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Bank Annual Reports: Treasure Maps to $700 Million in Distressed CRE Assets

by on April 12, 2012

Costar…

While the Federal Deposit Insurance Corp. (FDIC) doesn’t reveal the identities of banks listed on its “Problem List” of institutions — ones that the FDIC determines pose a greater risk of loss to its deposit insurance fund — there is nothing stopping the problem banks’ parent companies from identifying themselves. In a study of annual reports filed by bank holding companies in the first quarter of this year, CoStar Group found 15 firms that…

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Bank Annual Reports: Treasure Maps to $700 Million in Distressed CRE Assets

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SAFE HAVEN? Europe’s Investment Woes May Push More Offshore Capital To U.S.

by on April 12, 2012

Costar…

Cross-border investment in real estate reached its highest level in three years in 2011, with New York, Washington, Los Angeles, San Francisco and Chicago accounting for five of the top 10 international markets. However, hopes for a massive influx of foreign capital into U.S. property markets by risk-averse international investors has so far gone unfulfilled. That may be changing, according to recent separate reports from Property and Portfolio…

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SAFE HAVEN? Europe’s Investment Woes May Push More Offshore Capital To U.S.

Find our Weekly Commercial Real Estate, Private Equity and Fund Newsletters at www.WeeklyBrief.net

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After Sale Approval In Bankruptcy Court, Grubb & Ellis Moves To Next Phase Under BGC

March 29, 2012

This week a bankruptcy court judge approved the sale of the venerable but cash-strapped Grubb & Ellis Co. to BGC Partners, Inc., ushering in the latest in a series of changes that have roiled the commercial real estate brokerage business. Next comes the hard work involved in exiting bankruptcy and integrating the new acquisition. Among the challenges the two firms face are preserving Grubb & Ellis’s property and facilities management and brokerage…

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Brick & Mortar Decisions No Longer Just About Dollars & Cents at H-P

March 29, 2012

With new CEO and ‘CIO’ officers at the helm, Hewlett Packard (HP) is realigning its organizational structure – a portion of which has it taking global real estate decision-making away from its financial managers and putting it into the hands of its techies. The move likely means that the real estate consolidation the company said was largely completed last year may not be over. HP’s global real estate footprint encompassed nearly 70 million…

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ULI: Consensus of Economists Sees Promising CRE Outlook Through 2014

March 29, 2012

Even among the stream of positive real estate surveys and forecasts recently, the one issued this week by the Urban Land Institute (ULI) stands out. Expressing the consensus views of 38 leading real estate economists and analysts from across the U.S., ULI reported commercial real estate market conditions and the overall economy is expected to see broad improvement over at least the next two years as the recovery cycle kicks into overdrive and shifts…

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RREEF America Jumping into New-Fangled REIT Arena

March 29, 2012

Possibly just weeks away from being sold, RREEF America LLC isn’t sitting around waiting to find out who its new owner is. The leading real estate investment manager is planning to form a new REIT to be called RREEF America Property Income Trust Inc. and hold an initial public stock offering to raise up to $2.5 billion. The new property income REIT will invest primarily in properties, but also in real estate debt and publicly traded REIT stocks, although…

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Bahrain-based Arcapita Bank Files Ch. 11, Protecting $2 Billion in U.S. Properties

March 29, 2012

Arcapita Bank BSC, an international investment firm based in Bahrain, put itself and some of its affiliates into Chapter 11 bankruptcy reorganization in the United States. Included in the Chapter 11 filings is Arcapita Investment Holdings Ltd., which controls a $2.37 billion portfolio of investments in real estate, private equity and venture capital, and infrastructure. Its largest U.S. real estate holdings include: Arcapita US Residential…

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Real Estate, Restaurant Franchise Growth Starting To Heat Up

March 29, 2012

There are signs of an improved outlook in certain economic areas where franchises are traditionally strong performers, such as the restaurant and business and personal services industries, according to the International Franchise Association (IFA) and GE Capital Franchise Finance. The IFA released its first quarterly update to its economic outlook prepared by IHS Global Insight in December 2011. IFA is updating its Franchise Business Economic Outlook…

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Goodrich Corp Inks 105,000-SF Office Lease

March 28, 2012

Goodrich Corporation, a supplier of aerospace and defense products, signed a 104,662-square-foot lease at 2727 E. Imperial Hwy. in Brea, CA. The company is relocating and consolidating its two facilities in Monterey Park and Diamond Bar. The 104,662-square-foot office property is situated on 5.4 acres within the Brea Imperial Center in Orange County. With the addition of Goodrich, the center is now 100 percent occupied. Liz Hurley with Transwestern…

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Rockpoint Trades Parc 55 Wyndham for $235 Million

March 28, 2012

Rockpoint Group LLC sold Parc 55 Wyndham at 55 Cyril Magnin St. in San Francisco to New York-based The Blackstone Group for $235 million, or $231,984 per room, in a distress sale. The 700,985-square-foot hospitality building is located blocks from Union Square. The property includes 1,013 rooms and was awarded an Energy Star label for the last four years consecutively. No brokers were mentioned. Please reference CoStar COMPS #2279499 for more…

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Wood Partners Sells Annapolis Multifamily for $68M

March 28, 2012

Wood Partners sold 1901 West St. in Annapolis, MD, to Pantzer Properties for $68 million or $226,667 per unit. The 300-unit multifamily building was built in 2006 and includes 19,211 square feet of fully leased retail space on the ground floor. Freddie Mac provided a $52 million acquisition loan. Dave Nachison, Alan Davis and Brenden Flood of HFF represented the seller. The buyer had no representation. Please see CoStar COMPS #2276642…

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Inland Finalizes Purchase of 5 Hotels for $393 Million

March 27, 2012

Inland American Lodging Group, a subsidiary of Inland American Real Estate Trust, completed its purchase of five hotels in three separate deals totaling $393.1 million. DiamondRock Hospitality Co. (NYSE: DRH) sold three properties for $262.5 million or $184,599 per room. The assets were built between 1981 and 1986. The 1,422-door portfolio includes: the 409-room Griffin Gate Marriott Resort & Spa, a seven-story, 350,000-square-foot structure at…

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CapLease Receives 1M-SF Nestlé Renewal

March 27, 2012

CapLease, Inc. (NYSE: LSE) executed a lease renewal with Nestlé Holdings, Inc. for its 1,045,153-square-foot industrial property at 555 Nestle Way in Macungie, PA. The lease will commence on January 1, 2013 for a term of five years. Contract rent is $4.40 per square foot, increasing 3% per annum. Nestlé’s distribution building was constructed in 1994 on 86 acres in the Lehigh Valley Industrial submarket of Philadelphia. CapLease…

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In The Pipeline: CoStar Development & Construction News for March 25 – 31

March 27, 2012

In The Pipeline is a column on significant acquisitions of commercial land for sale , and other transactions and trends affecting office, industrial, flex, multifamily, mixed-use, hotel and public works developers. Send us news leads about your new commercial real estate project — and sign up to be added to our distribution list to receive future In the Pipeline columns by e-mail. Architects Report Higher Billings For 4th Straight Month The

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Holliday, Fenoglio Lead Veteran Team to CBRE

March 26, 2012

CBRE recruited Harold E. (Hal) Holliday, John T. Fenoglio, David M. Aaronson and James M. Richards Jr. as executive vice presidents. The brokers will serve in the mortgage brokerage’s debt and equity finance group in Houston. The team previously worked at Grandbridge Real Estate Capital. Holliday has nearly four decades in mortgage brokerage and co-founded Holliday Fenoglio. After HF’s acquisition by Amresco 18 years ago, he successfully led the…

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BOMA 360 Grows to 420

March 26, 2012

A total of 420 buildings in 55 markets have now received the coveted BOMA 360 designation, which recognizes commercial properties for excellence in overall building operations and management. BOMA International went on to name the top five companies, each with 20 or more commercial buildings across the country to have reached BOMA 360 status:CBRE – 59 buildingsBrookfield Properties – 31 buildingsPiedmont Office Realty Trust – 24 buildingsParmenter…

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Shoppes at Branson Hills Trade for $50.6M

March 26, 2012

Inland Real Estate Corporation has closed on its acquisition of The Shoppes at Branson Hills, a 447,725-square-foot regional power center located in Branson, Missouri for an aggregate price of $50.6 million. The shopping center is located on Highway 65 at Branson Hills Parkway in the popular family destination town of Branson. The existing buildings are 100 percent leased at time of sale, anchored by national retailers including Kohl’s, Best Buy…

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UPDATE: Shoppes at Branson Hills Trade for $50.6M

March 26, 2012

Inland Diversified Real Estate Trust, Inc. has closed on its acquisition of The Shoppes at Branson Hills, a 447,725-square-foot regional power center located in Branson, Missouri for an aggregate price of $50.6 million. The shopping center is located on Highway 65 at Branson Hills Parkway in the popular family destination town of Branson. The existing buildings are 100 percent leased at time of sale, anchored by national retailers including Kohl…

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CoStar’s People of Note (March 18-24)

March 23, 2012

This week’s People of Note includes the following markets: Charlotte, Chicago, Dallas/Fort Worth, New York City, Retail, San Francisco and South Florida. DALLAS/FORT WORTH Local Investment Sales Broker Moves to Cushman & Wakefield By CoStar Research Scot Farber joined Cushman & Wakefield in Dallas where he will focus on the sale of office and industrial properties as part of the firm’s investment sales group. Farber,

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Path Cleared For Bankruptcy Court Approval of Grubb & Ellis Sale

March 22, 2012

Grubb & Ellis Co. has canceled a bankruptcy auction to sell off its assets, leaving BGC Partners, LP as the only bidder and clearing the way for a court hearing on Thursday to approve the sale. Santa Ana, CA-based Grubb & Ellis filed for bankruptcy protection on Feb. 20 and entered into a letter of intent in which BGC Partners, acting as a stalking horse buyer, acquired the brokerage’s outstanding secured debt and submit the minimum bid to acquire…

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Lodging Sales Surge As ‘Unprecedented’ Hotel Market Run Unfolds

March 22, 2012

The U.S. lodging industry, benefitting from two years of sporadic recovery, should continue to enjoy gains in occupancy and pricing power through 2014, with rising profits luring greater levels of investment, according to a series of hospitality reports and outlooks released over the last few days. PKF Hospitality Research, LLC predicted this week that revenue per available room (RevPAR) for U.S. hotels will rise 5.8% in 2012, the result of solid…

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As Investors Shift Focus, CRE Sales Volume Falls Off

March 22, 2012

While February is always the slowest month of the year for commercial real estate investment sales, activity last month dropped off sharply from sales volume in January — but more importantly sales volume also declined from a year ago. While CoStar has not completely closed the books on its COMPs research for February 2012 and the sales volume for that month will still go up slightly–the gap is such that sales volume for February 2012 is unlikely…

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CMBS Market Heats Up, So Too Do Credit Risks

March 22, 2012

The CMBS market continued to heat up this week as securitization firms rolled out four new offerings totaling more than $3 billion. Those deals are in addition to three offerings totaling $2.67 billion that sold earlier this month. The offerings are another sign of a relaxation from the extremely tight credit conditions that smothered investment activity following the Great Recession, according Moody’s Investors Service. At the same time, the newest…

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Private Equity Funds Expect CRE Return Growth To Slow

March 22, 2012

One-year returns from private equity real estate funds have shown remarkable improvement since the real estate bubble burst in the latter half of the decade, despite under-performing every other major asset class, according to PitchBook/BMC Group’s annual private equity report. PitchBook is an independent private equity news and data provider. BMC Group is a leading global provider of information management solutions. Real estate funds were…

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Multifamily Mortgage Activity Enjoys Upswing after 3-Year Slump

March 22, 2012

The multifamily mortgage market continues to experience an increase in lending activity from a variety of participants. Although the GSEs and FHA have been the primary participants, there has also been renewed interest from portfolio lenders, banks and thrifts and commercial mortgage-backed securities issuers, according to new research from Fannie Mae. Based on publicly-available company reports, Kim Betancourt, director multifamily economics and…

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Archstone Trades Crystal City Multifamily for $175M

March 21, 2012

Archstone sold the 13-story Buchanan apartment building in Arlington, VA, to Dweck Properties, a Washington, DC-based management investment for $175 million, or about $395,928 per unit. The 579,000-square-foot, 442-unit multifamily complex delivered in 1971 at 320 23rd St. in Crystal City. It consists of 510,000 square feet of apartment space and 23,000 square feet of retail, according to CoStar information. Transwestern represented the buyer…

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GSA Buys Columbia Plaza Office Bldg. for $99.6M

March 21, 2012

The U.S. General Services Administration acquired the 511,500-square-foot Columbia Plaza Office Building in Washington, DC, from a partnership between Normandy Real Estate Partners and Westbrook Partners. The property traded for $99.59 million or $195 per square foot. The 15-story structure at 2401 E. St. NW was built in 1974 and renovated in 1999. The U.S. Department of State’s Diplomacy in Action agency has occupied the building since 1992 under…

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Baker Donelson Bldg in Downtown Nashville Sells for $47.1M

March 21, 2012

Sun Life Financial Services, an international financial services company, has acquired the 11-story Baker Donelson Building at 211 Commerce Ctr. in downtown Nashville, TN from The Mathews Company in a transaction totaling $47.13 million, or approximately $205 per square foot. The property was constructed in 2000 and totals 229,536 square feet of Class A office space . The building was 93.8 percent occupied at the time of the sale, and is currently…

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Don’t Look Now But Investor Interest Reviving In Warehouses

March 21, 2012

While the heated apartment market continues to grab headlines in the ongoing CRE recovery, a number of investors are quietly turning their attention to the warehouse sector anticipating a strengthening economic rebound as the U.S. jobs picture continues to improve, leading to increased consumption and consumer spending, according to the latest PwC (PricewaterhouseCoopers) Real Estate Investor Survey. “Warehouse demand is rapidly picking up, especially…

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In The Pipeline: CoStar Development & Construction News for March 18 – 24

March 20, 2012

In The Pipeline is a column on significant acquisitions of commercial land for sale , and other transactions and trends affecting office, industrial, flex, multifamily, mixed-use, hotel and public works developers. Send us news leads about your new commercial real estate project — and sign up to be added to our distribution list to receive future In the Pipeline columns by e-mail. Developer Breaks Ground on Mixed-Use in South Florida Stiles…

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3PL Global Inks 270,764-SF Deal in Carson

March 20, 2012

In one of the largest industrial deals during the first quarter, 3PL Global LLC signed a 270,764-square-foot full-building lease at 2211 E. Carson St. in Carson, CA, in the ProLogis South Bay Distribution Center. ProLogis developed the LEED Silver spec project known as Building 5 last year. It is on 12.4 acres about 20 miles south of downtown Los Angeles. The third-party logistics provider is currently headquartered at Airport Corporate Center…

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Transwestern Forms Global Alliance with BNP Paribas Real Estate

March 20, 2012

BNP Paribas Real Estate has strengthened its presence in the U.S. by signing an alliance agreement with Transwestern. The alliance agreement covers the transaction, valuation and corporate real estate consulting business lines and provides both firms the ability to provide real estate and transactional services for clients in 181 cities in 30 countries – 150 where BNP Paribas Real Estate is located and 31 where Transwestern is present. Bernard…

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CoStar’s People of Note (March 11-17)

March 16, 2012

This week’s People of Note includes the following markets: Chicago, Los Angeles, New York City and South Florida. NEW YORK CITY Horowitz Promoted to EVP at Studley By CoStar Research Longtime Studley broker Daniel O. Horowitz was recently promoted to executive vice president. Consistently one of the firm’s top-producing brokers, Horowitz has been with the New York-based real estate services firm since 1990. Over the course of his career

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Shell Taps Pittsburgh Area For Proposed $2B Chemical Plant

March 16, 2012

Shell Oil Co. has picked a site in Beaver County, PA over locations in two other states for a proposed $2 billion petrochemical complex that could create more than 10,000 permanent jobs and another 10,000 construction jobs. Shell Chemical LP signed a land option agreement with Horsehead Corp. to evaluate the site in Potter and Center Townships near Monaca, PA, about 35 miles northwest of Pittsburgh. The facility would include an ethane “cracker…

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Distressed Sales Volume Remains at Elevated Levels Despite Big Boost in Non-Distressed Sales in Recovering Economy

March 15, 2012

Distressed trading volume has stabilized but continues to remain at elevated levels, increasing by approximately 2% last year over 2010. However, a surge in non-distressed property trading driven by improving economic conditions has begun to mitigate its impact on commercial real estate pricing levels overall. According to CoStar Group data, the volume of distressed transactions in December 2011 remained well above the average monthly volume for…

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Plenty of Recession Damage Still Left To Undo

March 15, 2012

The commercial real estate rubble still left over from the Great Recession continues to exact a punishing toll on property values and owners’ and lenders’ books. In this statistical state analysis, CoStar Group has identified 168,580 office, flex, industrial and retail properties in its national property database with a vacancy rate of 60% or more. The number of properties by type at this level of vacancy distress is as follows: Retail: 67,525…

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Investors See Good Prognosis for Health-Care Real Estate Despite Market Uncertainty

March 15, 2012

The health care industry and its real estate providers are literally caught between two eras as the 2012 elections and a key U.S. Supreme Court decision that will determine the future of health-care reform play out against the backdrop of a strengthening, yet far from robust, economic recovery. Richard Taylor, managing director with Jones Lang LaSalle’s Healthcare Solutions Group, said three key pressures are contributing to the current environment…

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CoStar CRE Pricing Indices Continue Upward Trend In January

March 15, 2012

CoStar’s monthly National Composite Index of commercial real estate prices opened 2012 with a 1.5% increase as the ongoing recovery reaped the benefits of improving investor confidence and steady pricing growth. With the gain in January, the National Composite Index is now 1.9% above the same period last year and has posted gains in eight of the last nine months since April 2011, with an average monthly increase of 0.8% — consistent with steady…

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Auction Sales Keep Going, Going, Going Up

March 15, 2012

One of the clear winners so far in the post Great Recession market are commercial real estate auctioneers. The dollar volume of CRE properties sold via auction jumped 33% from 2010 through 2011. Auction sales, excluding non-arms length foreclosures, jumped from $2.52 billion in 2010 to $3.35 billion, according to data from CoStar COMPs. It should be noted that these numbers may under-report the amount and volume of auction-based sales activity…

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Facing Wave of Maturities, More Banks Expected To Sell Non-Performing Loans in 2012

March 15, 2012

After years of slim pickings as many banks opted to extend non-performing loans (NPL) to CRE owners, investors are finally enjoying an uptick in opportunities for acquiring distress commercial real estate assets, according to the latest Ernst & Young U.S. nonperforming loan survey, At the crossroads: Ernst & Young 2012 real estate nonperforming loan investor survey. Improving bank earnings and declining loan loss reserves, coupled with the sheer…

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BAM Backs Perot With $400M Joint Venture Targeting Industrial Real Estate Investment

March 14, 2012

Brookfield Asset Management (NYSE: BAM) formed a joint venture with Hillwood, the Dallas-based real estate investment and development firm owned by Ross Perot, Jr., to acquire, develop and manage industrial property across the U.S. Backed by an equity commitment of $400 million, the venture could deploy up to $1 billion buying up industrial property within three years, principally large warehouses. Hillwood will be tasked with selecting suitable…

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PG&E’s Inks 250,000-SF Office Lease in San Ramon

March 14, 2012

Pacific Gas and Electric plans to move the majority of its gas operations to Bishop Ranch, a 585-acre business community in San Ramon, CA. The utility supplier finalized a 10-year lease for 250,000 square feet of office space at 6121 Bollinger Canyon Road. Built in 2003, Building Z is a five-story, 250,000-square-foot office building in in the East Bay/Oakland market. Sunset Development Co. owns the LEED Gold certified property. Bishop Ranch…

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A Tale of Two Buildings: Gamemaker Zynga’s $228M Purchase Underscores Growth Spurt of Social Networking Cos.

March 8, 2012

One week after Web-based software maker Salesforce.com cancelled its plans to build a massive office complex in San Francisco leaving investors and city officials puzzled, another highly successful Internet company, Zynga Inc., struck a deal to purchase its corporate headquarters in San Francisco from an affiliate of TMG Partners for $228 million. The developer of popular online games such as Farmville, CityVille and Words With Friends, Zynga…

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Banks Returning to CRE Lending via Multifamily, Owner-Occupied Properties

March 8, 2012

It’s not a big hook to hang a hat on, but the small increase in some commercial real estate loan balances on bank books at the end of the year serves as yet another indication of thawing lending markets for property investors. Overall loan balances on bank books posted their largest real growth in four years, according to year-end numbers released this past week by the Federal Deposit Insurance Corp. (FDIC). As far as CRE lending goes, it was…

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As Banks Cautiously Return to CRE Lending, CMBS Market Poised for Takeoff

March 8, 2012

CMBS markets are ramping up for a blast of activity that they haven’t seen since the first half of last year. In the past few days, three new deals totaling $2.67 billion have priced or hit the streets, part of an expected larger volume of spring deals to come. “The roughly $11 billion of CMBS deals lined up through April puts the market on pace for PPR’s prediction of $35 billion in 2012,” says John O’Callahan, capital market strategist for CoStar…

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The Unanswered Multifamily Contradiction

March 8, 2012

With increasing occupancies and rents, the multifamily sector has been one of the commercial property types to bounce back fastest from the effects of the ‘Great Recession.’ Yet, at the same time, the multifamily sector has been one of the worst performing property types in terms of delinquencies, a contradiction noted by Fitch Ratings. Using the standard Fitch Ratings definition that counts any loan 60 or more days behind in payment as delinquent…

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Biotech, Lab Property Owners Holding Their Own Despite Shifting Landscape for Tenants

March 8, 2012

Big changes are roiling U.S. biotechnology and life sciences companies — and by extension the real estate owners that rent them with lab, R&D and manufacturing space — with pressures from global markets and regulatory and economic uncertainty causing tenants to rethink their property footprints and expansion plans, and even downsize in some cases. While the changes over the last five years have inevitably created volatile market conditions for…

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CBRE Taps Durburg To Oversee All Leasing and Sales Transaction Services

March 7, 2012

CBRE Group promoted one of its division presidents to the newly created position of Global President, Transaction Services. In his new role, Jack Durburg, formerly president of CBRE’s U.S. Central Division based in Chicago, will be charged with expanding the firm’s position in leasing, capital markets and transaction management services globally across all property types, working closely with the regional and business line leaders. Durburg…

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Real Mex Abruptly Closes 10 More Eateries; Proceeds with Bankruptcy Sale

March 7, 2012

Noteholders including affiliates of Tennenbaum Capital Partners, Z Capital Partners and J.P. Morgan Investment Management, have won the bankruptcy auction to acquire virtually all of the assets of Real Mex Restaurants Inc.in Cypress, CA. The group offered an $80 million credit bid for Real Mex’s second-lien notes, as well as about $49 million in cash and the assumption of certain liabilities. Real Mex Restaurants is the largest full-service, casual…

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Defensive Leasing Strategy Helps Aussie REIT Dodge First Refi Bullet

March 7, 2012

With an $87.6 million loan coming due this August, Sydney, Australia-based Real Estate Capital Partners USA Property Trust may have dodged a refinancing bullet on a two-building complex in Bedford, MA, but may still take a hit on a separate office campus in Parsippany, NJ. Real Estate Capital Partners USA signed RSA Security to a 328,232-square-foot, 12-year lease renewal in the two buildings at 174 and 176 Middlesex Turnpike (Bldgs 3 and 4) in…

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