Friday, April 24, 2009

Shoppers Playing Merry Tunes on London Retailer Cash Registers

By Stephen Stephanou, Principal of Madison Retail Group, Chicago

CHICAGO, IL--I just returned from London having been there during the second half of the Easter Holiday.

Consequently, families on vacation and tourists were in abundance in the major shopping venues in the capital. Piccadilly Circus, (middle right photo) Regent Street, and Oxford Street were literally teaming with people - many carrying shopping bags.

Apparently, while there is a settling of retail sales in other parts of the UK, sales in London (Downtown, top left photo) remain strong for many retailers.

As one real estate professional mentioned to me, “this is the cheapest place to buy a Rolex, at least for Europeans,” who are benefiting from the softening of the pound against the euro.

This seems to be making London a bit like the shopping mecca that New York enjoyed until recently - where literally hordes of shoppers descended on the city seeking values.

The luxury blocks of Old Bond Street had its share of foot traffic as well - although this seemed less vibrant than a year ago.

But it looked considerably less challenged than its American sister venue of Madison Avenue between 57th and 72nd Streets, where there are a number of opportunities for both direct deals and subleases at rents considerably less than a year ago.

Some of the newest players to the street-scape - and familiar to Americans, include the new National Geographic Store on Regent Street.

It opened last November and is located on three floors.

The store sells a vast range of products from the most basic of travel essentials such as maps and bug spray, to innovative apparel suitable for worldwide expeditions.

The store includes a tapas cafe, library and cartography areas, and travel services.

More stores are planned in other major European cities.

Abercrombie & Fitch’s store appeared to be booming with business. Located a bit “off” - behind the Royal Academy of Art, on 7 Burlington Gardens, operates with no signage - between Bond Street and close to Savile Row.
There is no visible signage on the store. However, its destination shoppers have no trouble finding it - and buying. One does however wonder if a store on Regent Street would have made more sense.

Everyone knows Harrods’s and Harvey Nichols. But Selfridge’s (middle left photo) remains one of the best department stores.

It has almost everything under one roof and a terrific sales staff to back it up.

And Fortnum & Mason(bottom right photo) is one of a kind - great for gifts, tea, wine, jams, candies and gift items.

All of its floors have been very recently remodeled and the dining and tea venues are comfortable and elegant.

Westfield (bottom left photo) opened its White City center, a 1.6 million square foot retail venue in West London. The center boasts various luxury brands, including Louis Vuitton, Mulberry and Prada housed in a boutique-style environment called “The Village”.

There are also close to 50 restaurants and a multi-screen cinema.
The center is beautifully fitted out - but its opening last fall - although strong, comes in the wake of a recession in the UK not dissimilar from that in the US.
And its location and the duplication of brands has not driven the tourists to this center from central London.

While shopping centers do exist in the UK, they do not enjoy the prominence that they have over the last 40 years in the US. I was able to visit some of the high-end market towns south and west of London, like Tunbridge Wells, Guilford and Brighton, where high-street retail remains the order of the day.

Contact: Kurt Ivey,

Arbor Closes 3 Loans Totaling $10M in LA and GA

Two Fannie Mae DUS® Small Loans on Georgia Properties Total $4,727,100

UNIONDALE, NY) - Arbor Commercial Funding, LLC (“Arbor”), a wholly-owned subsidiary of Arbor Commercial Mortgage, LLC, announced the recent funding of two (2) loans totaling $4,727,100 under the Fannie Mae DUS® Small Loans product line. These loans include:

· Lauren Heights Apartments - Marietta, GA – 48-unit complex in the amount of $1,727,100. The 10-year loan amortizes on a 30-year schedule and carries a note rate of 5.95 percent.

· Wyndham Hills Apartments - Forest Park, GA – 112-unit complex in the amount of $3,000,000. The 10-year loan amortizes on a 30-year schedule and carries a note rate of 5.95 percent.

The loans were originated by Robert Anderson, (top right photo) Director, in Arbor’s full-service Atlanta, GA lending office.

“Arbor was able to provide long-term financing for an experienced borrower and his two properties in the metro Atlanta area,” said Anderson. “The client was happy to take advantage of a drop in interest rates to replace their maturing mortgage.”

$4,555,000 Fannie Mae DUS® Small Loan Goes to 8th Street/S. Westlake Apartments in Los Angeles, CA

Uniondale, NY (April 24, 2009) - Arbor Commercial Funding, LLC (“Arbor”), a wholly-owned subsidiary of Arbor Commercial Mortgage, LLC, announced the recent funding of a $4,555,000 loan under the Fannie Mae DUS® Small Loan product for the 86-unit complex known as 8th Street/S. Westlake in Los Angeles, CA
The 10-year loan amortizes on a 30-year schedule and carries a note rate of 6.21 percent.

The loan was originated by Ronen Abergel, (bottom right photo) Director, in Arbor’s full-service New York, NY lending office. “Timing was of the essence, so we worked at lightning speed to close this transaction for the borrower,” said Abergel

Contact: Ingrid Principe, P: 516.506.4298, F: 516.542.2555,

Summit Acquires Two Prominent Marina Properties in Florida Keys

Company Plans Major Renovations to Upgrade Mangrove Marina and Sombrero Resort and Marina

NORTH PALM BEACH, FL/PRNewswire/ -- Summit Development, a diversified real estate development company with offices in North Palm Beach, said it has acquired two prominent marina properties in the Florida Keys -- Mangrove Marina (top left photo) in Tavernier and The Sombrero Resort and Marina (middle right photo) in Marathon.

Summit said it will undertake extensive renovations to upgrade both properties.

Summit Development, which is actively seeking office, retail, residential, hotel and marina opportunities throughout South Florida, has wide-ranging experience in property acquisition, renovation and management.

The company specializes in repositioning under-performing real estate assets.Summit Development President Felix Charney said the two marina properties will require major investment to restore them.

"While both are clearly in need of work, that does not diminish their inherent value in terms of their location and potential.

"We see tremendous opportunities with respect to the marinas. We have spent the last 15 months looking at under-performing assets in South Florida and these two locations stood out," he said.

Robert Charney, who oversees Summit's Florida operations, noted that Summit recognizes the importance both locations play in the Keys.

"It is obvious that the deterioration of these two properties has been a cause for concern.

"We are well-financed and are confident that we can accomplish a repositioning of the two sites that will once again make them the valuable component of the Keys business community that they can and should be."

Summit acquired the two sites from Sun Vest Communities, the successor to Cay Clubs.

Robert Charney said: "We want to assure the Keys community and our visitors that under Summit's ownership the two properties will be properly renovated so that they can regain their prominence in the community."

-- Mangrove Marina has 130 boat slips as well as rack storage, boat yard facilities, a fuel dock, boat launching ramp and a ships' store. It is situated on the Inter-coastal Waterway and is protected on three sides by mangrove islands. Tavernier is about 12 miles south of Key Largo a 30-minute drive from the mainland.

-- Sombrero Resort and Marina is midway between Key Largo and Key West. It includes a 54-slip marina as well as 124 one-bedroom condo-style suites and eight detached villas, "The Latitudes," a full-service restaurant, tennis courts and a poolside tiki bar.

CONTACT: Geoff Thompson of Thompson & Bender for Summit Development,+1-914-762-1900,

Fontainebleau Las Vegas Files $3B Suit Against Bank of America, JP Morgan Chase and Other TARP Recipients for Reneging on $800M Loan Commitment

Lawsuit Seeks At Least $3 Billion in Damages for ‘Intentional and Malicious’ Misconduct

Failure to Fund Loan Would Further Damage Las Vegas Economy

LAS VEGAS, NV--(Business Wire))--Fontainebleau Las Vegas, LLC filed a $3 billion lawsuit today against Bank of America, JPMorgan Chase Bank, Deutsche Bank Trust Company Americas and certain other lenders after they reneged on their contractual commitments to provide the Company with almost $800 million in prearranged funding.

(Fontainebleau Las Vegas project 70 percent completed, top right photo)

The lawsuit notes that Bank of America, JP Morgan Chase and certain other lenders charged in the lawsuit collectively received tens of billions of dollars in federal bailout money that was meant to increase the flow of credit.

“This case arises from the breach by a group of unscrupulous banks of their clear and unequivocal written promise to Fontainebleau to finance the construction of its multi-billion dollar casino-resort development project in Las Vegas (the “Project”) -- a promise in exchange for which the Banks have already secured for themselves tens of millions of dollars in fees,” according to the lawsuit filed by Fontainebleau Las Vegas in the District Court of Clark County, Nevada.
(Rendering of Fontainebleau Las Vegas, middle left)

The lenders’ “misconduct here was calculated, intentional and malicious.

"Defendants abandoned their lending commitments solely to try to extricate themselves from a loan they no longer wish to make, notwithstanding that those commitments are clear, unequivocal, and binding, and that Plaintiff and thousands of employees and their families are relying on those commitments to be performed.”

The complaint alleges that the lenders notified Fontainebleau Las Vegas on April 20, 2009 that they had purportedly “terminated” their commitments under an $800 million revolver loan, “ostensibly based on ‘one or more’ unspecified ‘Events of Default,’” but without outlining any detail or specifics of an Event of Default.

According to the lawsuit, “In fact, there has been no Event of Default, and there is no contractual basis whatsoever for the Revolver Banks’ breach of their clear and unambiguous obligations. The purported termination is nothing more than the Banks’ baseless attempt to walk away from the Project and abandon their obligations.”

The $800 million loan is in addition to more than $2 billion in debt and equity that Fontainebleau Las Vegas has already borrowed and invested to build what is expected to be a new landmark casino-resort on the Las Vegas Strip.

"We are not asking for anything special, merely that the revolver banks fulfill the commitment they made to fund this project,” said Jeff Soffer, (middle right photo) Executive Chairman of Fontainebleau Resorts LLC. “We need them to live up to their promises so that we can complete a landmark project that will help revitalize tourist visitation to Las Vegas."

The lawsuit says that the banks’ “brazen breach of contract” jeopardizes Fontainebleau Las Vegas’ ability to complete its signature casino-resort on the Las Vegas Strip.
(Bank of America building, San Diego, CA, middle left photo)

The project is more than 70 percent complete, with finish work being undertaken in the resort's sleeping rooms and suites.

Failure to provide the funding will, according to the lawsuit, “cause enormous harm to the public interest” by further damaging the local economy.

“In addition to the approximately 3,300 construction workers on-site daily (plus the additional 1,700 workers who would be needed to work on the final stages of the Project) and hundreds of others presently employed by the Project, the opening of the Fontainebleau Las Vegas is expected to result in over 6,000 full-time jobs at the facility, and approximately 2,000 additional jobs in Las Vegas,” according to the lawsuit.

“All of these sources of employment will vanish as a result of the Banks’ breach -- a further blow to a local economy that, in the words of the Las Vegas Sun, is in ‘freefall’ and may be in for its ‘longest recession since the Great Depression.’”

Further damage will be caused to the many suppliers and contractors from across the country that are supplying materials and services to the project.

The lawsuit also says that the wrongful termination of the loan “is all the more egregious in light of the tens of billions of dollars that certain of the Revolver Banks have received from the federal government’s Troubled Asset Repurchase Program (“TARP”).
(JP Morgan Chase Tower, Houston, TX, middle right photo)

Defendant Bank of America, N.A., has to date received a total of $52.5 billion dollars in federal assistance (including funds received in connection with its acquisition of Merrill Lynch & Co., Inc., the corporate parent of defendant Merrill Lynch Capital Corporation) and JPMorgan Chase has received $25 billion dollars in federal assistance.

These TARP and other funds were provided to the Banks with one purpose: to ensure that these Banks would begin lending again, and would continue to lend, rather than further constricting the flow of credit that is absolutely critical for any economic recovery.

But instead of lending -- instead of standing by the contractual commitments to which they already agreed and are legally bound -- the defendant Banks have seized upon a false pretext -- a nonexistent unspecified “Event of Default” -- in a vain attempt to escape their obligations.”

The lawsuit was filed against Bank of America, N.A., Merrill Lynch Capital Corporation, JPMorgan Chase Bank, N.A., Barclays Bank PLC, Deutsche Bank Trust Company Americas, The Royal Bank of Scotland PLC, Sumitomo Mitsui Banking Corporation New York, Bank of Scotland, HSH Nordbank AG, New York Branch, Camulos Master Fund LP, and MB Financial Bank, N.A.
Fontainebleau Las Vegas is represented by Kasowitz, Benson, Torres & Friedman LLP of New York, and Morris Peterson of Las Vegas, Nevada.

Fontainebleau Las Vegas is seeking specific performance of the Revolver Banks’ obligations, as well as recovery from the Revolver Banks of all of its damages resulting from the lender’s bad faith breach of their obligations, including consequential damages arising from their bad faith and wrongful conduct, totaling in the billions of dollars, but in no event less than $3 billion.

Neither the lawsuit nor the $800 million loan affect Fontainebleau Miami Beach, (bottom right photo) which is a separate legal entity from Fontainebleau Las Vegas and which is currently open and operating.

Contact: Sitrick And Company, Lance Ignon, 415-793-8851 or Dave Satterfield, 408-802-6767