Scott Miller's January 2014 Commercial Real Estate Review


Calendar of Events
RealShare's Real Estate Outlook conference


RealShare's Real Estate Outlook conference has been the leading Los Angeles commercial real estate event for 25 years. In 2013, we're excited to bring you RealShare Los Angeles, where 1000+ attendees will gather to talk about every income producing property type, locally and nationally.


 


Dreaming Big but Playing Small? How to Develop your Ability as a Thought Leader


Wednesday January 8th 8:30am-10:30am


Every conversation, sales interaction, and all leadership starts from within. Don't like the results you're getting? Change your inner dialogue/voice. Learn more


 


 


Local


 



Onni Group, of Vancouver, British Columbia, on Wednesday finalized its purchase of the land where The Seattle Times' old headquarters building stands.

 


The new growth strategy for Red Lion Hotels, the Spokane-based hotel chain, includes selling half a dozen properties between Kelso and Pocatello, Idaho.

 


Total Wine & More has leased about a quarter of the space in a shopping center planned for 1600 Armory Way in Seattle, officials of commercial real estate company Kidder Mathews said Monday.

 


Crews have broken ground on a long-planned hotel project in Seattle’s University District, where records show the same developer is buying more land right next door.

 


Real estate developer Greg Smith said he plans to build the tallest skyscraper in downtown Seattle on a site where the famous Metropolitan Grill steakhouse operates.

 


Jose L. Nino De Guzman, 30, who operated NDG Investment Group LLC from 2006-2009, was sentenced to 10 years in prison Thursday for running a "classic Ponzi" scheme that raised more than $30 million.

 


The British Columbia Investment Management Corp. paid $17.75 million on Tuesday for a nearly half-acre development site at Third Avenue and Virginia Street in downtown Seattle, public records show.

 


Seattle-based developer Touchstone announced Tuesday it had found an equity partner in Texas-based USAA Real Estate, moving it closer to redeveloping the former Troy Laundry block in South Lake Union into a new 820,000-square-foot complex.

 


In Seattle’s South Lake Union neighborhood, you can build a 283-room hotel without any parking.

 


Holland Partner Group is the new owner of a large property in Seattle’s South Lake Union area.

 


A three-building industrial property in Seattle’s Sodo neighborhood sold Wednesday for an extraordinary price of nearly $120 a square foot.

 


The 1800 Ninth Avenue Building in downtown Seattle sold Monday for nearly $150.4 million, public records show.

 


The Landing shopping center in Renton has been sold to a Boston-based investment fund for $165.4 million.

 


 


A divided US Court of Appeals for the Second Circuit upheld a finding of summary judgment against Con Edison insurers in their bid to collect damages from World Trade center leaseholder Larry Silverstein for…

 


Hilton Worldwide Holdings Inc. set terms for its expected return to the public markets next week, in an offering that could raise as much as $2.7 billion if it is well received by investors.

 


LOS ANGELES-Los Angeles is the nation’s most dense city, according to experts at the recent Impact on Density Symposium at The Downtown Breakfast Club.

 


CHICAGO—The economic recession may have hit middle-market retailers hard, but many outlets serving cost-cutting consumers thrived, and remain very attractive to investors.

 


CHICAGO—One of the nation's largest providers of senior housing has just entered into a lease at AMA Plaza, the iconic tower adjacent to the Chicago River and formerly known as the IBM Building, bringing its lease rate up to 92%.

 


CHICAGO-Continued moderate job growth will mean vacancies continuing to slowly trend downward in 2014 and 2015 across the office, industrial and retail sectors, DTZ Research said Thursday.

 


Private-equity giant Blackstone Group BX -0.91% LP has been using initial public offerings to exit its massive investments in shopping centers and hotels, like next week's expected IPO for Hilton Worldwide Holdings Inc.

 


DETROIT—Locals call it the " Dan Gilbert effect," the recent buying spree of commercial buildings in downtown Detroit by the billionaire founder of Quicken Loans.

Now the phenomenon appears to be spreading.

 


James Madison University students long ago dubbed the Ashby Crossing housing complex "Trashby" because of its age and rowdy residents.

 


Pressure is mounting on Allen Smith to expand the Four Seasons Hotels and Resorts brand, just three months after the former real-estate investor became chief executive officer of the storied hotel operator.

 


Among the nation's large cities, Denver has long had among the sleepiest office markets. But there are signs of an awakening.

 


LAS VEGAS-The Las Vegas investment market is really heating up, and both seasoned and new investors are buying multifamily properties at record paces.

 


The Volcker rule prohibits banks from owning more than 3% of a hedge fund or private-equity portfolio.

So why did Goldman Sachs Group Inc. GS +0.54% tell would-be investors that it would contribute up to 20% in a new fund that makes loans backed by office buildings, hotels, shopping centers and other properties?

 


 


SEOUL—About a decade ago, a huge tract of land reclaimed from the Yellow Sea west of Seoul was a barren wasteland. Today it is a city named Songdo with a population of 67,000, Korea's tallest tower and a green oasis modeled on New York's Central Park.

 


In late October, executives from Taubman Centers Inc., TCO +0.05% the luxury retail real-estate empire built by the Taubman family of Michigan, gathered with local officials and business leaders in Hanam City, South Korea, to celebrate the groundbreaking of a massive mall the company is building there.

 


SEOUL—A record number of foreign tourists visiting South Korea in recent years has fueled in Seoul what property developers are calling the biggest hotel boom in the country's history. But some industry participants say an overreliance on visitors from China and Japan leaves South Korea vulnerable to future overcapacity.

 


As the Chinese economy continues to boom, Chinese are looking abroad to spend money on real estate.

 


TOKYO—Some of Japan's pension funds are moving into the country's newly hot real-estate market in search of higher profits.

 


As Europe slowly recovers from its worst financial downturn since World War II, tensions are intensifying in Germany, France and the U.K. over new efforts to regulate rents

 

 

MultiFamily

 


MIAMI—Cranes are again rising over this city, as the poster child for the real-estate collapse enjoys a new condominium boom fueled by foreign investors looking to park their money in U.S. real estate.

 


BEAVERTON, OR-HFF has closed the sale of Waterhouse Place, a 279-unit, garden-style multi-housing community here. HFF marketed the property on behalf of the seller, a joint venture between Guardian Real Estate Services and a value-added fund advised by UBS Global Asset Management.

 


I reflect on my visit to the 2008 Urban Land Institute Fall Meeting in Miami, when a deep financial gloom was setting-in and 22,200 condos were shiny-new, but very vacant

 


IRVINE, CA-Creative new concepts in senior housing will be the key to catching the big wave of approximately 10,000 Baby Boomers a day turning 65, according to Manny Gonzalez, principal with KTGY Group Inc., a locally based architecture and planning firm

 


After World War II, insurance giant MetLife Inc. MET +0.77% transformed 80 acres of land in Manhattan into two sprawling apartment complexes with more than 11,000 units for returning veterans.

 

DISTRESSED

 


WASHINGTON, DC-Two separate reports add to the growing picture of health that is commercial real estate finance

 


SAN FRANCISCO-While there are many encouraging signs of recovery in the commercial real estate market ranging from rising property values to increasing mortgage originations, investors should be aware that there is also a great deal of CRE debt set to reach maturity in the next several years…

 


IRVINE, CA-While overall US foreclosure activity is down 23% year-to-date through October 2013, foreclosure activity on homes in the $5 million-plus value range is up 61% from the same time period in 2012….

 


A tax break for struggling mortgage borrowers ends Jan. 1 and that could mean big tax bills -- and financial hits for their neighbors.

 


KKR KKR -0.30% & Co. expects to complete raising a $1.5 billion real-estate fund this week, say people familiar with the firm, the latest sign that some large investors are regaining an appetite for riskier real estate.

 



 


REITs’ Involvement in Net Lease Growing


LOS ANGELES-REITs are becoming increasingly more attracted to net lease transactions as the sector proves itself stable, Michael Weil, president of American Realty Capital, tells Carrie Rossenfeld in this EXCLUSIVE video interview during RealShare Net Lease West.


 


The Pros and Cons of REITs


MIAMI—Where are the opportunities and challenges for commercial real estate REITs? What’s the long-term outlook for the REIT sector?


 


REIT Sectors to Watch in 2014 and Beyond


MIAMI—Some say now is not the right time for REITs—that it’s time to reduce REIT holdings. Others say now is the perfect time. Who’s right?


 


REIT Grabs $53M Net Leased Portfolio


MIAMI—Lexington Realty Trust aquired a portfolio of 10 retail locations leased to BluePearl Veterinary Partners, a 24-hour emergency pet care provider. The sale price is $52.6 million.


 


ARC Healthcare REIT Will Trade on National Exchange


NEW YORK CITY-Having told investors this past summer that AR Capital LLC was moving away from non-traded net lease REITs, Nicholas Schorsch said late Friday afternoon that a non-traded REIT…


 


Commercial Property Prices Rise 1%


NEWPORT BEACH, CA-Commercial property prices have virtually remained the same, rising only 1% in November, reports Green Street Advisors Inc., an independent research, trading and consulting firm concentrating on REITs….


 


A Remarkable Story


A bit of history . . . I was a newly minted NYSE REIT chief financial officer in 1994, and I had the pleasure of attending a dinner during a NAREIT conference hosted by Wells Fargo’s real estate banking team.


 


 


NEW YORK CITY-The metro area economy has outpaced both expectations and the nation in recovering from the downturn, a level of performance that tops the list of six megatrends for the city, Delta Associates’ Alexander Paul said in a presentation…..

 


Some of the nation's largest banks will offer loans that don't conform to new gold-standard lending definitions under sweeping mortgage regulations set to take effect next month, reversing course after industry leaders had earlier suggested that banks might further curtail lending.

 


PALO ALTO, CA-Crowdfunding platforms are proving to be highly popular among individual investors interested in commercial real estate transactions.

 


DENVER-Following historic seasonal trends, October home sales edged 2.8% lower than September, but still pushed 2.2% higher than sales in October 2012, RE/MAX reports. Median home prices were 11.9% above prices seen last October.

 


Few things are as consistent in the U.S. home-building industry as the annual hope trade, in which investors bid up the stocks of home builders each winter in anticipation of a robust spring season for home sales.

 


CHICAGO—Retail builders have spent many of the post-recession years just getting by on smaller projects such as luxury-oriented retail, which retained much of its demand, but 2014 may have something better in store.

 


SANTA ANA, CA-A new trend of certain industrial properties being repositioned as retail and showroom properties is emerging in Orange County.

 


IRVINE, CA-Maximus Advisors reports that just three metros have cut payrolls over the past six months, although the firm’s acceleration index has lost steam over the past two months,….

 


December 3, 2013

ALTA reported title insurance premium volume rose 14 percent during the third quarter of 2013 when compared to the same period a year ago.

 


WASHINGTON, DC-Offering more evidence of normalizing markets five years after the capital markets collapse, defeasance is back as a going concern.

 


NEW YORK CITY-With retail properties accounting for 19% of total US investment sales volume year-to-date, Jones Lang LaSalle is predicting a 20% increase in transaction volume next year….

 


Luxury home builder Toll Brothers Inc. TOL -1.15% caters to affluent customers who typically aren't deterred by price increases. But even the wealthy have their limits.

 


IRVINE, CA-Reducing real estate costs is the top motivator for workplace change initiatives, according to Rick Cleveland, managing director, research and strategy, for Cushman & Wakefield.

 


The strength of the housing recovery was a welcome surprise this year. If forecasters are correct, the sector is finally ready to start picking up the rest of the economy in 2014.

That's because the market is changing in important ways.

 

 

RE Blogs Education

 


LOS ANGELES-When considering net lease investments, go with a company rather than a particular property for the best strategy, Gordon DuGan, CEO and director of Gramercy Property Trust, told Carrie Rossenfeld in this EXCLUSIVE video interview during RealShare Net Lease West.

 


Ronald L. Bueing, Partner at Pivotal Law Group, PLLC;

Many remote sellers breathed a sigh of relief when the U.S. House of Representatives failed to take action on the Marketplace Fairness Act passed by the U.S. Senate last year.

 

Job Opportunities

 


UBS GLOBAL REAL ESTATE

Asset Manager

(SOUTHLAKE, TX)

 

HFF, L.P.

Real Estate Analyst

(NEW YORK, NY)

 

CBRE

Sr. Managing Director, Regional Facilities Management, West Region

(LOS ANGELES, CA

 

ULI

Director, Resiliency

(WASHINGTON, DC)

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