Saturday, August 30, 2008

Tampa's Industrial Vacancy Level Rises to 7.1%

TAMPA, FL-- A challenging economy continued to weigh heavily on Tampa’s industrial market during the second quarter of 2008, according to a new market analysis by Randy Smith (top right photo), Director of Research, GVA Advantis, Tampa.

.Year-to-date, both direct and sublease space have expanded, pushing Tampa’s overall vacancy rate to 7.1 percent—up from 5.0 percent at this year’s start.
New construction boosted Tampa’s industrial inventory by just over 800,000 square feet in the first half, with 60 percent of this space committed on delivery.

It now appears that the climb of Tampa’s industrial rents peaked in the final quarter of 2007 at $7.66 per square foot. The average asking rate for industrial space in Tampa has since receded to the $6.66 mark this period.
However, the longer term prospects for Tampa’s industrial market show definite signs for optimism.

According to projections by Global Insight, Florida’s economy will make a turnabout in the second half of this year—real gross domestic product in the state is forecast to grow by 1.2 percent in 2008 and accelerate to double that pace for 2009.

This upcoming improvement in Florida’s economic production should have a positive impact on local industrial demand going into next year.

According to a mid-year 2008 review by Real Capital Analytics (RCA), the sale prices of Tampa’s industrial properties are stacking up well against other markets in the Southeast region.

Based on RCA’s regional average of $101 per square foot for flex properties, Tampa’s flex sales recorded a 25 percent premium so far this year. For warehouse / distribution properties, Tampa’s pricing registered 90 percent higher than RCA’s average of $44 per square foot for the Southeast region.

For a detailed copy of the report, please contact Randy Smith, Director of Research, Advantis Real Estate Services Company, 3000 Bayport Drive, Suite 100, Tampa, FL 33607. Tel 813.342.4725. Fax 813.372.4004. E-mail

Stephanie Lockard of Cushman & Wakefield, Orlando, Represented NAIOP Central Florida at NAIOP Developing Leaders Summit in Colorado

ORLANDO, FL – Local NAIOP Developing Leaders committee co-chair Stephanie Lockard (top right photo) of Cushman & Wakefield, Orlando, was among a select group of 25 commercial real estate professionals nationwide in representing NAIOP Central Florida at the NAIOP Developing Leaders Summit on August 8-9 at Cheyenne Mountain Resort in Colorado Springs, CO.

The purpose of the summit held by the National Association of Industrial and Office Properties, she explained, was to provide an idea exchange on education, career development and networking forums that have proven successful in other parts of the country. With 50 DL committee members locally, the committee’s mission is to develop young NAIOP members into future leaders of Central Florida’s commercial real estate community.

“Targeted to a new generation of future leaders, age 35 years and younger,” said Lockard, “NAIOP’s Developing Leaders initiative has been an instant success both locally and nationally. For example,” she continued, “our local DL committee first captured the attention of NAIOP National following creation of our innovative Educational Immersion Series.”

Contact: Kenneth H. Cristol 407-774-2515

CVS Pharmacy in Pensacola, FL Gets $1.675M Loan

ORLANDO, FL— Daniel Byrnes, Assistant Vice President for Thomas D. Wood and Company, secured financing in the amount of $1,675,000 for the CVS Pharmacy in Pensacola, Florida.

The loan was financed through Summit Investment Partners, one of Thomas D. Wood and Company’s correspondent lenders, at a permanent fixed-rate of 6.49%. The loan term is 10 years, based on a 19-year amortization, and a loan-to-value of 57.5%. The 10,908 square-foot retail store was built in 1997 and is located at 5301 North Palafox Highway, Pensacola, Florida.

Daniel Byrnes (407) 937-0470,
Jessica Gurtowski (407) 937-0470,

Tri-City Electric Working on Contracts Valued at $10.97M

Altamonte Springs-based Tri-City Electrical Contractors, Inc. under way on new 120-unit Villa Grande (top right photo) on Saxon Apartments assisted living facility in Orange City, FL

ORLANDO, FL – The Multi-Family and Residential Division of Tri-City Electrical Contractors, Inc. is under way on $770,000 of work at the new 120-unit Villa Grande on Saxon Apartments, an assisted living facility in Orange City, FL, under its contract with LeCesse Construction, Altamonte Springs, FL. Completion is slated for December 2008.

Tri-City working on $10.2 million of contracts at Darden Restaurants' new 400,000-square-foot LEED-certified Support Center and Data Center

ORLANDO, FL – The Central Florida Commercial Division of Tri-City Electrical Contractors, Inc. is under way on $8.4 million of work at Darden Restaurants’ new 400,000-square-foot LEED-certified Support Center as well as $1.8 million of work at its new 16,284-square-foot LEED-certified Data Center, both located on Taft-Vineland Road in Orlando, FL, under its contract with Hardin Construction, Orlando. The projects are slated for completion in December 2009 and December 2008 respectively.

(Darden's $100 million corporate headquarters was designed by Chicago-based Perkins+Will. The facility will achieve LEED certification with green features such as grey water irrigation, a reflective roof system, high-efficiency HVAC chillers, and an open workspace plan that maximizes natural light.

(The three-story, 450,000-sf project will accommodate more than 1,500 corporate employees and will include a 30,000-sf culinary development center, 25,000-sf training center, onsite dining facility, fitness and wellness center, company store, bank branch, and 17,000-sf data center.
Trammell Crow is developing the project, which will be the largest office building constructed in Orlando in the last decade.)

Contact: Kenneth H. Cristol 407-774-2515

HFF engaged to sell Lend Lease’s 50% interest in the King of Prussia Mall

(Atrium photo above of the 2.6-million-sf King of Prussia Mall, King of Prussia, PA)

PITTSBURGH, PA – HFF (Holliday Fenoglio Fowler, L.P.) has been named to sell Lend Lease’s 50% interest in the nationally renowned King of Prussia Mall, (above centered photo) a 2,613,476-square-foot national fortress retail shopping destination with a trade area extending throughout portions of the Northeast and Mid-Atlantic regions of the U.S.

The King of Prussia Mall, with sales volume well in excess of $1 billion annually, is home to major national anchor tenants such as Nordstrom, (bottom left photo) Neiman Marcus, Lord & Taylor, Bloomingdale’s, Macy’s, JCPenney and Sears along with nearly 400 other international, national, regional and local tenants located in the northwest portion of the Philadelphia MSA.

As one of the largest destination retailing locations in the U.S., King of Prussia attracts customers from portions of the Northeastern and Mid-Atlantic regions of the U.S. as well as Canada, not to mention tourists from other foreign countries who are visiting these regions.

HFF’s executive managing director and managing member, John Pelusi, (top right photo) and senior managing directors Glenn Whitmore (top left photo) and Chris Turner (middle right photo) will lead the team on behalf of Lend Lease.
“With its dominant retailing position in the populous and high income Northeast and Mid-Atlantic regions, the King of Prussia Mall is viewed as one of the top 10 retail destinations in the U.S.

"As one of just a handful of retailing locations able to generate over $1 billion in annual sales, it is a must location for all major international and domestic tenants such as Apple, Tiffany, Thomas Pink, Coach, Salvatore Ferragamo, and Hugo Boss,” said Whitmore and Turner.

“King of Prussia’s historic growth in sales volumes and revenue streams will be further enhanced by the rollover of existing tenants with below market rents as well as the redevelopment of the former Strawbridge Department Store. We anticipate that an asset of this quality will command unprecedented investor interest and pricing,” said Pelusi

Lend Lease, headquartered in Australia, is an international property group with broad skills across the property value chain. Lend Lease is structured along five key lines of business globally: retail, communities, public private partnerships, investment management, and project management and construction.

Lend Lease is a member of the Dow Jones Sustainability World Index which is used by DJSI licensed asset managers to manage investments worth over US$5 billion each year.

HFF (NYSE: HF) operates out of 18 offices nationwide and is a leading provider of commercial real estate and capital markets services to the U.S. commercial real estate industry.

HFF offers clients a fully integrated national capital markets platform including debt placement, investment sales, structured finance, private equity, note sales and note sale advisory services and commercial loan servicing.


John H. Pelusi Jr., HFF Executive Managing Director and Managing Member, 412 281 8714,

Glenn E. Whitmore, HFF Senior Managing Director, 212 245 2425,

C. Christopher Turner, HFF Senior Managing Director, 404 832 8460,

Laurie Fish McDowell, HFF Associate Director, Marketing, 617 338 0990,

Special Report: PKF Says Caribbean Hotels Face Several Threats In 2008

(Sandy Cay , above, is a private Caribbean tropical island, located approximately 1/2 mile off the west end of the main island of Utila. Utila Island is itself located approximately 18 miles from the coastal town of La Ceiba on the northern coast of mainland Honduras)

ATLANTA, GA-–PKF Hospitality Research (PKF-HR), an affiliate of PKF Consulting, has released its 2008 edition of Caribbean Trends in the Hotel Industry.

The report finds that the Caribbean hotel industry faces some strong challenges going forward. After a soft 2006, most Caribbean destinations saw their visitation rates grow in 2007.

In 2008, however, the combination of a slow U.S. economy, increased competition, rising energy costs, and threats of reduced air service could result in lower levels of occupancy and profits for the region’s hotel owners and operators.

“Given the region’s dependence on airlift, the most daunting issues facing the Caribbean hotel industry are the rising cost of airfares and the announced cutbacks in air service,“ said Scott Smith, (top right photo) MAI, senior vice president in the Atlanta office of PKF Consulting.

“Due mostly to the rising cost of fuel, four of the five leading air carriers to the Caribbean have announced cutbacks in service. Puerto Rico and the Dominican Republic could see as many as 26 percent fewer flights in December of 2008 compared to December 2007.” In an effort to maintain air service, the Puerto Rico Port Authority is offering to reduce airport fees by 45 percent.

Not only is the reduced air capacity a concern, but so are rising airfares. “The Caribbean has always been attractive to price-sensitive travelers. If airfares continue to rise, hotels may have to reduce their room rates in an effort to maintain the Caribbean’s position as an affordable destination,” Smith said.

Airlines are not the only mode of transportation impacted by the rise in energy costs. The relatively low cost of Caribbean cruises has made the region the number one cruise market in the world.

“Despite the strength of the market, we have seen shifts in the cruise industry that have been influenced by the rising cost of fuel. Cruises to more remote ports in the southern Caribbean, such as Aruba, are being cut from itineraries due to the length of the trip and fuel required to get there,” Smith noted.

Energy Costs

The rising cost of energy is not only impacting transportation, it has perpetuated the high cost Caribbean hotels have to pay for utilities, as well. Utility costs for the average property in the Caribbean Trends sample were 7.3 percent of total revenue, or $8,341 per available room in 2007. This compares to just 3.6 percent, or $3,868 per available room, for comparable U.S. resorts.

In an effort to offset the rising cost of energy, some Caribbean hotels have instituted energy surcharges. Most people believe this is not a permanent solution. The buzz word in the region is to “go green.”

“To preserve the natural beauty of the region, Caribbean resorts have had a long history of being environmentally friendly,” Smith commented.

“Hotel operators are now parlaying this experience into energy conservation. In addition to installing cost-cutting equipment, such as efficient light bulbs, showers, toilets, sinks, and air conditioning, Caribbean hoteliers are working with their local energy providers to develop new sustainable technologies. This will not only reduce the cost of operations, but improve the overall economy of the island on which they operate.

New Competition

Another challenge to Caribbean hotels is the anticipated growth in competitive supply predicted over the next few years.

Most major international brands have extensive plans to increase their presence in the region. The World Travel and Tourism Council estimates that more than $100 billion has been committed to the development of new hotels in the Caribbean over the next five to six years.

“If you profile the hotel projects that are currently under construction there, you’ll find a preponderance of luxury and upper-upscale properties,” Smith observed. “Like the recent trend in the United States, most of these projects are resorts with a significant residential component and first-class spa.”

Caribbean properties will not just face new competition from within the region. Hotel construction is flourishing throughout Latin America. “Belize and Costa Rica are two markets that are becoming increasingly competitive with the Caribbean as a vacation destination for U.S. citizens, as well as travelers from Europe and South America,” Smith said.

Operating Costs

For the third consecutive year, PKF-HR compared the financial performance of Caribbean hotels with comparable U.S. resorts. The observations continue to be consistent.

“Historically, Caribbean hotels have enjoyed the benefit of paying their employees relatively low salaries and wages. However, due to rising standards of living among the islands, we have started to see a closing of the gap between U.S. and Caribbean labors costs,” Smith noted.

(Photo at left, Suerre Caribbean Beach Hotel Resort, Punta Uva Beach, Province of Limon, Costa Rica.)

Caribbean hotels continue to pay less property taxes than their U.S. counterparts. This is attributable to the level of government subsidies tourist-related businesses frequently receive.

Utility costs are not the only expense that is extraordinarily high for Caribbean hoteliers. “Because of their isolated locations, hotels in the Caribbean need to import the majority of their food and beverage items. Accordingly, the profit margins in this department are lower than would be expected within the United States,” Smith observed. “In addition, Caribbean insurance costs continue to exceed the U.S. average due to the constant risk of hurricanes.”

To purchase a copy of the 2008 Caribbean Trends in the Hotel Industry report in PDF format, please visit the firm’s online store at, or call (866) 842-8754. The report contains several data tables that allow Caribbean hotel owners and operators to benchmark the financial performance of their property based on size (room count) and ADR groupings.

(Photo at right, Blue Reef Island Resort, Ambergris Cave, Belize.)

PKF Hospitality Research (PKF-HR), headquartered in Atlanta, is the research affiliate of PKF Consulting, a consulting and real estate firm specializing in the hospitality industry. PKF Consulting has offices in Boston, New York, Philadelphia, Washington DC, Atlanta, Indianapolis, Houston, Dallas, Bozeman, Sacramento, Seattle, Los Angeles, and San Francisco.
Scott Smith, MAI Senior Vice President, PKF Consulting, Inc., 3475 Lenox Road, Suite 720, Atlanta, GA 30326. PH (404) 842-1150, ext 233

Chris Daly or Jerry Daly (media), Daly Gray Public Relations, 620 Herndon Parkway, Suite 115 Herndon, VA 20170. PH (703) 435-6293

Strong Economy Drives Office Investment Activity in Denver

DENVER, CO— The Denver office market is expected to record steady operating performance this year, and the long-term outlook remains optimistic, according to a second-quarter Office Research Report by Marcus & Millichap, the nation’s largest real estate investment services firm.
Employment growth is projected to exceed the national average through the next five years as companies target the market’s educated work force and attractive business climate.

“The healthy economic outlook for Denver is expected to increase transaction velocity through the second half of 2008,” says Adam Christofferson, (top right photo) regional manager of the Denver office of Marcus & Millichap.

Following are some of the most significant aspects of the Denver Office Research Report:

· Total employment in Denver is on pace to grow 0.3 percent with the addition of 4,000 positions in 2008.
· Office construction activity in Denver is forecast to rise in 2008 to 1 million square feet, compared with 320,000 square feet last year.
· Vacancy is forecast to improve 60 basis points this year to 14.7 percent.
· Asking rents are expected to increase 5 percent to $22.43 per square foot.
· Effective rents will advance 5.5 percent to $18.79 per square foot.

For a copy of the complete Denver Office Research Report, as well as reports on other markets nationwide, visit our website at

Press Contact: Stacey Corso. Communications Department, (925) 953-1716

Marcus & Millichap Hires Art Macaraeg as Senior Associate in Las Vegas Office

LAS VEGAS, NV– Marcus & Millichap Real Estate Investment Services, the nation’s largest real estate investment services firm, has hired Art Macaraeg (top right photo) as a senior associate in the Las Vegas office, according to John Vorsheck, regional manger of the Las Vegas office.

“With more than 25 years of experience in the commercial real estate industry, Art brings a wealth of knowledge and local expertise to our firm,” says Vorsheck. “Art is considered one of the best land development consultants in the area and specializes in large master-planned residential, commercial and industrial projects.
"His established relationships and expertise in the local market will make him an invaluable asset to the Las Vegas office.”

Prior to joining Marcus & Millichap, Macaraeg worked for NAI Horizon. He has been involved in several major development projects, including the assessment of the Special Improvement District for Summerlin in Las Vegas, the premier San Diego shopping destination Horton Plaza and the successful redevelopment of the Gas Lamp District.

Macaraeg earned bachelor’s degrees in engineering technology and construction, engineering and management from California Polytechnic State University, San Luis Obispo.

Press Contact: Stacey Corso, Communications Department, (925) 953-1716

HFF named to market sale of two luxury multifamily communities in Plymouth, MN

CHICAGO, IL – The Chicago office of HFF (Holliday Fenoglio Fowler, L.P.) has been named to market for sale Parkers Lake Apartment Homes (top left photo) and Shadow Hills Estates,(bottom right photo) two luxury multifamily communities totaling 570 units in Plymouth, Minnesota.

HFF senior managing director Matthew Lawton,(top right photo) director Sean Fogarty (middle left photo) and managing director Marty O’Connell (bottom right photo) will market the properties on behalf of the seller, Principal Global Investors.

The properties are listed without a formal asking price, free and clear of debt and can be purchased together or individually.

Parkers Lake Apartment Homes includes 248 one-, two- and three-bedroom units averaging 1,066 square feet each. Residents have access to amenities including a fitness center, business center, tanning bed, two outdoor pools and a gazebo bar and grille.

Located at 15100 18th Avenue North, the property is one block from Parkers Lake and surrounding park areas and less than one mile west of Interstate 494.

Shadow Hills Estates is located just north of Rockford Road near Highway 169. Completed in 2002, the property has 322 one-, two- and three-bedroom units averaging 1,038 square feet. Community amenities include underground heated parking, an outdoor pool, a fitness center, a billiards room and a children’s play area.

“Both properties are located in Plymouth, a premier Twin Cities suburb, the third largest suburb of Minneapolis and just 15 miles to the northwest of downtown,” said Fogarty. “Plymouth was also recently voted the #1 small city to live in America by CNN/Money Magazine in 2008.”

Principal Global Investors is a diversified asset management organization and a member of the Principal Financial Group®, with expertise in equities, fixed income and real estate investments, as well as specialized overlay and advisory services.
Principal Global Investors manages $244.4 billion in assets primarily for retirement plans and other institutional clients.*

Matthew D. Lawton, HFF Senior Managing Director, 312, 528 3650,
Laurie Fish McDowell, HFF Associate Director, Marketing, 617 338 0990,

$206.99M in financing secured by HFF for national Class A multifamily portfolio

HARTFORD, CT – The Hartford office of HFF (Holliday Fenoglio Fowler, L.P.) has secured first mortgage financing totaling $206.99 million for six Class A multifamily communities throughout the United States.

HFF senior managing director Dana Brome (top right photo) worked exclusively with UBS Realty Investors in arranging the five-year, fixed-rate loans through MetLife Real Estate Investments on behalf of the Trumbull Property Fund.

“The lender selection process was surprisingly competitive even in light of the current financial markets,” said Brome. “The extremely low leverage and diversity of markets really enticed all the primary players.

" Ultimately MetLife won the financing based upon a combination of factors that included a rapid rate lock and streamlined closing process, which allowed the borrowers to capitalize on the current interest rate environment.”

The properties total 2,157 units and are located in Chula Vista and Orange, California, Atlanta, Georgia, Chicago, Illinois and Durham, North Carolina. (Trumbull Property Fund's Boston headquarters building, bottom left photo).

HFF (NYSE: HF) operates out of 18 offices nationwide and is a leading provider of commercial real estate and capital markets services to the U.S. commercial real estate industry.

HFF offers clients a fully integrated national capital markets platform including debt placement, investment sales, structured finance, private equity, note sales and note sale advisory services and commercial loan servicing.

Dana E. Brome, HFF Senior Managing Director, 860 275 6199,
Laurie Fish McDowell, HFF Associate Director, Marketing, 617 338 0990,