industrial Portfolio for a brokerage. Steven Weilbach, previously chief investment officer of West Coast apartment 3 Houston Tower Fetches Record Price investor Pacific Property, was named head of the national multi-family practice. And 3 Pension Shops Stake in Ohio Tower Matthew Gworek, best known for his decade as a senior investment executive at Equity Office Properties, was appointed head of capital markets for the Eastern U.S. Cushman 4 Big Chicago Industrial Portfolio Listed is expected to select a capital-markets boss for the Western U.S. within weeks. The hirings are the biggest by global capital-markets chief Greg Vorwaller since 5 Parmenter Offers Tulsa Office Towers Cushman poached him from rival CB Richard Ellis last fall with orders to fix the 6 Silicon Valley Apartment Site Offered brokerage’s sagging investment-sales and debt-placement businesses. Cushman, traditionally one of the nation’s top three brokers of large commercial 6 Industrial Offering Hits Hot Markets See CUSHMAN on Page 14 8 New Va. Shopping Center Listed 8 Hotel in Downtown LA Up for Sale 2 Seattle Offices Could Fetch $500 Million In one of the largest core offerings on the West Coast this year, a developer is 9 Florida Apartments Up for Grabs shopping two new Seattle office buildings with a combined value of about $500 mil- 9 Lender Lists Stabilized Offices lion, or $550 a square foot. Up for grabs are the 668,000-sf tower at 1918 Eighth Avenue and the 232,000-sf 10 71% of Funds Had Gain in 3rd Quarter property at 818 Stewart Street. The buildings are about a block apart in the sought- after Westlake Triangle submarket of downtown Seattle. Given the strong demand for top-flight core properties on the West Coast, mar- ket pros thinks investors will peg the buildings’ value to a stabilized capitalization THE GRAPEVINE rate of 5.25-5.5%, including the benefits of pending leases. The owner,Schnitzer West of Portland, Ore., will consider bids on either building or both. It has given the Former General Growth Properties chief listing to CB Richard Ellis, which declined to comment. investment officerJoel Bayer has joined Schnitzer completed the 36-story building at 1918 Eighth Avenue last year. O’Connor Capital as president and chief Amazon.com inked leases for just under 500,000 sf in March, which will raise the operating officer. Bayer will head acquisi- See SEATTLE on Page 14 tions and business development for the New York investment manager, which re- Westbrook Takes Over St. Regis Hotel in DC cently began investing its first retail fund. It held an initial close on the planned In its second recent high-profile hotel acquisition,Westbrook Partners last week $500 million O’Connor Retail Partners in bought defaulted debt on the St. Regis in Washington from Barclays for about December, with $150 million of equity. $100 million in cash and immediately foreclosed on the luxury property. Bayer joined General Growth in 1993. Barclays, which held $125 million of senior and mezzanine debt on the St. Regis, In his most recent post, he worked on won the right to seize the 182-room hotel at a foreclosure auction held April 12. The mergers and acquisitions, structuring bank then sold that right to Westbrook. joint ventures and arranging financing. At the $550,000/room purchase price, Westbrook’s initial annual yield will be He previously had stints at Sam Zell’s roughly 5%. Equity Financial and Management of Chi- The price was far below the hotel’s $170 million valuation during a recapitaliza- cago and retail developer Copaken, White tion in September 2007. Claret Capital, an Irish syndicator, acquired a 90% stake & Blitt of Kansas City, Kan. from a Brickman Associates partnership for $153 million, with the partnership re- taining a 10% interest. That worked out to $881,000/room, because the property Anglo Irish Bank hit the market this had 193 rooms at the time. week with a pair of cross-collateralized Brickman and its partner, New Valley Corp. of Miami, had acquired the St. Regis See GRAPEVINE on Back Page See WESTBROOK on Page 9 In , “Eastdil Secured was by far the most active offi ce broker …” – Real Estate Alert, February , And we have even higher aspirations for $. BILLION * OF OFFICE TRANSACTIONS CLOSED IN THE LAST MONTHS (with an additional $ billion in the market for ) PROPERTY SALE & JOINT VENTURE TRANSACTIONS
Los Angeles, CA New York, NY San Francisco, CA Pittsburgh, PA Washington, D.C. Portland, OR
566,000 SF 305,000 SF 453,000 SF 2,336,000 sf 680,000 SF 365,000 SF April 2011 April 2011 April 2011 April 2011 March 2011 March 2011
Bay Colony 111 Corporate Center Eighth Avenue Waltham, MA New York, NY Chicago, IL Costa Mesa, CA Houston, TX Honolulu, HI
986,000 SF 2,900,000 sf 1,490,000 sf 827,000 sf 1,150,000 sf 930,400 sf February 2011 December 2010 December 2010 December 2010 December 2010 November 2010
1111 MARKET University Park Pennsylvania Ave CENTER @ MIT Los Angeles, CA Washington, D.C. San Francisco, CA Bellevue, WA San Francisco, CA Cambridge, MA
443,000 sf 331,000 sf 770,000 sf 583,000 sf 657,000 sf 1,150,000 sf November 2010 October 2010 September 2010 July 2010 June 2010 February 2010 FINANCINGS, LOAN SALE & STRUCTURED FINANCE TRANSACTIONS TRIBECA WEST Commercial Bank 299 PARK AVENUE Los Angeles, CA New York, NY San Francisco, CA Atlanta, GA Non-Performing Loan Washington, D.C. Acquisition O f fi c e Mezzanine Financing Financing Offi ce Loan Sale Financing Offi ce Financing Offi ce Financing February 2011 January 2011 December 2010 December 2010 October 2010 September 2010
Public REIT Special Servicer Life Insurance Co. Life Insurance Co. 46 Performing Loan Los Angeles, CA New York, NY 11 Performing Loans Performing Loan Non-Performing Loans O f fi c e Offi ce/Retail Subordinated O f fi c e Offi ce Loan Sale Portfolio Loan Sale Financing Financing Debt Sale Loan Sale August 2010 July 2010 July 2010 June 2010 June 2010 May 2010 INVESTMENT BANKING TRANSACTIONS
Commonwealth REIT $325,000,000 $201,000,000 $300,000,000 $648,000,000 $250,000,000 $750,000,000 Senior Notes Preferred Equity Follow-on Equity Initial Public Offering Senior Notes Revolving Credit Facility Joint Bookrunning Manager Joint Bookrunning Manager Joint Bookrunning Manager Joint Bookrunning Manager Joint Bookrunning Manager Co-Lead Arranger April 2011 April 2011 March 2011 January 2011 September 2010 August 2010
*Includes sales of partial interests and portfolios SELECTED TRANSACTIONS www.eastdilsecured.com A WHOLLY OWNED SUBSIDIARY OF WELLS FARGO & COMPANY Securities off ered through Wells Fargo Securities, LLC—member FINRA and SIPC. Not all products off ered are securities. May 18, 2011 Real Estate ALERT 3
TA Pitching Big Industrial Portfolio Center 2, which was completed only in 2009, in order to boost occupancy. By the time it brought the 12-story property to TA Associates is shopping a 5 million-square-foot portfolio market in March, the 97% occupancy rate was well above the of industrial properties that could fetch $300 million, thanks to 84% average for Houston’s 190 million sf of office space. surging demand from core buyers. The city’s current per-foot record for office properties was The offering encompasses 31 warehouses, concentrated set in August 2007, when a GE Pension Trust partnership paid heavily in the nation’s strongest industrial markets. At the es- $289/sf, or $367 million, for the 1.3 million-sf Bank of America timated price, the buyer’s initial annual yield would be about Center. That was the biggest office trade ever downtown. The 6.2% — reflecting a recent drop in capitalization rates among per-foot record including Houston’s suburbs was set in January core industrial properties. 2007, when Sarofim Realty Advisors paid $298/sf, or $29.5 mil- CB Richard Ellis is advising Boston-based TA. lion, for the 99,000-sf building at 21 Waterway in The Wood- While a number of industrial-property packages have gone lands. out for bid in the past few months, this one is expected to stand The price fetched by Energy Center 2 could soon be rivaled out because of its geographical makeup. The strong markets rep- by Enron’s one-time headquarters. The 1.3 million-sf office resented in the portfolio include Chicago, with eight properties building, called Four Allen Center, is valued at about $300/sf, (1.5 million sf); Southern California, with four properties or $380 million. The owner, Brookfield Office Properties of New (837,000 sf); Dallas, with eight properties (914,000 sf); New Jer- York, is in talks to sell it to current tenant Chevron. If a deal sey, with three properties (583,000 sf); St. Louis, with four proper- isn’t struck, Brookfield plans to put the skyscraper on the open ties (513,000 sf); Philadelphia, with three properties (426,000 sf); market. and San Francisco, with one property (210,000 sf). The buildings, ranging from 22,000 sf to 354,000 sf, are Pension Shops Stake in Ohio Tower 92% leased by 72 tenants. About 15% of the rent roll entails investment-grade companies, including Alberto Culver, Ingersoll Ohio State Teachers is shopping its majority stake in a pre- Rand and Walgreens. The average remaining lease term is four mier office tower in Columbus, Ohio. years, with leases on just 25% of the space maturing within two The 907,000-square-foot Huntington Center is valued at years. The result is a staggered rollover schedule that offers both roughly $175 million, or $193/sf. At that value, the pension stable cashflow and the opportunity to boost income as leases fund’s 60% stake could trade for $105 million. Eastdil Secured expire. is handling marketing, which is aimed at core investors. The portfolio’s current net operating income is $18.6 mil- Houston developer Hines, which has a small equity stake, lion. manages the property and the partnership that owns it. The other partners are Huntington National Bank, law firmPorter Houston Tower Fetches Record Price Wright and Columbus Dispatch Printing. The bank and the law firm are the building’s largest tenants. Houston’s hot office-sales market continues to gain steam, The 37-story tower, at 41 South High Street, stands directly with a trophy office building in the Energy Corridor poised to across Capitol Square from the Ohio Statehouse. It contains set a high-water mark for the city. 886,000 sf of offices and 21,000 sf of retail space. Occupancy is The buzz is that American Realty has agreed to buy the 92%, slightly better than the 88% average for Class-A space in 303,000-square-foot Energy Center 2 for about $302/sf — the the central business district. highest per-foot price ever for a Houston office building. The Huntington National occupies 329,000 sf, and recently ex- $92 million price tag would translate into a capitalization rate tended a lease for 199,000 sf of that space until 2030. Porter of just below 7.25% for American Realty, an investment man- Wright leases 133,000 sf until 2020. Other tenants include ager in Glendale, Calif. PricewaterhouseCoopers, Ernst & Young, Squire Sanders and CB Richard Ellis is advising the seller, a partnership between Wells Fargo. The weighted average remaining lease term is 9 1/2 Houston-based Trammell Crow and Principal Global Investors, years. Rents in the tower are unknown, but comparable space the investment-management arm of Principal Financial of Des nearby averages $18.29/sf. Moines, Iowa. The granite and glass building was completed in 1984. It has In July, the Trammell partnership sold the companion build- a 1,000-car garage and a 30,000-sf athletic club. ing — the 332,000-sf Energy Center 1 — to Wells Real Estate of Atlanta for $94 million, or $270/sf. CB also handled that listing, which spurred a bidding war that culminated in Houston’s first Unless your company holds a multi-user license, it is a violation of major trade since the downturn. A rash of big office listings fol- U.S. copyright law to photocopy or reproduce any part of this lowed, resulting in a tenfold increase in sales of large properties publication, or forward it electronically, without first obtaining last year, to $1.1 billion. permission from Real Estate Alert. For details about licenses, The Trammell partnership, however, bided its time. After contact JoAnn Tassie at 201-234-3980 or [email protected]. selling the fully leased Energy Center 1, it held on to Energy May 18, 2011 Real Estate ALERT 4
Big Chicago Industrial Portfolio Listed plummeted because investor appetite for Class-A industrial buildings is far outstripping supply (see Regional Spotlight on A development firm is shopping a large industrial portfolio Page 15). in suburban Chicago that could attract bids of $110 million. CB Richard Ellis is advising the seller, Atlanta-based Industrial The 1.4 million-square-foot package, which is nearly fully Developments International, which developed Rock Run and leased, encompasses seven buildings in three high-end indus- Bolingbrook. trial parks: Turnberry Lakes International Business Center, The properties, which are being offered as a package, have Rock Run Business Park and Bolingbrook Corporate Center. 10 tenants, including FedEx, Staples and Fujifilm. Investment- At the estimated value of $80/sf, a buyer’s initial annual grade companies lease 77% of the space. The weighted average yield would be about 6.5%. That is in line with recent indus- remaining lease term is four years. trialArbor_RealEstateAlert_JrPgBW_May18:. trades in the Chicago area, where capitalization 5/6/11 rates 11:45 have AM PageFour 1 buildings, totaling 604,000 sf, are in Turnberry Lakes, one of the Chicago area’s premier corporate industrial parks. The buildings, which were constructed from 1993 to 2001, range in size from 75,000 sf to 291,000 sf. The 4.7 million-sf industrial NO MATTER HOW YOU WORD IT, WE DO MULTIFAMILY LENDING BEST park, in the Chicago suburbs of Hanover Park and Roselle, Ill., is virtually fully occupied and has been 97% leased on average since it was built in the 1990s. It is near the Elgin O’Hare Expressway, the Canadian Pacific Railway spur and a commuter train line. Two other buildings, totaling 715,000 sf, are in the 3.8 million-sf Rock Run industrial park, in Joliet, Ill., near the junction of Interstates 55 and 80. The park is 94% leased and has averaged 96% occupancy since Industrial Developments built it in 1997. Only two tenants have ever vacated the park, and one was because of bankruptcy. Four tenants have expanded their buildings. The park’s proximity to rail yards drives long-term leasing demand at the site. The package’s remaining building is a 60-door truck ter- minal in Bolingbrook Corporate In today’s market, successful real estate investments are as much about Center in Bolingbrook, Ill., along partnerships as they are proceeds. They are as much about relationships as they the Interstate 55 corridor, Chi- are about ROI. Arbor Commercial Mortgage provides its borrowers with the stability cago’s key distribution market. and security of a long-established financial foundation as well as the customized loan products and personal service that allow your portfolio to expand and The 53,000-sf building has never prosper, deal after deal, with Arbor the partner by your side. been vacant since it opened in 1997. 1-800-ARBOR-10 • www.arbor.com FANNIE MAE • FHA • BRIDGE • MEZZANINE Growing Financial Partnerships Need to see the largest property sales that were completed Bloomfield Hills, MI • Boston, MA • Chicago, IL recently? Go to The Marketplace Dallas, TX • Los Angeles, CA • New York, NY section of REAlert.com and click Follow us on twitter @arbor1 Oakland, CA • Uniondale, NY on “Sales Activity.” It’s free. May 18, 2011 Real Estate ALERT 5
Parmenter Offers Tulsa Office Towers face lots. Southern Hills Country Club and numerous restau- rants and stores are nearby. Parmenter Realty is shopping an office complex on the out- Parmenter paid MetLife $75.2 million for the complex in skirts of Tulsa, Okla., that’s valued at about $113 million. July 2005. The fund shop renovated the property in 2007 and Warren Place consists of two Class-A buildings with a total refinanced with an $82.5 million securitized mortgage from of 960,000 square feet. The buyer must assume $85 million of J.P. Morgan. That loan matured in February and Parmenter re- seven-year loans that were originated last week. The estimated financed again with the $85 million debt package, also from value of $118/sf would translate into an initial annual yield of J.P. Morgan. The interest rate is below 6%. The new debt has about 9%. Eastdil Secured is advising Miami-based Parmenter. a loan-to-value ratio of roughly 75%, valuing the property at The complex is 92% leased, with 61% of the space occupied about $113 million. Net operating income was $9.9 million last by companies with credit ratings of double-B or better. The av- year, according to a servicer report, and occupancy has risen erage tenure for tenants is over 12 years. The property should over the past several months, from 83% in August. benefit from regular rent bumps and increased rents as leases roll over. Warren Place is the only property of its quality in Tulsa’s suburbs, allowing it to dominate the leasing market. Major tenants include Petrohawk Energy (109,000 sf until 2015), Linde Process Plants (90,000 sf until July 2013), SemGroup (74,000 sf until 2019), Apache Corp. (71,000 sf until Your retail experts 2016), DCP Midstream (53,000 sf until September 2012), McKesson Corp. (49,000 sf un- til 2015), Questar Exploration (48,000 until 2016) and Bank of America (36,000 sf until 2015). MetLife developed the 20-sto- ry, 470,000-sf One Warren Place in 1983 and followed with the Jones Lang LaSalle Capital Markets is a full-service global provider of capital solutions for real estate investors. 19-story, 490,000-sf Two War- Whatever your investment—grocery-anchored, strip center, power center, lifestyle center or regional mall—our ren Place in 1987. The towers, at experts will effectively position your property and attract the right investors to your asset or portfolio. 6100-6120 South Yale Avenue in Visit us at the ICSC Las Vegas Conference May 22–24 | Las Vegas Convention Center, AC1001-10th Avenue the South Central submarket, are on a 54-acre campus that includes Transaction highlights a separately owned DoubleTree Greenbriar Mall The Mall at the Point Westdale Mall Hotel. There are 3,500 parking Atlanta, Georgia Sayreville, New Jersey Cedar Rapids, Iowa Investment sale Investment sale Investment sale spaces, in two garages and sur- +/- $30,000,000 In market In market
Village on the Parkway %rook¿eld Towne Centre Lakeview Pointe Shopping Center Addison, Texas %rook¿eld, Wisconsin Stillwater, Oklahoma Investment sale Investment sale Investment sale Terms con¿dential In market Terms con¿dential Prime Outlets Jeffersonville Summit Point Huntington Square Plaza Jeffersonville, Ohio Atlanta, Georgia East Northport, New York Still Receiving Real Estate Investment sale Investment sale Investment sale Alert the Slow Way? In market In market In market You can switch to e-mail delivery and get the lowdown on the property market the moment it’s published each Wednesday. The Margaret Caldwell Kris Cooper Jay Koster subscription price is the same for [email protected] [email protected] [email protected] delivery by e-mail or snail-mail. +1 404 995 2270 +1 404 995 2271 +1 212 418 2685 Switch to e-mail delivery by calling 201-659-1700. www.us.joneslanglasalle.com/capitalmarkets May 18, 2011 Real Estate ALERT 6
Silicon Valley Apartment Site Offered tax break to keep construction costs down, or could tweak the project plan. Those choices could result in a wide range of bids A multi-family development site is up for grabs in Silicon for the property. Valley, where strong demand for rentals is squeezing supply. Milpitas has a tight apartment market, with occupancy at Integral Communities of Newport Beach, Calif., has won ap- 98%. Several developers are scrambling to bring new projects on provals for construction of up to 924 apartments and 54,000 line. Fairfield Residential of San Diego has begun work on a 374- square feet of retail space on the 13-acre site, in Milpitas, Calif. unit complex called Murphy Ranch, and Lyon Communuties of The project, called The District, is divided into three phases, Newport Beach, Calif., is moving ahead with a 381-unit complex which could be sold separately. called Centria West. The limited supply is expected to push aver- Bids are expected to total at least $50 million — although es- age rents up by 9.4% this year, according to research by REIS. timating the value of the land is difficult because buyers could pursue a number of different strategies. The total build-out cost Industrial Offering Hits Hot Markets under the existing plan is estimated at close to $300 million. Apartment Realty Advisors is marketing the property for Integral. A package of industrial properties that just hit the block offers The District, at 1315 McCandless Road, is adjacent to Great investors a crack at two of the nation’s hottest markets — Dallas Mall, the largest shopping center in Silicon Valley. A light rail and Chicago. station and a planned Bay Area Rapid Transit station are within The offering consists of three distribution buildings total- walking distance. Several large employers, including Cisco and ing 694,000 square feet, each fully leased to a single tenant. KLA Tencor, are nearby. Together they could fetch about $54 million, or $78/sf. That As approved, the project would consist of four low-rise would translate into an initial annual yield just above 6%. An- buildings, two of which could have street-level retail space. An nual rent bumps would increase the capitalization rate to 6.5% agreement with the region’s redevelopment authority would within three years. allow for a phase-in of property taxes over several years. But The listing is expected to generate strong interest, as few that agreement comes with strings attached, including a re- core buildings of such recent vintage (2003-2008) are up for quirement that the developer honor prevailing wage guidelines grabs. CB Richard Ellis is advising the seller, Seefried Industrial during construction. A buyer could consider opting out of the Properties of Atlanta. While investors can bid on individual properties, Seefried is pitching them as a package, touting the portfolio’s reach into two major markets with especially strong demand for indus- trial space. The largest of the buildings, at 329,000 sf, is River Park 700 in Fort Worth, Texas. It is fully occupied by paper and packag- ing company Pratt Industries under a lease that expires in 2026. It was built in 2007. The larger Chicago-area property is a 253,000-sf building at 1717 Busse Road in Elk Grove Village, Ill. It was built in 2003 and is fully leased through 2020 to CEVA Logistics. The third property is a 112,000-sf building at 250 Kehoe Boulevard in Car- ol Stream, Ill. Built in 2008, it is fully leased until 2017 to Ta Chen International, the largest stainless-steel distributor in the U.S. All of the tenants are likely to renew because they have in- vested in the buildings. Their rents are in line with the mar- ket. The buildings have ceiling heights of 30-32 feet and are designed to accommodate multiple tenants, providing future leasing flexibility. The Elk Grove property is being offered subject to assumable financing — a $13.9 million loan with a 5.61% coupon that ma- tures in 2021. The others are offered free and clear of debt.
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REAL ESTATE ALERT MAY 18, 2011 8.5” W X 11” H FULL-PAGE 4C May 18, 2011 Real Estate ALERT 8
New Va. Shopping Center Listed 85. The population within three miles grew 37% during the last decade, and is projected to grow another 13% over the next five A team of developers is offering an almost-completed shop- years. ping center in a booming suburb of Richmond, Va. Hancock Village will total 330,000 square feet when con- Hotel in Downtown LA Up for Sale struction finishes late this summer. The 154,000 sf of space list- ed could fetch offers of about $30 million, for an initial annual Investors are getting a crack at a 434-room upscale hotel in yield of roughly 7.5%. The property is anchored by a separately downtown Los Angeles that is unencumbered by a manage- owned, 176,000-sf Wal-Mart Supercenter. ment contract or brand. Jones Lang LaSalle is advising the sellers, a local landowner Kyoto Grand Hotel and Gardens, at 120 South Los Angeles and developer Atlantic Realty & Investments of Charleston, S.C. Street in a neighborhood known as Little Tokyo, is expected The owners are willing to stay on as joint-venture partners and to fetch offers of up to $50 million. The listing likely will ap- operators of the property. They also are seeking an equity part- peal both to institutional investors attracted by the prime lo- ner for their plan to build another 141,000 sf of retail space on cation and high-yield players seeking the operational flexibil- an adjacent parcel. ity of an independent property. The owner,3D Investments of Hancock Village is about 95% pre-leased. The portion of the Los Angeles, has listed the property with Jones Lang LaSalle center that’s up for grabs includes space that will be occupied Hotels. by Hobby Lobby (56,000 sf) and Dick’s Sporting Goods (50,000 3D acquired Kyoto Grand in 2007 along with an adjacent sf). The offering also includes ground leases for two separately shopping center, Weller Court. The firm paid $54 million for owned restaurants: McDonald’s and LongHorn Steakhouse. the two properties, financing the purchase with a $44 million The property, at 14501 Hancock Village Street in Chester- mortgage from First Regional Bank. The Los Angeles bank field, is along Highway 360, the main retail corridor in Rich- failed in January 2010 and was taken over by the FDIC. mond’s western suburbs. The population within a three-mile 3D renovated the property and changed it’s name to it Kyoto radius grew 33% in the past decade and is projected to increase Grand from New Otani Hotel. The hotel, which was built in another 11% over the next five years. 1977, historically appealed to Japanese tourists. While the retail sector has struggled during the downturn, During the downturn, 3D was unable to refinance the ma- many properties with a grocery presence have held their own turing loan, and last year put the two properties into bank- — encouraging owners of well-leased shopping centers in sta- ruptcy protection to prevent the FDIC from foreclosing. Earlier ble and growing communities to bring them to market. this year, 3D and the FDIC reached an agreement to extend the For example, Jones Lang also has the listing of a 105,000- loan to 2014, and the properties emerged from bankruptcy last sf shopping center in a fast-growing suburb of Atlanta. That month. The hotel currently generates enough cashflow to cover property, Summit Point in Fayetteville, Ga., could fetch about its portion of the debt service. $21 million, for a capitalization rate of about 6.5%. The seller is The hotel encompasses a 21-story tower and three-story lob- developer Concordia Properties of Roswell, Ga. by. There are three restaurants and a half-acre rooftop garden The center is anchored by a Publix supermarket, which has over the lobby that is used for special events. annual sales of $384/sf and a lease that runs to 2024. Occu- The property’s financials were unavailable, but upscale -ho pancy is 89%, and would rise to 94% with the expected arrival tels in downtown Los Angeles saw occupancy rates climb to of two new tenants. Rollover is balanced, with leases on an av- 64.5% at the end of the first quarter from 58.4% a year earlier, erage of 7,400 sf expiring each year through 2015. according to Smith Travel Research. During the same period, Summit Point is at 840 Glynn Street South, 12 miles south of room rates jumped almost 18%, to $123.62. Revenue per room Hartsfield-Jackson International Airport on Georgia Highway soared 30%.
CALENDAR
Main Events Dates Event Location Sponsor Information May 22-25 RECon Las Vegas ICSC www.icsc.org June 1-2 U.S. Real Estate Opportunity & Private Fund Investing New York IMN www.imn.org Oct. 4-6 Expo Real 2011 Munich Messe Munchen www.exporeal.net Oct. 25-28 ULI Fall Meeting Los Angeles ULI www.ulifall.org Nov. 15-17 NAREIT Annual Convention Dallas NAREIT www.nareit.com Jan. 18-20, 2012 Winter Forum on Real Estate Opp. & Private Fund Inv. Laguna Beach, Calif. IMN www.imn.org To view the complete conference calendar, visit The Marketplace section of REAlert.com
May 18, 2011 Real Estate ALERT 9
Florida Apartments Up for Grabs recession, and the Claret partnership defaulted when its debt matured in May 2010, prompting Barclays to file for foreclo- A partnership is marketing a luxury apartment complex in sure, with CB Richard Ellis as its advisor. Fort Lauderdale, Fla., that could appeal to core investors, while More recently, performance has improved. Revenue per also offering some upside. room climbed 3% last year and is projected to grow 14% this The property, Falls at Marina Bay, encompasses 376 units year. Net income is expected to reach $5 million this year, up and a marina with slips for 168 boats. It’s expected to fetch bids from $2 million last year, when the occupancy rate averaged of at least $85 million. At that price, the buyer’s initial annual 66% and the average room rate was $344. yield would be about 5.5%. The St. Regis, which opened in 1926 as the Carlton Hotel, The offering includes an adjacent 2.4-acre site zoned for a has a prime location, at 923 16th Street NW, just two blocks hotel — presenting an opportunity for a new owner to boost from the White House. The property includes an adjoining its return. Jones Lang LaSalle is marketing the complex for the 2,000-square-foot townhouse slated for conversion into a spa owner, a partnership between Taplin Development of Pembroke and additional guest suites. Pines, Fla., and Real Estate Capital of New York. The deal reflects Westbrook’s strategy of targeting overlev- Falls at Marina Bay is 98% leased. The garden-style prop- eraged high-end hotels in major cities. Two months ago, the erty, at 2600 Marine Bay Drive East, just off the Intercoastal New York fund shop took control of the 667-room Westin San Waterway, was built in 2004 to luxury-condominium specifica- Francisco by paying off $172 million of senior and mezzanine tions but was never used for that purpose. Units range from debt on the property. The deal staved off a foreclosure auction studios to three bedrooms and feature vaulted ceilings, great by the mezzanine lender, RREEF, and provided a clean exit for rooms and balconies. Community amenities include a water- the previous owner, a partnership between Goldman Sachs’ front clubhouse with a heated pool, indoor racquetball courts Whitehall Street Real Estate Funds and Highgate Holdings of and a billiards room. New York. As for the adjacent parcel, a new owner could sell the land Highgate stayed on to manage the hotel and retained a to a developer or take advantage of improving economic condi- participation interest that could produce a return in the tions by handling construction on its own. long run if prescribed performance hurdles for the hotel are achieved. Lender Lists Stabilized Offices Principal Life is shopping a foreclosed office building in sub- urban Washington that could fetch $70 million. The 202,000-square-foot McLearen Center, at 13857 FOR SALE THE McLearen Road in Herndon, Va., is 84% leased by a unit of de- 75-UNIT “CLASS A” APARTMENT BUILDING BUILDING fense contractor General Dynamics through 2017. It is likely to BOSTON, MASSACHUSETTS appeal to core and core-plus investors. CB Richard Ellis has the listing. Previous owner ING Clarion purchased the Class-A building Boston FINANCIAL Harbor for $47 million shortly after it was completed in 2007, using Boston DISTRICT Common a loan from Principal. But ING made no headway in finding Boston Federal Courthouse tenants and Principal foreclosed on the mortgage in May 2009. South Station Several months later, Principal Life stabilized the property FORT POINT by signing General Dynamics Information Technology to a seven-year lease. General Dynamics is seen as likely to expand Fort Point Channel in the building and renew its lease, as it has made substantial D improvements to its space — including the installation of data- S ROA center facilities. Its rent is about 10% below average for compa- STON BYPAS rable space in the Route 28 South submarket. W BROADW SOUTH BO THE BUILDING The property is across Route 28 from Washington Dulles In- AY ternational Airport, near the Dulles Toll Road and Interstates 66 and 495. The five-story building includes a fitness center and FOR MORE INFORMATION a cafe. WWW.THESIGNALBUILDINGBOSTON.COM
... From Page 1 Westbrook WWW.BRADVISORS.COM in 2005 for $47 million and plowed $85 million into a reno- INVESTMENT SALES • NOTE SALES • CONSULTING T: 617.375.7900 • F: 617.536.9566 vation. Claret stepped in as the property was re-opening. But BOSTON • NEW YORK the hotel’s performance and value were dragged down by the May 18, 2011 Real Estate ALERT 10
71% of Funds Had Gain in 3rd Quarter up from negative 0.28% in the previous quarter. In a reverse of the previous quarter, vehicles that invest The performance of high-yield funds showed marked im- solely or primarily outside of the U.S outperformed their U.S. provement in third quarter of 2010. counterparts. U.S. funds had a 3.2% gain, with 38 of 57 showing Some 71% of closed-end funds reviewed by Real Estate Alert a positive return. Non-U.S. funds posted a 7% return, with all posted an increase in net asset value from July to September, but seven in the black. up from about 50% in the two previous quarters. The results Despite the rebound, most funds remain in the red overall provide further evidence that strengthening fundamentals and following big losses in 2008 and 2009. Among the 59 funds for increased availability of credit have started to turn the tide after which cumulative data were available, the weighted average re- more than 18 months of dismal returns. turn since inception was negative 21%. Of the 89 funds in the sampling, 63 had an increase in net The figures are based on information supplied to inves- asset value, 25 had a decrease, and one was flat. Overall, the tors in recent weeks. Fund returns are reported on a lagging vehicles produced a 5.1% return on a weighted average basis, basis. Fund-Performance Scorecard for Third Quarter
HIGH-YIELD PROPERTY FUNDS Return 3Q-10 Since Return Inception Final Fully Equity Operator Fund (%) (%) Close Invested ($Mil.) Aetos Capital Aetos Capital Asia Fund 1 3.8 2003 2005 $739 Aetos Capital Asia Fund 2 -7.8 2005 2009 2,200 AEW Europe AEW European Property Investors 2.4 2003 2006 900 Invesco Real Estate AIG Asian Real Estate Partners 2 48.1 -3.6 2008 765 Alex. Brown Realty ABR Chesapeake Fund 3 0.6 -1.1 2007 2009 255 AMB Property AMB Japan Fund 1 7.5 14.0 2005 2008 526 Angelo, Gordon & Co. AG Core Plus Realty Fund 2 11.1 0.7 2007 794 AG Realty Fund 7 0.8 3.0 2007 1,257 ARA Group Asia Dragon Fund -0.3 2008 1,130 AREA Property AREA Real Estate Fund 5 -2.4 2005 2008 700 Sun Apollo India Real Estate Fund 2.9 2007 630 AVP Advisors American Value Partners Fund 1 3.6 2007 2009 400 Beacon Capital Beacon Capital Strategic Partners 4 4.9 -14.5 2005 2007 2,000 Beacon Capital Strategic Partners 5 10.6 -31.7 2007 2010 4,000 Bryanston Realty Bryanston Retail Opportunity Fund 0.7 36.7 2004 2008 150 Canyon Capital Realty Canyon Johnson Urban Fund 3 -7.0 2008 1,000 Capmark Investments Capmark Structured Real Estate Partners 24.4 -41.2 2006 2007 1,099 Capri Realty Capri Select Income Fund 2 -11.0 -25.7 2005 2008 303 Carlyle Group Carlyle Europe Real Estate Partners 3 18.8 -20.6 2008 3,400 CB Richard Ellis Investors CBRE Strategic Partners 3 -1.6 4.9 2003 2005 498 CBRE Strategic Partners 4 -8.6 -30.5 2005 2008 1,172 CBRE Strategic Partners Europe Fund 3 0.8 2007 2009 €300 CBRE Strategic Partners UK Fund 3 -5.0 2007 2008 £300 CIM Group CIM Real Estate Fund 3 -3.3 -38.8 2007 2,000 CityView CityView Los Angeles Fund -1.5 2007 150 DivcoWest Properties Market Street Capital Partners 2.7 -15.6 2006 2010 650 DRA Advisors DRA Growth & Income Fund 6 3.7 -3.7 2008 1,250 Europa Capital Europa Fund 3 11.1 12.2 2008 €730 Fortress Investment Fortress Residential Investment Deutschland 10.1 -14.9 2005 2009 2,000 Fortress Japan Opportunity Domestic Fund 6.8 6.8 2010 ¥75,000 Fremont Realty Capital Fremont Strategic Property Partners 2 6.9 -9.3 2004 2007 500 GEM Realty Capital GEM Realty Fund 4 5.2 -4.5 2010 450
See SCORECARD on Page 11 May 18, 2011 Real Estate ALERT 11
Fund-Performance Scorecard (continued)
HIGH-YIELD PROPERTY FUNDS Return 3Q-10 Since Return Inception Final Fully Equity Operator Fund (%) (%) Close Invested ($Mil.) General Investment & Development Windsor Realty Fund 7 -4.7 2006 167 Hampshire Partners Hampshire Partners Fund 6 2.3 4.5 2003 2007 235 Harbert Management Harbert European Real Estate Fund 2 10.4 2007 2009 305 IL&FS Investment Managers IL&FS India Realty Fund 0.6 2006 2008 525 IL&FS India Realty Fund 2 -2.7 2008 895 Invesco Real Estate Invesco Real Estate Fund 1 11.3 -6.1 2004 2008 320 JER Partners JER Europe Fund 3 9.1 2006 2009 1,215 JER Real Estate Partners 4 3.4 -16.8 2008 2009 1,500 Kennedy Wilson Kennedy Wilson Property Fund 2 0.4 2006 2008 200 LaSalle Investment LaSalle Asia Opportunity Fund 3 -6.0 2008 3,000 LaSalle French Fund 2 1.4 -30.0 2005 402 LaSalle Income & Growth Fund 3 1.6 8.8 2003 350 LaSalle Income & Growth Fund 4 0.8 -6.0 2005 500 LaSalle Japan Logistics Fund 2 1.3 2007 ¥90,000 Liquid Realty Liquid Realty Partners 4 0.0 -16.3 2007 2009 570 Lowe Enterprises Investment Lowe Resort Community Fund -0.4 -50.5 2006 2007 81 Morgan Stanley Morgan Stanley Real Estate Fund 5 International 5.4 -3.7 2005 2007 4,200 Morgan Stanley Real Estate Fund 6 International 15.9 -56.6 2007 2009 8,000 Niam AB Niam Nordic Fund 3 6.7 9.8 2004 2008 312 Niam Nordic Fund 4 4.6 2008 700 O’Connor Capital O’Connor North American Property Partners 2 -1.5 -40.3 2008 2010 550 PCCP California Smart Growth Fund 4 6.5 -24.0 2006 746 Prudential Real Estate Investors PLA Retail Fund 1 1.6 2006 2009 625 PRECO 3 1.1 -19.4 2006 2009 700 RLJ Capital RLJ Lodging Fund 2 -1.0 -7.5 2006 2008 743 RLJ Real Estate Fund 3 -2.1 2008 1,192 Rockpoint Group Rockpoint Real Estate Fund 2 -3.9 2005 2007 1,700 Rockpoint Real Estate Fund 3 12.1 2007 2,518 Rothschild Realty Five Arrows Realty Securities 5 5.0 5.4 2008 840 RREEF RREEF Global Opportunities Fund 2 2.4 -21.7 2005 2008 1,600 Savanna Investment Savanna Real Estate Fund 1 4.2 2007 2010 313 Secured Capital Japan Secured Capital Japan Real Estate Partners 1 -0.7 17.2 2004 2005 126 Secured Capital Japan Real Estate Partners 2 0.6 2005 2007 176 Secured Capital Japan Real Estate Partners Asia 1.2 2007 2009 758 Starwood Capital Starwood Global Opportunity Fund 7 4.3 -6.1 2006 475 Starwood Capital Hospitality Fund 1 2.8 7.9 2005 2008 900 Strategic Capital Strategic Partners Value Enhancement Fund 0.2 -12.0 2006 2009 250 TA Associates Realty Realty Associates Fund 8 0.4 -12.1 2007 2010 900 Realty Associates Fund 9 0.5 -3.9 2010 1,688 Tuckerman Group Tuckerman Multi-Family Development Fund 3 1.9 25.0 2002 2005 86 UrbanAmerica UrbanAmerica Fund 2 9.2 -25.1 2007 2010 400 Valencia Capital Next Block Medical Fund 1 -55.3 -34.4 2006 115 Walton Street Capital Walton Street Real Estate Fund 4 1.6 6.2 2004 2006 742 Walton Street Real Estate Fund 5 4.0 -16.0 2006 2009 1,580 Walton Street Real Estate Fund 6 4.1 -69.5 2009 2,000 Xander Group Xander JV Fund 1 -3.6 2007 500 See SCORECARD on Page 12 May 18, 2011 Real Estate ALERT 12
Fund-Performance Scorecard (continued)
HIGH-YIELD DEBT FUNDS Return 3Q-10 Since Return Inception Final Fully Equity Operator Fund (%) (%) Close Invested ($Mil.) AREA Property AREA Real Estate Finance Corp. -0.2 -5.5 2006 2009 $623 Fillmore Capital Fillmore West Fund 39.0 -45.9 2008 2009 500 Guggenheim Partners Guggenheim Structured Real Estate Fund 3 0.7 -11.2 2007 2009 1,250 Hudson Realty Capital Hudson Realty Capital Fund 4 -3.0 -12.0 2007 2009 350 Invesco Real Estate Invesco Real Estate High-Yield Debt Fund -66.9 -55.2 2008 2009 100 Invesco Real Estate High-Yield Debt Fund 2 -4.7 10.8 2009 2010 75 Principal Real Estate Investors Principal Mortgage Value Investors 6.8 2007 2009 225 Square Mile Capital Square Mile Partners 2 2.6 -34.8 2007 2009 561 Square Mile Partners 3 2.2 -6.6 2009 806 Starwood Capital Starwood Debt Fund 2 3.3 -2.7 2009 630 Tricon Capital Tricon Fund 7 0.2 -27.0 2005 2009 247
Eastdil Winsed was Hotel the most-active Ranking hotel broker as last yearSales as the sector Soar contin- s Deal Database, Eastdil Secur ued to surge. finished a strong second,Real with Estate $4 billion Alert’ of activity, fol- Eastdil brokeredard $5.3 Elliott billion ofat hotel$2.4 billion. sales, giving The three it a whopping firms handled 33% almostmarket three- Hodges W FEBRUARY 14, 2007 share. Jones Lang LaSalle, TOP INDUSTRIAL BROKERS IN 2006 lowed by won (see article and 6 quarters of all large sales last year, according to d Ellis TOP INDUSTRIAL DEALS IN 2006 which tracks sales of $25 million or more (see rankingCB and Richar list of top deals on Pages 6 TEL on Page 8 TEL BROKERS IN 2006 8-9). See HO TOP HO 8 ers The victory was Eastdil’s fourth in last year’s league tables. The firm already won the rankings of office, mall and shopping-center brokers. But Eastdil’s string 9 TOP HOTEL DEALS IN 2006 was broken in the industrial ranking, which 3 Cushman Recruiting‘Green’ Retail BrokFund ranking on Pages 6-7). Venture Hotel sales, including unbrokered transactions, soared by 32% last year, to 3 Developer Raising ks Retail k � YES! Start my 3-issue3 Goldman Fund Bac . Offices FREE on Bloc trial subscription to kage Listed 2 Big Retail Portfolios Offered in New England 4 Repositioned Califial Pac m Two large retail portfolios have hit the market in New England, giving investors Michigan Industr The 1.9 4 rare opportunitiesa development to scoop up clusters firm based of supermarkets in Braintree, inMass., one fell is marketing swoop. 10 shop- x Available Flatley Co., is shopping the propertiesJones as Lang a package. LaSalle. REAL ESTATE ALERT.5 Hotel SyndicatorThere to Expand Platfor are no stringsakefield attached -- ping centers in affluent sections ofof the Rockland, Boston metropolitan Mass., has listed area, 26 Cape shopping Cod and centers Profit 5 Bay Area Office Compleial Ranking Cushman & W southern New Hampshire. The 2.5 million-square-foot portfolio is valued at about abs llion. Tedeschi Realty $500 mi 7 CB Tops Industr Meanwhile, Apartments Up for Gr AIL on Page 5 I won’t receive an invoice10 Atlanta unless I chooseand freestanding supermarkets to in the Boston subscribe. area with See RET VEHICLES million-sf portfolio is valued at about $440 million. At that price, the buyer’s initial INVESTMENT 10 annual yield would be roughly 6.25%. Investors can bid on the entire portfolio or any of three sub-portfolios. From the Freshest Flatley’s portfolio has a 96% average occupancy rate. The package represents about three-quarters of the firm’s retail holdings. Flatley, which built up its retail will sell NAME: THE GRAPEVINE oup ops Plan for Apartment Fund Blackstone Gr operties It looks like Equity Office Pr ING Spinoff Dr the Boston and Chicago-area buildings it ING spinoff has canceled plans to raise a $300whose million principals value-added operated fund two multi- An artners, inherited with one-by-one, rather than in bulk. The because of the difficultyConcert of finding Realty high-yield P apartment investments, in the latest buzz is Blackstone thinks it can maxi- sign of weakness in that sector of the fund market. Chicago-based COMPANY: mize profits by targeting a variety of buyers for the downtown and suburban family funds while at ING, planned to launch their own vehicle after the spinoff in Robert Intelligence late 2005. Concert Multi-Family 3 fund would have targeted a 13-15% return, pri- buildings. Blackstone took a different strategy in New York, Washington, marily by acquiring underperforming or distressed multi-family properties on Page 11 Seattle and Portland, Ore., where it nationwide. See SPINOFF Fund raising was not a problem. Investors said— Concert were unable lined upto find soft propertiesequity that flipped big portfolios.which is seeking to e Capital, commitments of at least $100 millionAndrew from Sands institutional players last year, including ADDRESS: Dunmor Ed ING — enough to hold a firstand closing and begin acquisitions. But the closing never took place. Apparently, Concert’s principals — raise up to $200 million of equity for its een, Bradley Muth first opportunity fund, has hired long- McSw time Democratic Party operative as a vice president. EmersonBentley age Emerson
will solicit equity, primarilySee GRAPEVINE from on West Back P See for yourself how REAL ESTATE ALERT guarantees CITY/ST/ZIP: Coast institutional investors.
your edge by tipping you off to private wheelings and TEL: dealings in the commercial-property market. E-MAIL: FREE 3-ISSUE TRIAL SUBSCRIPTION Sign up for a Fax this coupon to: 201-659-4141 and each week you’ll get the latest word on the secret To order by phone, call 201-659-1700 strategies of opportunity funds, foreign buyers and other Or mail to: Real Estate Alert smart money. We’ll also tip you off to big owners 5 Marine View Plaza, #400, Hoboken NJ 07030 preparing to offer their real estate holdings. You can also start your free trial at REAlert.com May 18, 2011 Real Estate ALERT 13
register annually 1000+ The 12th Annual US Real Estate Opportunity & Private Fund Investing Forum June 1-2, 2011 6KHUDWRQ1HZ Why should you attend IMN’s 12th Real Estate Opportunity & Private Fund Investing Conference on June 1-2 in NY? Look at these figures from last year’s conference: 1000+ Registrants 235+ Speakers 300+ Fund Representatives Registered 60+ LPs Registered 37 Panel Sessions 65+ Sponsors/Exhibitors 1 Real Estate networking event to attend: IMN's Opportunity Fund Conference. This year’s figures are already promising to be bigger. Register now to secure your place at this must-attend event. We look forward to seeing you June 1. twitter.com/imn_realestate For more information, please visit: hashtag:#imn www.imn.org/usopps11_hsp HOTLINE IMNORG s linkd.in/imn_realestate May 18, 2011 Real Estate ALERT 14 Four to five candidates for each position were considered as -fi Cushman ... From Page 1 nalists. properties, along with Eastdil Secured and CB, lost market share The evolving role of the big brokerages makes recruiting during the economic downturn. Last year, HFF leapfrogged over from the principal side logical, according to Anthony LoPinto, Cushman, pushing the company into fourth place in sales vol- a managing director of New York executive search firm Korn/ ume for the five major property types, according toReal Estate Ferry, which handled recruitment for both positions. He said Alert’s Deal Database, which tracks trades of $25 million and that institutional clients are increasingly seeking strategic ad- up. Cushman’s market share was 8.5%, down from an average vice, which makes buy-side experience more valuable. of 12.5% the three previous years. Gworek and Weilbach joined Cushman this week as senior It’s rare for top brokerage posts to go to investment-side pros managing directors, reporting to Vorwaller, an executive vice with no brokerage experience. The conventional wisdom is that president. principals, because they are used to being the boss, may have Gworek most recently was a principal of Reunion Office a tough transition to brokerages, where client service is para- Partners, a Chicago investment firm launched in 2009 by Jeff mount. Johnson, formerly chief investment officer of Chicago-based Cushman is betting that Weilbach and Gworek, after years Equity Office. Gworek was previously senior vice president of of sitting at the other side of the table, will bring a deeper un- investments at Equity Office, where he worked from 1994 to derstanding of what Cushman’s clients desire. 2007. Before that, he had a stint at AEW Capital Management of “The real focus is having an understanding of client Boston. At Cushman, Gworek is based in Chicago. needs,” said Vorwaller. “Having someone who comes from Weilbach moved over from Pacific Property, a Palo Alto, the principal side sensitizes them to what we need to provide Calif., firm he joined in 1999. He is based in San Francisco. to clients.” Recruiting will be among Weilbach’s immediate goals. San In addition to executives from the buy side, Cushman con- Francisco, Los Angeles and San Diego are among the handful sidered candidates from rival brokerages and real estate invest- of markets where Cushman is looking to beef up its team for ment banking. The company set up a vetting committee that multi-family sales. Cushman’s U.S. multi-family team now con- included brokers who would report to both men, Vorwaller sists of roughly 30 senior and associate brokers. said, to help ensure those hired would fit in Cushman’s culture. As Cushman struggled with debt problems during the downturn, it suffered from turnover. The last multi-family chief, Keith Misner, left last year to joinAIMCO, the big Denver apartment REIT, as vice president of acquisitions. The capital- EXECUTIVES ATTENDED OVER 400 markets post filled by Gworek is a new position. IN JUNE 2010!! The 8th Annual Seattle ... From Page 1 1HZ 11 years. THE LARGEST NON-TRADED REIT INDUSTRY Schnitzer was the seller in one of the recent major office GATHERING ON THE EAST COAST! “ transactions in the Seattle area. In that deal, which closed last September, Principal Real Estate Investors paid $410 million, IMN’s Non-Traded REIT Industry Symposium is an incredible opportunity for those who manage, or $543/sf, for the 755,000-sf Bravern 1&2 in Bellevue, Wash. advise, and distribute Non-Traded REITs to meet, network, and learn. Although hit hard during the recession, the Seattle office Mark Goldberg, President, CAREY FINANCIAL, LLC market’s fundamentals are improving rapidly. The average oc- “ cupancy rate is just over 85%, up nearly a full percentage point from yearend, according to Marcus & Millichap. And the out- look for further improvement is promising. Only 230,000 sf of newly constructed space is scheduled to come on line in 2011, For more information, please visit: imn.org/reitsny a 14-year low, keeping a lid on supply. Meanwhile, the technol- Tel: 212-224-3428 | Email: [email protected] ogy sector is rebounding, benefiting the many computer and software companies in the area. May 18, 2011 Real Estate ALERT 15 REGIONAL SPOTLIGHT Chicago Area Industrial Market Strong demand for core properties has shrunk capitalization rates to 6% and lower. Market pros expect further compression. Brokers predict an increase in value-added listings because buyers priced out of the core market are becoming more willing to absorb risk in search of higher yields. While rents are down 25% from the 2007 peak, they are projected to grow by up to 3% this year, according to Grubb & Ellis. The market’s 1.2 billion square feet of space is 90.5% occupied, up from 90.2% at yearend. Construction is rising, but is limited to build-to-suit projects. On the Market Hit SF Estimated Value Property Seller Market (000) ($Mil.) (Per SF) Broker National Core Markets Portfolio* TA Associates May 5,000 $300 $60 CB Richard Ellis IDI Core Chicago Portfolio Industrial Developments Intl. May 1,400 110 80 CB Richard Ellis Seefried Core Portfolio* Seefried Industrial Properties May 694 54 78 CB Richard Ellis J.P. Morgan Portfolio J.P. Morgan, TCB Development February 825 42 51 Colliers International Recent Deals SF Sales Price Property Buyer Closed (000) ($Mil.) (Per SF) Broker Northern Builders Portfolio Heitman (Pending) 2,300 $140 $61 Colliers International Interstate/Towne Portfolio Stockbridge Capital May 2,100 130 61 Cushman & Wakefield HSA Commercial Real Estate Portfolio Industrial Income Trust (Pending) 1,400 100 71 Colliers International 2 properties in Elwood, Ill. Liberty Property (Pending) 1,200 52 43 (None) * Includes space in other markets. 2011 BROOKLYN European Bank & REAL ESTATE SUMMIT Financial Institutions THE 2ND ANNUAL CONFERENCE FOR Conference on Real INFLUENTIAL REAL ESTATE PLAYERS IN Estate Workouts NYC’S LARGEST BOROUGH +ĮħĞϛϚϛϛ ϛϙϚϚr-ĨħĝĨħ &ħĠĥĚħĝ Join over 400 investors, owners, developers, lenders, attorneys, and other professionals to discuss, debate, learn and network during the 2011 Brooklyn IMN’s is pleased to announce that its European Bank & Financial Institutions Real Estate Summit, a GreenPearl Event. #ONFERENCE ON 2EAL %STATE 7ORKOUTS #ONFERENCE WILL TAKE PLACE *UNE IN This year we subtitled the event BEYOND London, England. DISTRESS as we explore important themes regarding recovery. Visit imn.org/bankerslondon for more information. THURSDAY, JUNE 16, 2011 ST. 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Email [email protected] or call +1 646 862 6136 May 18, 2011 Real Estate ALERT 16 reports to managing director Kris two smaller pools, valued at about $70 THE GRAPEVINE Cooper, who heads Jones Lang’s million combined. One consists of a national retail team. single New Jersey complex, the other ... From Page 1 of 10 small properties. AIG is betting mortgages on adjoining Manhattan Tucker Kelton arrived at Beacon Capital it can get better pricing by allowing properties that should draw interest of Boston last month as an associ- regional players to compete with big from equity players. The distressed ate, working on acquisitions. He was institutional investors hunting for loans, with a combined balance of previously a senior financial analyst at portfolios. HFF is AIG’s advisor. roughly $28 million, are backed by Boston Properties. Beacon is invest- two small office buildings, totaling ing its latest opportunistic vehicle, the Darryl Law joined C-III Asset about 21,000 square feet, at 570 $2.5 billion Beacon Capital Strategic Management this month to work on Fifth Avenue and Three West 46th Partners 6. The shop focuses on office the special servicer’s growing portfolio Street. The sites are owned byExtell properties in prime U.S. markets, as of foreclosed hotels. The Dallas firm Development of New York. Combined, well as London and Paris. has been actively seizing and selling they form an L-shaped parcel facing distressed hotels. Before joining C-III, both Fifth Avenue and West 46th AIG Global Real Estate is taking a Law spent four years at PKF Capital, Street, with more than 62,000 sf smaller-is-better approach to packag- most recently as a director, working of buildable space. HFF has the ing apartment properties for sale. The on investment advisory and valuation assignment. insurance giant in January earmarked assignments. Law also had a stint at for sale 31 New Jersey and Pennsyl- brokerage Colliers International. Jones Lang LaSalle has added a retail vania multi-family properties worth property specialist to its expanding about $725 million. The first six sold John LiGreci has joined Cushman & West Coast operations. Michelle quickly in March to Angelo, Gordon & Wakefield in New York as an associate Schierberl started recently as a Co. for about $245 million. The speed in the capital-markets group. LiGreci managing director in Irvine, Calif. and strong pricing of that deal led will help underwrite transactions and She came from Grubb & Ellis, where many to believe AIG would shop the compile market data. He was previ- she had worked since 1994, rising remaining 25 properties in just one or ously at ABS Partners Real Estate of to senior vice president. Schierberl two batches. 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