the Editors of Commercial Property Executive
Gap Among Struggling Retailers, Plans to Reduce Square Footage
On the heels of bankruptcy filings for Mervyn’s and Steve & Barry’s, as well as Walgreens’ scaling back of its expansion plans and Starbucks’ closing of 600 U.S. locations, Gap Inc. is the latest retailer to be hit by the struggling economy. The clothing chain plans to reduce its 40 million square feet across the country by 10 to 15 percent over the next three to five years.“Our second quarter total sales were $3.5 billion, down 5 percent versus last year. Given the volatile macro environment and recent economic indicators like housing and unemployment, which don’t seem to point to…
Lehman Taking Steps, But Clock May Be Ticking
The week will apparently end without a much-anticipated sell-off of securities and assets by Lehman Brothers Holdings Inc., but speculation continues about how the company’s next move will influence the real estate capital markets in the next few quarters and beyond. In some respects, Lehman is making progress, Fitch Ratings managing director Eileen Fahey told CPN this afternoon. The firm is in the process of trimming its commercial real estate exposure from $50 billion to $40 billion. Lehman’s issuer default rating–a much-cited risk measurement–remains at A+, identical to Merrill Lynch & Co., Fahey pointed out. That said, Lehman could still…
Troubled Fannie, Freddie Still Vital to Capital Markets
Government-sponsored entities Fannie Mae and Freddie Mac may well be in line for a further infusion of capital that would reduce stockholder value. The future of the two agencies is still up in the air, but the capital markets are relying on them heavily for multi-family financing. Although both Fannie and Freddie are experiencing major problems tied to the housing market’s downturn and the subprime crisis in particular, top capital markets professionals point out the GSEs still have a critical role. “From what we see, they are continuing to support (multi-family) in a disciplined way,” Thomas McManus, chairman & CEO…
Prime Income to Build $733M Resort in Germany
Dallas-based Prime Income Asset Management and Port Olpenitz GmbH are ready to break ground on the approximately $733 million, 425-acre Port Olpenitz, a holiday resort located in the northeastern section of Schleswig-Holstein, Germany. The company plans to start work on the site in the fall, and it will be located on the site of the former Olpenitz naval base between the mouth of the River Schlei and the Baltic Sea. Upon completion, it will be the largest holiday resort in Northern Europe. The naval base closed in 2006, but left behind a deep-water port with an open expanse of land…
Prime Retail Buys Land for $100M Dallas Shopping Center
Prime Retail has just wrapped up the acquisition of 64 acres of land in suburban Dallas that will become home to Prime Outlets-Grand Prairie. The new 485,000-square-foot shopping center carries a development price tag of approximately $100 million. The new retail property, located in Grand Prairie 12 miles west of Downtown Dallas and 15 miles east of Fort Worth, sits at the intersection of I-20 and State Highway 360 within five minutes of Dallas/Fort Worth International Airport. Designed by Dalpos Architects, the open-air center will feature approximately 120 upscale outlet stores, a food court and restaurants, as well as parking…
Post Sells Atlanta Apartment Property, Refinances Others
It’s only Wednesday and already it’s been a big week for upscale multi-family developer Post Properties of Atlanta. The REIT has sold its 250-unit Post Oglethorpe apartment community in Atlanta’s Brookhaven area for $38.5 million and has refinanced two apartment complexes held in joint ventures. In addition, two of the big three credit rating agencies recently had some news for the company. In June, citing difficult market conditions, Post had announced that it was ending its five-month effort to be acquired, having received some inquiries but no definitive proposals. One of the options for enhancing the shareholder value that the…
Pacific Office Properties Nabs $195M Portfolio
Pacific Office Properties Trust Inc. and an institutional co-investor have acquired a portfolio of seven Southern California office complexes for $195 million. The combined properties contain more than 1 million leasable square feet across 15 office and flex buildings. The acquisition increases Pacific’s total portfolio under management by 30 percent to 4.3 million leasable square feet. The Santa Monica-based firm, which was formed in March of this year, typically acquires with co-investors. In this case, the company will hold a managing ownership interest in the SoCal portfolio and own in partnership with a real estate fund organized and managed by…
Grubb & Ellis Realty Investors Nabs 199,000-SF Atlanta Office
One Live Oak, a 199,000-square-foot office property in Atlanta, has just been snapped up by Grubb & Ellis Realty Investors L.L.C., which made the purchase on behalf of tenant-in-common investors. Crescent Real Estate Equities was the seller, having shelled out $31 million to acquire the property from TMW Real Estate Group in late 2004. Located at 3475 Lenox Rd., One Live Oak sits on two acres within Atlanta’s prestigious Buckhead-Lenox submarket. The 10-story structure was developed in 1981 and upgraded to the tune of nearly $1.3 million in 2004. In addition to Class A office space, the property encompasses a…
$167M Construction Loan in Place for Brooklyn M-F Project
Forest City Ratner Cos. has closed on a $167 million construction financing deal for 80 DeKalb, a 365-unit apartment project in Downtown Brooklyn. The New York State Housing Finance Agency approved the project for $109.5 million in tax-exempt bonds and an additional $27.5 million in taxable bonds. Construction on the 335,000-square-foot building commenced last month. For Forest City Ratner, the project marks Brooklyn-based company’s first residential development endeavor in Brooklyn. Wachovia Bank N.A. and Helaba supplied credit enhancement to the $137 million bonds for 80 DeKalb, while the National Electrical Benefit Fund provided a $10 million mezzanine loan and $20…
CarrAmerica Heavy Hitter Scruggs Heads to Transwestern
After a highly successful 11-year stint as vice president of leasing at CarrAmerica Realty Corp. in Austin, real estate industry veteran Roy Scruggs has left the company and made his way to Transwestern as senior vice president. His departure has brought the closing of the leasing division of the Austin office two years after CarrAmerica had been snapped up by affiliates of The Blackstone Group in a $5.6 billion deal. Moving to Transwestern, Scruggs told CPN today, was a natural transition. “Transwestern has a similar culture to CarrAmerica’s, so the fit was just right.” During his time at CarrAmerica, Scruggs…