the Editors of Commercial Property Executive
Pushing Back from the Abyss
Monday saw the continuation of frantic efforts to prevent the collapse of the U.S. financial system as the Federal Reserve converted Goldman Sachs and Morgan Stanley to bank holding companies. The move transformed both companies from investment banks into depository banking institutions, brought them under the Fed’s regulatory control and marked an end to a Wall Street era. Unlike investment banks, depository banks may borrow at the Fed’s discount window. They also have access to funds held for depositors, which are insured by the Federal Depository Insurance Corp. (FDIC). In return, however, depository banks must submit to Fed regulations, including…
SL Green Refis Pair of Manhattan Properties
SL Green Realty Corp. has announced the refinancing of two properties in two separate transactions: 717 Fifth Avenue with The Royal Bank of Scotland and 28 West 44th Street with DekaBank. Total combined proceeds were $410 million with net proceeds to SL Green of $160 million. The cash-out refinance during such a difficult time for credit underscores the REIT’s clout with lenders. The company now has approximately $$850 million of cash and other immediately available capacity to deploy should opportunities arise in this volatile market, according to Andrew Mathias, president & chief investment officer.The retail condominium at 717 Fifth Avenue…
General Growth Examines Options for Reducing Debt
General Growth Properties Inc., one of the country’s largest public REITs and a major shopping center owner/manager, is considering a wide range of alternatives as it prepares for a November mortgage offering to lenders and pursues funding for its near-term maturing obligations. The company has announced that options such as “core and non-core asset sales, the sale of joint venture or preferred equity in selected pools of its assets, a corporate level capital infusion, and/or strategic business combinations” are all on the table as it seeks to reduce debt. At the close of today’s trading on the New York Stock…
Big Government, Big Spender
A weekend of frantic activity in Washington’s halls of economic power has produced a government approach that is diametrically opposite from what conservative administrations might be expected to favor—an enormous big-government plan to intervene in the free markets and to have taxpayers buy $700 billion of bad debt from the troubled financial sector. On Saturday President Bush emphasized his desire for direct government involvement and control in his radio address. “ My Administration is working with Congress on legislation which will approve the Federal government’s purchase of illiquid assets, such as troubled mortgages, from banks and other financial institutions. This…
Hines Sells Interest in Pair of Boston Trophy Buildings to Equity Office
Equity Office Properties now has full ownership of two trophy buildings in Boston’s Back Bay area after buying out the minority interest in both properties from ownership partner Hines.Terms of the deal for Two Twenty Two Berkeley (pictured) and Five Hundred Boylston were not released. Hines, which developed both buildings, will continue in its role as property manager. “We continue to seek attractive investment opportunities here in the Boston market, both in the repositioning of our currently owned properties as well as new acquisitions,” Greg Shay, president of the Boston region for Equity Office, which is owned by The Blackstone…
Interstate, John Buck Open Hotel in Tennessee
Interstate Hotels & Resorts has announced that it has opened and will operate the aloft hotel Nashville-Cool Springs, in Tennessee. The 143-room, newly built hotel is owned by a joint venture in which Interstate and The John Buck Company of Chicago are partners.It is the second aloft hotel developed and opened by the partnership in 2008. The John Buck Co. oversees development of the hotels for the partnership. The aloft is Starwood Hotels & Resorts’ premium, select-service hotel brand. Including the Cool Springs hotel, there currently are 18 aloft hotels open in 12 states, Montreal, Canada, and Beijing, China, with…
Berkshire Income to Sell Suburban D.C. Apartments in $53M Deal
Taking another step in its mission of creating value through property management and repositioning, Berkshire Income Realty Inc. has entered into an agreement to sell Westchester West Apartments in Silver Spring, Md., in a transaction valued at approximately $53.4 million. The deal includes the buyer’s assumption of a $37.5 million mortgage debt on the 345-unit apartment community. Berkshire acquired the Westchester West from an affiliate three years ago for $39.3 million. Located at 3212 Hewitt Ave., about 25 miles from Washington, D.C., Westchester West is a garden-style multifamily complex that was developed between 1970 and 1972. The area’s apartment market…
ProLogis Ups Common Dividend by 10 Percent, Adjusts 2008 Guidance Down
ProLogis has announced that its new annualized dividend level for 2009 will be $2.28 a share, or $0.57 per quarter, representing a 10.2 percent increase over 2008, but that 2008 and 2009 guidance would be moved down.The company revised its 2008 FFO guidance from $4.65 – $4.85 per share to $4.00 – $4.35 per share, due to a more conservative outlook for valuation and contribution timing in its CDFS business, as well as the appreciation of the dollar relative to the exchange rates assumed in previous guidance. Approximately 75 percent of second-half FFO per share is expected to be recognized…
Panel: Bright Future for Transit-Oriented M-F Developments
Changing tastes of Gen X, GenY and Baby Boomers, rising gas prices, and bumper-to-bumper commutes are all factors that are driving an increased focus on transit-oriented-developments, according to a panel that convened on Thursday at the Multi-Housing World Conference in Denver. Since the popularity of suburban development in post-World War II America, today’s younger generation, and some Baby Boomers, are turning their backs on suburban sprawl. “In Southern California, it used to be ‘drive until you qualify’ [for a house that is affordable,]” he said. “But, it’s a waste of time to sit in traffic 2, 3, 4 hours a…
Management Matters with Mike Myatt: When to Consider Corporate Restructuring
Times are tough, and they’re likely to get tougher, so my question is this; Should you, or should you not, consider a move toward corporate re-engineering? Whether directly or indirectly, your business will likely face negative repercussions of the struggling economy at some point, and there will be tough decisions that need to be made. The mere discussion of corporate re-engineering can cause fear, anxiety, and in some cases even panic. This is so much the case that some CEOs will avoid restructuring initiatives at all costs. There are even some business theorists that warn against undertaking complex restructurings because…