Vornado picks up Tribeca building in auction for $8.2M

Vornado Realty Trust bought a discounted five-story Tribeca building in an auction yesterday for $8.2 million, Crain's reported, outbidding at least five other interested parties. Bidding for the 14,545-square-foot property at 334 Canal Street, near Lispenard Street, started at $7 million, after lender CNBS Trust took control of the property from Mymom Realty, which purchased it for $11 million four years ago.


http://therealdeal.com/newyork

Big Lots at Half-Price Signals 50% Markup

For buyout firms looking for a deal, Big Lots Inc. (BIG) is now offering the biggest bargain among discount retailers in America.

Big Lots at Half-Price Signals 50% Markup in Cheapest Retail LBO: Real M&A

Big Lots, which sells discontinued and overstocked brand name goods, trades at 13.9 times its so-called free cash flow, according to data compiled by Bloomberg. That’s the cheapest among its closest rivals and half the industry median. As private equity firms circle 99 Cents Only Stores (NDN) and Family Dollar Stores Inc. (FDO), a buyer could pay a 50 percent premium for Big Lots and still get the Columbus, Ohio-based retailer at a lower price than any of its competitors, the data show.

Selling Big Lots would help Chief Executive Officer Steve Fishman hand owners a billion-dollar windfall after retailers returned 10 times as much in the past three years. While Big Lots had hired Goldman Sachs Group Inc. to explore options, the stock plunged 26 percent since its April high as a sale failed to materialize. The slide has made Big Lots even more affordable now to private-equity buyers, Telsey Advisory Group LLC said.

http://www.bloomberg.com/news/2011-09-21/big-lots-at-half-price-signals-50-gain.html

City Resients Flock to Suburban Walmarts in Record Numbers

A Walmart store Despite political opposition to Walmart, many New Yorkers are growing more willing to welcome the store into their city. New figures reported by Crain's show local politicians may have 7.7 million reasons to follow suit. Sales to New York City residents in suburban stores are up 10 percent from a year ago, and city dwellers are on pace to spend $215 million at the area's stores this year. That would translate to at least $7.7 million in sales tax revenue alone, experts said.

http://therealdeal.com/newyork/articles

Simon Property Buys Most of Pennsylvania Mall

Mall giant Simon Property Group Inc. has bought out most of its partners to take majority ownership of Pennsylvania's King of Prussia Mall, one of the most lucrative shopping centers in the U.S.

In a series of deals finalized in recent weeks, Simon has boosted its ownership share in the 2.4 million-square-foot mall in King of Prussia, Pa., to 96% from 12.4%, according to a person familiar with the matter. The largest transaction involved Simon's purchase of a 50% stake that Australia's Lend Lease Corp.


http://online.wsj.com/article

Industrial Real Estate Booms

Industrial real estate booms in front of expected consumer spending hikes

The same signs of increasing consumer spending that are expected to boost the retail real estate market are already positively impacting the industrial real estate market. The New York Times cited Cushman & Wakefield data that shows the vacancy rate in industrial properties declined in the first half of the year to 9.7 percent, year-to-date leasing activity is up 27 percent from a year ago, and sales volume in the first half of the year grew nearly 160 percent compared to the same period a year ago. Several companies have been especially aggressive in acquiring industrial properties, including Clarion Partners, Terren Realty Corporation, Morgan Stanley, the Cabot Group and CenterPoint Properties.

http://therealdeal.com/newyork

Rush to Restaurant Real Estate Brings 53% Increase

The Cheapest restaurants in America are luring activist investors who are betting companies from Ruby Tuesday Inc. (RT) to Cracker Barrel Old Country Store Inc. (CBRL) can make more money selling their own real estate than food.

The 10 biggest U.S. restaurants that sell for less than the value of their property, plants and equipment trade at 70 cents on the dollar, according to data compiled by Bloomberg. With the restaurants slumping twice as much as the Standard & Poor’s 500 Index this year, firms from Biglari Holdings Inc. (BH) to Carlson Capital LP and Becker Drapkin Management LP are agitating for board seats at eateries with fixed assets that are worth an average of 53 percent more than the companies themselves. Ruby Tuesday has $1 billion of such assets, twice its market value.

The economy expanded 0.7 percent in the first half of this year, the weakest stretch since the recovery began in June 2009. As job growth stalled last month, a RBC Capital Markets survey showed one-third of Americans now plan to spend less dining out in the next 90 days, the largest proportion in almost a year.

Gyms Working Out for Landlords

Retail landlords focus more on nonretail tenants.

Vacancy-plagued shopping centers in the U.S. are getting a lift from tenants who deal in sweat rather than typical retail goods.

Health clubs and gyms accounted for 8.8% of new leases signed so far this year by retail chains in the U.S., compared with 7.9% at the same point last year, according to real-estate research company CoStar Inc. The rush into shopping centers has helped fuel a 57% increase in square footage occupied by U.S. health clubs since 2007, to more than 70 million square feet.

http://online.wsj.com/article/SB10001424053111903648204576554872299798998.html

Net Lease Cap Rates, Sector by Sector

By Winston Orzechowski,
Research Director, Calkain Cos.

Net lease cap rates averaged 7.75 percent for the first quarter of 2011, continuing the rate drop that began in the second half of 2010. The key driver in this trend has been an increased demand for high-quality net lease properties — assets which feature a strong credit tenant, good location and favorable lease terms – and the scarce supply of those high quality assets. Investors have clearly shown a lopsided preference for these triple-net-lease investment properties and, as 2011 progresses, demand will outpace supply.

http://www.cpexecutive.com/newsletters/capitalmarkets-newsletter/netleasecolumn/net-lease-cap-rates-sector-by-sector/

Brokers say Commercial Retail Market Stabilizing

Aspen, CO
by Dorothy M. Atkins,Aspen Daily News Staff Writer

The downtown commercial core is nearly full, with a vacancy rate reaching pre-recession percentages.

About 30 retail leases have commenced in the past year, which is more than the usual handful that occur annually, said commercial real estate broker Karen Setterfield.

With the increased level of activity, there is a consensus among commercial brokers that the retail vacancy rate is somewhere between 2 and 5 percent, which pales in comparison to last year around the same time when it hovered around 9 or 10 percent. (At the beginning of 2008, less than 1 percent of restaurant, retail and office spaces were empty in the downtown core.)

Blockbuster Deals Disappear in Office Market

The Manhattan office leasing market tightened last month even as the unpredictable stock market and stalled national economy unsettled landlords and tenants alike. Landlords, who have seen their leverage strengthen over the past year, lost a bit of confidence because of the new round of economic turmoil, some Manhattan brokers said. "The market was rising rather quickly, particularly in the better product and the better locations, [but] I think tenants' expectations [now] are that the deals should be improved and they should be more aggressive," David Hollander, a senior vice president at CB Richard Ellis, said. But that doesn't mean that most tenants are chomping at the bit to get deals done.

http://therealdeal.com/newyork

UDR closes on $325M purchase of 95 Wall

Colorado-based UDR has closed on its acquisition of the 507-unit rental building at 95 Wall Street for $325 million, the firm announced today. It bought the 22-story Financial District building, formerly known as Dwell95, from the Moinian Group, which converted it to luxury rentals after it previously served as JPMorgan's headquarters.



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