1450 Brickell Tower Becomes Miami\'s First LEED Gold Office Building
By Michael Gerrity, Real Estate Channel on September 2, 2010 11:14 AM
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\\1450 Brickell\<\/a\>\<\/p\>\<\/div\>\<\/span\>\n(MIAMI, FL) -- Just days after unveiling that 1450 Brickell now has 226,000 square feet of office space leased, the project\'s developer announced today that the \'class-A\' building has been awarded LEED Gold certification by the U.S. Green Building Council. The LEED (Leadership in Energy and Environmental Design) Green Building Rating System is the nation\'s accepted benchmark for the design, construction and operation of environmentally-sound buildings. This makes 1450 Brickell the Downtown Miami/Brickell market\'s first and only office tower to achieve LEED Gold status in the core and shell category, which applies to new construction.\ By Michael Gerrity, Real Estate Channel on September 2, 2010 9:10 AM By Alex Finkelstein, Real Estate Channel on September 1, 2010 8:20 AM Xanadu rendering, East Rutherford, NJ\<\/p\>\<\/div\>\<\/span\>\nIt\'s the end of the road for Xanadu, a planned billion-dollar, 2.3-million-square-foot retail emporium in East Rutherford, NJ.\ \Xanadu work site\<\/a\>\<\/p\>\<\/div\>\<\/span\>\nThe group said it is \"disappointed that despite its best efforts\" it couldn\'t reach a deal with the Colony group.\ Chris Christie, NJ governor\<\/p\>\<\/div\>\<\/span\>\nXanadu\'s developers paid the New Jersey Sports and Exposition Authority an initial $160 million as part of a ground-lease agreement.\ By Alex Finkelstein, Real Estate Channel on August 31, 2010 12:23 PM \Toronto Canada Skyline\<\/a\>\<\/p\>\<\/div\>\<\/span\>\nB-class office space outside Toronto\'s downtown core used to get little respect from buyers and investors. Not anymore, however.\ \Toronto\'s bloor street (retail district)\<\/a\>\<\/p\>\<\/div\>\<\/span\>\nThe price per square foot for B-class office space in the Greater Toronto Area has almost doubled over the past five years, from approximately $125 in 2005 to approximately $210 in 2010.\ Bill Evans\<\/p\>\<\/div\>\<\/span\>\n\"As the city\'s population continues to experience burgeoning growth, there is an increasing need for employers to consider where their employees live, and how they commute to their workplace,\" said Bill Evans, co-founder of Evton Capital Partners.\ Michael Bunston\<\/p\>\<\/div\>\<\/span\>\nEvans\'s co-founding partner, Michael Bunston, states, \"As neighborhoods continue to experience nodal development - the mix of houses, condominiums, stores and office space, all in one central area - people have the opportunity to lessen their commute time and increase their \'living\' time.\ By Alex Finkelstein, Real Estate Channel on August 27, 2010 8:00 AM \Stratford City Shopping Center rendering, London\<\/a\>\<\/p\>\<\/div\>\<\/span\>\nThe latest data published by research group Investment Property Databank show property values in the United Kingdom have grown 15.4% since August 2009 and about 7% this year.\ \Andrew Barber\<\/a\>\<\/p\>\<\/div\>\<\/span\>\nThe WSJ reports Andrew Barber, director of international valuations at CBRE, points out that trading in U.K. property derivatives suggest U.K. property has had its run.\ Chris Grigg\<\/p\>\<\/div\>\<\/span\>\n\"Valuations have risen more slowly in this quarter, reflecting in part a more uncertain economic outlook,\" Chris Grigg, British Land chief executive, told reporters when presenting results Aug. 4. \"Valuations won\'t grow as quickly. But in terms of rental growth, we\'re quite optimistic. It\'s a function of \'not much supply.\"\ \Standard Pacific farm land, San Diego\<\/a\>\<\/p\>\<\/div\>\<\/span\>\nIrvine, CA-based Standard Pacific Corp. (NYSE: SPF) is rolling the dice and betting there will be a huge demand for new housing in Northern San Diego over the next five years. Specifically, about 737 residences.\ \Barangaroo development, Sydney, Australia\<\/a\>\<\/p\>\<\/div\>\<\/span\>\nIn 2009, a rapid economic slowdown, particularly in the U.S. and Europe, generated nearly A$1 billion worth of asset write downs and negative property revaluations at the company.\ By Alex Finkelstein, Real Estate Channel on August 26, 2010 3:52 PM \4 World Financial Center, NYC\<\/a\>\<\/p\>\<\/div\>\<\/span\>\nThe trend bodes poorly for an office market struggling with a national vacancy rate of 17.4%, the highest since 1993, according to real-estate research firm Reis Inc.\ Victor Calanog\<\/p\>\<\/div\>\<\/span\>\nBusinesses aren\'t expanding as much partly because they are uncertain about the strength of the economic recovery. They also are figuring out how to use less space per employee by setting up more-collaborative work environments.\ Denise M. Wilson\<\/p\>\<\/div\>\<\/span\>\nThe New Jersey-based power company\'s employees will work in a space with no enclosed offices, reducing the amount of space per employee the company needs to pay for, and, executives say, helping people work more efficiently.\ \NRG Energy HQ Princton NJ\<\/a\>\<\/p\>\<\/div\>\<\/span\>\nLandlords have taken note. Boston Properties President Doug Linde said in a conference call with analysts last month that law firms were looking to reduce their overall footprint by 10% to 15% -- both because they no longer need many spread-out conference and file rooms and because they have yet to rehire laid-off employees.\ Doug Linde\<\/p\>\<\/div\>\<\/span\>\nUnder the lease deal, which isn\'t final, Deloitte -- which now occupies some 934,000 square feet of office space in the city -- would eventually move those operations into just 390,000 square feet at 4 World Financial Center, with options to expand to 630,000 square feet.\ By Kevin Brass, Real Estate Channel on August 26, 2010 3:40 PM \15 Penn Plaza Tower, New York City\<\/a\>\<\/p\>\<\/div\>\<\/span\>\nA skyscraper billed as a rival to the iconic Empire State Building was approved Wednesday by the New York City Council.\ By Michael Gerrity, Real Estate Channel on August 26, 2010 10:00 AM Lawrence Yun\<\/p\>\<\/div\>\<\/span\>\nThe SIOR index, measuring 10 variables, rose 2.8 percentage points to 41.0 in the second quarter, but remains well below a level of 100 that represents a balanced marketplace. This is the third consecutive quarterly improvement after nearly three years of decline; the last time the commercial market was in equilibrium at the 100 level was in the third quarter of 2007.\ By Alex Finkelstein, Real Estate Channel on August 25, 2010 1:09 PM \Li Ka Shing\<\/a\>\<\/p\>\<\/div\>\<\/span\>\nDespite the government\'s attempt to hold down commercial real estate prices, two prime Hong Kong development lots have sold at above-market amounts at a hotly-contested and closely-watched government land auction.\ \Hong Kong land - Cheung Kong\<\/a\>\<\/p\>\<\/div\>\<\/span\>\nThe government also said it would sell an additional three sites before the end of September following Tuesday\'s auction, which was the fifth in the current fiscal year ending March 2011.\ \Hong Kong Hung Hom land site\<\/a\>\<\/p\>\<\/div\>\<\/span\>\nThe Hung Hom site sold for nearly double the opening bid of HK$1.77 billion and fetched far more than forecasts of between HK$2.3 billion and HK$2.8 billion.\ By Alma Kadragic, Real Estate Channel on August 24, 2010 9:52 AM \Al Raha Gardens\<\/a\>\<\/p\>\<\/div\>\<\/span\>\n(ABU DHABI, UAE) -- Aldar Properties PJSC, the Abu Dhabi property development, management and investment company, announced details of a shopping and community center, as well as a range of retail kiosks that will serve residents of Al Raha Gardens and surrounding communities.\ \Al Raha Gardens\<\/a\>\<\/p\>\<\/div\>\<\/span\>\nOther tenants are Claire\'s Accessories, Grand Optics, Modern National Laundry, Mothercare, Pace e Luce Ladies Salon, Pace e Luce Mens Barbers, Pets Delight, Tasti D Lite, Tele Pizza, and Tip Top Nail Bar.\ September 2, 2010 11:14 AM (MIAMI, FL) -- Just days after unveiling that 1450 Brickell now has 226,000 square feet of office space leased, the project\'s developer announced today that the \'class-A\' building has been awarded LEED Gold certification by the U.S. Green Building Council. September 2, 2010 9:10 AM According to the Mortgage Bankers Association\'s (MBA) Commercial/Multifamily Delinquency Report, delinquency rates were mixed in the second quarter for commercial/multifamily mortgage investor groups. The delinquency rate for loans held in commercial mortgage-backed securities (CMBS) is the highest since the series began in 1997. September 1, 2010 8:20 AM It\'s the end of the road for Xanadu, a planned billion-dollar, 2.3-million-square-foot retail emporium in East Rutherford, NJ. Big-name financiers and developers have dropped the ball. The state of New Jersey is considering foreclosing on the property. August 31, 2010 12:23 PM B-class office space outside Toronto\'s downtown core used to get little respect from buyers and investors. Not anymore, however. Toronto suburban B-class space today is poised for growth as escalating traffic congestion and longer commute times restrict easy access to the city center, August 27, 2010 8:00 AM The latest data published by research group Investment Property Databank show property values in the United Kingdom have grown 15.4% since August 2009 and about 7% this year. But the growth in property values has been slowing for the past four months. August 26, 2010 3:52 PM The office-leasing numbers look good right now but they could be deceiving, according to a recent national study by New York City-based Studley. August 26, 2010 3:40 PM A skyscraper billed as a rival to the iconic Empire State Building was approved Wednesday by the New York City Council. The 1,190-foot \'15 Penn Plaza\' is planned for two blocks west of the Empire State Building, drawing criticism that it will alter New York\'s famed skyline. August 26, 2010 10:00 AM According to the National Association of Realtors (NAR), the U.S. commercial real estate sector, hurt by weak job growth, are now offering various incentives in many areas that are conducive to luring new tenants or expanding existing tenants. August 25, 2010 1:09 PM Despite the government\'s attempt to hold down commercial real estate prices, two prime Hong Kong development lots have sold at above-market amounts at a hotly-contested and closely-watched government land auction. August 24, 2010 9:52 AM (ABU DHABI, UAE) -- Aldar Properties PJSC, the Abu Dhabi property development, management and investment company, announced details of a shopping and community center, as well as a range of retail kiosks that will serve residents of Al Raha Gardens and surrounding communities.
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The 35-story, 582,817 square foot office tower\'s LEED Gold certification coincides with receipt of its Certificate of Occupancy, which verifies that the building is in compliance with all local building codes and is safe for permanent occupancy.\
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\"In earning its LEED Gold certification, 1450 Brickell has set a new standard for the sustainable design and construction of new commercial office buildings in Miami,\" said Alan Ojeda, CEO of Rilea Group, developer of 1450 Brickell. \"As tenants seek opportunities to become more environmentally-conscious in line with their business principles, properties like 1450 Brickell will stand out from the competition. Recognizing this trend toward green buildings and the cost efficiencies created by sustainable design, we set out to build Miami\'s most sustainable office tower. We are now seeing this commitment materialize in the form of strong leasing activity among the market\'s top-tier corporate tenants.\"\
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1450 Brickell features a range of efficient strategies and technologies that enhance the health and productivity of its tenants while reducing waste and promoting environmental sustainability.\
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Highlights include:\
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\"1450 Brickell\'s development team took a big risk five years ago in setting out to build a LEED Gold office tower at a time when there were no LEED buildings in Miami,\" said Rob Hink, a LEED Accredited Professional and Principal of the Spinnaker Group, 1450 Brickell\'s environmental consulting firm. \"Now, 1450 Brickell stands alone as the only newly constructed LEED Gold certified office tower in Downtown Miami, making it a model for green construction.\"\
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News of 1450 Brickell\'s LEED Gold certification follows a string of transactions that bring the total amount of leased space at the tower to more than 226,000 square feet. Tenants include Miami-based law firm Bilzin Sumberg, financial services firm BNY Mellon, executive recruitment firm Korn/Ferry International, Spanish financial institution Bancaja, private investment firm H.I.G. Capital, investment banking firm BroadSpan Capital, law firm Ratzan & Rubio, commercial reinsurance company International Broking Solutions, global commodities trader Yntegra, Kempler Energy, AgriCommodity Trade, and Preston III.\
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Beyond 1450 Brickell\'s sustainable features, tenants are drawn to the building\'s glass curtain wall system, which played an integral role in attaining LEED Gold status and sets new market standards in commercial building strength. Specifically, the curtain wall system improves impact resistance, solar performance, energy efficiency, sound attenuation and UV blocking. The glass façade, fabricated entirely of large-missile impact glass, was tested to withstand wind loads over 300 mph, making 1450 Brickell one of the nation\'s most wind-resistant office buildings. The tower also has two generators, one for use in emergencies and another that can power tenants\' basic electrical needs during outages.\
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Designed by Miami-based architecture firm NBWW & Associates and constructed by Coastal Construction, 1450 Brickell offers sweeping views of Biscayne Bay, Brickell Avenue, and the city of Miami. Floor-to-ceiling windows and wide-open floor plates range in size from 24,000 square-feet to 25,600 square-feet and maximize the flow of natural light throughout tenant areas.\
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\Commercial Mortgage Delinquencies Mixed in Q-2, Says MBA
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\<\/span\>\nAccording to the Mortgage Bankers Association\'s (MBA) Commercial/Multifamily Delinquency Report, delinquency rates were mixed in the second quarter for commercial/multifamily mortgage investor groups.\
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The delinquency rate for loans held in commercial mortgage-backed securities (CMBS) is the highest since the series began in 1997. Delinquency rates for other groups remain below levels seen in the early 1990\'s, some by large margins.\
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Between the first quarter and second quarter 2010, the 30+ day delinquency rate on loans held in CMBS rose 1.39 percentage points to 8.22 percent. The 60+ day delinquency rate on loans held in life company portfolios decreased 0.02 percentage points to 0.29 percent. The 60+ day delinquency rate on multifamily loans held or insured by Fannie Mae rose 0.01 percentage points to 0.80 percent. The 60+ day delinquency rate on multifamily loans held or insured by Freddie Mac increased 0.03 percentage points to 0.28 percent. The 90+ day delinquency rate on loans held by FDIC-insured banks and thrifts remained unchanged at 4.26 percent.\
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\"Different investor groups lend in different ways and on different types of properties,\" said Jamie Woodwell, MBA\'s Vice President of Commercial Real Estate Research. \"Those differences are becoming more evident as the economy continues to struggle to work its way out of the recession. Life insurance companies, Fannie Mae and Freddie Mac continue to see relatively low delinquency rates on their commercial and multifamily mortgages, the delinquency rate on banks\' commercial and multifamily mortgages appears to have reached a plateau, and the delinquency rate for loans in CMBS continued to climb during the period. Performance across all investor groups will continue to depend on economic growth and its ability to generate demand for commercial real estate space.\"\
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Construction and development loans are not included in the numbers presented here, but are included in many regulatory definitions of \'commercial real estate\' despite the fact that they are often backed by single-family residential development projects rather than by office buildings, apartment buildings, shopping centers or other income-producing properties.\
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The MBA analysis looks at commercial/multifamily delinquency rates for five of the largest investor-groups: commercial banks and thrifts, CMBS, life insurance companies, Fannie Mae and Freddie Mac. Together these groups hold more than 80 percent of commercial/multifamily mortgage debt outstanding.\
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The analysis incorporates the same measures used by each individual investor group to track the performance of their loans. Because each investor group tracks delinquencies in its own way, delinquency rates are not comparable from one group to another.\
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Based on the unpaid principal balance of loans (UPB), delinquency rates for each group at the end of the second quarter were as follows:\
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● CMBS: 8.22 percent (30+ days delinquent or in REO);\
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● Life company portfolios: 0.29 percent (60+days delinquent);\
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● Fannie Mae: 0.80 percent (60 or more days delinquent)\
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● Freddie Mac: 0.28 percent (60 or more days delinquent);\
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● Banks and thrifts: 4.26 percent (90 or more days delinquent or in non-accrual).\
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\Two Years Behind Schedule, $2 Billion Xanadu Retail Project Near Collapse in New Jersey
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Big-name financiers and developers have dropped the ball. The state of New Jersey is considering foreclosing on the property.\
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The venture is reported to be near completion but needs another $1 billion to fund the final work, according to The \
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A group of investors including Colony Capital LLC, Dune Capital Management LP and KanAm has relinquished control of the project to a group of about a half-dozen lenders led by Capmark Financial Group Inc., Credit Suisse Group and Fortress Investment Group LLC.\
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Those lenders now must deal with the state of New Jersey, which has a major role in the project and has made it clear that it might try to take control if it isn\'t completed soon, the WSJ reports.\
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\"For reasons that are not clear to us, when it came time for our existing lenders to support the continuation of Xanadu, they refused to engage with us, ignored our proposed business plan and were unsupportive of a restructuring plan that would keep the project going,\" according to a statement released by the Colony group.\
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The Xanadu project in East Rutherford originally was the brainchild in 2004 of Mills Corp. and was acquired by the Colony-led group in 2006 for $500 million. Mills was later taken over by Simon Property Group Inc. and Farallon Capital Management.\
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Xanadu was envisioned as one of the top shopping destinations in the country located near sports stadiums and offering such attractions as an 800-foot indoor ski slope and the largest Ferris wheel in North America.\
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But some industry observers said the development was ill-conceived from the beginning, according to the WSJ.\
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Since taking office in January, Gov. Chris Christie has made it clear he plans to get tough with the complex that was supposed to open in November 2008.\
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Those funds were an advance payment for the first 15 years. Thereafter, the authority was slated to be paid a minimum of $95 million in staggered payments through 2026.\
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A state commission recently recommended that if the project doesn\'t move ahead under certain guidelines the state should \"move quickly and aggressively to pursue all rights and remedies available to the State, including possible foreclosure and damages,\" the WSJ reported.\
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The state also is weighing its role in helping to salvage the project, including providing some tax-exempt financing.\
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\"It really doesn\'t matter to us who the title holder of the property is. What\'s most important is that it\'s an entity ultimately that can handle the project and complete it,\" Michael Drewniak, a spokesman for Gov. Christie, told the WSJ.\
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In its statement, the Colony group noted that a Lehman Brothers Holdings Inc. affiliate that was part of the lender group defaulted in March 2009.\
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\"Of the remaining lending syndicate, a substantial majority were in severe financial distress and unable to meet their commitments,\" the statement said.\
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\"In an effort to save the project, we agreed to allow the lenders to terminate their initial loan obligations in exchange for pursuing good faith efforts to restructure the project\'s financing.\" \
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According to various published histories, Xanadu, also known as Zanadu or Shengdu, is a mythical place that is rooted in an actual area of Inner Mongolia.\
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Xanadu became popular as the legendary place mentioned in Samuel Taylor Coleridge\'s poem as the place where Kublai Khan built a giant dome to indulge his every fantasy.\
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The place was believed to be mythical until the ruins were discovered 270 km (168 miles) north of Beijing and near Dolonnuur city, at the end of the 20th Century.\
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Xanadu is now believed to have been the capital of Kublai Khan\'s Empire, which was founded sometime in the 13th century.\
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\Toronto\'s Suburban B-Class Office Space Hot Ticket
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Toronto suburban B-class space today is poised for growth as escalating traffic congestion and longer commute times restrict easy access to the city center, according to the newest Evton Capital Partners Commercial Real Estate Trends Survey.\
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Evton Capital Partners is a commercial real estate investment and property management firm based in Toronto. Since its inception in 1995, the company has completed over $200 million in commercial real estate transactions in Ontario and Alberta\
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Increasing demand for B-class office space in Toronto over the past few years has pressured both market activity and average purchase prices upwards.\
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Evton\'s survey notes that over the past five years, the purchaser profile for B-class office space in the Greater Toronto Area has changed dramatically.\
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The combination of the high value of the Canadian dollar and reduced strength of the US dollar and Euro has led to a decrease in the number of foreign investors participating in Canada\'s commercial real estate sector.\
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Since 2005, Canadian private investors have accounted for a large portion of deal flow in the commercial real estate market. The year-to-date dollar volume created by Canadian private investors is approximately $100 million and has already exceeded the total dollar volume by this group in all of 2009, which was approximately $75 million.\
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Ontarians identified Mississauga, Vaughan and Markham as the top three areas outside of Toronto\'s city center that will see a boom in commercial real estate in the next five years.\
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that Nearly half of all Torontonians (43%) said they would be likely to change their place of employment in order to lessen their commute time, the survey found..\
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\"Proximity to public transit and short commute times trump the prestige of an address or the need to be in the heart of the city - a trend that will only increase in the future.\"\
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Added Evans: \"Popularity of B-class office buildings on the outskirts of the city\'s core that are on the subway line - be it in Midtown, Uptown or Bloor West- has increased dramatically over the past few years; more affordable lease rates compared to their city-center counterparts were extremely attractive incentives during the recession.\"\
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He adds, \"From a historical perspective, Toronto\'s B-class office real estate market has performed very well.\"\
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\"Our survey found that 69 per cent of Torontonians feel that average house prices will increase in neighborhoods and areas that are characterized by nodal development.\"\
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As the City of Toronto continues to struggle with traffic congestion and overall public transportation issues, more than three-quarters (76%) of Greater Toronto Area residents feel that it is likely companies will soon begin to set up offices away from the city\'s core to make the workplace more accessible to employees.\
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Nearly half (45%) of Torontonians rank the ability to take public transportation to work as an important factor when determining their place of employment.\
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Added Bunston: \"Debates around how the city\'s next mayor will deal with transit systems, and the unwavering public support for Transit City have shown us that people are passionate about public transportation- we are seeing that the proposed new line extensions are as much about building communities around the city as they are about moving people.\"\
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He cites figures showing city commuter chaos. More than one third (35%) of respondents in the Greater Toronto Area spend half an hour or more commuting in one direction. In contrast, only 20 per cent of Southwestern Ontarians commute for more than 30 minutes - be it on the road or rail.\
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Evton is focused on acquiring private Canadian real estate investment opportunities for high-net-worth investors. Through selective and managed growth the Evton Real Estate Fund LP has accumulated over $77 million in assets under management since its inception in 2005.\
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\GLOBAL COMMERCIAL REAL ESTATE ROUNDUP
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But the growth in property values has been slowing for the past four months. In July, U.K. property values barely budged, rising just 0.2% from the previous month, according to The \
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For more than a year, commercial-property investment has benefited from low interest rates, low bond yields and, in some key markets, a rise in income from rent. In the U.K. in particular, property valuations surged last year.\
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\"We expect some companies with lower-quality assets and short leases to see prices decline,\" says Harm Meijer, head of European property research at J.P. Morgan Chase & Co. in London. \"We expect a small dip, but not for quality assets or long leases.\"\
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Analysts are particularly watching U.K. values because that market fell faster when the crisis hit in 2007 and led Europe when market valuations began recovering toward the middle of last year.\
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According to the latest report on capital returns in property by CB Richard Ellis, property values in Europe, excluding the U.K., rose 0.3% in the second quarter of 2010, the first Continental Europe rise in values since the index was launched in December 2007.\
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Market consensus appears to be that U.K. property values will rise a total of about 2.5% this year. Given that property values already are up 6% to 7%, it seems property values are set for a fall, he says.\
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\"This means that U.K. property values will be negative in the second half of 2010, and in 2011 and 2012,\" Barber said.\
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\"Where do we go from here?\" asks Leonard Geiger, associate portfolio manager at Cohen & Steers property-investment firm in London. \"In order to grow, companies are going to have to develop and make acquisitions.\"\
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The evidence of stagnation is beginning to show in the balance sheets of European property companies. British Land PLC reported recently that the growth in value of its property portfolio slowed significantly to 1.4% in the company\'s fiscal quarter to June 30. That sluggish growth comes after British Land\'s portfolio surged 16% in the previous two quarters.\
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\"Vacancies are still very high in Brussels, around 12%,\" said Ingrid Daerden, Cofinimmo SA\'s investor-relations officer. \"The Belgian market has not hit bottom yet.\"\
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Among the safe havens: retail property in Germany and Scandinavia.\
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In the first half of 2010, investment in the German retail market rose 88% to €4.1 billion ($5.3 billion). International investors accounted for 52% of the investment in German shopping centers, according to data published by CB Richard Ellis.\
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Investment in the Nordic region rose 63% to €1.4 billion in the first half of 2010, according to CBRE.\
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By comparison, retail investment in the U.K. fell 12% to €5.1 billion, and investment in shopping centers in Spain plunged 27% to €1 billion. Retail investment in France rose 33% to €1.1 billion, and investment in Italy was up 38% to €697 million.\
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Bond traders, fund managers and others in the U.S. financial services realm, see a golden opportunity over the next 12 months in offering jumbo commercial real estate loans.\
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This marks a new turn in the previously tight realty capital markets, according to The \
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The latest example: New York City-based Cantor Fitzgerald, best known for bond trading, is getting into the business of originating commercial mortgages.\
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The firm, which lost numerous key people in the 9/11 tragedy, has teamed up with CIM Group, a Los Angeles real-estate fund manager. They say they hope to make about $5 billion in commercial-property loans available over the next 12 months. They plan to sell the loans later as bonds.\
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Anthony Orso, a former real-estate banker at Credit Suisse Group who joined Cantor about a year ago, tells the WSJ \"the timing is perfect\" for his firm to enter the business.\
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Property values have started to stabilize after plunging more than 40% from the peak in 2007, limiting lenders\' risks. And commercial real-estate debt is drawing interest from yield-hunting investors world-wide.\
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Demand for fresh funds is likely to be enormous, Orso says.\
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Already, financing challenges have contributed to a spike in loans being transferred to debt specialists responsible for dealing with soured loans, according the WSJ.\
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About 15% of outstanding commercial mortgages bundled into bonds, or about $110 billion, is expected to be in \"special servicing\" by year\'s end due to default or imminent default, according to a study by New York City-based Fitch Ratings.\
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The company has contracted to buy 438 acres of raw land for $150 million or about $320,512 per acre or $7.36 per square foot. Not exactly a fire-sale price, land appraisers tell Real Estate Channel.\
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The Wall Street Journal reports the transaction, Standard Pacific\'s biggest land deal since the market\'s 2006 crash, is further evidence of the company\'s strategy to bulk up on bargain-priced land now as it prepares for the housing market to improve.\
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In addition to its latest deal, Standard Pacific has committed to spend about $300 million for 4,600 lots so far this year.\
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The land Standard Pacific will buy currently contains active dairy farms, egg ranches and citrus groves. Although it plans as many as 737 homes, it will also consider selling lots to other builders\
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Raw land is typically less expensive than finished lots, so while Standard Pacific has to pay for the infrastructure, it can earn money selling homes or finished building lots, the WSJ reports.\
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\"We decided to take the risk ourselves instead of sharing it with others,\" said Ken Campbell, chief executive of Standard Pacific CEO Ken Campbell told the WSJ.\
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Sydney, Australia-based Lend Lease Group, Australia\'s largest property developer, is back on track after surviving previous quarters of heavy write downs. \
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The company posted full-year net profit of A$345.6 million Australian dollars (US $308.6 million), compared with a A$653.6 million net loss in the previous year, reports Dow Jones.com.\
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Operating profit for the year ended June 30 was A$323.6 million, beating the company\'s guidance of a result in line with last year\'s A$307.5 million, and a A$319 million average forecast of four analysts.\
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With offshore construction activity subdued, Lend Lease had to cut costs to boost its operating profit, the company reported.\
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Revenue fell roughly 29% to A$10.57 billion from A$14.79 billion on lower construction activity and the impact of a stronger Australian dollar.\
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A slowdown in construction often lags behind a broader economic slowdown because many of Lend Lease\'s jobs are booked a year or two in advance and can often take years to complete.\
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Lend Lease, which blends property management and development with investment management, said it will pay a final dividend of 12 cents, down from 16 cents last year.\
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The company last year added a number of big projects to its development pipeline, the WSJ reports. Those projects include the A$6 billion first stage of Barangaroo redevelopment in Sydney and the GBP1.3 billion expansion of the Stratford City shopping center in London, which it said will underpin earnings growth over the longer term.\
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Macquarie noted the shift away from the U.S. in Lend Lease\'s earnings to contribute just 7% of operating profit, down from 30% in the 2009 financial year. Asia Pacific, however, accounted for 65% of earnings, up from 55%.\
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The broker is forecasting the group\'s net operating profit to grow 8% this financial year but earnings per share to fall 6% as the full impact of a recent A$806 million equity raising is felt.\
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Goldman Sachs noted the lack of specific earnings guidance saying, \"we expect investors will take this to indicate a weak FY11 and therefore delayed recovery back to EPS growth.\"\
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else if (article_param==3081) {document.write("Office-Leasing Rally Deceiving as Tenants Sign More Contracts but Take Less Space
\\\<\/span\>\nThe office-leasing numbers look good right now but they could be deceiving, according to a recent national study by New York City-based Studley.\
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In the 12 months that ended June 30, office tenants signed 161.3 million square feet in leases nationwide. That is a 5.7% increase over the 12-month period ended in March.\
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But what the numbers don\'t show is that tenants are signing up for less space than they previously had. Each employee is being given a little less work room.\
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Three of the five largest deals of the second quarter in New York City involved tenants either taking the same amount of space or less, according to The \
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\"Until tenants shift into expansion mode ... the market will be engaged in a process of musical chairs,\" states Studley\'s second-quarter report on New York.\
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Concerns are particularly acute for the hundreds of office properties that are in precarious financial condition because they are worth less than the mortgages that were made during the boom years. They need to fill space to boost rental revenue -- and values, the WSJ reports.\
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\"People should temper their expectations about how quickly office space will be leased up,\" said Victor Calanog, research director for Reis. \"Where there are leases being signed, companies are trying to be efficient with the space they\'re using.\"\
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NRG Energy is cutting office space in Houston by moving into an open-plan work space modeled on its Princeton, N.J., headquarters. In Houston, NRG Energy Inc. is moving out of 260,000 square feet across two buildings into less than 220,000 square feet of office space in a new property, Houston Pavilions.\
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\"You get efficiency from a real-estate standpoint, but you gain even more efficiency from the way people interact or share information,\" Denise Wilson, NRG\'s chief administrative officer, says.\
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Law firms have been among the most aggressive in reducing their space. Law firm Baker & McKenzie recently signed a lease to move its offices into 237,000 square feet down the street from its current home in Chicago\'s East Loop, allowing it to reduce space per attorney to about 700 square feet from 1,000 square feet, according to Jones Lang LaSalle Inc.\'s Bill Rogers, who brokered the deal.\
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\"We have seen a clear change,\" Linde said, according to a trans\cript.\
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More efficient use of space could help reduce office demand even when the economy recovers -- adding to the hesitation that most real-estate developers feel about investing in new buildings.\
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The trend \"is an impediment for new construction,\" says Richard LeFrak, head of LeFrak Organization, a large private developer in New York. \"We have all this supply from within. You have to be cautious now.\"\
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In New York, accounting giant Deloitte recently asked the city for $11 million in tax breaks that would support a consolidation of its New York offices at 4 World Financial Center in downtown Manhattan.\
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Deloitte would spend more than $90 million on building and fitting out the space with a new, more efficient design, according to its application for the tax breaks.\
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The federal government also is looking for more efficient office space. President Barack Obama in June sent a memo to federal agency heads urging them to squeeze $3 billion in costs out of their real-estate portfolios by the end of the 2012 fiscal year by, among other things, consolidating into unused office space and increasing the number of people who can work in an office.\
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\New York City Approves Iconic New Skyscraper
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The 1,190-foot \'15 Penn Plaza\' is planned for two blocks west of the Empire State Building, drawing criticism that it will alter New York\'s famed skyline. Anthony Malkin, owner of the 80-year-old Empire State Building, called the project an \"assault on New York City and its iconography.\"\
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But the council overwhelmingly rejected that argument.\
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\"Anybody that builds a building in New York City changes its skyline--we don\'t have to run around to every other owner and apologize,\" Mayor Michael Bloomberg told reporters. \"One guy owns a building, he\'d like to have it be the only tall building--I\'m sorry, that\'s not the real world. \
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Developed by the Vornado Realty Trust, a New York-based REIT, the new 67-story office tower will be shorter than the 102-story Empire State Building. But 15 Penn Plaza will loom above the building\'s popular 1,050-foot-high observation deck.\
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Vornado overcame many of the objections by offering to improve the neighborhood\'s transit and subway connections.\
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\"Our skyline is always changing and growing,\" City Council speaker Christine Quinn said at the meeting. \"New York City is not a stagnant city.\"\
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\Many U.S. Commercial Real Estate Markets Hurting From Weak Job Growth, Says NAR
\\\\<\/a\>\<\/span\>\nAccording to the National Association of Realtors (NAR), the U.S. commercial real estate sector, hurt by weak job growth, are now offering various incentives in many areas that are conducive to luring new tenants or expanding existing tenants.\
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Lawrence Yun, NAR chief economist, said fallout from the recession continues to impact commercial real estate. \"Vacancy rates are beginning to level off in some sectors, but rent discounts and moderate levels of landlord concessions are widespread,\" he said. \"This is very much a tenant\'s market, which is quite favorable for businesses that are considering expansion. It\'s also encouraging that there is a modest improvement in the sentiment of commercial real estate practitioners.\"\
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The Society of Industrial and Office Realtors, in its SIOR Commercial Real Estate Index, an attitudinal survey of more than 600 local market experts, shows vacancy rates are beginning to level, but rents remain depressed, and subleasing space is high.\
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Fifty-seven percent of respondents expect improvements in the office and industrial sectors in the third quarter.\
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Commercial real estate development remains stagnant in all regions with low investment activity; 88 percent of respondents said it is virtually nonexistent in their markets, but development acquisitions are beginning to grow in many areas in what is described as a buyer\'s market.\
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Looking at the overall market, vacancy rates will shift modestly in the coming year according to NAR\'s latest COMMERCIAL REAL ESTATE OUTLOOK. The NAR forecast for four major commercial sectors analyzes quarterly data in the office, industrial, retail and multifamily markets. Historic data were provided by CBRE Econometric Advisors.\
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Vacancy rates in the office sector, with high levels of available sublease space, are expected to increase from 16.7 percent in the second quarter of this year to 17.0 percent in the second quarter of 2011, and then ease later next year.\
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The markets with the lowest office vacancy rates in the second quarter were New York City, Honolulu and Long Island, N.Y., with vacancies around the 9 to 11 percent range.\
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Annual office rent should fall 2.7 percent this year and decline another 2.1 percent in 2011. In 57 markets tracked, net absorption of office space, which includes the leasing of new space coming on the market as well as space in existing properties, is projected to be a negative 13.6 million square feet this year and then a positive 22.6 million in 2011.\
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Industrial vacancy rates are likely to decline from 14.1 percent in the second quarter of 2010 to 13.7 percent in the second quarter of 2011, and then continue to ease modestly as the year progresses.\
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The areas with the lowest industrial vacancy rates in the second quarter were Los Angeles, San Francisco and Kansas City, with vacancies ranging between 8 and 11 percent.\
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Annual industrial rent is estimated to drop 5.4 percent this year, and to decline another 4.7 percent in 2011. Net absorption of industrial space in 58 markets tracked is seen at a negative 31.7 million square feet this year and a positive 157.2 million in 2011.\
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Retail vacancy rates should hold steady at 13.1 percent in both the second quarter of this year and in the second quarter of 2011, with a level pattern for most of next year.\
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Markets with the lowest retail vacancy rates in the second quarter include San Francisco, Honolulu and Miami, with vacancies of 7 to 8 percent.\
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Average retail rent is expected to decline 2.6 percent in 2010 and then flatten out, slipping 0.1 percent next year. Net absorption of retail space in 53 tracked markets is forecast to be a negative 2.3 million square feet this year and then a positive 6.4 million in 2011.\
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The apartment rental market - multifamily housing - is benefiting from modestly higher demand. Multifamily vacancy rates are likely to decline from 6.0 percent in the second quarter of this year to 5.6 percent in the second quarter of 2011.\
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Areas with the lowest multifamily vacancy rates in the second quarter include San Jose, Calif.; Pittsburgh; and Philadelphia, with vacancies of less than 4 percent.\
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With additions from new construction, average rent should slip 0.6 percent in 2010, and then hold even in 2011. Multifamily net absorption is expected to be 105,200 units in 59 tracked metro areas this year, and another 138,000 in 2011.\
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Approximately 79,000 NAR and institute affiliate members specialize in commercial brokerage services, and an additional 263,000 members offer commercial real estate as a secondary business.\
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\Prime Hong Kong Land Sells for Premium Prices
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Cheung Kong (Holdings) Ltd., controlled by billionaire Li Ka-shing, bid 7.61 billion Hong Kong dollars (US $976 million).\
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Dow Jones.com reported six bidders vied for one of the sites that Cheung Kong bought, a prime residential plot in Kowloon City, across the harbor from Hong Kong Island.\
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The company said it paid HK$4.1 billion for it, which translates into a value of HK$10,399 for each square foot of buildable space the site could accommodate.\
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The sales price was 44% above the opening bid of HK$2.86 billion, and was higher than the HK$3.5 billion to HK$3.94 billion expected in a poll of eight surveyors and analysts.\
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Victor Li, vice chairman of Cheung Kong and son of Li Ka-shing, told Dow Jones the two sites were particularly appealing because of their location.\
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The company, the city\'s second-biggest developer by market capitalization after Sun Hung Kai Properties Ltd., also won the second site located in Hung Hom--where Cheung Kong has a major presence.\
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That waterfront site, also on the Kowloon side of Hong Kong\'s Victoria Harbor, attracted 11 bidders, and was sold for HK$3.51 billion, translating into HK$9,597 a square foot.\
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Hong Kong\'s property prices have risen 13% so far this year following a 30% jump in 2009, prompting the government to tighten mortgage lending and increase land supply.\
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In a recent new move, the government said it was banning sales contracts on new condominiums being flipped before the properties are delivered.\
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\\\\<\/a\>\<\/span\>\nAlso, the Hong Kong Monetary Authority ordered banks to stress-test mortgage applications to ensure that borrowers could withstand an interest-rate increase of two percentage points.\
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Commenting on the two lands sales, Alvin Lam, a director at Midland Surveyors, said, \"We are talking about years of investment and construction for property projects, something in the medium to long term.\" Added Alfred Lau, an analyst at BOC International, \"Developers won\'t give up good and quality sites just because of short-term policy volatilities,\
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\"The result was good for Cheung Kong. The firm needs to replenish its land bank, and it also has a very strong balance sheet to support the acquisitions,\" he said.\
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\Aldar\'s Al Raha Gardens Opening Retail and Food Outlets in Abu Dhabi Village Center
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Kiosks operated by Al Raha International Integrated Facilities Management Co. supplying basic goods through the Abela supermarket group will open in September at three locations across Al Raha Gardens. Additionally, mobile ice cream operator Desert Chill is already operating across the community on selected days.\
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Al Raha Gardens Village Centre will be a 2,300 square meter community shopping center with a community hall, gym facilities and a 916 square meter Abela supermarket. The Village Centre will also include a range of coffee shops and restaurants - including Jones the Grocer, Zyng Asian Grill and an Arabic restaurant for which terms are being finalized. Service retail units and ATMs as well as male and female prayer rooms and toilet facilities will be included.\
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The Village Centre will feature a mix of Arabic and modern themes, with a double height covered entrance area, landscaped courtyard areas and food and beverage units with external seating. Construction work will be completed in early 2011.\
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Fred Douglas, Director of Leasing at Aldar Properties, said,\"We are pleased to unveil these exciting developments within Al Raha Gardens.\" He added, \"Aldar is committed to the development of sustainable communities in Abu Dhabi, and this is a tangible example of how we are delivering this.\"\
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\1450 Brickell Tower Becomes Miami\'s First LEED Gold Office Building
Commercial Mortgage Delinquencies Mixed in Q-2, Says MBA
Two Years Behind Schedule, $2 Billion Xanadu Retail Project Near Collapse in New Jersey
Toronto\'s Suburban B-Class Office Space Hot Ticket
GLOBAL COMMERCIAL REAL ESTATE ROUNDUP
Office-Leasing Rally Deceiving as Tenants Sign More Contracts but Take Less Space
New York City Approves Iconic New Skyscraper
Many U.S. Commercial Real Estate Markets Hurting From Weak Job Growth, Says NAR
Prime Hong Kong Land Sells for Premium Prices
Aldar\'s Al Raha Gardens Opening Retail and Food Outlets in Abu Dhabi Village Center