the Editors of Commercial Property Executive
Economic Update – Investors Still on Lookout for Deals
A deal like this was garden-variety stuff only about two years ago, but these days it has a ring of news to it: Men’s Wearhouse is leasing about 232,400 square feet at a warehouse in Bakersfield, Calif., owned by Northbrook, Ill.-based New Trier Partners as part of its Fund I investment portfolio. The men’s wear retailer will use the space as its West Coast Tuxedo Service Center. “It was a juggling act to get everything done in this environment, including dealing with the existing tenant, the new tenant, and the lender–which was a conduit loan, and those are especially difficult…
PWC Survey: Investors Focus on Maintaining Property Values as Economy Struggles
“Survival mode” is how the current state of the commercial real estate investor community is described in the first quarter 2009 PricewaterhouseCoopers Korpacz Real Estate Investor Survey. With the recession taking its toll on the market, investors across the board are just trying to bolster the sliding values of their portfolios in an attempt to keep their heads above water in one of the country’s most economically challenging climates seen in decades. Confidence in the real estate market has been eroding with great speed. Speaking to CPN, Susan Smith, editor-in-chief of the PWC Korpacz survey and a director in PWC’s…
For Some Hotel Firms, Glass Remains Half Full
Despite the well-documented economic struggles that have laid low the hospitality industry as of late, a number of firms are soldiering on in the face of adversity–and some are even viewing now as a time of opportunity. Less than a week after Intercontinental Hotels Group unveiled plans to build new hotels in Edinburgh and Moscow–the latter being the world’s largest Holiday Inn–Savills L.L.C. has formed an advisory group designed to guide clients in value-added hospitality plays. Savills L.L.C., the real estate investment banking arm of international advisory firm Savills Plc., said the new unit will focus on owners of hotels,…
AIG to Put Manhattan Headquarters Up For Sale
Embattled insurer American International Group Inc., which has made headlines this week due to shelling out millions in executive bonuses after receiving a $173 billion bailout from taxpayers, said today that it is putting its Downtown Manhattan headquarters building up for sale, along with another nearby office owned by the firm. The story was first reported by the New York Post. According to multiple reports, AIG spokesman Mark Herr said that the company is “evaluating the sale” of both its 66-story, 775,000-square-foot headquarters building at 70 Pine St., as well as 72 Wall St., a 16-story building measuring 279,000 square…
With Calgary Feeling No Pain, Work on 1M-SF Office Tower Continues
As major cities across the nation see office projects put on the sidelines for lack of pre-leases, in Calgary developers of speculative office projects like the 1 million-square-foot Phase I of the $1 billion Eighth Avenue Place aren’t giving much thought at all to the idea of bringing construction to a halt. “We’re not slowing down at all; we’re on moving as planned and we’re on schedule,” John Smith, vice president of Eighth Avenue Place’s manger VIC Management Inc., told CPN. It’s a comment rarely heard these days in the States. Montreal-headquartered international investor SITQ, Calgary’s Matco Investments Ltd. and…
Report: Northern New Jersey Retail Suffers, Vacancy Jumps in 2008
While Northern New Jersey remains one of the most dynamic retail markets in the nation, the vacancy factor in retail properties along the region’s six major shopping corridors jumped to 6.6 percent during 2008 from 3.6 percent a year earlier, according to R.J. Brunelli & Co. With recent retailer bankruptcies and downsizings adding to an inventory, it could take several years for the vacancy factor to get back to its usual levels. R.J. Brunelli, an Old Bridge, N.J.-based retail real estate brokerage, in January conducted its 19th annual study of the northern New Jersey market and found 1.9 million…
Economic Update – Despite Bernanke’s Optimism, Plenty of Problems Remain
While Federal Reserve chairman Ben Bernanke’s recent comments that the economy could get back on its feet by 2010 will probably go a long way toward calming some frayed nerves, for now there remains plenty of bad news to go around.The Mortgage Asset Research Institute, an arm of LexisNexis, reported on Monday that mortgage fraud nationwide spiked 26 percent in 2008 when compared with the year before, even though the aggregate volume of mortgages originated dropped during the same period. “With fewer loan originations today, the data suggests that the economic downturn may have created more desperation, causing more people…
The Expert: Economic Impact on Market Intelligence
As the recession continues to worsen, it is time for real estate investors to consider its impact on one of their most fundamental tools: market-level demographics.Typically, investors view this data either as a commodity—the quicker and cheaper, the better—or as a requirement for every financial package. In these volatile times, investors need to look a little deeper, gauging data on the long and short of how economic conditions like rising unemployment and foreclosures can impact the accuracy of demographic data.Three million jobs were lost in 2008, and some experts predict that another 1 million or more will disappear this year….
The News: Retail Again Tops CMBS Defaults: Fitch
For the sixth time in the past seven months, the retail sector has claimed the dubious distinction of generating more new delinquent securitized loans than any other commercial property category, according to an analysis released by Fitch Ratings yesterday. Fitch predicts a steady increase in loan defaults generated by shopping centers and single-tenant properties this year as soft consumer spending and bankruptcies continue to plague the retail sector.Specifically, Fitch tracked 46 retail loans, valued at $277 million, that became newly delinquent in February. Forty-three of the loans have an outstanding balance of $15 million or less and are backed by…
The Expert: Staffing a Remote, Seasonal Resort
Following its acquisition by Behringer Harvard, Hawks Cay Resort in the Florida Keys has completed a $40 million renovation. The 177-room luxury resort’s management team is headed by Northview Hotel Group L.L.C.’s David Zeuske, who in February 2007 began work to make the resort the employer of choice in the Florida Keys. His strategy includes:• a strong leadership culture,• getting the right people in the right place at the right time and• matching the needs of associates with the needs of the organizationVariable, Seasonal DemandDemand at Hawks Cay is highly seasonal, and it peaks in the spring and summer. Staffing…