Philip Blumberg Blog

CBRE Buys Tempest Management

As reported in Commercial Property News, CB Richard Ellis Group, Inc. (CBRE) announced the acquisition of Tempest Management Corp., one of Canada's foremost project management firms, in a move to enhance CBRE's service offerings throughout the Canadian market. Tempest, with offices in Ottawa and Toronto, delivers project management services to corporate, government and real estate organizations, including Public Works and Government Services Canada, Canada Post Corporation, Ontario Realty Corporation, Carleton University, Ottawa University and Tonbridge Corporation.

Tempest will be integrated into CBRE's Global Corporate Services division, and Cam Kourany, the founder and President of Tempest, along with select other senior managers, will move to Toronto to work with the CBRE Canada leadership team. "Adding Tempest's well-recognized project management expertise, process-oriented systems and talented professionals enhances our global services offering," said Ken Loeber, Executive Managing Director, CB Richard Ellis Global Project Management. "From strategic planning and benchmarking to the final move-in, the addition of Cam's talented project team and program delivery leadership to our existing Canada project management business will provide a depth of service that is unmatched in the Canadian market."

This is Los Angeles-based CBRE's second international deal this month with a foreign partner. The firm also signed a joint venture agreement with Vanke, a residential developer in China, to manage the latter's portfolio.

For more real estate news and information, visit Blumberg Capital Partners.

Shorenstein Purchases $250 Million Midtown Manhattan Package

Shorenstein Properties LLC, based in San Franciscio, CA, has purchased a $250 million senior mezzanine loan backed by 450 Lexington Avenue, a 910,000 square foot office building located in the Grand Central submarket of Manhattan, as reported by GlobeSt.com.

The loan, purchased by Shorenstein on behalf of Shorenstein Realty Investors Nine, L.P., a $2.062 billion private commingled fund formed in the spring of 2007, was part of a five-year, fixed-rate financing package made to the building owner, Lexington Operating Partners LLC, in August 2007. The transaction to acquire two separate mezzanine loans is the ninth debt purchase made by the company in the last nine months, and brings its total debt holdings to $685 million.

Built over the historic Grand Central Station Post Office, 450 Lexington Avenue is a 40-story office tower. Completed in 1991, the 800,000 sf building establishes a strong presence on an important Midtown site while remaining consistent with the details of its historic base. The property is currently 99.9 percent leased. Major tenants in the building include Davis Polk & Wardwell, Warburg Pincus and Citigroup.

For more real estate news and information, visit Blumberg Capital Partmers.

Office Buildings of the Year for 2007 Announced

The Building Owners and Managers Association International has announced The Office Building of the Year (TOBY) regional winners for 2007. The TOBY award honors the buildings—and the men and women who own and manage the buildings—that exemplify excellence in building management, operational efficiency, tenant retention, emergency planning and community impact. The awards program recognizes excellence in hundreds of communities around the country, first at the local level, then regional and culminating in the international awards that are bestowed at the annual TOBY and Earth Awards Banquet.

Winners of the award are as follows:

Under 100,000 Square Feet Category

Courvoisier Centre I
Miami, Florida
Managed by: Jones Lang LaSalle
Owned by: TishmanSpeyer
BOMA Local Association: Miami-Dade
Region: Southern

100,000 – 249,999 Square Feet Category

Maitland Promenade II
Maitland, Florida
Managed by: Triple Net Properties, LLC
Owned by: Maitland Promenade LLC
BOMA Local Association: Orlando
Region: Southern

250,000 – 499,999 Square Feet Category

Two Memorial City Plaza
Houston, Texas
Managed by: MetroNational
Owned by: MetroNational
BOMA Local Association: Houston
Region: Southwest

500,000 – 1 Million Square Feet Category

Fourth & Madison
Seattle, Washington
Managed by: Hines Interests Limited Partnership
Owned by: TIAA-CREF
BOMA Local Association: Seattle King-County
Region: Pacific Northwest

Over 1 Million Square Feet Category

The Towers at Williams Square
Irving, Texas
Managed by: Cousins Properties Services Inc.
Owned by: TIAA Realty Inc.
BOMA Local Association: Dallas
Region: Southwest

Corporate Facility Category

USAA Phoenix Campus
Phoenix, Arizona
Managed by: USAA
Owned by: USAA
BOMA Local Association: Greater Phoenix
Region: Pacific Southwest

Earth Award

Adobe Systems Incorporated
San Jose, California
Managed by: Cushman & Wakefield
Owned by: Adobe Systems Incorporated
BOMA Local Association: Silicon Valley
Region: Pacific Southwest

Government Building Category

90 Church Street
New York, New York
Managed by: Boston Properties
Owned by: United States Postal Service
BOMA Local Association: New York
Region: Middle Atlantic

Historical Building Category

Hurt Building
Atlanta, Georgia
Managed by: Harbor Group Management Company
Owned by: Hurt Financial Associates, LLC
BOMA Local Association: Atlanta
Region: Southern

Industrial Office Park Category

Eagle Hill Business Park
High Point, North Carolina
Managed by: Liberty Property Trust
Owned by: Liberty Property Limited Partnership
BOMA Local Association: Carolinas – West Virginia
Region: Southern

Medical Office Building Category

Westgate Medical Center
San Antonio, Texas
Managed by: Cambridge Healthcare Management, Inc.
Owned by: Cambridge Holdings
BOMA Local Association: San Antonio
Region: Southwest

Renovated Building Category

First City Tower
Houston, Texas
Managed by: CB Richard Ellis
Owned by: FC Tower Property Partners, LP
BOMA Local Association: Houston
Region: Southwest

Suburban Office Park Low-Rise Category

Pacific Ridge Corporate Centre
San Diego, California
Managed by: Brandywine Realty Trust
Owned by: BOI-Pacific Ridge, Inc.
BOMA Local Association: San Diego
Region: Pacific Southwest

Suburban Office Park Mid-Rise Category

LakePointe Office Park
Charlotte, North Carolina
Managed by: Childress Klein Properties
Owned by: Childress Klein Properties & TIAA-CREF
BOMA Local Association: Carolinas – West Virginia
Region: Southern

For more real estate news and information, visit Blumberg Capital Partners.

Building A Greener NYC Pays

Commercial and residential customers have been handed new incentives to green their rooftops as a new tax bill passed on Tuesday. Under the new law, property owners who install green rooftops on at least 50 percent of their available rooftop space can apply for a one-year property tax credit of up to $100,000, equal to $4.50 per square foot of roof area that's planted with vegetation. Building owners will be able to apply for the credit starting Jan. 1, 2009. This is a pilot program that will expire after March 15, 2013, unless it is extended.

In an exclusive comment to CPN, Ron Crauderueff, director of sustainable policy at Sustainable South Bronx and chair of the Storm Water Infrastructure Matters (S.W.I.M.) policy committee, explained, “The return on investment is, first, a significant reduction in energy use, from 10 to 20 percent in the summertime. And second, it doubles or triples the lifetime of the roof.” Green roofs mitigate the sun’s UV rays’ wear on the roofing membrane with constant fluctuation due to temperature. “A green roof uses the sun as a resource,” he added.

Dr. Paul Mankiewicz, Gaia Institute executive director and board member of the New York City Soil & Water Conservation District, said in a statement that, "Each 10,000-square-foot green roof can capture between 6,000 and 12,000 gallons of water in each storm event. At the same time, the evaporation of this rainfall will produce the equivalent of between a 1,000 and 2,000 tons of air conditioning, enough heat removal to noticeably cool 10 acres of the city.”

In addition, the announcement of a strategic alliance between GE Energy and GAF Materials Corporation to develop solar roofing systems is expected to advance the use of solar energy technology, allowing customers who are interested in purchasing a new roof the convenience of installing a solar system at the same time.

For more real estate news and information, visit Blumberg Capital Partners.

Welsh Capital Arranges Over $27.9 Million in Recent Mixed-Used Loans

Welsh Capital of Minnetonka, MN, providing a variety of creative mortgage financing solutions for developers, owners and investors of commercial real estate, has announced the closing of more than $27.9 million in permanent mortgages for commercial properties across the Midwest, according to a crefeed.com release.

"The perception that rates have hit bottom and will now rise has lead to robust financing activity," said Peter Austin, Senior Vice President at Welsh Capital. "Many of our lenders are currently offering a variety of attractive financing packages that have resulted in very smart, economical deals for our clients."

The loans closed in the last 30 days and were originated with Welsh Capital's correspondent lenders. They were used to finance the following properties:

- A 9,000 square foot office building in Hopkins, Minn.

- A 19,890 square foot junction mall in Menomonie, Wis.

- A 77,650 square foot industrial property in Franklin, Wis.

- A 72-unit apartment complex in Wausau, Wis.

- A 100-unit multi-family in Minneapolis, Minn.

- A 92-unit apartment community in Brooklyn Park, Minn.

For more real estate news and information, visit Blumberg Capital Partners.

Cannon Commercial Acquires Travis Park Plaza

In a market where covered parking is demand, the real selling point can sometimes be a parking garage. In downtown San Antonio, where there are only six or seven structured parking garages, Cannon Commercial Inc. scooped up the 160,172 square foot Travis Park Plaza and adjacent 800 space parking garage from Darren Casey Interests Inc., a property assessed at $13,9 million. "Covered parking is scarce," explains Kam Mateen, president of Cannon Commercial, in an exclusive interview with GlobeSt.com. He adds that the garage is open to the public and provides an excellent source of revenue.

While the final selling price was not disclosed, sources indicate that the sale followed the norm for comparable buildings in the area, trading for $130 to $150 per square foot. The class A office building, built in the 1970s, is 90% leased and has been well maintained, but Cannon plans to invest about $1 million into upgrades of the lobby and exterior. Post renovation they plan to bump rents; Cannon Commercial will manage the Plaza and NAI-REOC Partners of San Antonio will handle leasing arrangements.

For more real estate news and information, visit Blumberg Capital Partners.

Blumberg Capital Partners in the News

Blumberg Capital Partners was recently featured in Commerical Real Estate News Direct. Seller Solves Bidder's Financing Dilemma.

An excerpt:

When bids came in 10 percent below its asking price for a Tampa, Fla., office building, Blumberg Capital Partners stirred the process by offering gap financing.

The Coral Gables, Fla., firm eventually got the property under contract for the full asking price after it had provided the buyer 15 percent financing for the transaction.

According to Philip Blumberg, chief executive officer, the buyer had been hoping to line up 90 percent financing, but was only able to line up a loan totaling 75 percent of the purchase price due to the tightened credit markets. "We had to step in to make up the difference," he said.

General Growth Properties Unveils Vision for South Street Seaport

General Growth Properties released the details of a multi-faceted plan to redevelop the South Street Seaport and return the district to its former glory as a vibrant hub for commerce in Lower Manhattan. According to a Commercial Property News article, General Growth Properties first acquired the property with its purchase of the Rouse Co. in 2004.

The plan replaces the enclosed mall with a pedestrian district, more than two acres of additional open space and circulation areas connected to the street grid of the historic Seaport District. New shops and restaurants, a boutique hotel, and a five-star hotel and residential building are proposed. The proposed master plan will be reviewed by the city’s Landmarks Preservation Commission (LPC). Pending that review, the plan could enter the city’s Uniform Land Use Review Process (ULURP) in the spring of 2009, with construction planned to commence in late 2010. Construction is expected to take four years.

New York City Deputy Mayor Robert Lieber said, “This comprehensive vision to remake the South Street Seaport holds the promise of a new and vibrant waterfront destination with amenities for the financial community, New Yorkers and visitors alike. Pier 17 sits at a critical juncture of two of the city's most important and exciting projects – the East River Waterfront and Fulton Corridor Revitalization. Investment in a re-imagined Seaport would further enhance Lower Manhattan's resurgence and expand on the success of a growing adjacent residential neighborhood. The public review processes will help ensure its seamless integration with its Lower Manhattan neighbors.”

More information, including images for download, can be found on the new Seaport website, www.thenewseaport.com.

For more real estate news and information, visit Blumberg Capital Partners.

Tysons Dulles Plaza Fetches $152.8 Million

Vornado Realty Trust announced yesterday that it has completed the sale of its 482,000 square foot Tysons Dulles Plaza office building complex located in Tysons Corner, Virginia for approximately $152.8 million, which resulted in a net gain of approximately $56 million since the firm first purchased the building in 2000 for $103.4 million. As reported by CREFeed.com, Paul Collins, Bill Collins, Drew Floyd and James Cassidy of Cassidy & Pinkard Colliers represented Vornado in the transaction.

Tysons Dulles Plaza is a Class A office complex consisting of three office towers directly on the Dulles Toll Road offering prominent visibility and excellent access. Constructed of the highest quality materials and originally built in 1986, the buildings feature efficient designs, towering six-story atrium lobbies, extensive window lines and balconies. Currently 92 percent leased, the location provides tenants with vehicular access to the Dulles Toll Road, I-495, I-66 and Route 7 via Spring Hill Road and Leesburg Pike.

Vornado Realty Trust is an integrated real estate investment trust (REIT) and conducts its business through Vornado Realty L.P., a Delaware limited partnership (the Operating Partnership).

For more real estate news and information, visit Blumberg Capital Partners.

Jones Lang LaSalle Acquires Staubach

The Staubach Company, founded by former Dallas Cowboys quarter back Roger Staubach, is being merged with industry giant Jones Lang LaSalle Inc. for $613 million, according to a Wall Street Journal report. The Addison, Texas based real-estate brokerage firm has represented users of office, industrial and retail space for over 30 years, reporting 7,280 completed transactions during the fiscal year ending June 2007 totaling $28 billion. The sale, however, "takes place as businesses are pulling back on renting office space, a signal that the economic bad times are hurting landlords and business hiring is likely to remain weak". According to a first-quarter data report from Reis Inc., demand for office space dropped this spring for the first time since the economy's return after the late 90's crisis.

Under the terms of the agreement, Jones Lang LaSalle will pay $613 million, with $123 million in cash and $100 million in stock paid at the transaction close and the balance paid out in cash over five years, for all of the outstanding capital stock of Staubach Holdings, Inc. Staubach will be folded into the existing JLL brand and is expected to add to earnings per share starting in 2009. The transaction, however, does not include Staubach Retail Services or Cypress, Staubach's investment development business, both of which will continue to operate under separate license agreements. “It’s not about being bigger, it’s about being the best for our clients and our people,” said Greg O’Brien, The Staubach Company’s CEO.

For more real estate news and information, visit Blumberg Capital Partners.