Recession Weighs on Washington, DC Retail Investment Activity

WASHINGTON, DC— Despite the Washington, D.C., metro’s high concentration of jobs and affluent households, the recession continues to weigh on the local retail market, according to a second-quarter Retail Research Report by Marcus & Millichap, the nation’s largest real estate investment services firm.

Fortunately for local property owners, President Obama’s inauguration provided a temporary reprieve from economic headwinds.

“The recession has hampered retail investment activity in the metro, though demand for single-tenant assets was resilient through the end of last year,” says Ramon Kochavi, (middle left photo) regional manager of the Washington, D.C. office of Marcus & Millichap.

“A shift in sales trends has occurred, however; in the first quarter, as fears of further reductions in consumer spending limited transactions to a small number of fast-food properties.”

Following are some of the most significant aspects of the Washington, D.C. Retail Research Report:

· Employment levels in the metro are expected to recede by 0.6 percent, or 18,400 jobs, in 2009. Last year, 12,100 workers were let go.

· Retail construction will slow to 4.1 million square feet this year, after builders completed 5.4 million square feet in 2008. Approximately 2.2 million square feet is expected to come online in suburban Maryland, and 1.9 million square feet is projected in northern Virginia.

· Easing retail demand and persistent inventory expansion will boost vacancy 200 basis points to 7.3 percent in 2009. Vacancy increased 170 basis point last year.

· This year, asking rents are projected to decline 3.3 percent to $26.65 per square foot, while effective rents will recede 4.1 percent to $23.94 per square foot. Asking rents rose 0.8 percent in 2008, and effective rents retreated 0.4 percent.

For a copy of the complete Washington, D.C. Retail Research Report, as well as reports on other markets nationwide, visit our website at http://www.marcusmillichap.com/.

Press Contact: Stacey CorsoCommunications Department(925) 953-1716

Spanish Bank Hires Marcus & Millichap to Arrange Public Sale of SoHo Buildings for $4.9M

NEW YORK, NY– Marcus & Millichap Real Estate Investment Services, the nation’s largest real estate investment services firm, has arranged the public sale of 100 percent of the membership interests in Mediterranean Sun Property LLC and Sohomar Property LLC, which were pledged as collateral for a defaulted loan.

The LLCs are single-purpose entities organized to own and operate 448 Broome St. and 450-52 Broome St. (top left photo) , two mixed use buildings in SoHo (bottom right photo).

The final auction price was $4.9 million.

Peter Von Der Ahe,(top right photo) a vice president investments, and Scott Edelstein, a senior associate in the Manhattan office of Marcus & Millichap, arranged the sale on behalf of the buyer, Caixa de Aforros de Vigo Ourense e Pontevedra, a Spanish bank.

Marcus & Millichap was hired by Caixa de Aforros to perform the auction, which was the entity’s preferred method of foreclosing on the LLCs that owned the property. After several rounds of bidding, Caixa de Aforros emerged as the highest bidder. The auction took place on May 8 at the Manhattan office of Marcus & Millichap.

“The membership interests of these LLCs were pledged as collateral for a loan on a development project in South Florida by three Spanish developers,” explains Von Der Ahe.

“In February 2008, the borrowers defaulted on the construction loan in South Florida. Upon default, the bank asserted its rights to the collateral by offering a public sale of the membership interests in the LLCs that were formed to operate the Manhattan property,” he adds.

“The SoHo buildings were performing well,” says Von Der Ahe, “but the developers were enmeshed in troubled investments in Florida, thus prompting them to put the New York assets up as collateral.”

The two buildings, located at the corner of Broome and Mercer streets, encompass a total of 27,174 square feet. Both properties have residential and commercial space.

“More than 100 people responded to the auction, evidence that there is an incredible amount of equity on the sidelines waiting for opportunities,” says Von Der Ahe.

“Despite the near-term challenges facing the local economy and real estate market, the long-term outlook for New York City investment real estate remains strong.”

According to Edward Jordan, (middle left photo) Northeast regional director of the firm’s Special Assets Services division and regional manager of the Manhattan office, additional properties are expected to come under duress as economic conditions continue to soften in New York and throughout the region.

“To date, Marcus & Millichap has completed more than 1,500 special asset assignments for financial institutions, asset managers and large owners, including valuations, advisory work and dispositions,” says Jordan.

“Distressed properties and portfolios are being well received by our private investors, and we expect to market a large volume of these properties during the coming months and years.

"This is driven by our lender clients’ need to clear their balance sheets and our fund clients actively working to free up capital,” he adds.

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

NAI Realvest Negotiates New Office Lease for Ad Agency in 2,138 SFat Millenia Park I in Orlando

ORLANDO, FL - NAI Realvest recently completed a new office lease agreement for 2,138 square feet in Millenia Park I (bottom left photo) at 4901 Vineland Rd. in southwest Orlando.

Jack W. Lynch, (top right photo) broker at NAI Realvest, negotiated the transaction on behalf of the tenant Triad Digital Media LLC, an online advertising firm headquartered in Tampa with seven offices nationwide.

Jacksonville-based Eola Capital, LLC is the landlord at Millenia Park.

NAI Realvest, covering all of central Florida, is a fully integrated commercial real estate operating company specializing in brokerage, development, investment, leasing and management, consulting and research services in the U.S. and worldwide.

For more information, please contact:

Jack W. Lynch, Broker, NAI Realvest, 407-875-9989, jlynch@realvest.com;

Patrick Mahoney, Chief Operating Officer, NAI Realvest, 407-875-9989

Beth Payan or Larry Vershel, Larry Vershel Communications, 407-644-4142;

HEI Hotels & Resorts Makes Being Green Look Easy

Company Wins 2009 Corporate Energy Management of the Year Award

NORWALK, CT—HEI Hotels & Resorts, the nation’s fastest growing private owner/operator of hotel real estate, announced the company will be presented with the 2009 Corporate Energy Management of the Year Award at The Association of Energy Engineers (AEE)’s Awards Celebration Banquet, held in conjunction with the World Energy Engineering Congress (WEEC), on November 4 of this year.

The event will be held at the Walter E. Washington Convention Center in Washington, D.C.

“Energy consumption is one of the leading issues facing the world today,” said Bob Holesko, (middle left photo) CEM, vice president of facilities, HEI Hotels & Resorts.

“This recognition validates our belief that ‘going green’ is something that all companies should work to achieve. Incorporating new technologies that improve energy efficiency and that recycle and reuse goods creates a win-win situation for everyone involved. Reducing energy consumption is just part of HEI’s commitment to becoming a better member of each of our communities.”

The award honors HEI’s dedication to the “green movement” via its concerted effort to reduce its carbon footprint, retrofit the fixtures at its properties with energy-conserving light bulbs, and better manage heating and air conditioning systems to decrease cooling water consumption.

AEE is a global non-profit association that promotes “sustainable development” in private and public sectors through scientific research and development and outreach programs, including conferences, technical journals, books and certification programs.

The awards banquet will feature dedicated environmentalist Robert F. Kennedy, Jr. (bottom right photo) as keynote speaker.

“Sustainability is a major cornerstone of HEI’s corporate responsibility mentality,” said Steve Mendell, (top right photo) HEI’s executive vice president of acquisitions and development.

“We are implementing socially responible strategies and policies throughout our entire hotel portfolio and recently formed a committee of associates to identify opportunities for further community and environmental involvement.”

Contacts:

Jess Petitt, HEI Hotels & Resorts (Media), (203) 849-2228

Jerry Daly, Chris Daly, (703) 435-6293

Mercantile Capital Corporation Reports Substantial Growth

ALTAMONTE SPRINGS, FL - Mercantile Capital Corporation, the Altamonte Springs-based firm that ranks as one of the nation’s leading providers of U.S. Small Business Administration (SBA) 504 loans for small business owners who want to acquire or expand their operations, is reporting significant growth in 2009.

Christopher Hurn, (top right photo) chief executive officer of Mercantile Capital Corporation, said commercial lending in May was up 66 percent over the same period last year and June appears to be heading for another double-digit increase over last year.

“We have over $16 million in fundings in the pipeline now just for June,” Hurn said.

Hurn attributed the firm’s growth to opportunities in the economy and his firm’s focus on the niche of small business owners and entrepreneurs. “Property valuations are down and interest rates are low,” Hurn said.

“Now is the best time to buy commercial properties in a long time, and we’re seeing a marked increase in demand from business owners realizing expense savings on their commercial real estate space by buying instead of leasing,” he said.

For more information, contact:

Chris Hurn, CEO, Mercantile Capital Corporation, 407-786-5040
Geof Longstaff, Chairman, Mercantile Capital Corporation, 407-786-5040
Larry Vershel or Beth Payan, Larry Vershel Communications, 407-644-4142