Commercial Real Estate Finance

Posts Tagged ‘Blackstone Group’

Week in Review for May 18 – 24:

• In a follow-up to last week’s “25 REITs Most Likely to Sell You a Property in 2013,” CoStar Group‘s Mark Heschmeyer lists the 25 REITS Most Likely to BUY Your Property this year. A variety of asset classes are represented on this list, including office, medical office, senior living, shopping center and standalone retail, student housing, industrial, and data centers. Few multifamily investors appear on this list.

• Search engine giant Yahoo! (NASDAQ: YHOO) leases about 176,000 SF at 229 W. 43rd St. in Manhattan’s Times Square, reports CoStar. The company is merging its other downtown offices in this building, which is majority-owned by Blackstone Group (NYSE: BX).

• Two development teams, South Beach ACE and Portman-CMC, vie for the opportunity to redevelop the famous Miami Beach Convention Center. Miami Beach commissioners will consider the financial and design details of the competitors’ proposals. The redevelopment project es expected to cost over $1 billion.

• In Philadelphia, Councilwoman Maria Quinones Sanchez pushes for the establishment of a land bank, a city organization that would consolidate and efficiently sell off the city’s abundant vacant land. Proponents of this measure say the more efficient system would bring much-needed revenue to the city, whose school system continues to suffer from severe under-funding.

• In a sign of increased investor confidence, the CMBS market sees an uptick in single-asset CMBS demand. The assets backing these securities include regional shopping malls and trophy office buildings. The single-asset CMBS market all but vanished during the financial crisis but has grown significantly since last year. Read the rest of this entry »

When my daughter Catherine was just over a year old, she placed the frame of a United States foam puzzle over a Dr. Seuss book and exclaimed, “Look Daddy! I made a city!”

I’m not saying the evolution of America’s middle market is going to be that fast or that simple, but the growth in South Dakota (were I live) and of the Midwest in general has been both exponential and inevitable.

With both coasts of the country growing on top of themselves, it’s only a matter of time before increasingly mobile generations drive an economic overflow into the middle of the country (as earlier generations did when they moved to America from the Old Country). After all, you can’t have sprawl into the ocean.

Another driving force behind the Midwest’s growth is what I like to call “The Delaware Factor”: the creation of a tax-friendly environment for corporations. The opportunity to thrive in such a place will lead corporations, even Fortune 500 companies, to relocate their corporate headquarters and attract other businesses for the same reason. This creates more jobs, more rooftops, more retail, and finally, more advanced medical and educational development (take note, Obama).

In the last three years, the population of Sioux Falls alone has gone from 75,000 to almost 180,000. From 2010 to 2011, the departures and arrivals from the airport (which you pull into like a lifestyle center) doubled, prompting the construction of two additional terminals and an initiative to establish Sioux Falls as an international hub. In the first quarter of 2012, the number of flights has already doubled the total amount of flights in 2011. Read the rest of this entry »

Week in Review for March 9 – 15:

- Writing for The Atlantic Cities, Eric Jaffe discusses the cultural, demographic, and economic conditions reshaping American communities and real estate–and potentially diminishing the role of the suburb.

-  Three Philadelphia brokers form a new boutique brokerage firm, Rittenhouse Realty Advisors, which will focus on sales and advisory services in the multifamily sector. Two of the firm’s founders are former members of Marcus & Millichap.

- Los Angeles REIT Kilroy Realty Corp. (NYSE: KRC) resumes its redevelopment of Columbia Square in Hollywood, reports the Wall Street Journal. The REIT acquired the enormous office building last year for $65 million and plans to convert the property into a mixed-use building, including residential, office, and retail spaces.

- Also on the West Coast, investment groups from China and Singapore commit greater amounts of capital to trophy properties in San Francisco, reports CoStar Group.

-  In Buckhead, Georgia, Tishman Speyer returns the distressed One Alliance Center to special servicer Orix Capital. The 22-story office tower was constructed at the height of the real estate boom, but fell into distress in 2010 and has suffered from high vacancy ever since. Read the rest of this entry »

Mensch:

Noun, informal. A decent, upright, mature and responsible person.

Schlemiel:

Noun, slang. An awkward, clumsy, or unlucky person whose endeavors tend to fail; a loser. 

Mensch of the Week:  

CrowdMason

A couple weeks ago, in one of our Week in Review posts, I discussed an article that explained how last year’s Jumpstart Our Business Startups Act (JOBS Act) might influence commercial real estate investment. This securities law, intended to bring increased investment capital to start-ups of all kinds, is expected to promote a more “democratic” investment community.

How?

By lowering the capital requirements for “accredited” investors, so that one doesn’t have to be a bona fide millionaire in order to invest in a CRE or other venture. Now, fund managers don’t have to rely on high net worth, corporate, or institutional investors, but can amass needed equity through lots of smaller contributions from investors in lower tax brackets. This “crowdfunding” approach (similar in structure to “crowdsourcing”) will hopefully strengthen the investor base of companies and funds not lucky enough to have Blackstone Group or a Saudi prince in their Rolodex.

Not that anyone uses Rolodexes anymore.

We asked our readers whether or not they approved of crowdfunding in a Llenrock poll. While the response wasn’t overwhelmingly positive, the Yay’s beat the Nay’s with well over 50%, showing some promise for this new investment tool.

Which brings me to CrowdMason, an online start-up working to promote commercial real estate investment on a more public level. Read the rest of this entry »

Have you ever stayed in a very low-end motel (think noisy neighbors, no hot water, the kind of bed you’re afraid to sleep in, etc…)? After that, even an average “economy” hotel will seem like the Ritz-Carlton. The hospitality market, like the business world in general, is a place of relative values. A market, submarket, or individual property doesn’t need 100% hotel occupancy and sky-high rates to become attractive for investment–it just has to be better than the competition.

In today’s bleak economy–and I wish I could put this more nicely–mediocre is the new good.

Domestic and international investors are most concerned with stability, so a market or asset showing potential for even modest returns and an assurance of economic security may be the recipient of investment capital. While U.S. hotels vary greatly in terms of quality, demand, and property value, the fact remains: there are much worse markets in which to invest.

Hooray for a lack of alternatives!

Even without New York City’s average occupancy (what is it now? 86%?), America’s largest markets are looking very attractive to REITs, private equity groups, and other investors because of their relative stability. A bit of good news for a sector that took a massive hit in 08-09. Read the rest of this entry »

The results are in!

See our previous polls here.

Week in Review for October 20 – 26:

 - As Hurricane Sandy, popularly known as Frankenstorm, roars toward the East Coast, analysts and investors continue to debate the potential outcomes of the government’s fiscal cliff. According to the Washington Post, many consumers remain undaunted by the possibility of a double-dip recession in 2013, suggesting this year’s holiday shopping season will be unaffected by Congressional gridlock and economic uncertainty.

- At the Philadelphia Navy Yard, an ongoing office development in South Philadelphia, Ensemble Hotel Partners begins work on a five-story Courtyard by Marriott hotel. The Navy Yard, a large-scale development spearheaded by Liberty Property Trust (NYSE: LRY) and the Philadelphia Industrial Development Corp., includes tenants such as Urban Outfitters (NASDAQ: URBN) and GlaxoSmithKline (NYSE: GSK).

- In Center City Philadelphia, Crown Properties sells its 88% stake in the 20-story, class A Two Penn Center to a joint venture for $66 million. The buyers, Optibase, Inc. and private investor Alex Schwartz, acquired the property for around $135/SF, says CoStar.

- Blackstone Group (NYSE: BX) and office park developer Embassy Property Developments pursue a REIT IPO on the Singapore Stock Exchange. Read the rest of this entry »

For those of you unfamiliar with this currency, I’ll explain: a zloty is the standard unit of Poland’s currency. For point of reference, a zloty is equal to  100 groszy.

Glad I could clear that up for you.

Although the BRIC nations (Brazil, Russia, India, China) are the most talked-about emerging markets in commercial real estate, they’re not the only markets offering returns. Surprisingly, considering the economic quagmire in which the Eurozone has found itself, Poland (of all countries) has emerged from the global economic downturn as one of the most promising international markets for opportunistic investments.

Yep, Poland. While other parts of Europe are either heavily saturated with CRE capital (Germany, France, the UK) or basically imploding (Greece, Portugal, Spain, et al) Poland has quietly emerged as a prime market for international firms to deploy capital, buying up retail, office and other real estate.

Let’s look at Poland’s office activity. The nation’s office hub is Warsaw, so the greatest amount of activity and new inventory can be found there. According to a report (PDF) by Jones Lang LaSalle (NYSE: JLL), of the 1.1 million sq.-meter development pipeline reported in Poland for Q2 2012, roughly half of that is in Warsaw. With a population slightly larger than Philadelphia’s, Warsaw is the nation’s center of both high-tech and industrial industries and enjoys an unemployment rate under 4% (as of the end of 2011). Read the rest of this entry »

From a listing provided by Commercial Mortgage Alert, here are the

Top 10 U.S. CMBS Deals This Fall:

(Note: each offering is described according to its amount and the firm(s) managing the deal)

• $1 billion. JP Morgan (Sept.)
• $1 billion. JP Morgan/Deutsche/Citigroup (Single asset: Blackstone/Motel 6. Nov.)
• $1.04 billion. Citigroup/Goldman Sachs (Sept.)
• $1.25 billion. Morgan Stanley/Bank of America (Oct.)
• $1.25 billion. Deutsche Bank/Cantor Fitzgerald (Oct)
• $1.3 billion. Wells Fargo/RBS (Sept.)
• $1.3 billion. Wells Fargo/RBS (Oct.)
• $1.3 billion. Goldman Sachs/Jefferies LoanCore (Nov.)
• $1.4 billion. Deutsche Bank/Cantor Fitzgerald (Sept.)
• $1.5 billion. UBS/Barclays (Nov.)
• $1.5 billion. UBS/Barclays (Sept.)

Also note: while there are some single-borrower and floating-rate CMBS deals in the works this fall, the above (i.e. the biggest) offerings are tied to fixed-rate debt and multiple borrowers (with one exception: see below). Read the rest of this entry »

Week in Review for July 14 – 20:

- Facing a depleted inventory and shrinking cap rates, multifamily REITs like Camden Property Trust (NYSE: CPT) begin to increase development.

- As the alternative energy sector scrambles for financing, those involved in solar energy explore funding through a REIT structure. However, a potential solar REIT (or “S-REIT”) sector isn’t likely without modification of tax codes governing REITs.

- In Philadelphia, the office property vacancy rate decreased to 11.3%, with 44,615 SF of net absorption in the previous quarter, reports CoStar Group. This improvement reflects an overall increase in office market demand. However, this increased absorption is yet to translate into rent growth.

 - Also in Philadelphia, Nexus EnergyHomes announces the city’s first “Net-Zero” residences. Planned for the Northern Liberties neighborhood, the town homes will be designed to generate as much energy as they use, and will feature geo-solar and water reclamation technology.

- Thanks to high demand and low rates, Fannie Mae and Freddie Mac’s CMBS issuance exceeds that of the private market. Read the rest of this entry »