the Editors of Commercial Property Executive
Fallout from $50B Merrill Lynch Sale Begins
The reverberations from the acquisition by Bank of America Corp. of Merrill Lynch & Co. are already being felt. Although the $50 billion all-stock transaction is, along with the filing for Chapter 11 by Lehman Brothers, signaling the end of an era on Wall Street, those who masterminded the deal contend that it’s the product of opportunity, not desperation.In a live interview this morning, BofA CEO Kenneth Lewis told CNBC that once BofA has integrated Merrill Lynch, “this company will be a thing of beauty…We have the opportunity of a lifetime.” He also pointed out that BofA has moved quickly…
As Banks Struggle, Fewer Worries for REITs
As commercial and investment bankers covered their eyes over the weekend, real estate investment trust executives were likely looking for opportunities. “If you are an illiquid, non-transparent and highly leveraged commercial real estate owner right now, you are in deep trouble,” Brad Case (pictured), vice president of research and industry information with the Washington, D.C.-based National Association of Real Estate Investment Trusts (NAREIT), told CPN. “REITs are none of these.” According to Case, the REIT industry on average maintains about 40 percent leverage. At that level, if credit is available, they can borrow. If credit is not available, they can…
FTC Declines to Make New Rules About Qualified Intermediaries
The Federal Trade Commission has denied a petition by the Federation of Exchange Accommodators (FEA), an industry group, to develop a rule regarding qualified intermediaries (QIs), who are independent third parties that facilitate 1031 exchanges. The FEA had asked the FTC to establish a mandatory registration process and operational standards for qualified intermediaries, who are currently virtually unregulated on the federal level. The FEA asked the FTC to “adopt a regulation that would apply the force of federal law to accepted industry standards and conduct that are intended to protect consumers who engage the services of exchange facilitators,” as it…
Behringer Harvard M-F REIT Plans $2B IPO
Behringer Harvard Multifamily REIT I Inc. announced its initial public offering today, with plans of raising $2 billion. The company, which expects to qualify for REIT status for the 2007 taxable year, is selling 200 million shares of common stock at $10 per share, and is also offering as many as 50 million shares of common stock at $9.50 per share through its distribution reinvestment plan. Multifamily REIT, organized two years ago with an initial sale of 1,249 shares of common stock to Behringer Harvard Holdings L.L.C., focuses primarily on the investment in and operation of high-quality multi-family properties. Targeting…
Evergreen Funds $750M for Kitson Florida Developments
Chicago based private equity investor Evergreen Real Estate Partners has committed $750 million to developer Kitson & Partners to pursue retail and residential development deals in Florida. WIth the funding, Kitson will be looking to acquire raw land, entitled land and semi-improved land on which to develop. The firm is anticipating that having the funds on hand will help them survive a tough credit market. “If our company makes an offer, we can close the deal with the seller. We have the financial strength to finish what we start,” Kitson’s CEO Syd Kitson said in a prepared statement. Kitson &…
New GFI-Carlyle JV Seeks $1.2B in Acquisitions
GFI Capital Resources Group has formed a joint venture with the Carlyle Group to acquire real estate assets throughout the United States. The partnership will provide GFI with $1.2 billion in buying power, leveraging a total of $300 million worth of equity. According to GFI, the JV will allow it to more than double the size of its existing portfolio, which totals about 20,000 multi-family units, representing 100 properties in five states. The company will be seeking distressed and other non-performing assets (such as real estate debt) as opportunistic plays. New York-based GFI has already made a number of recent…
Rechler Tapped to Build, Manage 485,000SF Long Island Biz Park
Officials of Long Island’s Suffolk County have selected Rechler Equity Partners to build and manage the Hampton Business and Technology Park, which will occupy 58 acres at the Francis G. Gabreski Airport. Designed as a high-tech compound, the park will feature a 485,000-square-foot center containing commercial space and a 145-room hotel with conference facilities. Owned by Suffolk County, the entire airport property, originally developed as a World War II air base, encompasses a total of nearly 1,500 acres. The Hampton Business Park parcel sits on the west side of the airport, and has been designated a Planned Development District, as…
German Investor Takes a Bite Out of Boston with $167M Office Buy
New York City’s Broadway Partners has sold 200 State Street to GLL Real Estate Partners GmbH, which acquired the premier property on behalf of European Institutional investors for $167 million. Broadway Partners’ had owned the 302,100-square-foot building since purchasing it through its Broadway Partners Real Estate Fund III last year as part of a 24-property office portfolio acquisition from Beacon Capital Partners L.L.C. for $5 billion. Developed in 1985, 200 State Street occupies a coveted spot adjacent to Faneuil Hall Marketplace in Boston’s Financial District. The 16-story tower has a history of strong occupancy levels, which jumped from 94 percent…
CBL Opens Plaza Macae in Brazil
CBL and Associates Properties Inc. and Tenco Realty of Belo Horizonte, Brazil, have announced the opening of the new 243,000-square-foot shopping center, Plaza Macae in Macae, Brazil. CBL has a 60 percent interest in the center. Plaza Macae is anchored by Lojas Americanas, C&A, Marisa, a five-screen Cine Ritz and Leader as well as over 56,000-square-feet of specialty store and restaurants. A second phase of Plaza Macaé, opening in December, will include a 68,000-square-foot WalMart. The center is approximately 92% leased and committed. For CBL, according to its president, Stephen Lebovitz, the opening is a significant milestone, marking its first…
Private Seller Parts with 101,000SF D.C. Office
Ownership of the Class B office building at 666 Eleventh Street NW in Washington, D.C.’s East End submarket has changed hands. Relying on the assistance of real estate services firm West, Lane & Schlager, Leonard Doggett of Doggett Enterprises Inc., the parent company of Doggett Parking Co., sold the 101,000-square-foot property, which was developed by Doggett over 40 years ago. The buyer has not been publicly identified, but snapping up 666 Eleventh was a momentous move, as the building was one of the limited group of individually owned office properties in the still highly coveted Downtown Washington, D.C., market. Occupying…