Wednesday, April 2, 2008

GVA Advantis Negotiates $3M Sale of 49-Acre Development Site in Riverview, FL

TAMPA, FL –– GVA Advantis is pleased to announce it has negotiated the sale of a 49-acre development site in Riverview, (above photo) Hillsborough County, Florida, for $2,978,725.00.

GVA Advantis’ Mark Cooney, (right photo) executive director of land services, and Randy Mills, (left photo) associate of land services, exclusively represented the buyer, Delaney Creek Crossing, LLC, an entity of Phillips Land Acquisition, LLC. The seller was Tampa-based Falkenburg Road, LLC, a Florida limited liability company that was represented by Willis & Associates Inc.

“The market timing for new multi-family rental units is warranted due to current economic constraints of single-family housing acquisition,” says Cooney.

Located at 5600 South Falkenburg Road, the property is situated just south of Progress Boulevard in Riverview. The site is planned for a multi-family rental community.

Lisa Hyde
Director of Marketing
Advantis Real Estate Services Company
3000 Bayport Drive, Suite 100
Tampa, Florida 33607
Tel 813.342.4752
Fax 813.342.4004

HFF Arranges $6.5M Financing for Crossroads Shopping Center in Beaumont, TX

HOUSTON, TX – The Houston office of HFF (Holliday Fenoglio Fowler, L.P.) has arranged a $6.5 million financing for Crossroads Shopping Center, a five-building, 80,440-square-foot community retail center in Beaumont, Texas.

HFF managing director Tucker Knight (top right photo) and real estate analyst Steven Gautier worked exclusively on behalf of Wu Investments, a California-based private investor, to secure the five-year, fixed-rate loan through Mercantil Commercebank for the acquisition of the property.

Mercantile Commercebank was represented by Jaime Elmore, vice president of commercial real estate lending. Knight and Gautier also closed the sale of and arranged a $5.76 million financing for Sharpstown Court on behalf of Wu Investments in late February. This is Wu’s second investment in Texas in 2008.

Situated on an eight-acre site, Crossroads Shopping Center is located at 4410, 4414, 4420, 4436 and 4438 Dowlen Road directly off of the Eastex Expressway in Beaumont. The property is currently 100% leased to tenants including Stein Mart, Sprint and Morgan Stanley.


Laurie Fish McDowell
HFF Associate Director, Marketing
One Post Office Square, Suite 3500
Boston, MA 02109
tel 617.338.0990
fax 617.338.2150
Tucker Knight
HFF Managing Director
(713) 852-3500

HFF Closes Sale of Kansas City Marriott Country Club Plaza in Kansas City, MO

MIAMI, FL – The Miami and Pittsburgh offices of HFF (Holliday Fenoglio Fowler, L.P.) announced today that they jointly closed the sale of the Kansas City Marriott Country Club Plaza (photo above) in Kansas City, Missouri.

HFF senior managing director Dan Carlo, (photo at left) managing directors Patrick Poggi (photo bottom right) and Mark Popovich,(photo top right) and real estate analysts Jaret Turkell and Ann Marie Milan led the investment sales team on behalf of the seller, an affiliate of GE Real Estate. An affiliate of Noble Investment Group, LLC purchased the property free and clear of debt.

The Marriott Kansas City at Country Club Plaza is a full-service, 19-story hotel positioned in the affluent Country Club Plaza district of Kansas City.

Country Club Plaza is Kansas City’s premier shopping and entertainment destination and the oldest suburban shopping center in the U.S. Many shops and restaurants in the city are within easy walking distance of the hotel. Additionally, several corporate headquarters and schools immediately adjoin the property. Originally built in 1987 and extensively renovated in 2000, the Marriott Kansas City at Country Club Plaza has 295 rooms and 16,000 square feet of indoor function space.

“The Property has tremendous long-term potential,” said Poggi, “it is an attractive destination for both transient and corporate group business, and it continues to benefit from its central position in the renowned area of Country Club Plaza.”

GE Real Estate ( is one of the world’s premier commercial real estate companies with more than $79 billion in assets and a presence in 32 countries throughout North America, Europe, Asia and Australia/New Zealand.

GE Real Estate offers a comprehensive range of capital and investment solutions including equity capital for acquisition or development, as well as fixed- and floating-rate mortgages for new acquisitions or recapitalizations of commercial real estate.

Noble Investment Group

( is a real estate private equity fund manager and an integrated operating and development organization that specializes in value-added investments within the North American lodging and hospitality sector.


Laurie Fish McDowell
HFF Associate Director, Marketing
One Post Office Square, Suite 3500
Boston, MA 02109
tel 617.338.0990
fax 617.338.2150

Patrick Poggi,
HFF Managing Director
(305) 448-1333

Mark Popovich
HFF Managing Director
412 281 8714

HFF Secures $8M in Financing for 347 Mount Pleasant Ave. in West Orange, NJ

FLORHAM PARK, NJ – The New Jersey and New York offices of HFF (Holliday Fenoglio Fowler, L.P.) has secured $8 million in financing for 347 Mount Pleasant Avenue, (photo above) a 50,295-square-foot office building in West Orange, New Jersey.

Working on behalf of the borrower, HFF senior managing directors Thomas Didio (photo bottom right) and Evan Pariser (photo at right) (New York) and associate director Michael Klein (photo top left) placed the 10-year, fixed-rate loan with a regional bank. Proceeds will take-out floating-rate bridge financing secured by HFF when the borrower acquired the property from Organon USA, Inc. in the first quarter of 2007.

347 Mount Pleasant Avenue is close to Interstate 280 in West Orange, approximately 15 miles west of Manhattan. The property is nearly 100% leased to a mix of medical and professional service firms. Upon acquisition of the property, the borrower repositioned the building from a single tenant to multi-tenant asset with numerous improvements to the exterior and common areas.


Laurie Fish McDowell
HFF Associate Director, Marketing
One Post Office Square, Suite 3500
Boston, MA 02109
tel 617.338.0990
fax 617.338.2150

Thomas R. Didio
HFF Senior Managing Director
(973) 549-2000

The Real Estate Capital Scoreboard tm - April 2008

CHICAGO, IL-- "March Madness" defines current realty capital markets. While treasury rates barely changed (about 10 basis points), lenders exercise extreme caution in a fog of doubt.

Even as rates remain near historical lows, borrowers are baffled by substantially less favorable lending programs including wider spreads, rate floors and overall lower leverage. (Dr. Timothy Riddiough, member, Editorial Advisory Group, Real Estate Capital Institute, photo at right)

In particular, mortgage pricing is one of the key misunderstood variables for sizing loans today. A brief review and update on mortgage pricing are as follows:

* Swap Spread Pricing - Lenders favor swap spreads their movementsaccount for treasury spread volatility. Pricing is protected fromunpredictable spread gyrations as was the case much of last year.

For example, a minimum spreads of in excess of 200 basis points plus a ten-year treasury yields translate to longer-term rates of 6.30% or more.

* "Baseline" Pricing - Obtaining the most competitive quotes in the marketplace normally requires calling various lenders and collecting the best quotes. Although this process is still common, lenders readily determine most attractive, risk-free realty debt pricing by checking with the commercial-mortgage securities markets. Today, the highest quality, commercial mortgage securities (e.g., 10 Yr AAA CMBS issues), trade in excess of 6.5% -- the new benchmark for lender rate floors.

* Balance-Sheet Pricing - While Swap-Spread and Baseline pricing models are popular, many funding sources rely on balance-sheet metrics for pricing permanent debt including banks, life companies and agencies. Eacho f these sources have cost-of-funds that aren't necesssarily indexed to bond markets or treasuries.

The Agencies, for example, are able to provide pricing below 6% for longer-term debt - well below traditional sources of capital. Several changes are on the horizon with respect to various pricing formats including:

* More Conservative Underwriting - while interest rates are relatively attractive, continued pressure on funding proceeds will drive lower leverage levels.

* Narrowing Spreads and Pricing - as bond markets gain more stability, narrower spreads are expected.

* Wider Band of Pricing - within recent years, various types of properties (e.g., lodging, multifamily, retail) were priced within a narrow range. As markets readjust, lenders will expect greater pricing premiums for different property risk profiles. More discipline will continue to drive debt pricing and capital market recovery.

Dr. Timothy Riddiough, (photo top right) an Editorial Advisory Group member of theReal Estate Capital Institute, suggests the long-term solution for improving capital market malise is "to educate and protect the demand side by encouraging moderation and safer practices."


The Real Estate Capital Institute(r) is a volunteer-based research organization that tracks realty rates data for debt and equity yields. The Institute posts daily and historical benchmark rates including treasuries,bank prime and LIBOR.

Furthermore, call the Real Estate Capital RateLine at 7RE-CAPITAL (773-227-4825) for hourly rate updates.

The Real Estate Capital Institute(r)
3517 West Arthington Street
Chicago, Illinois USA 60624
Nat Zvislo,
Research Director
Toll Free : 800-994-RECI (7324)

Washington Trophy Market Remains Tight, while Rest of Market Softens

Article from Jones Lang LasSalle's Market Intelligence Monthly eReport (,b5GBmtFn)

By Trip Howell (photo at right)

Despite a general slowdown in leasing activity among most asset classes in the Metropolitan Washington region, and rising concerns over the health of the national economy, fundamentals in the D.C. Trophy office market remained strong and many key indicators improved throughout the past two quarters.

Direct vacancy rates plunged to record lows, and rental rates soared to unprecedented highs, as Washington’s Trophy office market continued to outperform all other segments of the local commercial real estate market. Trophy properties recorded positive net absorption of 598,362 square feet in 2007, compared with negative net absorption of all other asset classes in Washington, D.C.

With just one block of contiguous available space greater than 25,000 square feet in the Trophy market’s 11.1 million square foot existing inventory, direct vacancy plummeted to an all-time low of 0.4% at the end of 2007. These tight market conditions made leasing activity at existing buildings nearly impossible, and ignited abundant preleasing at under-construction buildings.


The inventory of Trophy office space in Washington, D.C. increased 3.0% over the past year to 11.1 million square feet, extending a supply-demand imbalance that has persisted in the market over the past several years.

Existing Trophy supply spanned 32 buildings, with another 2.1 million square feet under construction across eight buildings. This segment of well-located, premium product accounted for 10.8% of the overall inventory within the District’s 102.4 million square feet of commercial office space.

Only one block of direct space above 25,000 square feet remained on the market in existing buildings, a 27,924 square foot vacancy at 1301 K Street, NW. These tight conditions required tenants in the market to begin space planning far in advance of lease expirations at costlier under construction product, over a third of which was already preleased.

Vacancy rates maintained their consistent downward trend over the past several years in the Trophy market, and ended 2007 with rates 3.4% below winter 2006, from an already low rate of 3.8%. The prime vacancy rate among Trophy properties ended the year at a record-low 0.4%; the addition of sublease space lifted the total vacancy to just 1.6%. Net absorption in 2007 was down across all asset classes in Washington, D.C., although the Trophy market’s share of net absorption reached its highest point in over a decade.


Comprising just 10.8% of the city’s total inventory, the Trophy market absorbed more space than all other asset classes combined, with gains coming despite exceptionally limited vacancy. Large tenants demonstrated a propensity to sign commitments 24 to 36 months in front of their lease expiration, which created backlog of demand in the market.

Leasing activity in the Trophy market during the past six months was heavily influenced by law firms and corporate government affairs offices. The 242,000 square foot lease by Mayer, Brown, Rowe & Maw, LLP at the under-construction 1999 K Street, NW, was the largest deal signed, but nine other leases over 10,000 square feet were also executed in D.C. Trophy buildings over the past six months. McKinsey’s 76,000 square foot lease at 1200 19th Street, NW, was the largest non-legal transaction.

Trophy net absorption totaled 377,529 square feet during the final six months of 2007, a 71.0% increase over the first six months of the year. The 598,362 square feet of positive net absorption in 2007 fell short of the 848,626 square feet of positive net absorption experienced in the previous 12 month period ending in the second quarter of 2007, and even further behind the 1,246,044 square feet of positive net absorption recorded in 2006.

The decline in net absorption was largely attributed to tight market conditions and a lack of available space. While the market averaged over one million square feet of positive annual net absorption over the past three years, that was virtually unachievable over the past 12 months based on the amount of space available in the market and the pace of new construction. The shortage of supply will continue to cause the majority of absorption to occur in under construction buildings, which remain the sole source of large blocks of contiguous available space.
Rental Rates

With available Trophy space at an absolute minimum, space continued to command a premium. Overall asking rents soared 5.0% from mid-year and 12.0% since year-end 2006 to an average of $55.11 NNN per square foot for existing and under construction product. Asking rates at select new developments approached $70.00 NNN per square foot, which brought D.C. closer to eclipsing the $100 full service per square foot barrier already prevalent in other major cities across the globe, including London, Tokyo, Midtown Manhattan, Hong Kong and Paris.

D.C. Trophy properties commanded a 59.1% premium to the overall D.C. office market, and the existing Trophy market’s 12.0% rental rate growth over the past 12 months far surpassed the 7.5% rate of increase of the broader market. While rents have soared in the Trophy market, concession packages have also become increasingly generous, with tenant improvement allowances for large deals averaging $65 per square and several months of free rent becoming the norm for large transactions.


One property delivered to the Trophy market during 2007, the fully-leased 505 9th Street, NW. Law firms DLA Piper and Duane Morris took the bulk of the 322,668 square feet at the location, with two smaller tenants leasing the remaining space at the East End building.

Just two properties were slated to deliver in 2008: 1099 New York Avenue, NW, and 1155 F Street, NW, both of which have already secured partial tenant commitments from Jenner & Block and Bryan Cave, respectively. Few new options will materialize for tenants until 2009 and 2010, when six additional buildings are expected to deliver. Space at the eight Trophy buildings under construction ended the year 33.6% preleased, with three buildings already more than 50% committed.

Investment Activity

Investment sales activity slowed to a standstill in the second half of 2007, influenced by widespread issues in the credit markets. Over the past year, just one Trophy building traded hands, Franklin Tower at 1401 Eye Street, NW, which sold for $150 million, or $658 per square foot.

Portfolio sales in early 2007 resulted in the trading of the Willard Office building at 1455 Pennsylvania Avenue, NW, along with Market Square East & West at 701-801 Pennsylvania Avenue, NW, however each of these transactions closed during the first half of the year, and sales activity has remained dormant since then.


The general economic malaise sweeping other parts of the nation should be mitigated in the D.C. market due to the extensive spending and steady employment presence of the city’s anchor tenant, the federal government.

Proximity to federal agencies and institutions, as well as access to key decision-makers and a network of business services professionals, makes well-located product in D.C. essential to government affairs and lobbying firms, whose demand for high-quality space and willingness to pay a premium for luxury building finishes continues to drive prices in the market.

Since corporate office space remains an important factor in conducing business and attracting and retaining personnel in the legal, government affairs and professional services sectors, demand should continue to thrive in the D.C. Trophy market among that tenant base.

In the months ahead, the District’s niche strength in government-oriented services and virtually recession-proof economy should provide sufficient stimulus and stability to deliver occupancy gains and rent increases to the Trophy market despite any potential challenges in the broader economy.


Trip Howell, Regional Managing Director
Amy Bowser, Vice President
JLL Market Intelligence Monthly e-Report Published by Robert Kasvinsky