Archive for October, 2010

First Industrial Taps Huge Chunk of Properties to Sell

Friday, October 29th, 2010

First Industrial Realty Trust Inc. wants to sell about a fourth of its portfolio as a way of reducing its current debt. According to ChicagoRealEstateDaily.com, the Chicago, Illinois-based First Industrial said it has 195 properties totaling 16.4 million square feet along with 724 acres that it calls “non-strategic,” all of which were unidentified. First Industrial, a real estate investment trust, took a non-cash impairment charge of $164 million in the third quarter of 2010.

The company expects to take another $14 million in the fourth quarter after determining that most of the assets in the group for sale are impaired, but CEO Bruce W. Duncan on Wednesday said “we are not engaging in a fire sale” with the non-strategic assets, according to a transcript of a conference call with analysts. According to Duncan, the REIT is hoping to complete $250 million to $300 million in sales by September 2012.

To read this and other briefs from ChicagoRealEstateDaily.com, click here.

Posted in Industrial, Mid America, Real Property | No Comments »

Hotel Tax Pits Hospitality Industry against City Officials

Thursday, October 28th, 2010

According to the St. Louis Business Journal, hoteliers, tourism officials and city budget crunchers all await the outcome of Tuesday’s vote on whether to raise hotel taxes by up to 5% in specific areas of St. Louis County, Missouri. Both hotel owners and the St. Louis Area Hotel Association claim that the increase in taxes will hurt tourism to the city. City officials on the other hand claim they need the hike to cover gaps in the budget.

Many local hotels have put renovations and acquisitions on hold in anticipation of the decision towards the ballot and the pending lawsuit challenging it. If the ballot passes, the hotel tax will be at 20%, the highest in the country, and could force business to other cities. Increasing prices during these times of weak demand don’t bode well for many hotels, especially those of the luxury variety who are already struggling to stay in business.

To read the full article from the St. Louis Business Journal, click here.

Posted in Hospitality, Hotels, Mid America, Real Property | No Comments »

Ohio Remains at Bottom of Tax Climate Ranking

Wednesday, October 27th, 2010

Ohio once again found itself in the bottom 10 of state business climates, but showed signs of improving momentum in the past year. According to the Business Courier, Tax Foundation research group released its State Business Tax Climate Index, which placed Ohio 46th. The score combines states’ income, sales, property, corporate and unemployment insurance tax rates, all of which are scored from zero to 10 for how conductive and hostile to business they are.

Once again, one of Ohio’s worst categories came from its property tax rate which ranked No. 45 in the nation. This fact doesn’t bode well for real and personal property owners as property taxes already own the highest dollar amount on their income statements. Though the rate is still among the bottom 5 in the nation, there has been steady improvement since 2005 when they claimed the dubious distinction of being dead last.

To read the full article from the Business Courier, click here.

Posted in Mid America, Paradigm Info, Personal Property, Real Property | No Comments »

SE Austin Industrial/Office Complex Sold

Tuesday, October 26th, 2010

Houston, Texas-based Hines Global REIT has bought the massive Southpark Commerce Center II in Southeast Austin, furthering positive signs of activity in the submarket. According to the Austin Business Journal, the site is a four-building, Class A industrial/flex office park purchased from KBS Southpark Commerce Center II LLC. The Center was completed in 2000 making it one of the youngest complexes of its kind in the market. Southpark contains 372,125 square feet and is 94% leased.

CoStar has the transaction listed at $31.3 million or $85.34 per square-foot. There has been a significant increase in activity in the Southeast Austin market in the past few months. Along with Hines purchase, Goodwill Industries of Central Texas also signed a lease for a 124,200-square-foot building, marking one of the largest industrial lease transactions of the year and one of the biggest deals across all real estate sectors in 2010.

To read the full article from the Austin Business Journal, click here.

Posted in Industrial, Leased, Mid America, Office, Real Property | No Comments »

Education Realty Trust to Sell Nine Properties for $84.8M

Monday, October 25th, 2010

Education Realty Trust has agreed to sell nine existing student housing properties for $84.8 million and has also completed the purchase of a housing complex at the University of Virginia for $45.5 million. According to the Memphis Business Journal, the company will use proceeds from the sale of the nine properties to reduce debt and finance new developments. The buyer is an unnamed, New York-based, private real estate investment fund.

The properties Education Realty Trust are selling average occupancy of 95% and monthly rent of $358. The purchase of the Virginia property along with the sale of the other nine developments shows solid execution of Education Realty Trust’s strategy to sell non-strategic assets in order to purchase newer facilities at larger universities. The Memphis, Tennessee based company manages 63 student housing communities in 23 states with over 37,000 beds.

To read the full article from the Memphis Business Journal, click here.

Posted in Eastern, Mid America, Multi Family, Real Property | No Comments »

GGP Proves Chapter 11 Restructuring Works for REITs

Friday, October 22nd, 2010

General Growth Properties Inc. is preparing to emerge from Chapter 11 in early November, becoming one of the first and one of the largest REITs to climb out of bankruptcy. According to GlobeSt.com, GGP will emerge from the financial restructuring with a strong balance sheet and substantially less debt thanks to $6.8 billion in equity from a variety of institutions. This proves that, in the right circumstance, bankruptcy works and can be the only way to protect everyone’s interest.

Any pre-Chapter 11 GGP creditors will be satisfied in full and GGP itself will separate into two publicly traded corporations upon emergence with current shareholders receiving common stock in both companies. Most REITs that have filed for bankruptcy have historically ended up dissolving or even worse left their equity shareholders with nothing. GGP differed in its planning and shareholder investment, preparing for the filing four months before it took place and hiring investment bankers and restructuring advisors.

To read the full article from GlobeSt.com, click here.

Posted in Bankruptcies, Financial Services, Real Property | No Comments »

More Hotel Distress Lurks in Shadows

Thursday, October 21st, 2010

The third quarter showed an increase in the number of California hotels in default or foreclosure, but the even more threatening concern is the shadow inventory of properties that are in trouble but have yet to hit the default market. According to GlobeSt.com, of the approximately 10,000 hotels in California, 1,000 have a huge inventory of distressed deals and have yet to hit the default market in addition to the 529 in default or foreclosed already.

The two major factors that are causing the increase in sales of foreclosed hotels are that lenders are realizing the difficulties in running and operating business like a hotel and are deciding to sell instead of hold, and that buyers are willing to pay higher prices than before. The reasons buyers seem willing to pay more seem to include that the general consensus is we have turned the corner economically and have already hit rock-bottom making now the time to buy. The fact that financing is coming back into the market is also another reason for willingness to spend more, although it is not as readily available as it has been in the past.

Posted in Financial Services, Foreclosures, Hospitality, Hotels, Real Property, Western | No Comments »

Manhattan Tower Sees Vacancy Slip Below 2%

Wednesday, October 20th, 2010

Opera Solutions has just finalized a lease for 11,161 square feet on the 17th floor of the 1.1-million-square foot, 41-story office tower located at 180 Maiden Lane in Manhattan, New York. According to GlobeSt.com, the new lease leaves about 19,000 square feet in the building for a vacancy rate of less than 2% in a Manhattan market where vacancy averages at about 9%.

Location tends to be the main draw for tenants at this location as the building is in the heart of the financial and insurance districts, within easy reach of Wall Street and adjacent to several retail, dining and mass transit amenities. Leading tenants in the building include AIG and law firm Stroock & Stroock & Lavin. The new tenant, Opera Solutions serves clients in financial services, retailing, consumer goods and health care, among many other sectors.

Posted in Eastern, Leased, Office, Real Property | No Comments »

Phillips Edison Launches $1.8B Retail REIT

Tuesday, October 19th, 2010

Cincinnati, Ohio-based Phillips Edison & Co. has formed a REIT to raise $1.8 billion and finance the purchase of more than 150 grocery-anchored shopping centers nationwide. According to the Business Courier this is by far the biggest offering ever attempted by Phillips Edison who has previously raised money through private placements and other forms of registered offerings, the largest of which was a $750 million fund.

In all of 2009 there was only $3 billion in initial public offerings raised by all REIT’s making Phillips’ goal of $1.8 billion difficult to accomplish. REIT’s are a hot commodity these days when it comes to real estate financing. CoStar Group estimates that REIT’s and real estate operating companies raised $5 billion from the sale of shares in August alone. That totals 58% of the $8.6 billion raised for real estate acquisitions and debt repayment.

To read the full article from the Business Courier, click here.

Posted in Eastern, Mid America, Real Property, Retail, Strip Centers, Western | No Comments »

Things Are Looking Good For the Commercial Real Estate Market In 2011

Monday, October 18th, 2010

With construction picking back up and rental prices slowly rising, it appears that the commercial real estate market is heading towards recovery in 2011. According to PricewaterhouseCoopers report, “Emerging Trends in Real Estate 2011″ it is beginning to become more prevalent that the past three years of loss in the commercial real estate industry is changing course. The report reveals that industry professionals and investors are becoming more hopeful of moderate improvements.

According to the Real Estate Journal Online, the well-located and well-occupied properties that can generate strong cash flow over the next years are what buyers and lenders want, resulting in prime apartment and office buildings in gateway cities generating a great deal of attention from the increasing pent-up capital. Of all the sectors, multi-family seems to be in the best position with expectations on increased rental by 2012.

To Read the full article from Real Estate Journal Online, click here.

Posted in Apartments, Multi Family, Office, Real Property | No Comments »

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