Historic Times Square Building Gets $267M Infusion for New Broadway Future

NEW YORK, NY—The largely vacant Times Square Building, (top right photo) one of the best-known commercial sites in the world has been given a new lease on life.

The owners, Africa Israel and its subsidiary, AFI USA, have received new five-year refinancing totaling about $267 million and access to a revolving line of credit from Banco Inbursa SA.

Five Mile Capital Partners LLC of Stamford, CT is converting its existing debt to equity to become a 50 percent equity partner in the property.

The 25 story, 807,000-sf former headquarters of The New York Times at 229 W. 43rd St. (42nd and Broadway) has had no tenants above the retail floors since the current owners bought the building in 2007.

When it was built in 1905, it was the second tallest building in the world, according to Wikipedia. The building has had several owners since The Times sold the building in 1961.

The digital signs on the building are considered to be the most valuable in the world. They can often be rented by the day or by the hour for product launches or other special events. The rental rates can be as high as $10,000 per hour.

“We applaud the flexibility, creativity and determination of Inbursa, our other lenders and our new partner, Five Mile Capital, for working so hard with us to restructure the debt on the Times Square Building,” says Richard A. Marin, (middle right photo)  Chairman and CEO of AFI USA.

Marin is the former chairman and CEO of Bear Stearns, a New York City-based global investment bank and securities trading and brokerage that collapsed in 2007 and was sold to JPMorgan Chase in 2008

“The renewed commitment of equity and involvement by our chairman Lev Leviev has made this all possible,,” he says. “As a result, we are proud to unveil today new plans for the property that will allow us to create the most value and make the greatest contribution to the Times Square neighborhood.”

AFI USA achieved the successful restructuring of the financing of the Times Square Building by settling the $236 million mezzanine debt with a group made up of BlackRock, CIT Lending Services Group, Five Mile Capital and Column Financial; securing a five-year extension of the senior debt; eliminating over $70 million in guarantees and transforming the entire project to being off-balance-sheet.

Jonathan Geanakos, Managing Director of Houlihan Lokey, advised AFI USA on the restructuring.

According to Marin, the financial restructuring of this property will result in a write-back of $370 million to the equity of AFI USA.

“This sets us on a course of renewal and success for our company, for our partners going forward, and for the Times Square Building,” Marin says.

AFI USA’s original plans after acquiring the building in 2007, called for the 365-foot tall building to offer 622,000 square feet of office space and 128,000 square feet of retail space.

The new plans call for an increase in retail space from 17% to over 38% of the total square footage.

In addition, AFI USA will sell or lease seven floors totaling approximately 330,000 square feet to a hotel operator for a high-end hotel property; and redevelop the remaining four top floors into a select number of luxury condominium penthouse residences.

The Times Square Building will offer exclusive landmarked signage opportunities.

“We believe in this project and are confident that the new leadership of AFI USA will bring the project to a successful completion,” says James G. Glasgow Jr.,  (bottom right photo)  a Partner of Five Mile Capital. “We are glad to be a partner in a redevelopment that offers so much unique value, even in a challenging real estate market.”

Glasgow says the new Times Square Building will meet the needs of Times Square’s most ardent users: the over 37.6 million tourists who visit each year.

The property’s location – just 500 feet from where the ball drops each New Year’s Eve and across from Broadway’s Schubert Alley  (bottom left photo) – makes it attractive to many restaurateurs and retailers, Glasgow says.

This, in combination with its unique architectural features – historic façade, high-ceilings, and oversized windows – and access from 43 rd and 44 th Streets, makes it an ideal hotel asset, he adds.

Marin says the retail space at the Times Square Building is already 55-percent leased in two deals totaling 134,000 square feet.

The first deal, with Discovery Times Square Exhibitions, occupies the sub-lower, lower and ground floors, and houses traveling exhibitions such as Titanic, the Artifact Exhibition and King Tut.

The second transaction, with the operator of Bowlmor Lanes, will offer bowling, entertainment and seven separate dining/bowling areas (fashioned after iconic New York neighborhoods) on floors three and four.

AFI USA’s plans call for the hotel to occupy floors five through 11 of the property.

The sky lobby, with double-height ceilings and arched windows, will be reached from its own entrance and elevator bank.

In addition to the 397 oversized hotel rooms, the property can deliver a spa, gym (complete with pool), restaurant and other amenities.

Marin says AFI USA will sell or lease this space to a hotel operator, and is currently in negotiations with a number of interested parties.

The final portion of the repurposing of the Times Square Building is the redevelopment of floors 12 through 16 into approximately 26 luxury condominium residences, and the marketing of the property’s grandfathered rooftop signage rights.

REITs Return 19.73% in First 11 Months of 2009, Fidelity Reports

BOSTON, MA—Despite a dark cloud hovering over the commercial real estate scene these days, Boston-based Fidelity Investments advises investors not to count this sector out of the trading arena.

Especially Real Estate Investment Trust stocks.

In its annual year-end review, Fidelity states, “Given that real estate was at the epicenter of last year's economic meltdown, it may surprise you that many real estate stocks have rebounded this year.

“The FTSE NAREIT All REITs Index, which represents the full universe of U.S. publicly traded real estate investment trust (REIT) stocks, had returned 19.73% year to date, as of November 30, 2009.”

"In my opinion, the year-to-date rebound has been mostly due to the realization that we're probably not going into the Great Depression, part two, and that most public commercial real estate companies are not going bankrupt," says Mark Snyderman,  (top right photo) manager of Fidelity Real Estate Income Fund (FRIFX).

"As a result, in my opinion real estate stocks have gone from being undervalued to being roughly fairly valued."

Because of this, Fidelity believes that, despite today's challenging economic conditions, some exposure to the $2.25 trillion commercial real estate sector still has potential long-term benefits for investors with a diversified portfolio.

Here is Snyderman’s full analysis of the REIT investment market:

What are REITs?

REITs are companies that invest in commercial real estate including office buildings, shopping centers, apartment complexes, and hotels. REITs qualify for special tax treatment that may help them generate a more attractive yield compared with a typical corporate stock.

To maintain its special tax status, a REIT must meet numerous requirements. Two of the main requirements are that, in general, a REIT must hold 75% of its assets in certain types of real estate assets, and 75% of its gross income must come from specified real estate investments and activities (such as rents and mortgages).

In addition, a REIT generally must distribute 90% of its taxable income to shareholders in the form of dividends.

There are two broad categories of REITs: equity, which own properties that seek to generate revenues from leases and rents; and mortgage, which seek to generate revenues by lending money to real estate investors or by purchasing existing mortgages and mortgage-backed securities.

Various pension funds, university endowments, and other institutional investors have long allocated a portion of their portfolios to commercial real estate investments. How?

In some cases by directly buying buildings, and in others, by buying the stocks of REITs, bonds issued by REITs, and commercial mortgage-backed securities.

Challenges in today's market

When the residential housing market bubble began to deflate in 2007, the commercial real estate market still managed to perform relatively well.

This is partly because the supply/demand cycles are quite different between residential and commercial property.

After Lehman Brothers collapsed last fall, however, the ensuing financial panic spread to the commercial real estate market. As a result, the FTSE NAREIT All REITs Index plunged 37% in 2008.

Since then, the weak economy has led to rising vacancy and loan default rates, and many REITs have reduced their dividend payments. While REIT stocks and bonds have rebounded off the market lows of last March 2009, the sector still faces several challenges.

"When you look at the fundamentals, they've been weak," says Snyderman. "There has been less demand for commercial property space, so vacancies have been increasing across all property types.

" This means that rents have been going down. When all is said and done, on average I would expect cash flows for commercial properties to decline 10% to 15%."

While commercial real estate cash flows are falling, Snyderman notes that commercial property values have declined much more, in many cases by about a third from their peak in late 2007.

This is because investors are less willing to pay as high a premium for certain types of commercial property as they had in the past, due to the level of uncertainty surrounding the future cash flows these properties can generate.

In the period leading up to the 2008 credit crisis, owners of commercial real estate were able to acquire and finance properties using low-cost debt.

The recent stress in the financial system has resulted in a sharp contraction in the availability of debt financing, placing additional pressure on property values.

Highly-leveraged owners have struggled to refinance maturing debt, leading to loan defaults on a number of well-known properties. It's likely that lenders will continue to experience deterioration in the credit quality of their commercial real estate portfolios in the near-term.

However, Snyderman feels that the decline in commercial property values is nearing an end for five reasons.

 "First, capitalization rates, the ratio between a property's net operating income and its market value, which have an inverse relationship to property prices, are 8%-9%—roughly in the vicinity of their long-term average.

· Second, while REIT fundamentals are still weakening, I believe that this is already priced into the market.

· Third, from the research I've done, it appears to me that there is some pent-up demand for commercial real estate property—money is on the sidelines and is waiting to be put to work.

· Fourth, the overall economic backdrop appears to be improving, which will certainly help this sector, among others.

· And last, the new supply situation is currently favorable.

New construction in the commercial real estate space has been below levels that would seem reasonable to accommodate the combination of future economic growth and the replacement of old and out-of-date buildings.

When you take a look at all of these factors working together, it tells me that we're close to the bottom," he explains.

(Wall and Broad Streets, New York City,  middle right photo)


· As well as being cautiously optimistic in the short term, Snyderman believes that the long-term outlook for commercial real estate remains similarly positive.

· From a balance-sheet perspective, even though cash flows are down, many REITs haven't borrowed beyond their means. In addition, many have adequate amounts of cash on hand, which may help them withstand the lingering effects of the credit crisis.

· Furthermore, some REITs raised significant amounts of capital in 2009 through public debt and equity markets.

· Finally, Snyderman thinks that most REITs will be able to refinance their long-term debt over the next few years, and while future loan terms may be more expensive, he believes these expectations are already included in current REIT valuations.

· From an overall supply/demand perspective, construction of new commercial property has come to a virtual standstill. With little new supply coming on the market, he thinks lease rates could rebound nicely when economic growth resumes and demand for commercial space rebounds.

Potential investor benefits

While the recent woes of the real estate sector may cause investors to question the outlook for REITs, we believe that an investment in commercial real estate for the long term provides an opportunity for capital appreciation, as well several other benefits, including:

Attractive yields. Because they are required to pass on at least 90% of their taxable income through dividends, REIT stocks and bonds have historically offered attractive yields.

In late 2008 and early 2009, however, most REITs made significant cuts to their stock dividends. Despite these cuts, REIT equities yielded an average of 3.9% as of November 30, 2009.1

"The questions for equity REIT investors now is: Will these companies go back to raising their dividends, and what are they going to do with extra cash they're keeping?" says Snyderman.

Diversification.

Historically, the performance of REIT stocks has not been closely correlated with the U.S. stock market. Correlation measures the performance of two investments and the degree to which they move in the same—or opposite—direction. Correlation values range from -1 to +1, and the lower the value, the higher the degree of diversification.

As an example, for the 20-year period ended September 30, 2009, the average correlation of the S&P 500® Index and FTSE NAREIT ALL REIT Index was 0.53.

More recently, however, for the three years ending September 30, 2009, the correlation has been 0.83, the highest level in history.

While REIT stocks may move in synch with stocks over the near term, "I believe that as the market continues to recover from the 'Great Recession,' correlations will revert to their historic norms," notes Snyderman.

Potential inflation protection.

Because commercial real estate is a tangible, hard asset, it can provide a degree of protection against rising inflation, as inflation increases the cost of constructing new buildings, making existing buildings more valuable.

In addition, many retail and office leases include automatic rent escalation clauses that protect property owners during the term of the lease. Apartment leases are usually for shorter terms and don't include such clauses. However, property owners may be able to raise rates between leases to keep pace with inflation.

REIT risks

Real estate is a cyclical industry that is sensitive to interest rates, economic conditions (both nationally and locally), property tax rates, and other factors. In addition, general risks (such as issuer risk, volatility, etc.) associated with stocks and bonds can also apply to the stocks and bonds of REITs.

Some REITs invest in foreign markets, which can be more volatile than U.S. markets due to increased risks of adverse issuer, political, regulatory, market, or economic developments.

Real estate funds are often nondiversified, meaning they can invest a greater portion of assets in securities of a small number of individual issuers. As a result, changes in the market value of single investment can cause greater price fluctuation than would occur in a more diversified fund.

How to invest

· Sophisticated and risk-tolerant investors might be interested in individual REITs if they're comfortable analyzing cash flows and risks.

· Most investors looking for exposure to commercial real estate may want to consider a diversified mutual fund or exchange-traded fund (ETF) that invests in REITs.

· Many of these vehicles focus exclusively on REIT stock investments, while a smattering may also include REIT bonds and other real estate-related securities in their portfolios.

· Be sure to check the prospectus for more information on a fund's or ETF's specific strategy.

· Also note that real estate investments are intended as a supplement to your investment portfolio, not as a core holding.

GLOBAL REAL ESTATE ROUNDUP

· Skanska Wins 2 Construction Jobs Valued at $156M

· San Antonio Gears for 1.6M of New Office Product as Vacancies Rise and Rents Fall

· Lower Prices Luring Mansion Buyers Back to Beverly Hills (Rodeo Drive, top right photo)

· New York Judge Scolds Lender and Erases $525,000 Mortgage Loan Balance for Homeowner

· Fannie Mae’s ‘First Look’ Buyers’ Program Taking Off

· New Jersey Developers Feud Over Planned Mixed Use Project Near Rock Arena (top left photo)

· New Student Housing Complex Under Way Near University of Texas at San Antonio

· Unlicensed Toronto Home Builders Fined $240,000

STOCKHOLM, SWEDEN—Repeat customers are proving to be valuable assets in a lukewarm construction industry these days, as Skanska USA Building has found out.

The Sweden-based builder has won two contracts in the U.S. totaling $156.4 million.

In Arizona, Skanska’s $85 million contract calls for construction management work at an industrial facility for an unnamed manufacturing company. Skanska’s Oregon office will be overseeing the project.

In Puyallup, WA, Skanska’s $71.4 million contract covers the continued expansion of the Good Samaritan Hospital, about 30 miles south of Seattle.

SAN ANTONIO, TX—More new office space is the last thing this metropolitan area needs at the moment. Still, metro San Antonio is set to receive the most new office product on an annual basis since the 1980s.

That phenomenon will generate higher vacancy rates and rising concessions, according to a new study by Encino, CA-based Marcus & Millichap Real Estate Investment Services.

“While fundamentals are weakening throughout much of the metro, investment activity has begun to increase,” says J. Michael Watson (middle right photo), regional manager of the San Antonio office of Marcus and Millichap.

This year, developers are on pace to deliver 1.6 million square feet of new office space, following the addition of about 740,000 square feet in 2008, Watson says. The completions will increase
existing inventory by 5.9 percent.

Asking rents are forecast to slip to $19.39 per square foot, limiting year-over-year gains to 0.7 percent. Effective rents are expected to decline 4.1 percent to $15.52 percent. Last year, asking and effective rents rose 2.0 percent and 1.4 percent respectively.

BEVERLY HILLS, CA—The favorite playground for the rich and famous is also garnering new attention as a popular investment destination, according to the Los Angeles office of Prudential CA Realty.

Beverly Hills is showing signs of being one of the first luxury residential markets to bounce back in the current global Recession. Lower prices across the board is the magnet drawing potential buyers.

While my foreign inquiries began to rise after the changing real estate markets of Europe and Asia, my global inquiries have more than doubled since the recent Dubai (financial) crisis,” says Greg Moesser, (middle left photo)  an estate direct at Prudential CA Realty and at LAClassicEstates.com.

In addition to Beverly Hills, Moesser says “there is also strong interest” in the Los Angeles Westside areas of Bel Air, Hollywood Hills and Malibu.

Los Angeles area prices have dropped 30 percent to 40 percent from the market peak of a few years ago, says Moesser.

RIVERHEAD, NY—OneWest Bank is fighting mad as it files an appeal to a higher New York court after losing a $525,000 mortgage loan lawsuit with a New York homeowner.

The Pasadena, CA-based bank, which took over the failed online IndyMac Federal Bank, is disputing a decision by Judge Jeffrey Spinner (middle right photo)  of Suffolk County Court in Riverhead, NY.

Spinner threw out OneWest Bank’s lawsuit which demanded the homeowner pay $525,000, the balance owed in a foreclosure settlement.

According to the New York Post, the judge scolded the bank for repeatedly refusing to work out a loan restructuring with the homeowner; misleading the couple about the follar amounts of the loan during the settlement hearings; and for the bank’s general treatment of the homeowner and his wife over several months of hearings.

The bank claims former IndyMac officials had tried to resolve the dispute for four years before filing a foreclosure action.

(NEW YORK, NY)—Fannie Mae’s First Look Initiative program of for-sale foreclosed properties is catching on with private homeowners and local government entities.

“First look provides owner occupants and public entities (local governments) that are committed to the community, an early opportunity to purchase one of Fannie Mae’s real estate-owned properties,” says Terry Edwards, executive vice president for credit portfolio management at Fannie Mae.

The First Look Initiative was piloted in August and is receiving positive initial responses nationally, says Edwards.

“George Romagnoli,  (bottom right photo) community development manager for Pasco County’s community development division (in west Florida), says the program “allows our non-profit partners the opportunity to get a slight leg up in obtaining properties for the Neighborhood Stabilization Program.”


NEWARK, NJ—Where is the $100,000? That’s what Arthur Stern, (bottom left photo)  CEO of Cogswell Realty Group is demanding from Hanini Group CEO Samer Hanini. Both are Newark, NJ-based developers.

In a Superior Court lawsuit filed in Newark, Stern alleges he gave Hanini $100,000 in 2006 as an advance joint venture investment on a planned mixed-use downtown development near The Rock, a two-year-old, 18,500-seat sports arena also called Prudential Center.

When plans for the residential-hotel-retail complex failed in 2007, Stern asked for the return of his $100,000. Hanini has not responded to the lawsuit or explained why the money hasn’t been returned, according to the Newark Star-Ledger.

ATLANTA, GA—Student housing construction continues to be a lone bright spot on the diminishing new construction horizon.

Avalon Place, A multi-million-dollar, 246-unit complex with 440 beds is scheduled for delivery by July 2010 in San Antonio, TX. The project will serve student at the University of Texas at San Antonio.

The developer is BVP Managers LLC, a joint venture between Atlanta-based Place Companies and Chicago-based Blue Vista Capitdal Management LLC. The owner of record is the Place/BV Student Housing Fund LLC.

“This project is in line with our strategy to developer high quality student housing assets in excellent student housing markets,” says Robert E. “Bob” Clark, (bottom right photo)  executive vice president, Place Management Group LLC.

"Avalon Place, along with High View Place and Hill country Place, gives us a dominant position in the UTSA market,” Clark adds.

TORONTO, CANADA—If developers are planning to build homes for profit in Toronto, they need to register and pay a fee first with Tarion Warranty Corp., a private, 31-year-old company that licenses all new home and condominium builders in the province of Ontario.

Unfortunately for them, Passion Homes Inc. owners George and Melina Tanacs of Toronto didn’t do that and were fined $240,000 for illegal construction. They could have faced a year in jail.

They Tanacs had built four homes in the Toronto suburb of North York and sold them for $400,000 to $500,000, according to the Toronto Star. Buyers later filed $60,000 worth of bad-construction claims against the couple.

Illegal construction of residential projects has increased over the past 12 months, according Dave Rogers,Tarion’s director of enforcement.

Toronto, with 2.6 million residents, is the fifth largest city in North America.

Fannie Mae Unloads 1,200 South Florida Properties in 2009

MIAMI, FL--Fannie Mae, the public-private secondary market mortgage giant, sold off more than 1,200 properties on an individual basis in the tricounty South Florida region in 2009, representing a 472 percent increase in transactions compared to 2008, according to a new report from CondoVultures.com.

An additional 1,100 properties are currently available for purchase in the Miami-Dade, Broward, and Palm Beach counties, according to the CondoVultures report.

The spike in closed transactions and available inventory for purchase comes some 16 months after Fannie Mae opened an office in Fort Lauderdale to work with borrowers to modify their mortgages or sell off properties that have been repossessed through foreclosure.

"Fannie Mae is capitulating one property at a time," said Peter Zalewski, (top left photo) a principal with the Bal Harbour, Fla.-based real estate consultancy and brokerage Condo Vultures® LLC.

 "The recorded deeds and available inventory for resale prove that Fannie Mae's South Florida office is working diligently to deal with the mountains of bad assets that the mortgage backed securities giant has in South Florida.

"Given the U.S. government's financial commitment to Fannie Mae, we expect Fannie Mae to increase the number of repossessed properties that it sells off in 2010."

Contact:  Peter Zalewski, 1-800-750-0517, peter@condovultures.com

NAI Realvest negotiates sale of industrial condo space for $272,000 at Anchor Road Commerce Center in Casselberry, FL

MAITLAND, Fla. — NAI Realvest recently negotiated the sale of units 1500, 1506 and 1512 with 3,600 square feet in the Anchor Road Commerce Center at 206 Reece Way in Casselberry.

Michael Heidrich, (top right photo)  a principal at NAI Realvest, negotiated the sales representing the seller, Anchor Road Commerce Center, LLC of Maitland. Buyer NRRN Holdings, LLC. of Casselberry paid a total of $272,000 for the three units and is represented by Byron Bonyadi of Associates Real Estate Investments Services.

For more information, contact:
Michael Heidrich, Principal NAI Realvest, 407-875-9989 mheidrich@realvest.com
Patrick Mahoney, Principal/Chief Operating Officer, 407-875-9989
Larry Vershel or Beth Payan, Larry Vershel Communications, 407-644-4142

Thompson Hine Partner Linda A. Striefsky Named to Annual List of Top Women in Real Estate

CLEVELAND, OH--(BUSINESS WIRE)--Linda A. Striefsky (top right photo) has been named a “Woman of Influence” by Real Estate Forum magazine. This is the magazine’s second annual “Women of Influence” list, which recognizes women across the country who are helping to shape the commercial real estate industry.

The nominees were evaluated not only on the strength of their contributions in real estate, but also on the merits of their professional and civic achievements. 41 of those nominated were selected for inclusion on this year’s list of Women of Influence; each woman is profiled in the November/December issue.

“I’m honored to have been selected by Real Estate Forum for this list”

Striefsky, a partner in the firm’s Real Estate practice group, focuses her practice on real estate financing including loan restructuring and workouts. Her finance work encompasses loans involving real estate investment trusts and multi-state financing transactions.

She also handles many transactions involving corporate facilities management, including sourcing contracts. She recently was elected President-Elect of the American College of Real Estate Lawyers and is admitted to the Anglo-American Real Property Institute, a group that is limited to 50 British and 50 U.S. real estate industry leaders.

“I’m honored to have been selected by Real Estate Forum for this list,” says Striefsky. “It’s gratifying to see increasing numbers of women both rise through the ranks and enjoy recognition for their achievements, and to see so many women assist others in the industry.”

“Linda is one of the top real estate lawyers in the United States and a very valuable member of our team,” says Tom Coyne, (top left photo)  who heads up the firm’s Real Estate Practice Group. “We congratulate her on being included on this impressive list.”

Contact:  Nina McCollum, 216-566-7421, Nina.McCollum@ThompsonHine.com

Papa John’s to Culminate 25th Anniversary by Ringing in New Year at Times Square

“Papa” John Schnatter to Deliver Pizzas to Times Square 2010 Crews and Participate in Special “Confetti Drop” During Countdown Celebration

LOUISVILLE, Ky.--(BUSINESS WIRE)--In celebration of an unforgettable 25th anniversary, Papa John’s, the world’s third-largest pizza chain, is ringing in the New Year at one of the world’s most famous New Year’s Eve parties – New York City’s Times Square.

“Papa John’s is excited to be a part of this iconic celebration which, like our pizza, brings friends and families together.”

As part of the festivities, Times Square revelers may have the opportunity to be “Papa” John’s co-stars as the company captures footage for a potential future “Papa’s in the House” commercial, part of the company’s new documentary-style series of advertisements in which Schnatter surprises customers with pizza deliveries.

Schnatter will also take the stage above the crowd to lead the crowd in a special chant before releasing thousands of pieces of confetti into the crowd which will include a promo code good for a unique offer available at www.papajohns.com.

“I can’t think of a better place than Times Square to reflect on the end of a tremendous 2009 and kick off an even bigger year ahead,” said John Schnatter, (top centered  photo)  Papa John’s Founder and Chief Executive Officer. “Papa John’s is excited to be a part of this iconic celebration which, like our pizza, brings friends and families together.”

New Year’s Eve is one of the top five busiest nights of the year for Papa John’s, which expects to sell nearly 5 million pizza slices (more than 600,000 pizzas) throughout the U.S.

As the first pizza company to introduce nationwide online ordering, Papa John’s also plans to bring the thrills of Times Square to all their loyal fans by featuring a live video stream on Papa John’s Facebook fan page, www.facebook.com/papajohns, of the action in New York.

Throughout the Webcast, Papa John’s will reveal special promotion codes good for pizzas ordered online.

Headquartered in Louisville, Kentucky, Papa John's International, Inc. (NASDAQ: PZZA) is the world's third largest pizza company.

 For nine of the last 10 years, consumers have rated Papa John's No. 1 in customer satisfaction among all national pizza chains in the American Customer Satisfaction Index (ACSI).

 Papa John's also was honored by Restaurants & Institutions Magazine (R&I) with the 2009 Gold Award for Consumers’ Choice in Chains in the pizza segment, ranked first among pizza companies in the 2008 Brand Keys Customer Loyalty Engagement Index, and was named 2007 Pizza Today Chain of the Year. For more information about the company or to order pizza online, visit Papa John's at www.papajohns.com.

Contact: Tish Muldoon, 502-261-4987tish_muldoon@papajohns.com

Home Prices Still Improving but at a Moderating Pace Entering the Fourth Quarter of 2009, According to the S&P/Case-Shiller Home Price Indices

NEW YORK, NY-- Dec.29, 2009 – Data through October 2009, released today by Standard & Poor’s for its S&P/Case-Shiller1 Home Price Indices, the leading measure of U.S. home prices, show that the annual rate of decline of the 10-City and 20-City Composites improved compared to last month’s reading.

This marks approximately nine months of improved readings in these statistics, beginning in early 2009.
The chart below depicts the annual returns of the 10-City and 20-City Composite Home Price Indices, declining 6.4% and 7.3%, respectively, in October compared to the same month last year. All 20 metro areas and both Composites showed an improvement in the annual rates of decline with October’s readings compared to September.

“The turn-around in home prices seen in the Spring and Summer has faded with only seven of the 20 cities seeing month-to-month gains, although all 20 continue to show improvements on a year-over-year basis. All in all, this report should be described as flat.” says David M. Blitzer (top right photo) Chairman of the Index Committee at Standard & Poor’s.

“Coming after a series of solid gains, these data are likely to spark worries that home prices are about to take a second dip.

"Before jumping to conclusions, recognize that the one time that happened at the beginning of the 1980s, Fed policy saw dramatic reversals, which is very different from the stable and consistent Fed policy we have today.

"Further, sales of existing homes – those included in the S&P/Case-Shiller Home Price Indices – have been very strong in recent months, working off the inventories of houses for sale. At the same time, housing starts remain weak, fears that the market will be swamped by a wave of foreclosures are heard and government programs aimed at the housing market will expire in the first half of 2010.

The chart above shows the index levels for the 10-City and 20-City Composite Indices. As of October 2009, average home prices across the United States are at similar levels to where they were in the autumn of 2003.

From the peak in the second quarter of 2006 through the trough in April 2009, the 10-City Composite is down 33.5% and the 20-City Composite is down 32.6%. With the relative improvement of the past few months, the peak-to-date figures through October 2009 are -29.8% and -29.0%, respectively.

San Francisco has reported seven consecutive months of positive returns, San Diego has reported six and Los Angeles and Phoenix are close behind with five.

While the two Composites were flat, seven of the MSAs reported positive monthly returns for October and two of those -- Phoenix and San Francisco -- were greater than +1.0%.

Looking at the annual statistics, both Minneapolis and Portland are no longer reporting double-digit declines. Denver and Dallas are nearing positive territory with their annual figures at -0.1% and -0.6%, respectively.

Las Vegas remains the one market that has not seen a glimmer of hope so far this year.

Prices have declined for 38 consecutive months, with a peak-to-trough reading of -55.4%. It is now barely 5% above its January 2000 level. This compares to its peak in August 2006, when the average home price was 135% above that same level.

For more information, please contact::
David Blitzer, 212 438 3907, david_blitzer@standardandpoors.com
David Guarino, 1 212 438 1471, dave_guarino@standardandpoors.com

Condo and Apartment Market Roundup

· Bargain hunters scoop up discounted units in Southwest Florida.


· South Beach, FL a sellers’ market as inventory shrinks sharply.


· Atlanta buyer pays $31M for 37-year-old Sunny Isles Beach, FL apartment complex.


· Non-gaming Planet Hollywood Towers Westgate opens in Las Vegas.


· Providence, RI mayor buys into struggling condo project to save local market.

· Canadians buy 78 units at stalled condo conversion in East Phoenix, AZ.


· Summit at Copper Square owners in Phoenix fight to stop lender from foreclosing 74 remaining unsold units

(SARASOTA, FL)—Deeply discounted prices have turned Southwest Florida markets into a buying frenzy, according to local brokers.

The median price in the Sarasota-Bradenton hub was down 20 percent from a year ago to $141,000 in November. In Punta Gorda-North Port, the media dipped 22 percent to $80,000.

Sarasota broker Perry J. Corneau (top left) tells the Sarasota Herald-Tribune, “A lot of people have been wanting to buy – they were just waiting for the price to come down.

“Now they are down to 2003 levels, where they were before the boom started – and people are thinking they don’t need to wait any more. Everything is on sale.”

Sales are also hot throughout the state. November sales in Orlando were up 301 percent; in Fort Myers-Cape Coral, up 174 percent; in Tallahassee, up 150 percent; and in Tampa Bay, up 80 percent.

But closing on a bargain-basement deal isn’t easy, cautions broker Charles H. “Charlie” Bray (top right photo)  of Surfside Realty in Englewood, FL.

“Right now, you’ve got to have cash to buy a condo,” he tells the Sarasota Herald-Tribune. “If you go to a bank, they will put you through the ringer.”

(MIAMI BEACH, FL)—The re-sale market in South Beach is shrinking.

Less than two percent of the South Beach inventory in condo projects with at least 30 units are available for resale in Miami Beach's internationally acclaimed neighborhood, far less than the industry standard of 10 percent typically found in a normal market, according to a new report from CondoVultures.com.

There are currently 258 units available for resale in the 25-block stretch of South Beach from South Pointe Drive north to 24th Street, the Atlantic Ocean west to Biscayne Bay.

The area is home to nearly 16,400 units located in 147 projects with at least 30 units, according to the newly released Condo Vultures® Official Condo Buyers Guide To South Beach™.

"The rule of thumb is, in a normal market some 10 percent of the units in a project are available for resale at any given time," says Peter Zalewski, (middle left photo)  a principal with the Bal Harbour, Fla.-based real estate consultancy Condo Vultures® LLC.

"If a condo has more than 10 percent of its units available for resale, the buyers have the negotiating advantage. On the flip side, if less than 10 percent of the units are listed for resale, the sellers have the advantage.”

Zalewski adds, "South Beach is definitely a seller's market considering the current inventory levels available for resale. By comparison, several other areas in South Florida have resale rates of 20-percent plus of the available condo inventory."

(SUNNY ISLES BEACH, FL)-- CondoVultures.com reports an Atlanta group has acquired Vistaview Apartments, (middle left photo) a 37-year-old, 308-unit complex in the barrier island city of Sunny Isles Beach for $31.3 million or $92 per square foot.

The newly created entity, JTCI5 Sunny Isles LP, along with Matt M. Bronfman, (middle right photo) acquired nearly 340,000 square feet of livable space in the four-building complex situated on seven acres, according to the CondoVultures.com report based on Miami-Dade County records.

"This is a four-decades old property on a great piece of dirt situated between luxury high rise condominiums, retail space, and high-end rental complexes," notes Peter Zalewski, a principal with the Bal Harbour, Fla.-based real estate consultancy Condo Vultures® LLC.

"The fact that the project is an apartment complex and not a condominium makes this an interesting situation for a number of reasons."

More than 18,000 condominium units -- including a new tower still under construction today -- exist in the Sunny Isles Beach submarket of Miami-Dade County, according to preliminary research for the Condo Vultures® Official Condo Buyers Guide To Sunny Isles Beach™.

The seller, Vistaview Apartments Limited with Yizhak Toledano of Aventura, deeded over the complex on Dec. 16, 2009. Toledano signed the deed, according to Miam-Dade County records.

In unison with the deed transfer, Utah-based Capmark Bank assigned the remaining outstanding balance of a $48.7 million loan secured by the complex over to Vista Sunvest LLC of Wilmington, Del.

Capmark Bank provided the loan in November 2007, but just 20 months later in July 2009 filed to foreclose on Vistaview Apartments, according to Miami-Dade County records.

The Vistaview Apartments have a 2009 assessed value of $31.5 million with $18.6 million, or $61 per square foot, allocated to the land, and $12.9 million, or $38 per square foot, allocated to the value of the 1972 buildings.

In 2008, the property had an assessed value of $29.8 million, according to the Miami-Dade County Property Appraiser.

(LAS VEGAS, NV)—When a non-gaming residential and hotel high-rise opens in Las Vegas, that’s news, say local brokerage sources.

The first phase of the planned two-tower, 52-story, 2,700-unit Planet Hollywood Towers by Westgate(middle right photo) has welcomed its first 20 owners who plan to use the premises as vacation homes and traditional hotel rooms, according to Westgate Resorts chief operating officer Mark Waltrip.

The top five stories of the first tower consist of 40 penthouse units sized from 4,000 square feet to 12,000 square feet. Eighty percent of the tower will be used as hotel rooms, Waltrip says.

The condo-hotel project’s partners are Planet Hollywood and Orlando-based Westgate Resorts. Westgate owns the property; Planet Hollywood is the marketing and operating partner.

(PROVIDENCE, RI)—Providence, RI mayor Joseph R. Paolino Jr., (bottom right photo)  who is also the general partner of Paolino Properties, has teamed with Boston-based Winn Development Co. to purchase the remaining 233 unsold condos at the five-year-old, 330-unit 903 Residences. (bottom left photo)

The transaction saved the property from going to a foreclosure auction the same week, according to the Providence Business News. The Athena Group LLC of New York City had defaulted on a $69 million acquisition loan.

The price was not disclosed. However, Winn Development president and managing partner Lawrence H. Curtis confirmed Winn helped financed the deal with a $17 million loan from Columbus Bank and Trust Co. of Georgia.

Paolino Properties, which had managed 903 Residences, had previously invested in the property. Winn Development will now manage the asset.

“I think by us buying it and stepping in, we not only bought a good asset, but I think we helped cushion any other potential problems other condo projects might have had,” Paolino told the Providence Business News.

(PHOENIX, AZ)-Three Canadian investment groups have teamed to buy 78 units for $4.875 million or $62,500 per unit at the 240 unit Riverwalk at Papago Park community.(bottom left photo)

The Calgary, Alberta-based buyers are Optimus Riverwalk LLP, Japhda Riverwalk LP and Strongwater Investments America. The seller was Riverwalk 240 LLC, a Delaware-registered company based in Miami, FL.

Mark Forrester, a partner in Phoenix-based Hendricks & Partners, told the Phoenix Business Journal some of the units at Riverwalk are privately owned; others have been leased out as apartments.

Forrester says Canadian investors are playing a prominent role in the current Phoenix condo sales market. Hendricks & Partners of Phoenix represented the seller. SiteWest of Phoenix negotiated for the buyers.

(PHOENIX, AZ)—In a metro area that didn’t produce its first high-rise condominium community until 1990, the fate of the two-year-old, 165-unit Summit at Copper Square is grabbing the attention of players in the local condo sales market.

The 23-story Summit at Copper Square (bottom right photo)  is the tallest residential development in metro Phoenix.

The owners of the development are fighting to stop the lender from foreclosing on 74 of the unsold units and selling them at fire-sale prices – a move that could lower the value of the entire condo market in Phoenix, they argue.

The three corporate owners are W Developments LLC with a 30 percent stake; Summit Investors LLC, also with a 30 percent stake; and Diamondstar Partners III LLC, a Wheaton, IL firm with a 40 percent equity investment.

According to court documents, they defaulted in August 2008 on interest payments for an original $64 million loan.

The owners seek Chapter 11 protection and have submitted a reorganization plan to an Illinois bankruptcy court judge. Judge Eugene Wedoff is expected to rule on the plan at a possible January hearing, according to the Arizona Republic.

The current lender is Stearns Bank of Scottsdale, AZ. Stearns bought a number of bundled notes from the Federal Deposit Insurance Corp. after the FDIC had taken over the original lender, FNBN or First National Bank of Nevada in Reno, NV in July 2008.

According to WeKnowUrban, a Phoenix-based brokerage firm that closely monitors the Phoenix condo market, two acquisition loans totaling $64 million were involved in the acquisition of The Summit at Copper Square by the three owners.

But when FNBN went under, the value of the $64 million notes was about $28 million. Stearns bought that note for $6.4 million, according to WeKnowUrban.