Tuesday, January 31, 2012

Gores Group LLC Acquired Pep Boys for $791 Million

Pep Boys -- Manny, Moe & Jack agreed to go private in an acquisition by Gores Group LLC valued at about $791 million after the auto-parts retailer’s previous attempts to sell itself were unsuccessful.
The cash offer of $15 a share is 24 percent higher than Pep Boys’ closing price on Jan. 27, the companies said today in a statement. Including debt, the deal is valued at $1 billion and is expected to be completed by the end of the fiscal second quarter of 2012, according to the statement.
The transaction is the largest in the auto-parts retailing sector since 2008, according to data compiled by Bloomberg. Pep Boys, founded in 1921, has more than 7,000 service bays in 700 locations across the U.S. Pep Boys halted efforts to sell itself last year after failing to attract high enough bids, two people with knowledge of the negotiations said in February.


Dollar General Market Sold for $3.6 million

A subsidiary of Inland Diversified Real Estate Trust, Inc. has acquired a fee simple interest in the 20,707 square foot Dollar General Market store in Port St. Joe, FL for $3.6 million. The cap rate for this property is approximately 8.5 percent based on the purchase price paid at closing.

The property is leased to Dollar General Corp on a fifteen year, triple-net lease expiring in November 2026. The lease is renewable for four five-year terms, through November 2046. This Dollar General Market store includes both non-grocery and grocery components.


Monday, January 30, 2012

Lehman's Estate Gets a Montana Resort

The estate of Lehman Brothers Holdings Inc. is now the owner of a Montana ski and golf resort, after assuming control of the assets of Moonlight Basin Ranch LP.

Moonlight Basin filed for bankruptcy more than two years ago, after Lehman's estate said it had fallen behind on loan payments. Lehman itself collapsed into bankruptcy in September 2008.


Opus Makes a Fresh Start

The family behind Opus, once one of the largest private developers in the country, is making a comeback after settling years of messy battles with creditors and former employees.

The Rauenhorst-family-controlled Opus, reorganized and renamed Opus Group, recently announced plans for a 33-story rental-apartment tower in downtown Minneapolis. It is constructing a fully leased headquarters for household-products maker Church & Dwight Co. in Ewing, N.J., and is developing a 120-unit student housing and retail property in Minneapolis.


Wednesday, January 25, 2012

Office & Industrial Report

The single tenant Office/Industrial market is highly competitive today, however, this competitiveness varies due to the nature of the tenant and the relevant market. High credit tenants in primary – especially urban – markets are among the highest in demand. According to Costar the market for single tenant NNN investments is averaging 10,000 transactions a quarter.
A majority of those were Retail spaces, Corporate and Regional HQ’s in Primary and Secondary Markets. Of these primary markets, none is more interesting than Washington DC. Many Investors and Corporations have excess cash holdings and seek less volatile investments than the open stock and bond markets.

This trend has been realized through the increased activity of Institutional Investors, Private Equity Groups, and both publicly and privately traded REIT’s D.C. is particularly fascinating with the inclusion of Government and Government Contracting Tenants such as SAIC, Booz Allen, Lockheed Martin, Northrop Grumman, etc.

Generally considered some of the most desirable tenants in terms of longevity and credit, Contractors are frequently subject to shorter leases (5-7yr periods depending on the time frame of their contract), but they also tend to renew due to the nature of the space amenities they often require. Government (Federal or State) tenants are typically a highly favored tenant as well.

Investors however must be comfortable with a “non appropriation of funds” clause which the government entity may exercise because of budgetary constraints. The DC metro, particularly Northern Virginia, has many prospects for advancement, such as: » Several New Developments in the Ballston/Rosslyn corridor through Arlington (attracting tenants into new facilities who seek proximity to DC).» Phase I Dulles Metro Rail expansion scheduled to be in operation in 2013 should help the Dulles/Tech Corridor and Tyson’s Corner. » BRAC’s (Base Realignment and Closure) southward shift along the I-395/I-95 corridor south to Stafford and Fredericksburg.

It is anticipated that these shifts will draw strong investment grade tenants into these areas in the form of regional headquarters, manufacturing facilities, single tenant satellite operations and those who need proximity to either the tech or DOD (Department of Defense) base. Each of these developments should be considered as having quality single tenant investment opportunities in the coming 12-18 months.


Tuesday, January 24, 2012

Zoning Laws Grow Up

This city's zoning codes regulating the size, use and location of buildings could sap the life force out of all but the most zealous urban enthusiasts.
"Zoning has always concerned itself, for better or worse, with social matters, such as banishing noxious uses," said Julia Vitullo-Martin, a senior fellow at the Regional Plan Association. "What's different now is that the planning commission is moving from zoning that's negative on social issues to being positive, like mandating green markets and bike rooms.
It's reasonable for city government to encourage people to move in a beneficial direction. Whether zoning is the correct device is another matter. A market person might say it's better to go with incentives than mandates." As such, zoning is something of which every New Yorker and visitor ought to be aware.


Judah Hertz is buying office buildings

California investor Judah Hertz is buying office buildings

After a four-year hiatus on the sidelines, California investor Judah Hertz is buying office buildings in small cities with some of the highest vacancies and lowest demand in the country. That probably means more torment for other landlords in these markets.
Attractive yields are increasingly luring investors like Mr. Hertz further afield to office markets in smaller cities and suburban areas. During most of the downturn, investors have focused on major cities like New York and Washington, but this has driven prices up and yields down, to under 5% in some cases.

"I should be in a very competitive situation," Mr. Hertz says.