Tuesday, April 14, 2009

Grubb & Ellis Awarded 1.8 Million SF Leasing Assignment

Firm Selected to Lease Mercer Crossing Office Space, Part of a 1,200-acre mixed-use development

DALLAS, TX, April 14, 2009 – Grubb & Ellis Company (NYSE: GBE), a leading real estate services and investment firm, today announced that it has been selected as the leasing agent for the 1.8 million square feet of Class A office space at Mercer Crossing, a 1,200-acre mixed-use development.

Included in the assignment are Fenton Centre, (top left photo) Browning Place (middle right photo) and Hickory Centre.

Comprising two seven-story office buildings, Fenton Centre is located at 1501-1507 LBJ Freeway and offers nearly 700,000 square feet of rentable space.

Located at 1601–1607 LBJ Freeway, Browning Place consists of three eight-story office buildings offering a total of 627,312 square feet of rentable space.

Hickory Centre is comprised of one eight-story and two four-story office buildings, offering approximately 425,000 square feet of rentable space. Plans exist to expand the complex with the addition of two Class A office buildings, adding approximately 300,000 square feet to the development.

“This is a great win for Grubb & Ellis, and our team is enthusiastic to provide Mercer Crossing’s management team with a superior level of service,” said Kathy Permenter, managing director, Agency Leasing in Grubb & Ellis’ Dallas office.

“Set inside a beautiful corporate park, Mercer Crossing offers a variety of leasing prices in its Class A buildings. The development is in a prime location and provides tenants with quality services and onsite amenities.”

Mercer Crossing (bottom left photo) is located between the George Bush Turnpike and Interstates 35 and 635.

Onsite amenities include restaurants, banking, a jogging trail, and a fitness center. Onsite management is also provided, as well as a 24-hour courtesy officer.

Overseen by Regis Property Management, the total office product of Mercer Crossing is currently 63.5 percent leased.

Permenter’s leasing team includes Russ Johnson, senior vice president, and Heather Densmore Shover, vice president, all with Grubb & Ellis’ Dallas office.

Contact: Damon Elder, 714.975.2659, damon.elder@grubb-ellis.com

National Office Vacancy at 15.6% After Soft First Quarter

Manhattan, Long Island and New York Outer Boroughs Only 3 Major U.S. Markets to Post Under 10% Vacancy Rates

SANTA ANA, CA-Bob Bach, (top right photo) senior vice president and chief economist, Grubb & Ellis Co., reports on the first-quarter 2009 office market:

· Commercial real estate, viewed as a lagging indicator, is catching up with the rest of the economy, unfortunately, as office market fundamentals deteriorated sharply in the first quarter.

· The vacancy rate ended the quarter at 15.6 percent, an increase of 80 basis points since last year’s fourth quarter and 260 bps since vacancy bottomed at 13.0 percent in the fourth quarter of 2007. It was the largest quarterly increase of this cycle, meaning that the pace of softening accelerated in the first quarter.

(Manhattan financial districtd map, middle left)

· Manhattan, Long Island and the New York Outer Boroughs remain the only three major U.S. markets to post sub-10 percent vacancy rates, although Manhattan’s vacancy rate, like the U.S. average, has risen for five consecutive quarters.

Eight markets posted vacancy rates above 20 percent led by Phoenix, where vacancy is approaching 25 percent.

· Over the past four quarters, vacancy increased by 400 bps (one percentage point per quarter) or more in seven markets led by California’s Inland Empire, which recorded a four-quarter gain of 840 bps. Four markets saw vacancy rates decline year-over-year: Long Island, Columbia, S.C., Columbus, Ohio, and Wichita, Kan.

(Long Island, NY skyline, middle right photo)

· Net absorption, which registered only modest negatives in 2008, plunged to recessionary levels in the first quarter, mirroring the big slump in the labor market that occurred in last year’s fourth quarter.

First quarter absorption of negative 18.4 million square feet is comparable to the quarterly losses in occupancy that occurred after the dot-com bust, 9/11 and recession early this decade.

· Restructuring on Wall Street shrank occupied space in Manhattan by 2.8 million square feet in the first quarter. Several markets that were supposed to hold up well did not, registering large negative absorption totals.

These included Los Angeles (-2.5 million), Houston (-929,000), Seattle (-740,000) and Washington, D.C. (-723,000). The recession has left few markets untouched, though a handful of markets, led by Dallas-Fort Worth, did eke out positive absorption.

· Space under construction at the end of the quarter retracted to 66 million square feet, its lowest level in 2 ½ years.

Washington, D.C., with 9.8 million square feet still in the pipeline, may be facing some difficult quarters given that absorption has turned negative in all three of the region’s major submarkets.

· Available sublease space ended the quarter at 111 million square feet, its highest level in 4 ½ years. New York City, with 14.6 million square feet, nearly doubled the sublease inventory of second place Washington, D.C.

Three of the four major markets surrounding Manhattan posted the highest sublease vacancy rates in the country: Northern and Central New Jersey, Westchester County, N.Y., and Fairfield County, Conn.

(Downtown Columbus, OH, middle right photo)

· Rental rates are behaving erratically. The average asking rate of $27.67 per square foot per year, full service, for space available on the market at the end of the first quarter actually rose by 0.3 percent since year-end 2008.

But the effective rate on deals signed in the first quarter, which includes concessions offered to tenants, fell 2.1 percent from the fourth quarter.

Though counterintuitive, asking rates sometimes increase in the early stages of a recession because the construction pipeline continues to deliver Class A space that was started before the recession began, and much of it is being delivered empty.

The asking rates for this top-of-the-line available space are driving up the average, but because landlords will do deals at lower rates (sometimes much lower), effective rates are falling. At some point landlords will begin to compete on asking rates in addition to concession packages.


The timing of a recovery in the office market depends on two related events: how quickly the economy begins to grow again and how quickly the labor market begins to add jobs.

While some analysts expect GDP growth to turn positive in the fourth quarter of this year, most expect the unemployment rate to continue rising until mid-2010 or later.
This could turn out to be a “jobless recovery” of the kind that followed the last two recessions when the economy was growing but not fast enough to encourage employers to hire.

There may not be an office market recovery worthy of the name until 2011.

HFF, Macquarie and UBS Named to Market for Sale 52-Property Shopping Center Portfolio

PITTSBURGH, PA, April 14, 2009(BUSINESS WIRE))--HFF (Holliday Fenoglio Fowler, L.P.) announced today that it has been named as a co-advisor, along with Macquarie Capital Advisers Limited and UBS Securities, LLC, for a strategic review of Macquarie DDR Trust’s (“MDT”) U.S. based real estate assets and to market for sale a 52-property shopping center portfolio in 20 states owned in a subsidiary, Macquarie DDR U.S. Trust Inc.

HFF executive managing director John Pelusi, (bottom right photo) senior managing directors Barry Brown (bottom left photo) and Doug Hazelbaker (top left photo) and managing director Lynn De Marco (top right photo) will lead the HFF investment sales team on behalf of the seller, a joint venture between Macquarie DDR Trust and Developers Diversified Realty Corporation.

Investors may seek to purchase MDT’s interest (approximately 85.5%) or 100% interest of the portfolio, sub-portfolios or individual assets. As of December 31, 2008, these assets were valued at approximately $1.9 billion by MDT.

The portfolio totals 12.5 million square feet and has an average occupancy of 88.5%. Major tenants include Walmart, BJ’s Wholesale Club, Bed Bath & Beyond, Best Buy, T.J. Maxx, Kohl’s and Dick’s Sporting Goods.

Macquarie DDR Trust is a listed real estate investment trust with assets totaling $2.7 billion.

As of September 20, 2008, more than $36 billion of real estate assets are managed globally by Macquarie Group and its associates across a portfolio of listed and unlisted real estate trusts, unlisted development funds and real estate investment syndicates.

Developers Diversified Realty Corporation owns and manages more than 720 retail operating and development properties in 45 states, plus Puerto Rico, Brazil, Russia and Canada totaling more than 159 million square feet.


HFF, Inc. Executive Managing Director, JOHN H. PELUSI, JR., 412-281-8714, jpelusi@hfflp.com

Senior Managing Director, BARRY M. BROWN, 214-265-0880, bbrown@hfflp.com

Senior Managing Director, DOUG HAZELBAKER, 214-265-0880, dhazelbaker@hfflp.com

Managing Director, LYNN A. DEMARCO, 212-245-2425, ldemarco@hfflp.com

Associate Director, Marketing, KRISTEN M. MURPHY, 713-852-3500, krmurphy@hfflp.com

Arbor Closes $32.35M Fannie Mae DUS® MBS ARM Loan for Vintage Pointe in Montgomery, AL

UNIONDALE, NY, April 14, 2009 - Arbor Commercial Funding, LLC (“Arbor”), a wholly-owned subsidiary of Arbor Commercial Mortgage, LLC, announced the recent funding of a $32,350,000 loan under the Fannie Mae DUS® MBS ARM Loan product line to refinance the 520-unit complex known as Vintage Pointe (bottom left photo) in Montgomery, AL.

The 10-year loan amortizes on a 30-year schedule and carries a note rate of 6.11 percent.

The loan was originated by Ronen Abergel, (top right photo) Director, in Arbor’s full-service New York, NY lending office.

“On this particular deal, Arbor was competing with another lender who ultimately did not deliver on its commitments to the borrower,” said Abergel.

“With timing being critical for our client, we screened the deal within a couple hours and closed 28 days later.

The proceeds of the loan were precisely on target with the borrower’s request, which enabled him to close the deal.”

Contact: Ingrid Principe, P: 516.506.4298. F: 516.542.2555. http://www.arbor.com/

Bulls Capital Partners Arranges Financing of $2.68M for 72-Unit Apartment Property in Fort Collins, CO.

VIENNA, VA, April 14, 2009 -- Bulls Capital Partners LLC, a multifamily financial services provider and Fannie Mae Delegated Underwriting & Servicing (DUS®) lender, today announced it has provided financing to Willow Grove, Ltd. in the amount of $2,680,000 for the refinance of Willow Grove Apartments (bottom right photo) in Fort Collins, CO.

Willow Grove Apartments is a 72-unit garden apartment complex built in 1990 with a mixture of one and two bedroom units.

The complex is part of a community development which shares amenities such as a pool, spa and fitness center.

The loan was originated by Mark Van Kirk (top right photo) at Bulls Capital Partners, LLC. Tom Sibbald of Shield Street Corporation represented the Borrower.

Herman Bulls, (top left photo) President & CEO of Bulls Capital Partners said, "A testament to our focus on customer service at Bulls Capital Partners is our ability to work with borrowers and structure deals which are responsive to their long term ownership needs and the current economic environment."

Bulls continued, "It was very important for us to retain this maturing loan in our portfolio and we like the long term outlook of the Colorado market."

"In the current multifamily debt market, most transactions have some challenges to overcome," said Van Kirk, co-founder of Bulls Capital Partners.

"The Fannie Mae personnel working on the Willow Grove transaction were extremely responsive to all issues that arose during the origination and closing process. This commitment by Fannie Mae was the catalyst to a timely execution for this transaction."

About Bulls Capital Partners, LLC

Bulls Capital Partners, LLC is a Fannie Mae approved Delegated Underwriting and Servicing (DUS®) lender that offers a full array of financing solutions to owners of multifamily property.

Bulls Capital Partners' key capabilities under the DUS program include small loan solutions, affordable housing solutions, student housing, market-rate multifamily mortgages, and credit facilities, among other offerings.

Bulls Capital Partners is a joint venture of Goldman Sachs Commercial Mortgage Capital, L.P. and Bulls Multifamily, LLC, a minority-controlled firm headed by Herman Bulls.

Bulls previously ran a successful DUS lending operation, and has extensive commercial real estate experience with one of the world's leading real estate service providers. Co-founding Bulls Capital Partners with Bulls is Van Kirk, who previously served as Director of Counterparty Risk at Fannie Mae.


Bulls Capital Partners, LLC, Herman Bulls, President & CEO, phone: (202)256-1814
Mark B. Van Kirk. Co-Founder & COO, phone: (703)283-9700