the Editors of Commercial Property Executive
Financial Market Update: After the Closing Bell-Friday, Sept. 19
It will be a strange weekend in Washington as Treasury and SEC officials say they will provide Congress with a plan–on Saturday–to deal with the financial turbulence of the past week. The proposal will not, in all likelihood, be a bona fide bill until Congress has had time to chew on it, but given the sense of urgency, movement by Congress will probably be preternaturally fast. But there may be time for a few add-ons. Sen. Charles Schumer (D-NY) has suggested bringing back, in some form, the Depression-era Reconstruction Finance Corp., an independent government agency that made loans to banks,…
Treasury Launches Big New Initiatives to Quell Financial Crisis
Treasury Secretary Henry Paulson obviously recognizes that huge problems require huge solutions. This morning, he announced that in contrast to the federal government’s piecemeal approach to the growing financial crisis of the past couple of weeks, “We must now take further, decisive action to fundamentally and comprehensively address the root cause of our financial system’s stresses,” that root cause being illiquid mortgage assets.“The federal government must implement a program to remove these illiquid assets that are weighing down our financial institutions and threatening our economy,” Paulson said. He acknowledged that the plan, to be hashed out in rough form over…
CoreNet Update: New York in Mild Recession, But Real Estate Stays Afloat
Uncertain times are in store for New York City again as it braces itself for the aftermath of the tumultuous few weeks on Wall Street. Marisa Di Natale, a senior economist for Moody’s|Economy.com and John Powers, chairman of the tri-state region for CB Richard Ellis Inc., offered their macro and micro views on what to expect at a luncheon hosted by CoreNet Global’s New York City chapter this afternoon. Di Natale noted that the U.S. is definitely in a recession, and has been since the fourth quarter of 2007. “We’re down 600,000 jobs, unemployment has gone from 4.4 percent to…
Hines Takes California Tower, Two Other Projects Get LEED Certification
With activity from coast to coast in the past few days, Houston-based Hines sold its interest in two Boston properties, as reported by CPN earlier today, and now is earning multiple LEED certifications on two California projects and acquiring Citigroup Center from Broadway Partners in Los Angeles Thursday. The Hines U.S. Office Value Added Fund II, L.P. (HVAF II) acquired the 48-story, 891,000-square-foot, Energy Star-labeled office tower is located at 444 Flower Street in downtown Los Angeles. The seller was represented by Eastdil Secured. Hines represented itself in the transaction. Hines will lease and manage the property. Terms of the…
Financial Fallout Will Impact NYC Office Market
The developments at Lehman Brothers, Merrill Lynch and AIG will have their biggest impact on available sublease space, according to a Grubb & Ellis Co. report authored by research manager Richard Persichetti. And as there are other failures, acquisitions and consolidations already discussed or rumored, there is sure to be continued pressure driving vacancy rates up and rent prices down. Lehman Brothers and Merrill Lynch alone occupy approximately 6 million square feet in Manhattan. Persichetti told CPN that the forecast doesn’t change based on today’s developments with the troubled firms.The additional sublease space will increase options for tenants and inevitably…
Days After Conservatorship, Freddie Mac Secures $548M Bond
Freddie Mac has announced a $548 million tax-exempt bond securitization with Citi. The deal was closed just days after the U.S. government took over the beleaguered agency. Collateral for the deal is a pool of fixed-rate tax-exempt and taxable multi-family housing revenue bonds, consisting of 79 tax-exempt bonds and nine taxable bonds. The transaction is evidence that despite the recent turmoil to hit Freddie Mac and the financial markets as a whole, the corporation, the nation’s second-largest mortgage provider, will still provide financing in a tight credit market. This transaction is the second largest tax-exempt bond securitization in the firm’s…
Wereldhave USA Buys San Diego’s DiamondView Tower for $161M
Wereldhave USA, a unit of a Dutch real estate property company, now owns the only two Class A, high-rise office towers to be built in downtown San Diego in the last 17 years after acquiring the 15-story DiamondView Tower for $161 million. The 305,255-square-foot tower, adjacent to Petco Park and located at 350 Tenth Ave., was sold by a partnership of Cisterra Partners, which developed the building, and The Prudential. The project broke ground in June 2005 and its first two tenants, Cox Communications/Channel 4 Studios and San Diego Interconnect Operated by Cox Media had moved in by late March,…
Del Taco Properties Go in $24M Sale-Leaseback
A 15-property Del Taco restaurant chain portfolio entered into a sale-leaseback deal with 20-year absolute Triple Net leases. The $24 million sale includes sites built between 1998 and 2002 in Arizona, California and Nevada. Richard Walter and Dennis Vaccaro of Irvine, Calif.,-based Faris Lee Investments represented the buyer, Innovative Property Partners, LLC, et al., a group of investors based in Orange County, Calif. who were in a 1031 Exchange. Del Taco Corp., which represented itself in the transaction, executed 20-year absolute NNN leases with the buyer and will continue to operate the properties. Del Taco Corp. was interested in a…
Buchanan Street Partners Sells San Antonio Tower to Tenant for $39M
After 15 years of leasing space in the Nowlin Tower, San Antonio-based Southwest Business Corp. opted to purchase the building for $38.5 million from Newport Beach-based Buchanan Street Partners. Located at 9311 San Pedro, the 13-story multi-tenant Class A office building has 236,400 square feet. Valued at $26 million by the Bexar County Central Appraisal District, Nowlin Tower and the adjoining five-level parking structure were constructed in 1986 on 3.3 acres. The is located near San Antonio International Airport. The building won San Antonio BOMA’s “Building of the Year” award in 2007. The property underwent extensive capital improvements including a…
Manhattan Loses Resiliency, Thanks to Banks Misfortunes
The bankruptcy of Lehman Brothers, the sale of Merrill Lynch to Bank of America and the ongoing financial woes of AIG that unfolded over one weekend in September were among the latest wave of bad news for New York City’s office market to digest. The three firms own or lease 9.5 million square feet of office space in Manhattan, according to the Associated Press.Manhattan’s office vacancy was at 7.1 percent, according to a midyear report on the market from Cushman & Wakefield Inc. While that is a healthy figure, it is also one that is on the rise, increasing 1.8…