the Editors of Commercial Property Executive
Economic Update – Valuations Down Across the Pond, While American Jobs Continue to Dwindle
On a day when a U.S. Report spelled out just how much American commercial real estate values are down, across the pond, properties also lost value. Commercial property valuation in the U.K. and Ireland lost a record amount in 2008, according to indexes compiled by Investment Property Databank Ltd.Values for U.K. office, industrial and retail properties collectively fell 26.4 percent in 2008, while the drop in Ireland was even more precipitous: 37.2 percent. According to IPD, that essentially means that the runup in valuation of British Isles’ commercial real estate from roughly the beginning of the 2000s until mid-2007 has…
New MIT Index Latest Sign of Declining CRE Values
As evidence of the declining commercial property values continues to mount, the Massachusetts Institute of Technology’s Center for Real Estate has unveiled a new survey detailing just how far pricing has plummeted. The report, the work of the center’s Commercial Real Estate Data Laboratory Initiative, discovered a 10.6 percent decline in prices in 4Q08 compared to the previous quarter for properties sold from the National Council of Real Estate Investment Fiduciaries database, placing the price index 21.9 percent below its 2007 second quarter peak. The demand-side index also continued to fall by 10.3 percent to 30.9 percent below that same…
Economic Update – Residential Market Burns Off a Little Inventory
Is it possible that some of the worrisome inventory of unsold houses nationwide is now, slowly, starting to be sold off? The National Association of Realtors said on Tuesday that pending home sales rose 6.3 percent in December from the previous month, with gains concentrated in the South and the Midwest. Or is that just a weird little uptick on the longer road to lower sales and a continuing residential real estate slump? Economists do not agree on the matter, as usual. But the fact is that anyone still in a position to buy a house can do so much…
ProLogis Continues Leasing Spree with 1MSF in Louisville
A grim economy and internal financial challenges have not prevented ProLogis from reeling in the tenants. The behemoth distribution facilities provider recently wrapped up just over 1 million square feet in lease agreements in and around Louisville, Ky. At the 1.2 million-square-foot ProLogis Park 65 in Brooks, ProLogis signed a pharmaceutical services provider to 273,000 square feet of new distribution space, and shaved off an additional 273,000 square feet with a lease by a third-party logistics provider that specializes in the pharmaceutical industry. A top industrial controls manufacturer inked a deal for 300,000 square feet at the 420,000-square-foot Riverport Distribution…
With Management More Vital Than Ever, Panattoni Taps Colliers for 18 MSF Contract
With a struggling economy dragging down the commercial real estate market, selecting the right property management team may be more important than ever. And now Panattoni Development Co. has expressed a major vote of confidence in Colliers International, tapping the firm to provide management services to some 18 million square feet of office and industrial property located across the country. The properties are sited in 10 major U.S. markets: Atlanta, Chicago, Dallas, Denver, Indianapolis, Memphis, Nashville, New Jersey, St. Louis and Tampa Bay.The assignment represents one-half of Panattoni’s 36 million square-foot office and industrial portfolio in the United States, and…
Transportation Firm Pockets $101M on First Phase of Sale-Leaseback Deal
For real estate-owning businesses seeking a quick cash infusion, selling the property they occupy and then leasing it from the new owner has proven to be a popular move, but the credit crunch has put a damper on such activity, which makes transportation service provider YRC Worldwide Inc.’s closing of the first phase of a $151million sale-leaseback deal quite a coup. According to global commercial real estate research and consulting firm Real Capital Analytics, sale-leaseback transactions decreased 51 percent from 2007 to 2008, and fourth quarter numbers are even more dire; sale-leaseback deals plunged 86 percent from the last three months…
Economic Update – Census Bureau Confirms Drop in Residential Construction Value, with Commercial Right Behind It
Where is that bottom? The economy is like a murky lake with no bottom visible. Construction is certainly feeling the pinch: the U.S. Census Bureau has reported that the value of construction in 2008 was about $1.078 trillion, down 5.1 percent from 2007. That total was dragged down by sagging private construction activity, especially–little surprise here–residential construction.The value of private residential construction in 2008 was about $358.4 billion, down 27.2 percent from the previous year. On the other hand, the value of public construction in 2008 was $308.5 billion, 7.4 percent higher than 2007. Of that, educational construction was up…
Office Sale Suggests Northern New Jersey Still Attractive
Proving that, even in today’s stalled markets, large-scale deals are getting done, CB Richard Ellis Investors has acquired the 420,000-square-foot Metropolitan Center in East Rutherford, N.J., from ING Clarion. The deal represented the third time in five years that the Class A office property has changed hands and is more evidence that high-profile assets located in prominent markets are still attracting buyers. The deal was orchestrated by Cushman & Wakefield Inc.’s metropolitan area capital markets group, including Jose Cruz, Andrew Merin, David Bernhaut and Gary Gabriel. The 15-story property (pictured) is sited across from the Meadowlands Sports Complex and the…
Industrial Sale-Leasebacks Outnumber Retail, Office
Sale-leaseback deal volume got off to a slow start in January, not a surprising development in light of the generally sluggish investment sales market. According to Real Capital Analytics Inc., sale-leaseback deals totaled only $183 million for the month. That figure represents only a fraction of the volume tallied for January 2008, when Real Capital Analytics tallied $790 million.In the biggest sale-leaseback deal reported so far this year, Gilead Sciences Inc. disclosed last Thursday that it had completed the $137.5 million acquisition of a 163,000-square-foot office building and 30 adjacent acres in Foster City, Calif. The transaction, a partial sale-leaseback,…
The Expert: The Pain Deepens
What a hangover! Almost all the news about the retail industry during the past few months is terrible and focuses on the lack of consumer spending and low retail sales, earnings statements and the number of retail jobs lost. Although some crumbs of good news have fallen here and there, no retail business has been exempt from this deep and profound recession. We have seen the pain spread from luxury goods stores to department stores to electronics and specialty stores and now even to discount stores. And according to most projections, consumer spending is expected to be extremely weak throughout…