National Commercial Real Estate News
News aggregated from various national sources.
07/30/2010 11:45 AM
Honolulu office vacancy rate rises
The demand for office space in Honolulu continued to slide in the second quarter of 2010 as the vacancy rate hit 11.3 percent, up half a percentage point from the first quarter, according to a report by Hawaii Commercial Real Estate.
07/30/2010 08:08 AM
Pontius Now Overseeing Marcus & Millichap’s National Retail Group
Marcus & Millichap Real Estate Investment Services continues to shake up its executive ranks.
Last month the firm promoted John Kerin to the positions of president and CEO to replace Harvey Green, who retired. Kerin officially took over those posts on July 1.
Today the firm has announced a second big move with the the promotion of Alan N. Pontius to the new position of national director of commercial leased investment properties. Pontius was previously the national director of the firm’s National Office and Industrial Properties Group and the promotion means he will now also oversee the National Retail Group. Pontius replaces Bernie Haddigan, who also oversaw the firm’s Special Assets Services division. According to Marcus & Millichap’s release, Haddigan retired from the firm.
It’s a big change given Haddigan’s prominence in the retail real estate sector. Haddigan has been a fixture at industry events for years and often spoke on panels representing the firm. And he was a key part of the company’s annual Retail Trends event in Las Vegas at ICSC’s RECon–a meeting he hosted and moderated for 12 years. In all, Haddigan had been with Marcus & Millichap for nearly 30 years in various ranks. He began his career as an associate in the Encino, Calif., office. He was appointed regional manager of the Encino office in 1986, then elected as a managing director and a member of the firm’s board of directors in 1994. In 1995 he relocated to Atlanta as a division manager to lead the firm’s East Coast expansion.
For his part, Pontius has been with Marcus & Millichap since 1985. Pontius began his career with Marcus & Millichap as a sales associate, and in this capacity he consistently ranked among the firm’s top 25 investment specialists. In 1993, he was appointed regional manager of the Palo Alto office, where he led that office to consistently rank among the top offices company-wide. Pontius was promoted to first vice president in 2000 and to senior vice president in 2002. Also in 2002, he was promoted to national director of the NOIPG. He was elected to managing director in 2007.
Kerin, meanwhile, has been with the firm since 1981. In 1987, he was promoted to regional manager of the Los Angeles office. He was elected first vice president in 1994 and managing director in 1996.
07/30/2010 07:13 AM
Brookfield Properties Becomes Brookfield Office Properties
Brookfield
press release:
NEW YORK, July 30, 2010 – Brookfield Properties Corporation (BPO: NYSE, TSX) today announced a strategic repositioning plan to transform itself into a global pure-play office property company. The plan includes the acquisition of an interest in a significant portfolio of premier office properties in Australia from Brookfield Asset Management (BAM: NYSE, TSX, Euronext) as well as the divestment of Brookfield Properties’ residential land and housing business.
“This strategy will position Brookfield Properties at the forefront of the global office property scene,” stated Ric Clark, president and chief executive officer of Brookfield Properties Corporation. “Expanding internationally to dynamic gateway cities such as Sydney, Melbourne and Perth, Australia, with similar characteristics to our current North American markets, provides great operational synergies.”
Clark added: “Given its rich resource base and strong trading relationship with the world’s fastest growing economies, investment in Australia should put Brookfield Properties in a strong position to experience meaningful growth as the global economies emerge from the economic downturn. Following these transactions, Brookfield Properties will have leading office portfolios in each of the United States, Canada and Australia, as well as a modest but growing interest in the United Kingdom, transforming Brookfield Properties into the global security for investors looking for ownership in premier office assets.”
Australia Office Transaction
Brookfield Properties has agreed to enter into a transaction with Brookfield Asset Management whereby Brookfield Properties will pay Brookfield Asset Management A$1.6 billion (US$1.4 billion) for an interest in 16 premier Australian office properties comprising 8 million square feet in Sydney, Melbourne and Perth which are 99% leased. The properties have a total value of A$3.8 billion (US$3.4 billion).
Brookfield Properties’ board of directors established an independent committee to assess the transaction. The committee retained Morgan Stanley & Co., Incorporated as its financial advisor. The independent committee unanimously recommended that the board of directors approve the proposed transaction.
This transaction is expected to be completed in the third quarter of 2010 following the receipt of third party consents and approvals.
Brookfield Properties will fund the transaction from available liquidity of US$1.3 billion and from a US$750 million subordinate bridge acquisition facility from Brookfield Asset Management, which will be repaid from the completion of some or all of the following: asset sales, including a sell down of Brookfield Properties’ equity interest in its publicly-listed company Brookfield Office Properties Canada (TSX: BOX.UN), or other financing or capital activities.
A supplemental information package relating to this transaction is available on Brookfield Properties’ website at www.brookfieldproperties.com.
Residential Operations Disposition
As a further step in the strategy of converting Brookfield Properties into a global pure play office company, the company announced that it intends to divest of its residential land and housing division. To this end, Brookfield Properties intends to commence discussions with Brookfield Homes Corporation (NYSE: BHS) regarding the possible merger of these operations with Brookfield Homes. Should the merger proceed, Brookfield Properties’ equity interest in the residential business would be converted into a listed security in the merged entity which Brookfield Properties would then dispose of through an offering to its shareholders. Brookfield Asset Management would commit to acquire any shares of the merged entity that are not otherwise subscribed for in the offering, thereby ensuring that Brookfield Properties will successfully dispose of its residential interests and receive full proceeds.
The above transaction would complete Brookfield Properties’ process of divesting of its residential land and housing business that commenced with the initial creation and distribution of Brookfield Homes in 2003. At the time, the current, largely Canadian business was relatively small and therefore retained within Brookfield Properties. Since that time, the operation has grown substantially and Brookfield Properties now believes that it is appropriate to separate the businesses, serving the dual purpose of furthering the strategic repositioning of Brookfield Properties and enhancing the value of the residential business through the creation of a diversified North American residential land and housing company.
Brookfield Homes, listed on the New York Stock Exchange with a market capitalization of approximately US$500 million, is a land developer and home builder focused primarily in California and the Washington, DC area markets. Brookfield Asset Management is the owner of approximately 82% of Brookfield Homes. Brookfield Asset Management has advised that it is supportive of the merger discussions. Any transaction would be subject to review by Brookfield Properties’ independent committee.
Name Change
To reflect this strategic repositioning, Brookfield Properties Corporation will begin operating immediately under the name “Brookfield Office Properties” and intends to seek approval at its next shareholder meeting to change its name to “Brookfield Office Properties Inc.” The company’s shares will continue to trade under the ticker symbol BPO on the New York and Toronto Stock Exchanges.
* * *
Brookfield Properties Profile
Brookfield Properties owns, develops and manages premier office properties. Its current portfolio is comprised of interests in 93 properties totaling 70 million square feet in the downtown cores of New York, Washington, D.C., Houston, Los Angeles, Toronto, Calgary and Ottawa, making it one of the largest owners of commercial real estate in North America. Landmark assets include the World Financial Center in Manhattan, Brookfield Place in Toronto, Bank of America Plaza in Los Angeles and Bankers Hall in Calgary. The company’s common shares trade on the NYSE and TSX under the symbol BPO. For more information, visit www.brookfieldproperties.com.
Brookfield Asset Management Profile
Brookfield Asset Management, focused on property, renewable power and infrastructure assets, has over $100 billion of assets under management and is co-listed on the New York and Toronto Stock Exchanges under the symbol BAM and on NYSE Euronext under the symbol BAMA. For more information, please visit our website at www.brookfield.com.
For more information, please visit our web sites at www.brookfieldproperties.com and www.brookfield.com or contact:
Brookfield Properties
Melissa Coley
VP, Investor Relations and Communications
Tel: 212-417-7215
Email: melissa.coley@brookfield.com
Brookfield Asset Management
Katherine Vyse
SVP, Investor Relations and Communications
Tel: 416-369-8246
Email: kvyse@brookfield.com
This press release does not constitute the offer of any securities.
Forward-Looking Statements
This press release contains forward-looking statements and information within the meaning of applicable securities legislation, including statements about Brookfield Properties' and Brookfield Asset Management’s beliefs and expectations relating to the Australia office transaction and a possible transaction involving Brookfield Properties’ residential land and housing business and benefits that are expected to be realized as a result of the transactions. There can be no assurance that any of the transactions will be consummated or that the anticipated benefits will be realized. Although Brookfield Properties and Brookfield Asset Management believe that the anticipated future results, performance or achievements expressed or implied by the forward-looking statements and information are based upon reasonable assumptions and expectations, the reader should not place undue reliance on forward-looking statements and information because they involve assumptions, known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of the companies to differ materially from anticipated future results, performance or achievements expressed or implied by such forward-looking statements and information. Accordingly, the companies cannot give any assurance that their expectations will in fact occur and cautions that actual results may differ materially from those in the forward-looking statements. Factors that could cause actual results to differ materially from those set forth in the forward-looking statements and information include, but are not limited to, general economic conditions; local real estate conditions, including the development of properties in close proximity to their properties; timely leasing of newly-developed properties and re-leasing of occupied square footage upon expiration; dependence on tenants' financial condition; the uncertainties of real estate development and acquisition activity; the ability to effectively integrate acquisitions; interest rates; availability of equity and debt financing; the impact of newly-adopted accounting principles on the companies’ accounting policies and on period-to-period comparisons of financial results; and other risks and factors described from time to time in the documents filed by the companies with the securities regulators in Canada and the United States, including in Brookfield Properties’ Annual Information Form under the heading “Business of Brookfield Properties – Company and Real Estate Industry Risks,” and in each of the companies’ most recent “Management’s Discussion and Analysis.” The companies undertake no obligation to publicly update or revise any forward-looking statements or information, whether as a result of new information, future events or otherwise, except as required by law.
07/29/2010 07:23 PM
KBS Acquires 300 N LaSalle for $655 Million
In Chicago's largest commercial real estate transaction this year, KBS REIT II has acquired 300 N LaSalle St. for $655 million, or $503 per square foot, according to an SEC filing. KBS primarily financed the purchase with proceeds from a five-year...
07/29/2010 05:41 PM
iStar Portfolio Fetches $1.3 Billion
Dividend Capital Total Realty Trust Inc., a Denver-based REIT, acquired a portfolio of 39 office and industrial properties for $1.3 billion from iStar Financial Inc. The portfolio is 99% occupied and consists of single-tenant corporate users. Neither...
07/29/2010 06:09 AM
Now CRE is Doomed Again
Two weeks ago, I posted when Time, MSNBC and Fortune almost simultaneously looked at aspects of commercial real estate and proclaimed signs of recovery.
In the latest dispatches, however, we’re back to commercial real estate being doomed again–at least according to this segment on CNBC.
The lesson, again, is that commercial real estate is a complex business with lots of moving parts. We’re going to have crisis alongside recovery. There’s no simple narrative to be had here. We’re not going to see a clear commercial real estate recovery nor are we going to come upon a moment where all is collapsing. So let’s stop looking for the one-line takeaways about commercial real estate.
07/29/2010 03:16 AM
Prudential US Quarterly Update on Commercial Real Estate
Prudential is out with its quarterly update on US CRE. Values have increased (in some cases dramatically), capital markets are opening up, and volume is gaining. All is great, except the fundamentals are still broken; job growth is anemic. Report embedded below. US Q July 2010_ PRU
07/28/2010 12:36 PM
LoopNet and CBRE ink agreement
The San Francisco-based online commercial real estate marketplace LoopNet has signed a long-term search agreement with CB Richard Ellis, the world’s largest commercial real estate services firm.
07/28/2010 08:54 AM
New CMBS Deal in the Works (Wednesday’s News & Notes)
Good news for commercial real estate borrowers: there is another CMBS issue in the works. Put together by Goldman Sachs and Citigroup, the new issue will mark the third multi-borrower CMBS deal this year after the industry saw zero multi-borrower deals in 2009. Industry sources have told Retail Traffic, however, that the banks are being extremely careful about these new issues. Rather than putting them together and then selling the bonds, the banks secure the bond buyers ahead of time. So while things are improving on the CMBS front, the market is still very, very shaky. For this and other stories on retail and retail real estate, follow the links below:
07/28/2010 07:05 AM
Beige Book: Commercial and industrial real estate markets continued to struggle
From
FRB:
Commercial and industrial real estate markets continued to struggle in all twelve Districts. Overall, vacancy rates were flat to slightly increased and continued to exert downward pressure on rents. Construction activity remained weak in most Districts. The New York District noted that commercial development remained generally sluggish despite some pickup in office and retail leasing in New York City. Atlanta, Minneapolis, and Dallas reported that construction activity continued to be weak or to decline, and Cleveland reported that the increase in construction from previous reports has begun to diminish. Philadelphia reported that projects funded with federal stimulus support were near completion with no prospects for additional major construction, while Chicago reported that public infrastructure construction picked up. Developers reported difficult credit conditions in the Cleveland, Richmond, St. Louis, and Kansas City Districts, while the Dallas District reported a few developers going out of business. The outlook for commercial and industrial real estate across the Districts ranged from further declines in activity to slow growth.
07/28/2010 05:14 AM
Miami Tower Built for Storms
A Miami-based developer is seeking to capitalize on predictions of a rougher hurricane season, which may be a marketing opportunity for him and his new tower at 1450 Brickell Ave.
07/28/2010 04:05 AM
STDBonline Lite FREE Trial for Commercial
STDBonline Lite, a tool that provides you with four reports on any location in the U.S., using radius rings or drive times. This package, valued at $350, is available only to NAR members at no charge through December 31, 2010.
07/28/2010 03:23 AM
CB Richard Ellis’ net income, revenue up
Revenue and earnings rose during the second quarter for CB Richard Ellis Group Inc., as the commercial real estate broker had improvements in most of its global business sectors. (CBG)
07/28/2010 02:52 AM
Office Developers Revive Plans
With Europe's financial sector showing signs of stabilizing, developers have begun to dust off plans. A development boom, however, isn't likely anytime soon.
07/28/2010 12:06 AM
Vornado, MGM Resorts in Deal
A Vornado-led partnership is paying MGM Resorts about $80 million for land connected to the Borgata Hotel Casino in Atlantic City.
07/27/2010 11:55 PM
Former Brookfield Pres. Named CFO at General Growth
Steven J. Douglas, the former president of Brookfield Properties, was named executive vice president and chief financial officer/director of accounting and finance at General Growth Properties. He will head the firm’s finance operations as it emerges...
07/27/2010 10:00 PM
True Value Renews 1.2 Million SF in Harvard, IL
True Value Co. renewed 1.19 million square feet of warehouse space for 10 years in Harvard, IL. The distribution center, one of 12 the retailer-owned hardware cooperative owns in the U.S., will continue to ship products from this location to its stores...
07/27/2010 08:15 PM
Pritzker, Bozzuto Form $75M Multifamily Joint Venture
Pritzker Realty Group has partnered with The Bozzuto Group to establish a multifamily equity fund with an initial investment of $75 million. The fund will purchase and develop apartment communities in the Mid-Atlantic and Northeast with a primary focus...
07/27/2010 06:03 PM
It's a Low Point for High Point
Vornado Realty Trust is opting to forfeit a 2 million-square-foot furniture mart in High Point, N.C., to holders of its $191 million securitized mortgage.
07/27/2010 05:30 PM
NFL Relocates, Cuts Back on Space
The National Football League (NFL) officially announced Tuesday that it is relocating its headquarters to 345 Park Ave. in Manhattan. But although the nation's most popular sports league inked one of the New York's largest office leases this year, it...
07/27/2010 02:18 PM
SL Green Signs CBS & Healthfirst to Major Office Deals
It was another landmark week for SL Green. The office REIT inked long-term deals for CBS Broadcasting and Healthfirst in Manhattan, while one of its subsidiaries closed two leases for PepsiCo and Citigroup in the Westchester/Southern Connecticut region...
07/27/2010 01:11 PM
Japan's Toyoko Inn Targets New York
Japanese no-frills hotel operator Toyoko Inn is planning to expand into the U.S. market with a 640-room tower in the New York City borough of Queens, where it plans to offer tiny rooms for rates that are among the lowest in the city.
07/27/2010 09:34 AM
Consumer Confidence Fades (Tuesday’s News & Notes)
I wonder if retailers are going to regret the fact that they have gotten more aggressive about opening new stores. After a tough few years, the healthy same-store sales numbers in the early parts of 2010 brought retailers out of hibernation and ready to talk to landlords about expansion plans.
But now the consumer picture is getting increasingly bleak. The latest consumer confidence figures show continued deterioration. And every day we hear “double-dip recession” mentioned more.
The Conference Board, a private research group, said Tuesday that its Consumer Confidence Index slipped to 50.4 in July, down from the revised 54.3 in June. Economists surveyed by Thomson Reuters expected a reading of 51.0. The decline follows last month’s nearly 10-point drop, from 62.7 in May, which marked the biggest since February, when the measure also fell 10 points.
The survey was taken July 1-21, beginning just as the Standard & Poor’s 500 index was falling to a nine-month low of 1,022.58 on July 2. It had risen 4.5 percent by July 21 and has since climbed an additional 4 percent.
The second straight month of declining confidence follows three months of increases.
“It’s all about jobs. That’s still the primary source of income,” said Lynn Frnaco, director of The Conference Board Consumer Research Center. “Until we see the pace of job growth pick up and consumers are confident that this is sustainable, we are not likely to see a significant pickup in confidence.”
I feel like I’m beginning to beat a dead horse here, but I can’t see how we have a real recovery in retail and retail real estate until a job recovery occurs. And on that front, there’s not much to be happy about either.
Ugh.
Aside from that, here are some other news and notes from the retail real estate world.
07/27/2010 06:39 AM
East London Hopes For Olympic Renewal
While building is on schedule for London's 2012 Olympic Games, locals fear the broad urban renewal central to the bid could become a lesser priority.
07/27/2010 05:47 AM
Commercial Podcast: Recharging Your Business
NAR Treasurer Jim Helsel updates members on the National Flood Insurance Program and carried interest as well as resources to recharge their businesses this summer.
07/27/2010 03:56 AM
Adecco signs lease in Deerwood South
Adecco Group North America, which earlier this year took over MPS Group and its Downtown Modis tower, has signed a lease for office space in Deerwood South business park, according to Flagler Development Group.
07/26/2010 02:51 AM
Brookfield CFO Jumps to General Growth
Brookfield Properties Corp. CFO Stephen J. Douglas resigned to take the same position with General Growth Properties.
Brookfield, of course, is working quite closely with General Growth on the regional mall REIT’s recapitalization and reorganization.
GGP CEO Adam Metz said in a statement, “We are extremely pleased to welcome Steve to our management team. His financial expertise and industry experience make him well qualified to lead GGP’s finance operations as we enter a new stage in the company’s history. We are nearing completion of our restructuring and emergence process and adding Steve to our team further enhances our position for long-term success.”
Brookfield CEO Rick Clark said in statement, “We thank Steve for his invaluable contributions to the success of Brookfield Properties and wish him well as he joins General Growth which is being recapitalized by our principal shareholder, Brookfield Asset Management.”
Ed Hoyt, who had been GGP’s interim CFO since 2008, will continue to serve as senior vice president, chief accounting officer for GGP.
