the Editors of Commercial Property Executive
The Expert: Availability Increases Accelerate in Q1
The industrial availability rate for the Torto Wheaton Research (renamed CBRE Econometric Advisors) Sum of Markets increased 80 basis points to 12.2 percent in the first quarter of 2009. This marks the sixth consecutive quarter of rising availability rates and the highest national availability rate in Torto Wheaton’s history, which dates back to 1989. The previous high, of 11.7 percent, came in the first quarter of 2004. The pace of increase has not yet reached that set during the 2001 recession, when the national rate increased 110 basis points in the second quarter of 2001.Of the 63 markets CBRE Econometric…
The News: Brooklyn to Phoenix, Projects Get Green Twist
Few settings offer a greater contrast than the Brooklyn waterfront and the Arizona desert, but in both places, developers are finding innovative ways to give industrial development a green twist.At the Brooklyn Navy Yard on Thursday, New York City officials formally opened the Perry Avenue Building, a $25 million, 89,000-square-foot project that they touted as the first multi-story green industrial facility in the United States. The building features rooftop solar panels, and—in a first for New York City—permanent building-mounted wind turbines. Elsewhere at the Navy Yard, a spring construction start is scheduled for the Duggal Greenhouse, a 60,000-square-foot facility that…
The Expert: Buyers, Sellers Remain Polarized
As the first quarter comes to a close, the investment strategies of multi-family buyers and sellers remain further apart than ever before. Transaction velocity continues to plummet: In January, investment sales of properties that were priced over $3 million dropped 93 percent from January 2008 figures. In other words, 93 percent of the nation’s apartment owners decided to wait on the sidelines, declined participation in the investment sales market.There are two types of investors in the market today: short-term players primarily being forced to sell because they have debt coming due and long-term buyers who believe that fundamentals and demographics…
The News: The Comforts of Assisted Living
Granger Cobb, president & co-CEO of Emeritus Corp., which operates 307 assisted-living communities encompassing 27,000 units and 32,100 residents across 36 states, talked recently with multi-family Eugene Gilligan about trends in the assisted-living sector.Gilligan: How is the assisted-living sector performing?Cobb: It’s a sector that is doing quite well. Occupancy at our properties is holding up. Our occupancy was 87.1 percent on a same-store basis, and for the first quarter of 2009, it looks like that number will be flat or slightly up. From the fourth quarter of 2008, compared to fourth quarter of 2007, revenue per occupied unit increased by…
Sale-Leasebacks Still Waiting for Star Status
Sale-leasebacks may yet emerge as a star of commercial real estate investment in 2009 as corporate owners unload assets in order to generate capital. But if first-quarter trends are any indication, the asset-leaseback strategy is still a star in the making.Reckoned strictly by dollar value, sale-leaseback transactions for the first three months of the year appear to have picked up where they left off at the end of 2008. Total leaseback volume amounted to $663.8 million nationwide through March 31, less than $15 million short of the previous quarter’s tally, according to Real Capital Analytics Inc. Office properties topped the…
Will the Economy Change Your Contract?
Credit markets are tightening, property values are falling, tenant defaults are increasing, rents are softening and unemployment is spreading. Surely all of this adds up to a material adverse change—and any borrower or lender, buyer or seller, and anyone else who signed an agreement with a so-called MAC clause in it may wonder whether rights under that clause may now be exercised. MAC clauses may be found in loan agreements, commitment letters, rate-lock agreements, merger and acquisition agreements and purchase and sale agreements, providing protection from having to perform certain obligations of a contract after a meaningful or significant event…
TIC Group Gets New Look for Changing Times
In the past few years, the young tenant-in-common industry has taken a major hit from the credit squeeze and the virtual disappearance of the commercial real estate securitization market. In recognition of changing times, the industry’s professional organization is adopting a new name and mission. Starting June 1, the six-year-old Tenant-in-Common Association will have a new name: the Real Estate Investment Securities Association. The re-branding reflects changing strategies among those who sponsor and sell tenant-in-common securities. “Right now, with the contraction in the tenant-in-common market, most of our members are moving into other products,” explained Bill Winn, president of Passco…
1M-SF Target Renewal a Boon for Minneapolis
Retail giant Target Corp.’s 1 million-square-foot lease renewal in Downtown Minneapolis would be a major deal in any kind of real estate market. But given the industry’s current malaise and the slumping economy, the news is especially encouraging–for the Minneapolis market and beyond. Target inked its renewal for headquarters space at Minneapolis’ 50-story City Center tower last week, committing to occupancy of 970,000 square feet through 2023, with options through 2038. The firm’s existing lease was due to expire in portions in 2013 and 2015. The retailer has had a presence in the tower since 1983, and houses 4,000 employees…
NYC Condo Prices Shrink in First Quarter
Condominiums in greater New York City aren’t exactly reasonably priced compared to the rest of the country, but they’re going for a little less these days. According to a report released by the Real Estate Board of New York, the average condo sales price in the city during the first quarter of 2009 was about $1.16 million, a 10 percent drop from first quarter 2008 prices. “The declines were to be expected given the economy,” REBNY president Steven Spinola noted in a prepared statement. “However, we must keep in mind that for a time New York City remained insulated from…
Economic Update – HSBC Looks to Do Big Sale-Leaseback
Over the weekend, the Sunday Times broke the news that London-based banking group HSBC is looking to sell various office assets, including its headquarters in the Canary Wharf district of London (HSBC Tower), property on the Champs Elysées in Paris and unspecified office buildings in New York. The Times said, without citing sources, that the company is hoping to raise about £2.7 billion (nearly $4 billion) from sale-leaseback deals.HSBC is thought to be relatively healthy among British banks, but not quite out of the woods, having spent a whopping $53 billion in the last three years to cover bad loans….