the Editors of Commercial Property Executive
Economic Update — Budget Proposal Gets Realtors’ Attention
Every federal budget, even a proposed one, is like a big layered onion, with plenty for every interest group of every kind to complain about. President Obama’s first proposed budget in particular, since much of it represents a considerable departure from previous budgets, is likely to ruffle more than a few feathers. The man did promise change, after all. The National Association of Realtors is already not too happy about the suggestion, tucked away within the onion, that the federal tax code be charged when it comes to the mortgage interest deductions. The plan is to reduce the value of…
London Loses Title of World’s Most Expensive Office Market
After nine years at the very top of the list of most expensive office markets in the world, London has conceded its spot to Hong Kong. As per Cushman & Wakefield Inc.’s new Office Space Across the World 2009 report, the credit crunch and the banking crisis are the factors that caused the city to fall from its perch, while relatively low vacancies pushed Hong Kong to the peak.”One of the interesting factors that came out of the study was the uniform contraction in demand from occupiers over the last quarter of 2008, and the rapid synchronization of trends across…
Credit Crunch Forces Hotel Developers to Think Smaller
While many hospitality developments have been halted or postponed, projects like the new four-story aloft hotel in Bolingbrook, Ill., continue moving forward. McShane Construction Co. topped out the project this week for developer LTD Management Co.While that project is slated for a July completion as part of a mixed-use development featuring more than 1 million square feet of shopping, dining and entertainment in a pedestrian-friendly environment, other projects are moving forward, too, albeit scaled back to a certain degree.Hotel development is being challenged by today’s rigid credit markets, but projects that can be developed in the $10 million to $20…
Economic Update – Existing Housing Sales Dip Unexpectedly
The National Association of Realtors reported on Wednesday that sales of existing homes fell 5.3 percent in January, which translates to an annual pace of 4.49 million, the most sluggish such pace since July 1997. The drop came after a small uptick in December that was attributed to falling prices.Prices are still falling, but industry speculation has it that some buyers were holding off in January in anticipation of government action of some kind on the housing problem. In any case, roughly 45 percent of home sales in January involved distressed property transactions, including foreclosures, reported the NAR. The association…
Economic Update — Markets Yo-Yo Up After Bernanke Pep Talk
The equity markets yo-yoed back upward again after Federal Reserve Chairman Ben Bernanke (pictured) went to great lengths to assure Congress, and indirectly investors (who are traditionally a nervous lot) that the United States isn’t going to nationalize its financial system. He didn’t mention that the government might buy into big banks more extensively than before–40 percent is the figure usually given for Citigroup, for instance–but that isn’t nationalization. Maybe that counts as “sort of” nationalization. Some observers think the government is, despite assorted denials, on track to de facto nationalization. “The Obama administration is on track to nationalize the…
German Investor Buys Low, Takes $112M Stake in DDR
The U.S. REIT index plummeted 38 percent last year, leaving the door open for investors with access to funds to purchase shares at bargain basement prices, and Alexander Otto is taking advantage of the opportunity. Developers Diversified Realty Corp. has announced that it plans to sell 30 million common shares to Alexander Otto, CEO of Germany-based shopping center developer ECE Projektmanagement and a DDR shareholder, for $112.5 million. DDR entered into a binding purchase agreement for the sale of the shares to Otto and certain members of Otto’s family. Marking a 33 percent premium over the closing market price for…
Self-Storage Deals Keep Coming with New $50M JV
Self-storage may not be as bogged down by the sluggish economy as other sectors, if recent deals are any indication. The latest news is the formation of a $50 million joint venture focused on self-storage started by Carey Storage, an affiliate of investment firm W. P. Carey & Co., and Harbert Management Corp. W. P. Carey contributed $20 million and Harbert contributed the remaining $30 million. The venture was seeded with an existing portfolio made up of 13 properties, which have been acquired by W. P. Carey’s self-storage-focused investment team over the past two years. W. P. Carey currently manages…
Report: CRE Pricing Continues to Fall, Returns to 2005 Levels
As commercial real estate prices continue to drop, the latest report on just how far they have fallen was released this week, with the latest Moody’s/REAL National All Property Type Index measuring 160.46 for December–a decrease of 2.2 percent over the previous month and a decline of 14.9 percent for the year. Moreover, the index is 7.8 percent lower than it was two years ago. “As in previous years, the number of repeat sale transactions increased in December when compared with November,” said Neal Elkin, president of REAL. “In addition, the dollar volume of activity also rose compared with November….
Economic Update — Government Unnerves Market with Reassurances
Don’t worry, we’re working on the problem, and don’t call it nationalization, please, said the most important U.S. financial regulators in a rare–unprecedented, in fact–joint statement on Monday. Actually, the text of the statement by the U.S. Treasury Department, the Federal Deposit Insurance Corp., the office of the Comptroller of the Currency, the Office of Thrift Supervision and the Federal Reserve went in part like this: “The U.S. government stands firmly behind the banking system during this period of financial strain to ensure it will be able to perform its key function of providing credit to households and businesses.” How…
YRC’s $122M Deal Bucks Slowing Sale-Leaseback Trend
Sale-leaseback transactions, a popular way for a company with its own real estate to get a quick cash infusion while staying put in its digs, have been on the downswing for the last several months, but one wouldn’t know it looking at YRC Worldwide’s latest activities. The Overland Park, Kans.-based transportation service provider just signed sale and financing leaseback deals valued at $122 million with Richmond, Va.’s Estes Express Lines, only two months after having entered into a $150 million sale-leaseback agreement with NATMI Truck Terminals L.L.C. The transaction with Estes involves a group of YRC industrial facilities located across…