Monday, March 22, 2010
WEST PALM BEACH, FL – After weighing several market options, the law firm of Casey Ciklin Lubitz Martens & O'Connell will continue to occupy two floors in Northbridge Centre (above centered photo) in downtown West Palm Beach. The 11-year lease opens the door for the original tenant to use a "plug 'n' play" opportunity to reconfigure longtime headquarters space.
The 32-attorney firm is gaining space efficiencies with the 24,054-sf lease at 515 N. Flagler Dr., where the availability of the 20th floor is being touted as a chief dealmaker for Northbridge Centre's owner, Gaedeke Group LLC of Dallas. For 25 years, the law firm has occupied floors 18 and 19 as part of its lease in the 21-story, class A office building.
The firm's partners have spent nearly two years exploring options, including development. "The availability of the 20th floor changed the dynamics," said Alan Ciklin, managing partner of the firm, which is marking its 25th anniversary. "It was already built out as law firm space. It worked for us, with very few renovations, and will be an easy move." The perks included high-end furniture that the former tenant left behind.
Casey Ciklin Lubitz Martens & O'Connell historically has been one of the largest tenants at Northbridge Centre, a favored office location for law firms because it is one block from the Palm Beach County Judicial Center complex. The lease was set to expire at year's end.
Ciklin cited the partners' longtime association with the building and its location as weighing heavily on the decision. "At the end of the day, we decided to stay. This deal was the best," he said. The tenant representative was Greg Katz in Studley's Miami office.
As Gaedeke celebrates the renewal, the owner has marked two more milestones at the 288,131-sf Northbridge Centre. On Tuesday, Gaedeke's Northbridge Centre will be accorded its second consecutive Energy Star® award from the U.S. Environmental Protection Agency.
The BOMA of Ft. Lauderdale and the Palm Beaches chapter last fall bestowed a regional TOBY on the high rise in the 250,000-sf to 499,000-sf category.
"We strive to exceed tenants' expectations, each and every day," said Bertie L. Russo, Northbridge Centre's property manager. "These awards validate our commitment to our building and our tenants."
Headquartered in Dallas, Gaedeke's current portfolio encompasses three million square feet of class A office properties in Arizona, Florida, Tennessee, Texas, Washington, D.C. and Germany.
Contact: Kirk Fetter, 561-515-7407
ATLANTA, GA., Mar. 22, 2010 – PKF Hospitality Research (PKF-HR) today announced that, according to the March 2010 edition of Hotel Horizons®, U.S. hotels should enjoy double-digit revenue growth by 2012.
PKF-HR is forecasting hotel rooms revenue to grow 10.5 percent on a per-available-room basis (RevPAR) in 2012.
“The U.S. lodging industry has not seen double-digit growth in RevPAR since the inflationary days of the late 1970s and early 1980s,” said R. Mark Woodworth, (top right photo) president of PKF Hospitality Research.
Until 2012, however, market conditions will remain relatively soft. For 2010, PKF-HR is forecasting a 1.1 percent decline in RevPAR, the third consecutive year of falling RevPAR for the U.S. lodging industry.
Concurrent with the growth in demand is a reduced rate in the number of new hotel rooms opening.
With demand rising at a 1.5 percent pace, the average occupancy rate for the U.S. lodging industry should increase 0.3 percent to 55.2 percent in 2010.
“This is obviously not great growth, but it is a step in the right direction after three years of declining occupancy,” Woodworth noted.
Unfortunately for U.S. hoteliers, a national occupancy level below the 60 percent mark means that rate discounting will persist.
PKF-HR does not believe that quarterly ADR will exceed 2009 levels until the third quarter of 2010.
“Such a tactic should position these operators to better capitalize on improving demand conditions: more aggressive pricing policies should result.” PKF-HR forecasts ADR will increase 3.4 percent in 2011 after declining 1.4 percent in 2010.
Segments and Cities
Just two of six chain-scales are forecast to benefit from an increase in RevPAR in 2010.
PKF-HR is projecting luxury hotels will enjoy a healthy 5.1 percent increase in RevPAR, while properties in the midscale without food and beverage segment will see their RevPAR rise 0.6 percent.
In both segments, it appears that discounted room rates will be required to increase occupancy.
Looking across the country, RevPAR for five of the nation’s 50 largest markets is forecast to increase 6.0 percent or more in 2010. In Newark, Boston, and Anaheim, RevPAR gains will be driven mainly by increases in occupancy. Conversely, rising room rates will propel RevPAR growth in Oahu and Salt Lake City.
The cities forecast to experience the greatest RevPAR declines in 2010 are Baltimore, Phoenix, Austin, Washington DC, and Houston.
For the most part, the RevPAR losses in these cities are the result of ADR declines in excess of 2.0 percent. The one exception is Baltimore, which is one of two U.S. markets projected to suffer from a decline in demand in 2010. The drop in Baltimore demand can be explained by the comparison to a relatively strong 2009.
The Bottom Line
“The composition of RevPAR change impacts a hotel’s bottom line. In general, RevPAR growth that is driven by ADR is more profitable,” Woodworth explained.
“Given that declining room rates will offset the slight gain projected for occupancy, PKF-HR is forecasting a 5.3 percent decline in unit-level net operating income (NOI) in 2010.”
The 5.3 percent profit decline forecast for 2010 follows an estimated 35 percent fall in 2009. “Looking at the preliminary 2009 data from this year’s Trends® in the Hotel Industry research, managers were able to cut their expenses by approximately 13 percent.
Unfortunately these reductions were not enough to overcome the 15 to 16 percent decline in total revenues,” Woodworth said.
(Fontainebleua Hotel Las Vegas, bottom left rendering)
Other significant cuts were made in the rooms (-12.0 percent), A&G (-14.6 percent), marketing (-12.0 percent) and utilities (-10.4 percent) departments.
Consistency Leads To Efficiency
“I’m sure our forecast of continued declines in revenues in 2010 concerns lodging industry participants. Nonetheless, our forecast for 2010 did not change much since December of 2009, and U.S. hoteliers should be encouraged by this level of consistency,” Woodworth commented.
“Given the degree of accuracy of our forecasts for the fourth quarter of 2009, and the consistency of our outlook for 2010 and beyond, hotel operators should feel increasingly confident about what the playing field will look like for the near- and mid-term.
"Now they can operate in a more efficient manner,” Woodworth said. “With a clearer picture of the future, hotel managers will be able to implement pricing policies, purchasing practices, and staffing decisions that will maximize revenues and control costs.”
(ORLANDO, FL)—Harsh economic times have even caught up with Orlando billionaire timeshare developer David A. Siegel (top right photo) .
The 78-year-old founder and chairman of 40-year-old, Orlando-based Central Florida Investments Inc. has retained global-oriented Carlton Advisory Services Inc. of New York City to sell off about $352 million of company assets not directly associated with the timeshare industry.
The assets include timeshares, hotels, condos, raw land and rights to develop near Disneyland in Anaheim, CA, Siegel told Orlando Sentinel.
About 75 percent of the assets are in Florida. The rest are in California, Missouri, Mississippi, Nevada, South Carolina, Tennessee and Virginia.
Real estate capital sources tell Real Estate Channel they estimate conservatively that the total assets could generate about 40 percent of their current listed value, or about $140 million.
The sale is expected to attract buyers worldwide, according to sources familiar with the current health of global real estate capital markets.
So dire has the cash-flow situation become at Siegel’s sprawling real estate empire, the Miami Beach-born developer has even stopped work on his 90,000-square-foot mansion in Windermere, an affluent south Orlando community.
The mansion has been under phased construction for the past five years and is being built at an estimated cost of $500 per square foot. Construction industry estimators familiar with the mansion say the total estimated $45 million cost could be on the low side when the project is finally completed.
Siegel’s flagship timeshare property is Westgate Resorts (middle left photo) in Orlando, a sprawling community with over 10,000 condominium units. Westgate Resorts operates about 30 timeshare resorts in more than 10 states
In addition to Westgate Resorts, CFI owns or has interests in magazines (I Love Orlando, I Love Vacations), real estate (Westgate Plaza Center retail space in Las Vegas), health spas (Papillon Spas),(bottom right photo) and restaurants (Westgate Smokehouse Grill).
Siegel has long held the reputation of being the biggest private timeshare developer in Florida and is also considered one of the largest timeshare developers nationally.
He is a big money contributor to political parties and is as well known in Las Vegas gambling circles as he is on California and Florida real estate fronts, according to persons who have known and done business with Siegel for years.
Carlton Advisory Services is part of The Carlton Group, an international real estate investment bank specializing in equity and debt placement, merchant banking, principal investment activities and commercial and residential loan sales.
Their clients include “some of the most successful developers and institutions globally,” according to the company website. Founded in 1991, Carlton has closed over $45 billion of transactions since 1998 alone.
(ANAHEIM, CA)—Orlando timeshare developer David A. Siegel (middle right photo) has placed his prime condominium development site adjacent to Disneyland on the auction block.
Philip A. Powers, managing director of Carlton Exchange, confirms Siegel, whom he is not naming, has received development rights bids in the $22 million to $25 million range. The rights were listed for sale at $37 million.
The rights allow a developer to construct up to 400 condominium homes above a parking garage at the 440,000-square-foot, outdoor Anaheim GardenWalk mall at 321 Disney Way in Anaheim, CA. The mall is one block from Disneyland.
But William J. Stone, (middle left photo) senior vice president of development at San Diego, CA-basedExcel Realty Holdings, the mall’s developer and manager, tells Real Estate Channel that existing entitlements "do not allow the construction of condominium homes on the property Westgate owns."
“All a buyer has to do is pull permits to get started,” Powers told the newspaper.
Siegel himself told Timeshare Forums, an online publication, on Feb. 10, 2008, that a groundbreaking had already started at his planned 400-unit California project, Westgate Anaheim GardenWalk.
Asked by Timeshare Forums how to explain his success in developing successful family resort destinations around the country, Siegel, a developer for 40 years, said,
“Part of it is magic…The rest is inspiration.”
But inspiration wasn’t enough to cope with an unexpected crippling economy. The Westgate Anaheim GardenWalk project was not completed and Siegel placed the rooftop development rights up for sale this year.
Coincidentally, Carlton Advisory Services Inc. of New York City is currently auctioning off other assets owned by Siegel’s corporate entity, Orlando-based Central Florida Investments Inc. Carlton Exchange is the online auction arm of Carlton Advisory Services.
While Siegel’s condo development rights currently are attracting bidders from hotel and timeshare companies, along with other global investors, Anaheim GardenWalk itself goes on the auction table April 8.
Valued at $325 million when it was constructed in 2008, Anaheim GardenWalk is only 65 percent occupied, according to the Los Angeles Times.
Stone told the Los Angeles Times Excel Realty is negotiating with Citigroup to remain as manager of the property.
Among its tenants are Ann Taylor Loft, Hollister, Harley-Davidson of Anaheim, Roy’s Hawaiian Fusion Cuisine and P.F. Chang’s China Bistro.