Monday, October 31, 2011

Andrew Farkas Keeping Brokers Happy

Investor Andrew Farkas, who made a bundle by buying one of the city's leading commercial real-estate brokerages in 1996, looks like he wants to repeat his success with the purchase of Grubb & Ellis, a national firm.

But he better move quickly. If the firm's New York office is any measure, the brokerage has been seeing top people depart.

Since 2010, when David Arena, the firm's tri-state chairman, made a high-profile departure for J.P. Morgan Chase, the New York ...

Thursday, October 27, 2011

Goodbye to Circuit Citys and Old Navys; Hello, Gun Ranges, Aquariums, Go-Carts

Sobered by store closings and the rise of online shopping, owners of U.S. shopping centers are filling space and drawing visitors by turning to unusual tenants like gun ranges and go-cart tracks.

Mall giant Simon Property Group Inc. opened an aquarium in July at its Grapevine Mills mall near Dallas. Real-estate brokerage Jones Lang LaSalle Inc. put a fencing academy in a former Old Navy store in Florida's Tallahassee Mall, and a community theater on the lower level of a former Boscov's store in Harrisburg, Pa.

Even top performing mall companies—like Simon, which reported a 19% rise in earnings Tuesday—are looking at restaurants, entertainment and other nonretail uses as a hedge against the drain from online shopping. Glimcher Realty Trust purposefully filled 25% of its upscale Scottsdale Quarter mall near Phoenix with restaurants such as Stingray Sushi and services like Drybar, a salon that specializes in blow drying women's hair. "She can't go out to lunch and have a salad and a glass of wine with her girlfriends online," Glimcher Chairman and CEO Michael Glimcher said, referring to the mall industry's coveted female shoppers.

The Arms Room gun range near Houston had a mixed reception. Mr. James's attorneys advised him to seek written statements from Target and Home Depot declaring that they didn't object to his business opening in their shopping center. Home Depot agreed, but Target declined, Mr. James said. (Target declined to comment). Later, representatives of PetSmart Inc. thanked him for boosting the center's customer traffic.

Friday, October 21, 2011

Net lease Market one of the Hottest Commercial Real Estate plays in the Country

With money to burn but still having a strong aversion to risk, investors have increasingly turned single-tenant properties into one of the hottest commercial real estate plays in the country.

The single-tenant, net lease investment sales market is expected to continue growing, according to Jones Lang LaSalle.

"The low interest rate environment and the lack of safe-haven investment alternatives are driving new sources in build-to-suit and sale-leaseback activity, and investors have incredibly healthy appetites for stable and dependable income streams that single-tenant assets provide," said Guy Ponticiello, managing director Jones Lang LaSalle's Corporate Finance & Net Lease division.

Fully leased core properties have been highly sought-after by investors, often from overseas, and prices for these properties have been strong, according to Jane L. Mendillo, president and CEO of Harvard Management Co. in her most recent Harvard University Endowment report.

"We were able to sell some of our portfolio properties in this category at excellent values," Mendillo said. And now Harvard is ready to invest in new round of such properties.

Thursday, October 13, 2011

Default Swaps Penalize Westfield Group Most Since 2009: Australia Credit

Westfield Group is being penalized in credit markets more than global peers as the world’s biggest mall operator faces weaker sales growth in the U.S. and at home.
In Australia, data released yesterday showed consumer confidence has plunged 16.9 percent in the past year, while in the U.S. an unemployment rate over 9 percent for six months will limit retail sales growth during this year’s holiday season, the National Retail Federation said this week. For Westfield, the world’s biggest mall owner, that may increase vacancies and lower what it can charge tenants in its two biggest markets.

Thursday, October 6, 2011

Net Lease Market: What will investors abandon next?

Net Lease Market: What will investors abandon next?: Reason to Pull REITs from the Wreckage What will investors abandon next? The first bout of jitters in July hit stocks. Then gold took its ...

What will investors abandon next?

Reason to Pull REITs from the Wreckage

What will investors abandon next? The first bout of jitters in July hit stocks. Then gold took its licks. The latest target: companies that own government-backed mortgages.

After holding up well through the summer, many mortgage real-estate investment trusts have fallen at least 15% in the last month. Such REITs tend to perform better when investors flee risky assets because they invest exclusively in government-agency-guaranteed mortgages. But Capstead Mortgage Corp. and CYS Investments now have valuations below 90% of book value, the lowest in over a year, ...

Wednesday, October 5, 2011

New York Beats London as Top Spot for Real Estate Investment

New York overtook London as the No. 1 destination for real-estate investment for the first time since 2007 after improved access to financing spurred more U.S. deals, Cushman & Wakefield Inc. said in a report today.
Investments grew 166 percent to $29.7 billion in the New York area in the 12 months through August, compared with a year earlier. Investment in greater London increased 2.4 percent to $27.2 billion, according to the report based on data compiled by the New York-based broker and Real Capital Analytics Inc. Buyers are drawn to cities like New York and London because of a greater focus on the “biggest and best,” Cushman said in the report. The trend will continue in the next six months, it said.
Outside of the U.S. real estate lending tends to be tighter and is still “very focused on prime, leased assets only,” Cushman said in the report.