Philip Blumberg Blog

Blumberg Capital Partners Video

US Market Confidence: Philip Blumberg of Blumberg Capital Partners talks about the mistakes made in our current economy and the US working to restore confidence in our market.

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

Blumberg Capital Partners in the News

Philip Blumberg was recently featured in an article on Reuters titled "Free drinks dry up as business media meets Wall St,", looking at the loss of funding of the Financial Follies Dinner symbolizing the crisis facing not only Wall Street but many media organizations suffering from falling advertising and, in the case of many magazines and newspapers, circulation. An excerpt:

Then there are the after-parties. Ludovic Roche, vice president at investment fund manager Blumberg Capital Partners of Coral Gables, Florida, paid $25,000 for one. That paid for a security guard, servers, finger foods like lemon meringue pie; and wine, Ketel One vodka, whiskey and soft drinks. For Blumberg, it looked like a positive move.

To read the full article, click here.

Siegel Associates Purchases JFK Medical Plaza for $8.3M

New York City-based Philips International has sold the JFK Medical Plaza for $8.3 million to Siegel Associates, according to a crefeed.com article. "In a very difficult real estate environment, we were able to find a focused buyer who understood the dynamics of the local market," said Michael Pilevsky, managing director of Philips International. "The building offered great value due to its close proximity to a major medical center, as well as the expected demand increase for medical and professional office space stemming from the area's growth and its aging population. This transaction worked out great for all parties."

JFK is a 35,000-square-foot medical office building on about 4.5 acres on Congress Avenue in Lake Worth, Florida. The property was under contract for about six months. S. Jay Siegel is managing partner of Siegel Associates and signed the financing documents as the new owner. Siegel assumed a $5.5 million mortgage with Wells Fargo as part of the deal. The remaining balance, $2.8 million, was paid in cash.

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

Philip Blumberg to Speak at the Distressed Residential Real Estate Symposium

The Information Management Network has organized the leading industry event geared towards Distressed Residential Real Estate Buyers & Sellers, inviting Philip Blumberg of Blumberg Capital Partners to join its panel of experts discussing opportunities in the sector. The symposium, to be held December 8-9, 2008 in Hollywood, FL, met with great success in previous editions with over 700 delegates attending the March meeting in South Florida and over 500 delegates attending the June meeting in Las Vegas.

The event is particularly timely in the current economy and well suited for real estate investors interested in the distressed residential real estate market. The two day event will include discussions and presentations on the following topics:

• Bank Regulators' Panel
• Hedge Fund & Private Equity Players' Roundtables
• Local/Regional Opportunities Roundtables
• Exit Strategies & Remedies
• Buy The Note Vs. Buy The Underlying Property
• Evaluating The Economics Of Carrying Vacant & Occupied Properties
• Half-Built Projects: What Are The Options?
• Fixed Income Real Estate Relative Value
• Successful Strategies For The Small (Under 50 Unit) Whole Project Buyer

For additional event information, visit www.imn.org/dres_caiae. For more real estate and investment news, visit Blumberg Capital Partners.

Citigroup Gets $306B Bailout

The Treasury Department, Federal Reserve and Federal Deposit Insurance Corp. announced this weekend that it would provide a multibillion-dollar backstop for Citigroup. In agreeing to protect Citigroup against potential losses on a $306 billion pool of troubled assets, the government made clear that it was not going to allow one of the nation's largest financial firms to collapse.

Citigroup will absorb the first $29 billion in any further losses on these assets, which are primarily securities backed by mortgages and commercial real estate loans, with the government stepping in to cover most of the losses beyond that amount. The distressed assets would be fenced off by Citigroup from the rest of its holdings, allowing the firm to insulate itself from the fallout. In return, the government is to receive up to $7 billion in preferred shares. Citigroup is the largest U.S. bank by assets, with $2 trillion on its books, but has incurred billions of dollars in losses in the past 18 months partly due to repackaging bad loans into what were viewed as safe securities.

As a condition of the emergency assistance, the company will have to adhere to new restrictions on what it pays its executives and carry out an FDIC program to help homeowners avoid foreclosure. According to a Washington Post article, Citicorp will begin reaching out this month to an estimated 500,000 customers who are not currently delinquent but who appear to be at risk — either because their credit files show telltale signs of financial stress or because their homes are in markets Citicorp classifies as facing serious economic strains and job losses in the coming year.

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

Blumberg Capital Partners Video

Time to Upgrade? Philip Blumberg of Blumberg Capital Partners comments on why average Americans should be buying residential properties for themselves, not for investment. For more real estate news and information, visit Blumberg Capital Partners.

BCP Succeeds in Volatile Market

The Wall Street Journal recently had several stories on the spread of real estate problems; they identified what we have maintained since last year: that the type of turmoil in the residential market will spread similarly to the commercial property sector.

That's why we recently completed the liquidation of our commercial property portfolio at top prices just prior to the credit freeze.

We emphasize stability and security, to avoid overreaching for yields at the expense of safety of invested capital.

My investment Funds have relied on moderate leverage only, to limit downside risk in a cyclical market. This coupled with our very strong internal management organization and investment strategies are keys to our success in spite of the volatile economic environment.

For more real estate industry information, visit Blumberg Capital Partners.

CMBS Market Shows Fissures

The market for debt used to finance commercial projects fell yesterday, propelled by concerns that the long-feared rise in defaults for commercial mortgage-backed securities has begun, according to a Wall Street Journal article. Credit Suisse analysts indicated that two big commercial mortgages that were packaged into securities in the past year are likely to default; the deterioration of these loans feed the worry that the weakening economy and higher unemployment rate will drag down the market for commercial backed securities (CMBS).

"It's pretty unheard-of for two large loans to go bad this early on," said Richard Parkus, head of CMBS research at Deutsche Bank Securities Inc. "This has shaken up the market." Both of the loans that sent the market down on Tuesday were made by JPMorgan Chase & Co: a $209M mortgage backed by two Westin hotels in Arizona and South Carolina, and a $125M loan secured by a retail center called Promenade Shops at Dos Lagos in Corona, California. A JPMorgan spokesman declined to comment.

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

Cassidy & Pinkard Colliers Secures $194M Loan

Cassidy & Pinkard Colliers has closed a $194,000,000, 54-month construction loan for 1000 Connecticut Avenue, NW, a 12-story, 383,392 square foot trophy office building under development in Washington, DC according to a crefeed.com article. Cassidy & Pinkard Colliers arranged the construction financing on behalf of the owner, Connecticut & K Associates, LLC. The financing was provided by a consortium of lending institutions led by Chevy Chase Bank.

1000 Connecticut Avenue is 66% pre-leased to the law firm of Arent Fox LLP. The property is located at the epicenter of the Central Business District (CBD) on the northwest corner of Connecticut Avenue and K Street, overlooking Farragut Square. The location is widely acknowledged as one of the finest in Washington’s CBD because it is situated at a prominent corner with significant visibility and is proximate to an abundance of amenities and transportation options. The owner is seeking LEED Gold certification for the building. The Pei Cobb Freed design complements its sister property, 1700 K Street, also a Pei Cobb Freed design, which is located across K Street. Photos from the demolition of the previous building are available on Flickr.

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

Grubb & Ellis acquires Houston's Oak Park Office Center III

Grubb & Ellis Realty Investors, LLC has acquired Oak Park Office Center III, a Class A office building in Houston, on behalf of tenant-in-common investors from Realty Associates Oak Park III, L.P., for $34 million as reported in a GlobeSt.com article. According to Grubb & Ellis Company's most recent Office Market Trends Houston report, overall full-service asking rents continued their upward trek and increased across the board, rising by $0.31 to $26.44 per square foot per year. Class A asking rents within Houston's CBD now stand at $39.29 per square foot per year as Class A vacancy still remains low at 6.8 percent.

Oak Park Office Center III, an approximately 151,000-square-foot building, is located within Oak Park at Westchase, a 225-acre master-planned office park. Situated on more than 11 acres, the building is adjacent Sam Houston Parkway (Beltway 8). Oak Park Office Center III features a two-story atrium complete with marble walls, wood accents, and both cove and pendant lighting. The building has open floor plans, card key access, two electric vehicle fueling stations and security cameras at all entries. The property offers ample parking with 855 spaces, an overall ratio of 5.7 spaces per 1,000 rentable square feet. It is located 30 minutes from both of Houston's major airports and 10 minutes from the Houston Galleria. Jacobs Engineering Group Inc. is the sole occupant of Oak Park Office Center III and operates the building under a long-term triple net lease.

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