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

Commercial Real Estate Values Fall 2.5%

For the 3Q of 2007, there was a decrease in the TBI of 2.5%. Since the 3Q of 2003, the TBI (The MIT/CRE CREDL Initiative has developed a Transactions-Based Index (TBI) of Institutional Commercial Property Investment Performance) has been steadily increasing for the past 4 years.

The MIT Real Estate Center analysis shows that
the drop may not only indicate the end of commercial real estate price increases which effectively doubled in the past 4 years, but it also may signal that weakness in the housing market is spilling over into commercial real estate. The last time we saw this large of a price decrease occurred when prices fell 3.9 percent following the terrorist attacks of 9/11, says the MIT center.

Commenting on the index for the third quarter of 2007, MIT center director David Geltner said in a statement, "The fall in our index is the first solid, quantitative evidence that the subprime mortgage debacle, which hit the broader capital markets in August, may be spreading to the commercial property markets."

Google Basewide? One Step Away in California

This is one of those "outlandish and inconceivable" notions that occurred to me as I was scanning a few news sites this weekend. Hey, if Jim Cramer can speak in generalities and sound bites on CNBC and induce the Fed to drop rates, then here's my two cents as I see a couple of dots that could be connected some time soon.

Question: If Jason McCarthy, who is the Development Manager of Real Estate for Google (Google Base), were to make a Redfin-type deal with Countrywide in California, what would be the impact?

Scenario: Google Base is attempting to deliver relevant real estate content to the consumer in a format most potential buyers are familiar with and aiming to be the prominent provider of property information aggregation; a new MLS system, if you will, with inventory provided by the agents and owners themselves at no charge.

Redfin is a new brokerage concept that hires in-house (employee) agents to oversee the listing transaction of an owners' home for a one (1%) percent fee, which effectively saves the owner between 2% and 5% of the purchase price in terms of a sales commission represented through traditional real estate brokerage. Redfin is VC funded and attempting to turn a profit through volume, which means that the jury is still out as to whether this type of brokerage business model will be profitable in the long run.

Countrywide is the largest lender in the country and quickly becoming the largest residential land owner in California. Using the chart, the amount of REO properties owned by Countrywide as of Sept. 1, 2007 is $995M in aggregate value, which is most likely going to grow month-to-month another 20% in October.

In the 1990's, the government established a quasi-public institution (Resolution Trust Corporation) to inventory, rehab and sell those REO properties taken back as a result of the Savings and Loan bailout. This time around, is that entity going to be the likes of a Google or Redfin. Is it inconceivable that Basewide or RedfinRTC would be established at a .5% listing commission rate on a Countrywide portfolio that is going to exceed $1B by the end of the year (if not the end of this month)?

I remember those days in the late '80s and early '90s in Houston when entire neighborhoods of 4,000 SF homes were abandoned, with the keys still stuck in the front doors for the RTC officials to pick up when they had time. But, this time around with the Google Van roaming the neighborhoods creating the little "Street View" guy for our viewing pleasure on Google Maps, it might not be that must of a stretch to contract with Google Base to inventory the entire Countrywide portfolio for a transaction fee and reduced listing commission.

Once Google Basewide has its California Broker's license, such a scenario would put Google on the Real Estate map in a hurry. Such a move would certainly get NAR's attention in Chicago (as well as CAR's in Sacramento). The 800 lbs. real estate gorilla (NAR, that is) will be forced to wake up and confront a growing threat to this industry; technology and its endless bank accounts.

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.

Need a Sunday morning top 10 list?

I guess it's the effects of a lazy Sunday morning (or perhaps the result of a Saturday night out), but I'm not finding much inspiration (or clarity to offer my origin comments) from the news feeds (and blogs) to comment about this morning. So, the intent here is to show all of the feeds that have some interest this morning (an eclectic group for sure):

1. Las Vegas speculators now rolling craps
2. Now the buyers have the hammer
3. I want my half
4. A sign of life in private equity
5. Help find Steve Fossett
6. Black Book launches new tool
7. I am the #2 make money online blog
8. Who is the youngest real estate blogger?
9. Speed up your wireless WAN connection
10. Sunglasses with hidden camera and attached PVR
    

Could Commercial Real Estate drop 15%?

In today's Bloomberg report, commercial real estate is looking at slowing sales and price adjustments, since July sales were the lowest in almost a year:

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Real Estate's Ph.D. in action

I found this article endorsing the CCIM designation this morning and as a CCIM it is welcome sight to see the benefits of our network in action:

Real estate broker Elizabeth Tilbury was still in the process of obtaining the professional designation CCIM when the effort started paying off.

A broker from California, who possessed the highly respected certification in real estate investment, telephoned Tilbury based on her status as a CCIM candidate. The broker's client was looking to buy an apartment complex of a particular size and value -- did Tilbury know of any matches in Portland? As a result of that inquiry, Tilbury, representing the seller, sold a 200-unit complex in Beaverton, earning a handsome commission...

Why are the CPI numbers on 8/15 important?

1. Tomorrow's CPI numbers will give us an indication of the Fed's next move in the market. If the CPI is lower (than expected), then the risk of inflation will not deter the Fed from jumping into the market with more money to keep us move forward (or on an even-keel - I'm sure some would argue this move regardless). BUT, if the CPI is higher (than expected), then the Fed's hands will be tied and they will stay away from any injections into the market that would exacerbate the risks of higher inflation. With the Fed staying away, the market will be free to fall on its own (the general consensus being a fall to a point near March lows).

2. Another hot topic that just came about today is the fact that certain Money Market funds will not honor their redemption values (these are the funds that your brokerage accounts park cash into when they're not placed into securities, bonds, or mutual funds). If the brokerage houses can't guarantee that your cash value will remain positive while you sit out of the market, then why have your money with the brokers at all.

3. Separate topic.. I found a view topics discussed about the advantages of the CCIM network in commercial real estate. One from a blogger that is taking CCIM courses in New Mexico today and is amazed at the few investors that spend the time going through the courses:

Howdy from my CCIM course in Albuquerque, NM......

Every time I take a CCIM course....I am humbled beyond the point of preference. The CCIM courses remind me how much I do not know. Even though I get up and teach commercial investing to a lot of you....there is a science behind commercial real estate that most investors never see...and do not care to see. It does not surprise me that I am one of a handful of investors in the class full of real estate brokers and agents. If you have any interest as an investor in learning more....I highly recommend attending a CCIM course....www.CCIM.com

Another blog describes the alliance that the CoStar Group and the CCIM network have created to allow CCIM members (yours truly) access to market data developed from CoStar's network of researched and verified commercial listings:

The partnership will also enable CCIM members to access CoStar Connect, a service that lets brokers and owners post their own for lease and for sale listings on their own web sites using CoStar's listing information and building photos. CoStar Connect automatically updates and manages customers' online property information.

This deal with CCIM is a big win for CoStar, as competition in the commercial real estate listings space continues to strengthen. CoStar and its nearest competitor, LoopNet, are trying to position themselves as the workflow platform of choice for the industry. Working with CCIM, which is an affiliate of the National Association of Realtors, will definitely help CoStar raise its profile within the industry and offering tools such as CoStar Connect will also help motivate members to regularly utilize that and all of CoStar's features. The alliance undoubtedly expands CoStar's reach--more than 8,700 commercial real estate practitioners hold the CCIM designation.

Why is Wednesday (8/15) important?

I had a couple of interesting observations passed on this morning after speaking with several clients in the bay area that follow the markets (real estate and wall street). First, there is particular interest on Wall Street this Wednesday. It is the last day that that investors have (given the 45-day notice to withdraw funds requirement) to notify hedge funds of their intent to withdraw funds by the end of the third quarter. Below is an portion of the article emailed:

Unnerved by heavy losses at some of the $1.75 trillion industry's most famous offerings, including AQR Capital Management, Highbridge Capital Management, D.E. Shaw and Goldman Sachs (GS.N: Quote, Profile, Research), many people want out before things get worse.

But exiting can be a difficult process in an industry where managers routinely lock up money for months, if not years, and often require 45 days' advance notice before returning it.

To pull out at the end of the third quarter, investors will have to notify their managers by August 15.

"Everyone always waits until the last second to get out, and (Wednesday) is the last second," said Mike Hennessy, managing director at hedge fund of funds Morgan Creek Capital.

Another trader friend follows the market much closer than I and clued me into a video series that tracks the S&P as well as a precursor for the market in general (Goldman Sachs). The recent problems with the GS Hedge Funds is one of the stocks that he tracks with the market, a disciple of the video author's company, inthemoneystocks.com.

The Credit Peloton

Let's start out with the peloton (French, meaning a small military group or platoon), which is most notably recognized as "the pack" in the annual Tour de France, cycling's premier race. Friday's troubles in the credit markets reminded me of this year's tour, which was riddled with controversy over doping issues from several lead cyclists (remembering that last year's US tour winner - Floyd Landis - may still be stripped of his title pending further investigation).

There are "to good to be true" mortgage products (along with lead cyclists) that race out ahead of the peloton pushing the limits of stamina, endurance and fatigue to provide the best investments to the secondary (hedge fund) markets. Then, one of two events occur (and has occurred). Either, the drugs wear off and the sprinter can't sustain the pace, burning out during the race and being overtaken by the peloton; or, the drugs don't wear off and the cyclist wins the race, but skeptical officials (the "market") test the cyclist and discover what looked like incredible production is only an artificially enhanced performance that doesn't have the fundamentals to belong in the race. Either eventuality results in disqualification and the peloton is affected. If you weren't paying attention on Friday (8/3/07), jumbo loan buyers just got affected in the credit race.

Friday saw Wells Fargo Jumbo loans jump in rates from 6.78% to 8.00%, as noted on the Housing Bubble Blog:

One said, “If we are going to see credit tightening in the mortgage lending arena, then how can that not affect the rest of our economy as the FED would have us believe. Take crack away from a crack head, cold turkey and you have a problem on your hands.”

A reply, “I don’t think it is a question of ‘if we are going to see credit tightening in the mortgage lending arena,’ we are seeing it. Just how bad did Alt-A get hurt yesterday? Just grazed, or was yesterday really a gut shot like many people think? How long until conforming follows the same path?”

One pointed out. “Wells Fargo just raised the interest rate on their jumbo mortgage to 8% this morning. Last week the rate was 6.78%. The meltdown is in full swing. Hold on the drop is going to be very steep. Ouch!!!!!!!!!!!!”

The sprinters in the credit race got caught "doping" their loans and the market is now faced with "what to do". The first step is the classic "knee jerk" disqualification of the sprinters, slowing the peloton to a crawl as the market continues to correct itself, exposing these loan products for what they are, doped products sold as derivatives in the secondary markets:

The highest rated tranches of The ABX Index, credit-default swaps based on bonds consisting of 20 subprime mortgages , for the 07-2, 07-1 and 06-2 series all settled on their lifetime lows again today (as per Markit). These tranches, AAA, AA and A, are the "most secure" investment series of the subprime mortgage derivatives indices. The lower BBB tranches are off their lifetime lows. Source: Markit.

Housing futures and forwards are showing increasing lower housing prices into 2008 and 2009 in all US metro areas. Of note is that the Miami, Las Vegas, San Diego and Los Angeles futures for May 2008 are 5% to 8% lower from spot index.

As is the case in any housing cycle, the credit peloton ("the pack" of conforming AAA, AA and A loans) will be effected as the market evaluates the pool of "doped" loans and disqualifies them from the race. This credit tightening will effect all buyers' ability to find and obtain credit and all builders' ability to sell inventory.

Banks and securities firms are trimming loans, especially to companies tied to the mortgage market. But it is a balancing act: Cutting back too far could make matters worse by accelerating corporate bankruptcies and causing more turmoil in financial markets.

Banks facing the prospect of taking on billions of dollars in buyout-related debt are starting to trim lending to companies that need to refinance loans or restructure their balance sheets.

As banks rein in riskier lending, companies could find themselves unable to refinance loans coming due or to overhaul their businesses. Some companies may be forced to seek bankruptcy protection, a development that would exacerbate bond-market turbulence.

Timing this cycle is the ultimate question as the credit peloton won't return to a "normal" pace again until the "bad apples" are pulled from race.