the Editors of Commercial Property Executive
In Troubled Times, Firms Turn to RE Service Providers for Guidance
With the United States and much of the global economy in a perilous state, many corporations are looking to their real estate service providers for advice on how to make the best use of their real estate portfolios. To this end, telecommunications firm Nokia has chosen CB Richard Ellis Inc. as its global strategic real estate advisor. CBRE will provide services such as transaction management, brokerage, and lease administration across Nikia’s 20 million square foot global portfolio, which encompasses more than 380 properties in 60 countries across Europe, the Middle East, Africa, Asia, and the Americas. A recent white paper…
Dallas-Fort Worth Hospitality Projects Still Move Forward
While the Dallas-Fort Worth Metroplex has, like the rest of the nation, suffered from the sagging economy, the impact on the hotel and hospitality industry has been somewhat less than might be expected. Some projects have pulled back, but several others are still on track.One such development is in its embryonic stages; the University of North Texas System and City of Denton’s negotiations with John Q. Hammons for the development of a full-service hotel with meeting and convention facilities on university-owned property. The UNT System issued a request for redevelopment proposals in September seeking an experienced developer and operator to…
New Jersey Preps to Reinvent Itself Despite Grim Economy
The commercial real estate market is taking a beating pretty much across the board, and New Jersey is no exception. As the industry braces for what is widely expected to be another tough year all over, the Garden State looks ahead to how it will reemerge once the dust settles. As is the case in most other markets, in New Jersey, the numbers tell the story. In the central part of the state, the average overall office vacancy rate jumped from 18.1 percent in the fourth quarter of 2007 to 19.5 percent at the close of 2008, according to a…
As Office Rates Sag in Manhattan, Tenants Gaining Upper Hand
With the industry’s current struggles dragging down office leasing rates in even normally robust Manhattan, tenants are finding that for the first time in a long while, the balance of power is tipping in their favor. According to a fourth quarter 2008 Grubb & Ellis Co. report. Class A direct average asking rents for Manhattan were down 2.5 percent in 2008 as compared to 2007, a $2.26 drop to $86.80 per square foot to end the year, the report said. In spite of the minimal decline in asking rents, landlords have discounted rents more precipitously. In 2007, landlords were completing…
As Other Hotel Markets Suffer, Planned Resorts Indicate Dominican Republic Remains Desirable
The U.S. hotel market is in a slump, but the situation–like the weather–is a bit sunnier in locales like the Dominican Republic, where upscale accommodations are still in demand. Capitalizing on the market’s viability, Philadelphia-based AMResorts has announced that plans to develop two new luxury resorts at Cap Cana at a cost of $200 million have just been approved by Cap Cana’s board of directors.Located on the eastern tip of the Dominican Republic, Cap Cana is a new 30,000-acre Caribbean resort development endeavor. The master planned destination, dotted with premier golf courses, upscale retail options and other amenities, is on…
Economic Update — Fed Worried About Commercial Real Estate
“Stay alive till ’95” was a mantra for beleaguered commercial real estate interests back in the early ’90s, when various noxious economic ingredients made an ill stew for the industry. What’s a good mantra for today? Hard to say, since the noxious ingredients are a little different this time, and there’s also some feeling in the industry that the other shoe has yet to drop. The Federal Reserve’s Beige Book, which was released Wednesday, attested to the uncertainty. The report from the Sixth District (headquartered in Atlanta), for instance, noted that “commercial real estate reports were decidedly more negative than…
Medical Office Sector Stays Active with Investments, Developments
While the credit crunch and economic downturn have significantly hampered real estate investment activity across all sectors, the medical office niche is one area that many in the industry expect to remain relatively active in the uncertain months ahead. Chicago-based Lillibridge’s recent closing on the purchase of a $31 million medical office portfolio is the latest in a spate of acquisition and development activity in the sector in the past few months. The Lillibridge deal entails a portfolio of 13 medical office buildings totaling 255,000 square feet, which the company acquired from Decatur Memorial Hospital. Ten of the properties are…
Heitman Latest Firm Looking for Overseas Opportunities
Chicago-based real estate investment management firm Heitman L.L.C. has just wrapped up the first closing of Heitman European Property Partners IV, the company’s fourth European value-added property investment vehicle, with approximately $486 million in hand. The sizeable amount of money raised will facilitate leveraged buying power totaling nearly $950 million for acquisitions of commercial real estate and debt in Europe, where some hard-hit markets could present long-term opportunities to investors. The Heitman fund’s investment activity will encompass various sectors of the real estate market, including retail, multi-family, offices and logistics properties, but not hotels. As is the case in the…
Global Logistic Properties Confident in China, Plans to Invest Up To $500M Annually
While the Chinese economy has not escaped the effects of the global economic turmoil of late, at least one firm is confident enough in the nation’s industrial real estate market to commit to a significant investment outlay there in the coming years. After selling off its China operations to GIC Real Estate earlier this year, Global Logistic Properties plans to invest $300 million to $500 million annually in China in the next few years, its president said on Tuesday. Global Logistic was formerly the Asia operation arms of industrial REIT Prologis. It was sold last December to GIC Real Estate–the…
Economic Update — Seniors Housing Specialist on Tenterhooks
The prospect of un-refinanceable debt has yet another commercial property company on thin ice, in this case McLean, Va.-based Sunrise Senior Living. The assisted- and independent-living specialist not only lost $305.6 million in the fourth quarter of 2008 (and $439.2 million for all of 2008), it’s also facing an imminent–end of March–deadline on renegotiating about $95 million in debt and $24.4 million in outstanding letters of credit.In particular, the former Fountains portfolio, some 420 properties that Sunrise bought in 2005, is causing problems for the company. “The operating performance of these communities continued to deteriorate in the fourth quarter of…