Thursday, April 15, 2010

Grubb & Ellis to Strengthen Presence in Ohio

SANTA ANA, CA – Grubb & Ellis Company (NYSE: GBE), a leading real estate services and investment firm,  will expand its presence in Ohio with the opening of company-owned offices in Columbus and Cincinnati, as part of the company’s strategy to distinguish itself as the leading provider of integrated real estate services.

To further support this objective, the company plans to significantly enhance its owned-office presence in key markets over the next 24 months.

“Over the past two years, we’ve restructured our Real Estate Services business, and we’ve been aggressive about bringing top talent into the company and strengthening and expanding our service platform to better meet the needs of our clients and enhance the company’s overall profitability. Our decision to open owned offices in Columbus and Cincinnati is consistent with those efforts,” said Thomas P. D’Arcy, (top right photo)  president and chief executive officer of Grubb & Ellis.

“Our clients have told us they place more value on their services providers having a strong presence in the markets in which they operate, and we are responding by ensuring that our geographic coverage is in alignment with their needs,” said Jack Van Berkel,  (middle left photo) president of Real Estate Services.

“In addition to providing an increased level of service, having an owned office allows us to better control the size, shape and composition of operations in these markets going forward, and as a company we will be better positioned to benefit from their success.”

Vineet Sahgal, executive vice president in the company’s Chicago office, will work with Bob Nosal, the company’s Cleveland market leader, to establish Grubb & Ellis’ owned offices in Cincinnati and Columbus.

Contact: Janice McDill, Phone: 312.698.6707, Email:

U.S. Office Market First Look: 2010-Q1

SANTA ANA, CA--The following summary was prepared by Bob Bach, (middle right photo) Grubb & Ellis Co.  senior vice president and chief economist.

· The economy is in recovery mode, but it’s hard to tell by looking at the U.S. office market. The pace of softening accelerated in the first quarter as the vacancy rate rose by 50 basis points to 17.9 percent versus an increase of 30 basis points in the fourth quarter of 2009.

· First quarter absorption remained about even with the fourth quarter of 2009 at minus 7.3 million square feet.

· On the supply side of the market, developers delivered 8.2 million square feet of new space, down slightly from 9.3 million in the prior quarter. Space still in the construction pipeline drifted lower for a seventh consecutive quarter to 25.7 million square feet. This is equivalent to 0.6 percent of the inventory, the lowest level in more than 14 years.

The biggest surprise of the quarter was a slight 1.0 percent uptick in the average asking rental rate for Class A space to $31.10. The average Class B rate was $23.00, an increase of 0.8 percent. This data series is volatile, so it is unlikely that rents have stabilized while the vacancy rate continues to rise.

There have been anecdotes of landlords in Class A properties in primary markets pulling back on their concession packages, but this would most likely impact effective rates before asking rates. It will be interesting to see if the market can sustain this plateau next quarter.

· In a more definitive sign of recovery, sublease space offered on the market decreased to 113 million square feet, down more than 10 million square feet over the past two quarters.


The office market appears on track to bottom out by year-end. During the prior softening cycle in the early 2000s, payroll employment hit bottom in the second quarter of 2003, three quarters before the office vacancy rate peaked in the first quarter of 2004.

 In the current cycle, employment appears to have bottomed out in the fourth quarter of 2009, meaning that vacancy should peak within the next two or three quarters if the market repeats the pattern of the last downturn. Rental rates are expected to bottom out one or two quarters after that.

How quickly the market recovers after it hits bottom will depend on the vitality of the employment rebound and on the supply of shadow space – cubes and offices emptied by layoffs but officially counted as still occupied. That space will have to be re-occupied before net absorption can gain any traction. Most likely, the market will not return to equilibrium for at least three years after the vacancy rate peaks, meaning 2013 or 2014.

Contact:  Janice McDill, Senior Vice President, Marketing & Communications, Grubb & Ellis Company, 500 West Monroe Street, Suite 2700, Chicago, IL 60661. Direct: 312.698.6707• Fax: 312.698.5941,,

Grubb & Ellis Healthcare REIT II Acquires Parkway Medical Center Near Cleveland

CLEVELAND, OH – Grubb & Ellis Healthcare REIT II, Inc.  has acquired Parkway Medical Center, a two-building medical office portfolio totaling approximately 88,000 square feet in the Cleveland suburb of Beachwood. The acquisition closed on April 12, 2010.

Located at 3609 and 3619 Park East Drive, Parkway Medical Center is approximately 10 miles from the Cleveland Central Business District and just one-half-mile from the 53-acre Ahuja Medical Center currently being developed by University Hospitals, one of the top 10 health systems in the nation based on performance, according to a study released in 2009 by Thomson Reuters. Parkway Medical Center also enjoys close proximity to Interstate 271, affording tenants easy access to all of Greater Cleveland.

“Parkway Medical Center is well located in a major metropolitan region and less than one mile from what will be a significant new hospital,” said Danny Prosky (lower right photo) , president and chief operating officer.

 “As we build Grubb & Ellis Healthcare REIT II, we are not only targeting attractive, performing medical-related assets located near significant medical campuses, we are also seeking to attain geographic diversification, which we are clearly achieving with our initial acquisitions.”

Including Parkway Medical Center, Grubb & Ellis Healthcare REIT II has acquired properties near Cleveland, New Orleans and St. Cloud, Minn. A fourth potential acquisition is located near Denver.

The larger of Parkway Medical Center’s two buildings, approximately 51,000 square feet, was built in 1972, while the smaller building, approximately 37,000 square feet, was built in 1987.

Since 2004, nearly $1.6 million has been invested in capital improvements at Parkway Medical Center, including upgraded lobbies, hallways, replaced parking lots, roofs and lighting, as well as the installation of new HVAC systems and boilers.

 The facility is currently 87 percent leased to 35 tenants, including University Hospitals of Cleveland, Rapid Medical Research, The MetroHealth System and ID Consultants.

Parkway Medical Center was acquired from Parkway Medical Center, LLC, an unaffiliated third party represented by Bob Nosal  (lower left photo) of Grubb & Ellis Company. Grubb & Ellis Healthcare REIT II financed the acquisition using cash proceeds received from its offering.

Contact: Damon Elder, Senior Director, Communications, Grubb & Ellis Equity Advisors, LLC, 1551 N. Tustin Ave., Suite 200, Santa Ana, Calif. 92705, 714.975.2659 (direct), 714.356.1460 (cell),

New Wyndham Hotel Brings ‘Fashionable’ Lodging to Manhattan’s Chelsea

PARSIPPANY, NJ – Wyndham Hotels and Resorts, a subsidiary of Wyndham Worldwide (NYSE:WYN),  welcomed its newest location, the newly constructed 280-room Fashion 26 – A Wyndham Hotel (top left photo) on West 26th Street in New York City’s Chelsea neighborhood and nearby Fashion District.

The latest addition to Manhattan’s hotel cityscape, the fashion-themed hotel offers distinctive services and amenities including signature Crumbs® cupcakes at check-in, innovative dining at specialty hamburger haven RARE Bar & Grill, and radio-frequency guest room keys that unlock doors with the wave of a hand.

The 22-story glass and steel tower, conceived by Peter F. Poon Architect P.C., stands across from the Fashion Institute of Technology, the hotel’s neighbor on the opposite side of Seventh Avenue. Designer Glen Coben took inspiration from the Fashion District’s history for the hotel’s fashionable look and style. Coben’s custom-designed wooden reception desk in the hotel’s lobby was modeled after a fashion studio cutting-room table, with iron legs common to old-fashioned sewing tables.

“Fashion 26 – A Wyndham Hotel makes an exciting statement about architectural imagination, refined service and unique amenities in one of the city’s most vital and vibrant neighborhoods,” said Jeff Wagoner, (middle right photo)  Wyndham Hotels and Resorts president. “We are proud to build on our strong presence in New York City and offer business and leisure travelers another great hotel option in Manhattan.”

“Having worked on this project since its inception two years ago, it is wonderful to see this unique combination of fashion, hospitality and exemplary service come to fruition,” said Paul Celnik, founder of Mode Hospitality, which manages the hotel and assembled a seasoned executive team led by General Manager Wayne Schneider.

In celebration of the hotel’s opening, introductory room rates begin at $299 through June 31, 2010, a commemorative 26% savings. Fashion 26 - A Wyndham Hotel is now accepting reservations at or (800) WYNDHAM. For more information, visit

Contact: Evy Apostolatos, Director, Public Relations, +1 (973) 753-6590

Berger Special Assets, in Receivership Role, Repositions Failed 178-Unit Unfinished Condo Project in St. Petersburg, FL

 FORT LAUDERDALE, Fla. – Berger Special Assets, acting as receiver for Plaza Fifth Apartments in St. Petersburg, Fla., has completed repositioning the 178-unit project, which is now being marketed as rental apartments, rather than condominium units as was planned by the original developer.

Berger Special Assets, a division of Berger Commercial Realty Corp. was hired in October 2009 by the lender, Capital Source, to provide construction management for completion of the failed condominium and subsequent oversight of the project.

“Our expertise and cost-efficiency in successfully resolving the challenges presented by failed properties and repositioning the asset for maximum value and occupancy has fueled our growth in this specialty around the state,” said Lloyd Berger, (top right photo)  founder and President of Berger Commercial Realty Corp. “This particular failed project had many hurdles, not the least of which was bankruptcy filings by two of the core trades during construction.”

One-, two- and three-bedroom apartments in the 12-story building range from 758 to 1975 square feet with features such as granite countertops, solid wood cabinetry, central air, walk-in closets, private patios, and floor-to-ceiling windows.

 The building's amenities include a business center, swimming pool with tanning deck, clubroom with flat screen TV, a cardio and fitness center, and controlled access gates.

Jane Grant, (954) 776-1999, ext 224,
Marielle Sologuren, Pierson Grant Public Relations, 6301 Northwest 5th Way Suite 2600
Fort Lauderdale, FL 33309, v. (954) 776-1999 ext. 226, f. (954) 776-0290,