Brookfield leases downtown space to Chevron, Rosetta

Brookfield Office Properties has leased a combined total of 272,000 square feet in downtown Houston to two high-profile energy companies.

Rosetta Resources Operating LP, a subsidiary of Rosetta Resources Inc. (Nasdaq: ROSE) that provides oil and gas exploration services, has leased 108,565 square feet at Heritage Plaza, which is located at 1111 Bagby St. and has a total of 1.2 million square feet of office space.

Jones Lang LaSalle Vice President Chad Beck and executive vice presidents David Bale…

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Big-Box Players Find Small Formats Require New Strategies

Big-box retailers have received a lot of praise lately for rethinking the sizes of their stores and investing in smaller formats to improve productivity and drive growth in urban areas. But it turns out operating a small format store in downtown New York or Los Angeles is a completely different proposition than operating a 150,000-sq.-ft. store somewhere in rural Idaho, and the big-boxers might be struggling to adapt.

A story in today’s Wall Street Journal points out that Wal-Mart, which has been working on its 20,000-sq.-ft. to 40,000-sq.-ft. urban Walmart Express stores, has been selling the same merchandise in those stores as in its regular supercenters.

The company wants to do the same in the U.S. At Wal-Mart’s annual meeting last June, U.S. stores chief Bill Simon said he would like the Express Stores “to deliver the same experience that a supercenter can deliver, only in 15,000 square feet.”

Problem is Wal-Mart has taken that statement quite literally, said Leon Nicholas of the consulting firm Kantar Retail.

“Wal-Mart can’t pull itself away from a supercenter mind-set,” he said. “Just look at the shelves. It is just absurd to see a dozen kinds of jelly or peanut butter when a shopper just wants to get in and out of the store quickly.”

As a result, the company still doesn’t have any plans to launch Walmart Express stores across the country, as the few stores it has opened remain in test mode.

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Apollo Commercial Real Estate Finance, Inc. to Present at Wells Fargo Securities Specialty Finance Symposium

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Square Feet: The Business of Retired Planes Attracts Investors

Marana Aerospace Solutions in Arizona is one of a number of maintenance and repair operations where retired airliners are sent to be refurbished or broken up for scrap.




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Square Feet: Westchester’s Cross County Shopping Center Gets a Makeover

At a busy intersection, the 58-year-old Cross Country Shopping Center withstood the recent recession, but is now trying to lure more upscale businesses and customers.




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Brookfield Asset Management to Spin Off $70B CRE Company

Brookfield Asset Management Inc., already one of the world’s largest holders of commercial real estate assets under management, is making a major play to capitalize on recovering property markets and become an even bigger global player.

The Toronto-based firm, which already manages worldwide property, infrastructure and financial assets valued at more than $150 billion, said it will spin-off several of its CRE units into Brookfield Property Partners…
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Owners Report Scattered Office Leasing Success in Q1

Many of the nation’s most prominent REITs and real estate companies reported continuing softness in the office leasing market during the first quarter. And while expectations for a continued slow recovery should result in expected hiring and improved leasing demand later this year, they acknowledge that economic uncertainties could drag down any success they might have been expecting.

CoStar Group culled through first quarter earnings press releases…
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Banks Finally Willing To Catch Up on CRE Borrowing Demand

Having experienced stronger demand over the past three months, banks have started easing their lending standards for commercial real estate.

The move is another signal that banks are more willing to start growing their CRE loan portfolios as they have in other lending areas.

The banking sector overall also has substantially improved its liquidity position over the past few years. Indeed, large banks in the aggregate have more than doubled their…
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U.S. CMBS REOs Top $11 Billion; One-Third of All Delinquencies

The volume of real estate-owned (REO) assets for lenders reached 11 billion for the first time and now represents one-third of all delinquencies outstanding, according to Fitch Ratings.

A closer look reveals stark differences in REO trends by state. For instance, in states where non-judicial (power-of-sale) foreclosure is allowed, the inventory of REO assets increased by 64% since the start of last year.

Conversely, the inventory in judicial…
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Brookfield Asset Management to Spin Off $70B CRE Company

Brookfield Asset Management Inc., already one of the world’s largest holders of commercial real estate assets under management, is making a major play to capitalize on recovering property markets and become an even bigger global player.

The Toronto-based firm, which already manages worldwide property, infrastructure and financial assets valued at more than $150 billion, said it will spin-off several of its CRE units into Brookfield Property Partners…
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Owners Report Scattered Office Leasing Success in Q1

Many of the nation’s most prominent REITs and real estate companies reported continuing softness in the office leasing market during the first quarter. And while expectations for a continued slow recovery should result in expected hiring and improved leasing demand later this year, they acknowledge that economic uncertainties could drag down any success they might have been expecting.

CoStar Group culled through first quarter earnings press releases…
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Banks Finally Willing To Catch Up on CRE Borrowing Demand

Having experienced stronger demand over the past three months, banks have started easing their lending standards for commercial real estate.

The move is another signal that banks are more willing to start growing their CRE loan portfolios as they have in other lending areas.

The banking sector overall also has substantially improved its liquidity position over the past few years. Indeed, large banks in the aggregate have more than doubled their…
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U.S. CMBS REOs Top $11 Billion; One-Third of All Delinquencies

The volume of real estate-owned (REO) assets for lenders reached 11 billion for the first time and now represents one-third of all delinquencies outstanding, according to Fitch Ratings.

A closer look reveals stark differences in REO trends by state. For instance, in states where non-judicial (power-of-sale) foreclosure is allowed, the inventory of REO assets increased by 64% since the start of last year.

Conversely, the inventory in judicial…
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Architecture Billings Slip Back Into Negative Territory

Following five months of positive readings fueling analysts’ hopes that the long construction drought is easing, the Architecture Billings Index (ABI) fell back into negative growth mode in April, although commercial and industrial development projects across the country continued to outperform the overall index.

The April ABI score was 48.4 following a reading of 50.4 in March, according to the American Institute of Architects (AIA). The index…
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Ivanhoé Cambridge, Hines to Build $300M Spec Tower In Chicago’s West Loop

In the largest commercial project in Chicago since the height of the real estate boom, Montreal-based Ivanhoé Cambridge plans to invest $300 million to build a 45-story office tower in the West Loop in downtown Chicago being developed by Hines on land co-owned by local business leader Larry Levy.

Construction of the 900,000-square-foot River Point at 444 West Lake Street on the western bank of the Chicago River is expected to begin before the end…
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Mortgage Lender ResCap Files Ch.11; To Sell All Assets

Residential Capital LLC, known as ResCap, a subsidiary of Ally Financial Inc. and the fifth largest mortgage originator and servicer in the country, filed for Chapter 11 protection along with 50 of its subsidiaries listing assets of $15.7 billion

Only Bank of America, JPMorgan Chase, Wells Fargo Bank and CitiMortgage service more mortgage loans than ResCap, which services more than 2.4 million mortgage loans with an aggregate unpaid principal balance…
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A $1 Billion War Chest for Net Leased Properties

Fast-growing Realty Income Corp. likely will be growing even faster soon. The Escondido, CA-based buyer of net-leased commercial properties entered into a new $1 billion unsecured acquisition credit facility, more than doubling its existing $425 million credit facility.

Under terms of the new credit facility, total funds available will be $1 billion, plus an additional $500 million accordion-expansion feature. The initial term of the new facility…
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Apartment Market Shifting Focus To New Supply

The ongoing recovery of the U.S. apartment market is entering a new phase, one marked by an increasing level of permits and construction starts for multifamily development projects. The upwelling in new development is expected to increase supply across many markets starting in 2013 after years of almost zero growth.

The new phase follows the dramatic vacancy declines and strong apartment rent growth that has occurred in the tightest and more desirable…
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Hudson Pacific To Buy San Fran, West L.A. Office Assets for $179M

Hudson Pacific Properties (NYSE: HPP) agreed to purchase multiple properties in San Francisco and West Los Angeles in two separate deals totaling $179 million. The company will use the proceeds from its recent public offering of 11.5 million shares of common stock for $15 per share to help finance the acquisitions. Hudson Pacific estimates that it will net approximately $166.1 million to $190.8 million from the offering.

The 211,000-square-foot…
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Kennedy Wilson JV Pays $64M for Capitol Towers

Kennedy Wilson led an investment group in the acquisition of the Capitol Towers multifamily complex at 1500 Seventh St. in Sacramento for $64 million. The Bond Cos. was the seller. The purchase was funded with $50 million in financing from HFF/Freddie Mac. Kennedy Wilson provided 50 percent of the deal’s equity.

The 409-unit apartment community has 203 units in one 15-story tower and 206 villa units surrounding the tower. The villa portion is…
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PGP Sells Manhattan Office for $850 PSF

Property Group Partners has sold the office building at 148 Lafayette St. in New York City for $850 per square foot, or about $131.7 million, to New York-based Epic.

The 12-story, 154,953-square-foot, class A office tower was designed by McKenzie Voorhees and Gmelin Architects in 1913, with renovations completed as recently as 2010. It features 14,000 square feet of ground-floor retail at the corner of Lafayette and Howard Streets in Manhattan…
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CoStar’s People of Note (May 6-12)

This week’s People of Note includes the following markets: Houston, National, Orange County, Sacramento and Washington, DC.

NATIONAL
CBRE President Robert Sulentic To Succeed Retiring CEO Brett White
By Randyl Drummer

Brett White announced he will retire as chief executive of CBRE Group, Inc. (NYSE:CBG) at the end of the year, capping a remarkable run in which he rose through the ranks from a sales trainee in 1984 to head the largest commercial…
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AVEO Pharmaceuticals Inks 126,000-SF Lease

AVEO Pharmaceuticals signed a 12-year deal for 126,000 square feet of laboratory and office space at 650 E. Kendall St. in Cambridge, MA. It will relocate its headquarters and primary research facilities to the Kendall Square property by the fourth quarter of this year.

The drug company, which works on products that treat a variety of cancers, is currently headquartered at 75 Sidney St. in the Harvard Square area of Cambridge. It is a five-story…
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Could Multifamily Lead Single-Family Out of its Recession?

The nation’s housing finance overseer and Freddie Mac are citing the strong multifamily investment market as a reason for pushing ahead on their agenda to gradually eliminate government guarantees in the multifamily sector business and replace them with new private capital sources well ahead of efforts to begin unwinding their single-family finance operations.

Earlier this year, the Federal Housing Finance Agency (FHFA), issued a strategic plan…
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Growth Diagnosis Differs for Largest Drugstore Chains

The nation’s three largest retail pharmacy chains continue to diverge on their real estate expansion plans.

Rite Aid Corp., which has consolidated dramatically since the onslaught of the Great Recession, has recently slowed the pace of closures and believes it now may even have an opening to regain some marketshare.

Walgreen Co., which had slowed annual growth from 4%-5% to 2%-3%, this year is slowly starting to ramp up growth again. However…
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Slip In First Quarter Warehouse Demand Tied To Slowing U.S. Economy

The U.S. industrial market continued to make progress and see overall vacancy decline during the first quarter even as absorption of new space by warehousers and distributors slowed in reaction to the downshifting economy.

With very few new buildings delivered or under construction compared to national historical levels, and moderate demand for distribution space from retail and manufacturing companies refocusing on growth, the vacancy rate fell…
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Fairmont Hotel Sells for Nearly $200 Million

Maritz, Wolff & Co. sold the Fairmont Hotel at 950 Mason St. in San Francisco, CA, for close to $200 million. Oaktree Capital Management partnered with Woodridge Capital Partners to purchase the hospitality building.

The 212,000-square-foot hotel was constructed in 1906 and opened in 1907. The 591-room building will continue to be managed by Fairmont Hotels & Resorts.

Hodges Ward Elliott Inc. represented the seller.

Please reference CoStar…
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Jamestown Pays $140M for Trophy Office Bldg. in DC

Jamestown, a Georgia-based equity funds investment firm, acquired the property known as 10th and G in Washington, DC, from Skanska USA Commercial Development Inc. for $140 million, or about $818 per square foot.

The 10-story trophy office building at 733 10th St. NW delivered last year. It totals 171,171 square feet and is anchored by CMGRP Inc. and the National Association of Manufacturers, according to CoStar information. Lincoln Property Co…
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Airbnb Leases 170,000 SF of Office Space

Airbnb leased 170,000 square feet at 888 Brannan St. in San Francisco, CA.

It will occupy a large portion of the five-story, 400,254-square-foot, Class B office building in Showplace Square. The property is currently under renovation and should be completed by the first quarter of next year.

Michael McCarthy, Michael Monroe and Brian McCarthy of Colliers International represented the landlord, Vantage Property Investors LLC. Jennifer Haeg…
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CBRE President Robert Sulentic To Succeed Retiring CEO Brett White

Brett White announced he will retire as chief executive of CBRE Group, Inc. (NYSE:CBG) at the end of the year, capping a remarkable run in which he rose through the ranks from a sales trainee in 1984 to head the largest commercial real estate service company in the world.

White, 52, will be succeeded by Robert Sulentic, who currently serves as CBRE’s president. White was re-elected to the company’s board of directors at its annual shareholders…
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