the Editors of Commercial Property Executive
Economic Update – Leading Economic Indicators Inch Up
A bright spot to kick off the Memorial Day holiday weekend, or economic fool’s gold? Time will tell, but in any case the Conference Board reported on Thursday that leading indicators of the U.S. economy posted their first rise since the summer of last year. The organization’s index of leading indicators, which is designed to predict economic activity six- to nine months in the future, rose 1 percent in April. The revised March figure was a 0.2 percent drop. Generally speaking, the index has been falling since late 2007, but according to the organization, the rate of decline has slowed…
Despite Retail Woes, SKT Makes $79M California Buy
No market has gone unscathed in this severely crippled economic environment, but some areas are feeling less pain than others are, as evidenced by a recent transaction that just closed in Southern California’s Inland Empire region. A 263,700-square-foot segment of the 539,270-square-foot Crossroads Marketplace in Chino Hills, Calif., was just snapped up at a 5.87 percent cap rate by SKT Investments for $79 million, including the assumption of an existing $63 million CMBS loan on the power center. Located in an affluent neighborhood just a stone’s throw from the 71 Freeway, the nine-year-old Crossroads Marketplace is home to such national…
As Investment Market Continues to Offer Attractive Pricing, JV Makes $41M Portfolio Buy
As the investment market remains in flux, those buyers with money to spend are continuing to eye high-value deals. In the latest such move, a joint venture between CB Richard Ellis Realty Trust and Duke Realty Corp. shelled out $41 million to acquire a pair of fully-leased office buildings in Houston and Orlando, along with a warehouse facility in Tampa. For the buyers, the current pricing downslope and limited buyer pool were key ingredients to getting their hands on attractive properties.“There is always an interest in finding good yielding properties with good cash flow and high quality tenants,” Jack Cuneo,…
Economic Update – CRE Sees First-Quarter Downtick in Brokerage Activity
Commercial real estate has had that sinking feeling all year so far, and on Wednesday the National Association of Realtors quantified things: brokerage activity in the commercial sector dropped 4.8 percent in 1Q09 compared with 4Q08. Compared with the first quarter of 2008, brokerage activity is down 12.9 percent. Moreover, the NAR is predicting down time for a while yet, since real estate is a lagging indicator behind a broader economy that’s still lagging itself. “Because commercial real estate always lags an overall economic recovery, it will take some time for the commercial real estate market to rebound,” said Lawrence…
Positive Signs in U.K. Hint at Stabilization of European CRE Market
With the global recession still in full swing, recovery is far off for even the best of the world’s commercial real estate markets, but , according to international property advisor DTZ’s new European Quarterly report, certain first quarter results in the United Kingdom indicate that the market in Europe may very well be on the road to stabilization. Sometimes, no news is good news, and in the case of transaction volumes in the U.K., there was nothing new to report in the first quarter; things didn’t get better, but they didn’t get worse either. At £3.5 billion, transaction volumes held…
CPN-RICS Survey: Sustainability Driven by Bottom Line
Throughout the commercial property industry, the shift toward green development and sustainability has proven resilient even as the industry has been laid low by the global economic slump. Indeed, it is increasingly the economic benefits of sustainability, rather than environmental concerns, that is behind the drive to green, according to a just-released survey conducted jointly by the Royal Institution of Chartered Surveyors (RICS) and CPN.The study, conducted as a supplement to RICS’s quarterly Global Commercial Property Survey, canvassed an international slate of real estate professionals about the most important sustainability issue among their client and their own firms. The results…
Houston Marks a Green Milestone
As green development continues to thrive across the country, Houston’s First City Tower has earned LEED Gold certification for an existing building from the U.S. Green Building Council, marking a milestone for sustainable development in the market. “It’s the first building in Houston to receive LEED Gold under the existing buildings rating system. The other three LEED-EB projects in Houston have earned silver or certified statuses,” Marie Coleman, USGBC communications coordinator, told CPN. “LEED for existing buildings is our second most commonly used rating system behind LEED for new construction.” Located at 1001 Fannin St. in Houston’s Central Business District,…
Economic Update – Legacy CMBS Now Under TALF
In a major expansion of the Term Asset Backed Securities Loan Facility (TALF), the Federal Reserve said on Tuesday that investors will be able to buy existing securities backed by commercial real estate loans–so-called “legacy” CMBS. The commercial real estate industry has been pushing for this for some time, and it will at last be possible starting in July. The crash of the CMBS market has created a very large storm on the horizon for commercial real estate, formed by loans that will need to be refinanced in the coming months and years with no way to do so, even…
Stimulus Programs, Financial Market Intervention to Benefit CRE–But Not Right Away
The government’s pumping up of the economy via various programs created by the nearly $800 billion economic stimulus package and interceding in the financial market will indirectly incite the revival of the commercial real estate market, according to a new report by Marcus & Millichap Real Estate Investment Services. But the major impact is unlikely to be felt this year. The present state of the commercial real estate market leaves a great deal of room for improvement. Marcus & Millichap notes in its report that sales volume, restricted by the gap between buyers’ and sellers’ pricing, has barely made a…
Pocketing $387M, SL Green Becomes Latest REIT to Raise Equity Via Public Offering
SL Green Realty Corp. has jumped on the bandwagon of REITs that, facing credit markets that are frozen like a block of ice, have opted to raise funds through public offerings. The company, which is still New York City’s largest office landlord, just walked away with net proceeds of approximately $387.4 million after selling 19.55 million shares of common stock. SL Green’s shares were offered at $20.75 each, representing quite a premium over the company’s lowest share price of $7.75 within the last 12 months, but a far cry from the high point of $101.07 during that period. No commercial…