National Commercial Real Estate News 1/21

Below is the weekly email I receive for National Commercial Real Estate News - 1/21/08

Albany
Kelley to Prime Cos. after 30-year career in economic development

Albany
Rosen, Amedore mixed-use project on Colonie drawing board

Albuquerque
Real Estate Briefs: Copper Square adds retail to Downtown

Albuquerque
Carom Club owner opts for 'quality' with new look, menu

Atlanta
Deloitte to increase space at downtown tower

Atlanta
Atlanta Business Chronicle 30th Anniversary: John Portman put his mark on city's skyline

Atlanta
Buckhead Hilton may rise in '08

Atlanta
Real Estate Notes: Veteran broker Granot setting up own shop

Austin
Fertile ground: More office developers eye Round Rock

Austin
In brief

Austin
Rents rising, more space available than ever, so what gives?

Austin
Sound off

Austin
Southwest gets office boost: Building is third site for Koontz McCombs

Austin
Dallas real estate veteran heads for Oxford in Austin

Austin
Lance Armstrong Foundation finds new east side digs

Baltimore
Computer Sciences Corp. leases Essex building for Census contract

Baltimore
Real Estate & Economic Development: Scarlett Place gets facelift

Baltimore
Struever group bringing club to D.C. waterfront

Baltimore
City law firm chooses Arundel for HQ

Birmingham
Renasant to open branch in U.S. 280 American Family site

Birmingham
Ross Bridge to get 240 apartments

Boston
Insider View: Real estate derivatives slowly but surely gain ground

Boston
Commercial real estate sales activity near a standstill

Boston
Measured commercial growth to continue in 2008

Boston
Blackstone plans sale of Burlington office bldgs.

Boston
Real Estate Roundup: NAI Hunneman restructures equity to reward talent

Boston
Insider View: New law calms the waters for tidelands development

Boston
Big plans on campus: Colleges and universities become a driving force in development as schools shore up capital campaigns and position themselves to compete

Boston
Insider View: South Shore snapshot shows an intense buyer's market

Buffalo
Inside Real Estate: FBI expects to remain in downtown Buffalo

Buffalo
Real estate overview has positive overtones

Buffalo
Protection experts

Buffalo
Addressing the drop

Charlotte
Office lease rates set a new mark as uptown leads way: Tight center city market pushing more tenants to suburbs; lease rates across area rise as result

Charlotte
Big west-side projects could hinge on city road deals

Charlotte
Real Estate: City Council to consider range of Branch developments

Charlotte
Around the Region: Manufacturer expands with relocation to Fort Mill facility

Charlotte
Developers target key tract in heart of NoDa: Investment in new residential community could reach $100M

Cincinnati
No wild highs means no wild lows: As hot markets plummet, local home values among safest

Columbus
Franklinton nabs 600 jobs through state office consolidation

Columbus
Housing development will give urban Harrison West area a park

Dallas
HQ and 800 jobs up for grabs

Dallas
In first decade, Victory Park produced $6M for tax district

Dallas
Real Estate: Markets overreacted to subprime mess, Forbes says

Dallas
'The killer app': Stream Energy on track to hit $1 billion in sales this year

Dallas
Pioneer inks huge lease deal in Williams Square

Dallas
Retail & Hospitality: Weitzman Group feeling bullish

Dallas
Dallas' Dunhill buys Houston retail center for $102M

Dayton
Panel dubs WPAFB as 'significant economic driver for community'

Denver
16th Street Mall retail site getting ready for Democrats

Denver
Additional products helped CHFA rise to record in '07

East Bay
Penumbra moves to Alameda site

East Bay
City spotlight: Emeryville

Greensboro/Winston-Salem
Brown Investment Properties expands into W-S

Greensboro/Winston-Salem
Potential industrial project considered in SE High Point

Honolulu
City's Class A office rents top $3 for first time since the 'bubble'

Honolulu
Scoops: Two new downtown medical buildings now appear likely

Honolulu
Hawaii maintains strong attraction to national retailers

Houston
Lease of the month: Dow Center to shift to Energy Corridor

Houston
Commercial real estate briefs

Houston
Sterling Bank signs major lease for headquarters relocation

Houston
Face to face with...: Jason S. Baker

Houston
More HP space hits selling block: Computer giant keeps shrinking at once-bustling site

Houston
Commercial brokers betting on steady market

Houston
Houston Heritage: Houston Heights a highlight in city's architectural heritage

Houston
Dallas firm dips deeper with Fountains purchase

Houston
Swelling Realtor ranks crowd market

Jacksonville
Louis Vuitton

Kansas City
Summit Technology Center

Kansas City
Newsmaker: Arnold renders life that blends his passion and profession

Kansas City
National Nuclear Security Administration

Kansas City
CenterPoint-KCS Intermodal Center

Louisville
$25 million industrial complex under construction

Louisville
Barrister wants to build 25-story tower downtown: $130 million project could provide space for Humana

Louisville
Keys to the future: PMR Cos. redefines its property-management goals as company's growth continues

Louisville
La Grange doctor opens office space for medical, other services

Memphis
Centrepot expanding, relocating HQ: Logistics firm signs new lease in Eastpark Distribution

Memphis
White Station upgrades paying off: Improvements help raise occupancy 10% at East Memphis tower

Memphis
Bred in construction: Construction background serving Jeb Fields well in commercial real estate

Milwaukee
Ready to take over the family business: Greg Marcus set to run movie theater, hotel firm

Milwaukee
ATC plans $20 million Pewaukee office building

Milwaukee
Stark Investments may build St. Francis office complex

Milwaukee
Real Estate Roundup: Towne affiliate plans $40 million Mequon condo project

Milwaukee
Despite banking slump, Baird expands research

Minneapolis / St. Paul
Real Estate Digest: Warehouse District office bldg. sold

Minneapolis / St. Paul
Winner's Circle Profile: Ben Marks

Minneapolis / St. Paul
IVG enters market with $50.3M purchase of Opus building

Minneapolis / St. Paul
Winner's Circle Profile: Tom Drees

Nashville
Great Escape makes midtown shift

Nashville
Columbia draws $6.5M medical office building

Nashville
TDK sees Murfreesboro as ripe market for assisted living facility

Orlando
Lamm & Co. to build Maitland brownstone project: $24M office development aimed at small professional firms.

Orlando
Belk out, opportunity in at West Oaks Mall

Orlando
Fountain Parke could get commercial development: Developer's Web site shows plans for 158,000 SF of retail/office.

Philadelphia
$7M will be invested to reposition Crowne Plaza hotel

Phoenix
Real estate brokerage creates edge with analytical program

Pittsburgh
Newcomer makes big splash on local development scene

Pittsburgh
Squirrel Hill firm in $19M deal to buy Cranberry flex park

Pittsburgh
Hill District development firm owes $295,000 in back taxes: Federal, state filings stretch over several years

Pittsburgh
Report: Pittsburgh top metro in home price appreciation

Portland
Church of Scientology plans Stevens makeover

Sacramento
City of the state: State government has a huge presence in downtown Sacramento, but only during working hours. The trend toward expanding its office space throughout the region might be healthier overall for downtown's economy

Sacramento
Views from the top: Lease rates rise the closer offices get to the roof

Sacramento
Office market struggles: One broker says leasing activity is lowest in past 11 years

San Antonio
Five Minutes With: Cathy Goodwin - 'Moving bank REO'

San Antonio
New office building is set to rise in S.A.: Developer Darren Casey unveils plans for latest project

San Antonio
Austin architectural firm will expand into the Alamo City

San Francisco
Tishman tower bags DLA Piper: Law firm set to go first

San Francisco
Last furniture biz gets heave-ho at S.F. Mart

San Francisco
Dot-com bellwether's lease heralds comeback in SoMa

San Francisco
Real estate: Reilly spices up his little slice of downtown S.F.

San Jose
Well-known real estate broker moves from Cornish to Colliers

San Jose
Leveling off: Construction cost hikes taper, but times uneasy

South Florida
Secrecy shrouded Seneca park sale: Tax loophole angers county appraisers as revenue drops

South Florida
New mortgages weren't so bad, Federal Reserve Bank study says

South Florida
Lennar offers units for sale at bulk price

South Florida
Lynne Wines returns to lead CNLBank in South Florida

St. Louis
Landlords try mixing Craigslist, Highway 40 panic

St. Louis
Frossard, Kuna lead new industrial growth in Dupo

St. Louis
BJC finally decides: It's Shiloh: Miles, Shelton selling 111 acres to health system

Tampa Bay
Fairest in Florida: Tampa office market outshines others

Tampa Bay
Avion Park bringing new flavor to Westshore

Tampa Bay
Building to get makeover, bank tenant and new name

Tampa Bay
Holiday Centre sale tops latest transactions list: Coca-Cola, Goodwill renew local leases

Tampa Bay
Texas now tops as most likely destination for fed up Floridians on the move

Tampa Bay
Unexpected positives provide glimmer of residential market hope

Washington, D.C.
Commercial Real Estate Week: Industry Notes: News, Trends & Resources

Washington, D.C.
Economic Development: Waterfront project to be green model

Washington, D.C.
Commercial Real Estate: Slowing market opening doors for smaller tenants

Washington, D.C.
Economic Development: Latest plan adds library to NE project

Washington, D.C.
Economic Development: Lerner cooks up plans for Manassas project

Wichita
WaterWalk executives hope to lure more tenants with latest lease announcement

Shift Happens

I wrote an article for BHB regarding a new commercial listing and the effects the slowdown in the residential market is having on some commercial businesses:

But, what we don’t hear is that one of Northern California’s most successful and prolific ancillary housing suppliers (having been in business 20+ years) is facing the business equivalent of Russian Roulette in 2008 and asking me take inventory of their value in the market. As it stands for their specific “wares”, the Home Depots, Wal-Mart’s and Lowe’s of the world have decided to adjust their inventory allocation systems to “pay by scan”, meaning that the item is never sold to the vendor but consigned to the store. The item sits on the shelf until it is scanned at “point of sale”. Once sold, the supplier will be credited for each item purchased on a piecemeal basis paid weekly, bi-weekly, or monthly as agreed per vendor. Long gone will be the days of vendor meetings at Vegas strip clubs pushing the contract line of supplier “garb”. New online industries will emerge as old purchasing habits may soon be replaced by the online “dot com’er” bidding up shelf space to the highest bidder at Home Depot #6620 in Sacramento, CA.

What The Fed Didn't Tell You?

As expected the Fed cut rates by 1/4 of 1%, or 25 basis points, but behind the headlines, the WSJ reported that the Fed pumped in more money into the financial system since the "credit crisis" took hold in August. This injection suggests that lending institutions are still wary to lend as the short-term debt markets are still sluggish (mortgage apps may be up in the past few weeks, but funding sources have dried up, even in commercial where Greenstreet Commercial (8th largest commercial lender) closed operations this past week).

NEW YORK -- The Federal Reserve pumped a total $41 billion to the U.S. financial system in three separate operations Thursday, amounting to the largest injection of funds since the liquidity crisis took hold this summer.

The size of the injection may come as a surprise, coming just a day after the central bank delivered its second consecutive rate cut. Wednesday's 25 basis point cut -- which brings the target rate to 4.5% -- follows a half percentage-point drop in September, which was intended in part to help ease stubbornly high lending rates in the interbank market.

The New York Federal Reserve's Web site announced a one-day repurchase of $12 billion, alongside a $21 billion seven-day, and a $8 billion 14-day operation. The total exceeds the $38 billion injection back in August that marked the largest contribution to the market in a single day since the World Trade Center attacks in 2001.

"This morning's combined RP package of $41 billion is significantly larger than we had expected based on our tentative reserve projections," said Lou Crandall, chief economist with Wrightson ICAP.

CCIM Call to Action

I posted the newest Call to Action from the Legislative Liaison for the CCIM on the BHB site. It looks like Dem's are trying to raise taxes on Real Estate Partnerships from 15% to 35%, which would have an immediate impact on commercial real estate.

Housing Is Taking Down Department Stores

I posted an article in September regarding Commercial CAP rates were (or would be) on the rise as a result of the slow down in the housing market and ensuing "credit crunch". The New York Times has an article yesterday showing the effects of the home builder problems and the correlation with the decline in department store value, which translates to slower consumer spending.

Since April, when investors voiced optimism that the housing slide had been contained, shares of the country’s biggest department store chains have fallen by about 30 percent.

With the sagging prices, investors have rendered a harsh judgment on the coming holiday shopping season, predicting that consumers will severely cut back on spending.

The gloom since April 20 has been spread evenly across the big chains: shares of J. C. Penney are down 33 percent, Macy’s by 27 percent, Kohl’s by 28 percent and Sears by 28 percent.

Robert J. Barbera, the chief economist of the Investment Technology Group, said, “The conventional wisdom of a year ago was that we would have a soft landing in housing.” But today, he said, “the stock market message is a hard landing for housing, with clear damage to consumer discretionary spending.”

Fashon Valley Mall v. NLRB

One of the more interesting articles that I found this weekend is the ongoing legal struggle between property owners (more specifically large shopping mall owners) and the advocates for ‘free speech’. There is a current case in front of the California Supreme Court that attempts to limit the private property rights of owners that their ability to control business practices on their properties. The tenants (and we’re talking about tenants like Target, Macy’s, etc.) have a right to conduct business on the properties that they lease from large shopping center owners. When someone attempts to pass out a flyer on private property or protest an "unfair" trade practice, the landlords argue that they (and their tenants) have a right to conduct business on private property.

This latest case, Fashion Valley Mall v. NLRB, stems from a 1998 incident in which a Teamsters Union affiliate involved in a dispute with the San Diego Union-Tribune newspaper was distributing leaflets outside a Robinsons-May store, urging shoppers to telephone the paper's owner. But the store was a Union-Tribune advertiser. The mall ejected the union representatives, saying that they had failed to complete a permit application agreeing to abide by mall rules — one of which forbids advocating boycotts. The case is now before California's Supreme Court, which last week heard amicus curiae testimony on behalf of ICSC and the California Business Properties Association delivered by Thomas Leanse, of the Chicago-based Katten Muchin Rosenman law firm. Leanse argued that shopping centers are private property and shopping center owners should be allowed to protect their business interests.

“This isn't Speaker's Corner in Hyde Park, it's not Pershing Square in Los Angeles,” said Leanse. “These are privately owned shopping centers and the protestors directly interfere with business.” The court is scheduled to deliver its verdict within 90 days. What makes the case important, Leanse says, is a 1979 ruling in California, Robins v. PruneYard Shopping Center, in which the court extended the right of free expression to large shopping centers, likening them to town squares. Leanse says there is a chance that this ruling will be overturned, though it is a small one. “It is unlikely the 1979 precedent will be overturned,” he said. “But we argue that the shopping center has rules, and they are rules we can enforce, like the no-boycott rule.”

Technology... A Terrible Thing To Waste

Below is my first article for BloodhoundBlog..

Hopefully as a new contributor to the forum I will be able to provide some insight on the commercial side of the business. Without going into the history of the Site To Do Business and its involvement with the CCIM Institute (I’ll save that one for a later date), I wanted to point out that one of the most helpful, most talked about (at least within the inner circles of the Institute) and worth every penny of this designee’s annual dues is the Site To Do Business (“STDBonline”) website.

Simply, STDBonline is an information resource site geared towards the commercial real estate professional with over 20,000 subscribers to date. It is offered as a subscription service for non-CCIM designees, but included as an exclusive membership “perk” once you become a CCIM candidate “on the way to the pin” ( another topic to be discussed later). For those in Silicon Valley and Bellevue pushing the residential side of the real estate technology chase (zillow.com, trulia.com, terabitz.com, et al.) in order to attract numerous eye balls searching for homes to justify venture capital dollars looking for advertising payback, the informational aspect of the commercial side of the technology chase is left to a select few (providers, that is). As a CCIM, this invaluable tool continues to add features and data that meet the demands of sophisticated owners, investors and potential clients. For many of my CCIM colleagues, STDBonline is always open in one browser on the taskbar.

For example, the October 2007 news blog on the STDBonline website highlights the following valuable data resources for its subscriber base:

• Business Lists - Once you establish a project and create a study area, you are able to generate lists of businesses to use for market analysis, competitive analysis, marketing, or prospecting. Business lists are available on study areas using radii, donuts, and hand drawn shapes or a standard geography, which receives the closest 2,000 to your center point. Currently, there are 16,000,000 businesses in this database. After creating/selecting a qualifying study area you want to use to create a business list, go to the deck entitled “Choose Reports and Maps.” Step one asks you to choose a report package from the drop down list of categories. There are two possible choices, the Business Extract or the Business Locator. The Business Extract provides you with an Excel spreadsheet of businesses that you can manipulate, upload onto a map, or use mail merge to create a mailing list. The Business Locator generates the same information but in a PDF;
• Flood Maps - FloodSource has 100% up-to-date coverage of the entire U.S. and 100,000 plus flood maps online. The data and the maps come directly from the actual up-to-date, official FEMA flood maps. If you’re an appraiser, surveyor, or other real estate professional and you simply need a “snapshot look” at a property’s location relative to the nearest floodplain, FloodScapes are what you need. They are ideal for inserting into reports or as a pictorial tool for illustrating a property’s likelihood of incurring flood damage. The concept is simple: enter any street address or any latitude/longitude in the U.S., and FloodSource automatically creates a custom map report, containing only the portion of the FEMA map you need with the property’s location indicated right on the map. You can save, import, or print your FloodScape report. Enter an address and get an official FEMA map;
• Environmental Reports - The First American Environmental Risk Determination Report is used for evaluating and completing due diligence on a commercial real estate loan or for a property transaction. The report also provides extremely valuable environmental information for assisting in your financial decisions. It not only provides all governmental listed environmental action sites within a one-mile radii of the subject site, but also ranks the RISK from these sites and provides next step actions; and,
• Business Information Summary - Now you can determine the number of businesses and employees in your area and compare its daytime population to its residential population. The Business Information Summary identifies the number of businesses and the number of employees by SIC and NAICS classifications in a market. The Business Information Summary also compares daytime population of the area to the residential population. Knowing where people live and work in your market is vital to deciding where to locate businesses and services such as new bank branches, ATMs, restaurants and hotels.

These are just a few of the features incorporated into the website, which has a separate sitemap as a promotions list of the available tools, but here are a couple of my favorites and why:

• GlobeXplorer – Online aerial mapping site that won’t replace Google Maps, but it will provide the latest aerials in the industry. And the most useful tool (at least with my clients) is a dropdown menu bar to show the previous aerials taken over the property. Need an aerial from 10 years ago to compare the growth patterns for your residential developer clients, you won’t find that information from Google Maps;
• LenderCheck – Online reports emailed to you for a specific property that will help you stay ahead of many “surprises” on your way down the Closing Checklist. Need to know if the property in escrow will require a Phase II, this tool will help you identify problems before they become surprises weeks before closing (as we all know, any deal has its "problems", but what you try to eliminate are the "surprises" that kill or delay a deal to death);
• Consumer Expenditures – Online consumer expenditure demographic reports emailed to you based upon radii, donuts, customized grid or drive-time analysis. Here's what I like to do with a drive-time analysis in a cold call example: “I know that the market is slow right now on the other side of town and you may be interested in looking for alternative retail space, I wanted to email you an excel spreadsheet of the business customers within a 20 minute drive time of our center so you can see your potential customer base from our location. Can I get your email address?”Which agent do you think a potential retail client is going to remember after you email him/her a list (in excel format – along with a graphical representation) of all the businesses in a 20 minute drive-time from their potential new retail location? With practice, the report takes less than 5 minutes once you input your location.

Many, if not the majority, of the new clients we pursue in the commercial real estate industry test our “proximity to opportunity” to help them make money. This “proximity to opportunity” might be the first step in the process, but the information, technology and resources (along with the speed in which we provide it) helps solidify a foundation of trust to maintain a lasting relationship with any client. STDBonline is our information staple in the commercial side of the business. Thanks again for the opportunity to contribute to the forum.

BloodhoundBlog Contributor

Thanks again to Greg Swann @ BloodhoundBlog for allowing me to become a contributor to their forum. Now it's time to get to work.

Autumn Winds of a Changing Market

As I mentioned on Aug 22, one of the greatest benefits of the CCIM network is the network of professionals we have in this industry, and their tireless assistance in providing expert market research for many of our posts. Last evening I received a detailed report on the effects of the "credit crunch" on the commercial markets and the implications of these changes as we move forward. Thanks again to Jim Nowak, CCIM from San Clemente, CA with Site Systems, Inc. for the information. I've asked Jim (as well as any other CCIM) to be a guest contributor to our forum.

Due to liquidity and valuation issues surrounding securitized debt backed by sub prime mortgages in the US home market, an increased perception of risk on the part of lenders has spread throughout the global financial system creating the current “Credit Crunch.”

Below are ten of the possible implications for the commercial real estate sector.

1. Sales volume will drop until a new price level is achieved and friction between sellers and buyers eases. Implication: Falling volume will result in less 1031 demand. Demand for 1031 properties will also soften as the gains on sales drop and more capital is reinvested into alternate asset classes.
2. A flight to quality is typically experienced during any period of market uncertainty. Implication: Top assets in top markets will see less of a price correction than class B & C assets in secondary and tertiary markets.
3. Properties and markets that command the attention of institutional and foreign buyers will continue to have the most competitive bidding. Markets with buyers that have relied most on CMBS conduit financing will see investor demand fall. Implication: Top assets in top markets will see less of a price correction than class B & C assets in secondary and tertiary markets.
4. Mega-deals and portfolio transactions have been primarily financed by Wall Street will be curtailed due to the credit crunch. Implication: Pricing premium enjoyed for portfolios and other major asset sales will diminish.
5. Portfolio Lenders are regaining market share from conduits. For these lenders, sponsorship matters and a track record and proven operating abilities are highly preferred. Implications: Sellers won’t see as many new, out-of-state bidders. It discourages new investors plus some portfolio lenders do not like TICs or other complicated ownership structures.
6. With the amount of busted deals and re-trading that has occurred lately, sellers are favoring buyers with a high confidence of closing. Implication: The highest bid may no longer win the deal. Sellers are favoring buyers with no financing contingencies and ones that can quickly make firm and non-refundable deposits. Institutions and other established, reputable buyers will be favored.
7. In the past, a 90- 95% leased building achieved prices close to that of fully leased buildings. Now buyers will have to put more equity at risk since their lender won’t give them credit for vacant space anymore. Implication: Prices for well leased properties will hold up well compared to those with current vacancy or heavy rollover exposure.
8. Just as construction costs were starting to stabilize and commercial development was gearing up, the credit markets have changed the economics again. Developers are facing higher financing costs and greater equity contributions even if they can get a loan. Implication: New development will remain constrained which is a positive for the space markets. Of all the uncertainties in the market, the fear of overbuilding is not one.
9. Demand for mezzanine debt has grown as LTVs of first mortgages have fallen. With a number of mezz lenders clipped by the credit crunch, mezzanine debt has been significantly re-priced with returns back in the mid to high teens. Implication: Yields on mezz debt are looking attractive compared to equity, and more private equity funds are contemplating filling this capital void.
10. As new mortgages are tough to get and terms are not as favorable, assumable debt will be sought by buyers. Implication: Properties with mortgages originated over the past few years that are also assumable will trade at a premium. Institutions may find opportunities in assuming moderate leverage with mortgage rates that are now relatively low.

- from Real Capital Analytics September Report (Phone: 866-REAL DATA)