Philip Blumberg Blog

Blumberg Capital Partners Video

Market Spillover: Philip Blumberg of Blumberg Capital Partners comments on what will happen when the foreclosure epidemic in the residential market spreads to commercial real estate.

Philip Blumberg on CNBC's Squawk on the Street

Philip Blumberg appeared on CNBC's Squawk on the Street today, along with Rick Santelli, to discuss whether commercial real estate still yet to build in terms of the crisis.

To read the full transcript of this segment, visit Blumberg Capital Partners.

Chicago's Mather Building to be Auctioned

According to Costar.com, a 20,000 square-foot building on Chicago's well-marketed "Magnificent Mile", also know as N. Michigan Ave, is being sold through a sealed-bid auction. The Mather Building sits at 326 N. Michigan Ave, just two blocks from Millennium Park. Loukas Development currently owns the building and the transaction is being handled by Inland Real Estate Auctions. According to Paul Rogers, senior vice president and managing broker of Inland Real Estate Auctions, this is a "developable" parcel of land with somewhere around 16,000 pedestrians and 37,000 vehicles passing the space every day. The next owner will receive full rights to develop the land, potentially valued at $93 million.

The decision to auction the property is another indication of the current stresses in the commercial real estate sector and the owner's desire to move the property quickly. "Increasingly, the owners of even high-profile properties are turning to auctions as a way to realize immediate value in a volatile market," said Rogers. GlobeSt.com cited a year-end market report by Cushman & Wakefield which found leasing rates for similar office space in the area goes for around $37 per square foot and occupancy rates are around 88%.

For more news and information, visit Blumberg Capital Partners.

Talcott Realty Investors Refinances Hartford's 1 Financial Plaza

One Financial Plaza, a 26 story building in Hartford, CT, has been refinanced by its owner Talcott Realty Investors L.L.C. According to Commercial Property News Online, "The Gold Building" received a $35 million, three-year adjustable rate refinancing from People's United Bank. The Class A office building is 99% leased and currently houses 28 tenants. Holliday Fenoglio Fowler L.P. arranged the details on behalf of Talcott Realty Investors.

For more news and information, visit Blumberg Capital Partners.

Gyrodyne Makes First Purchase in Washington, DC Market

CREFeed.com is reporting that a nearly 60,000 sq. foot medical office space in a suburb of Washington is changing hands for a reported $13.2 million. The building, situated at 10721 Main St., Fairfax, VA, has a current occupancy rate of 84% but the buyer, Gyrodyne Company of America, plans an aggressive lease program in order to fill the building. "Gyrodyne will continue to operate Fairfax Medical Center as a rental asset," Peter Pitsiokos, Gyrodyne's Chief Operating Officer noted. "This property has a strong occupancy history, and we are confident that it will lease up quickly." The property location is situated near both a surgical center operated by the Hospital Corporation of America and two institutions run by the not-for-profit Inova Health System: Fairfax and Fair Oaks hospitals.

Gyrodyne Company of America, Inc. hopes to close the deal for the Fairfax Medical Center by March 31st. The purchase also allows Gyrodyne to utilize funds from the state of New York in a "tax-efficient manner." According to Stephen V. Maroney, Gyrodyne's chief executive officer, "It also qualifies for tax deferral treatment under Section 1033 of the Internal Revenue Code and will get us over the finish line for investing in a tax-efficient manner within required time limits the $26 million advance payment for property condemned by the State of New York."

For more news and information, visit Blumberg Capital Partners.

Blumberg Capital Partners Video

How Do the Markets Relate? Philip Blumberg of Blumberg Capital Partners comments on how problems in the residential market can -- and do -- effect other markets. For more news and information, visit Blumberg Capital Partners.

CRE Industry Has Cause for Optimism in Obama's Economic Relief Package

Despite daily reminders of the commercial real estate industry's bleak state of affairs, experts see glimmers of relief in the current legislation making its way through Washington. According to experts interviewed by the National Real Estate Investor Online, efforts to revive the economy as a whole are expected to extend through to the commercial sector and improve conditions. "I think the stimulus bill will have a positive effect on the economy, and a positive effect on the economy is going to have a positive effect on commercial real estate," said Lawrence White, professor of economics at New York University. Specifically, provisions investing government dollars in infrastructure through the stimulus bill President Obama signed Tuesday would help the overall industry. According to John Terrence Farris, director of the Master of Real Estate Development program at Clemson University, "Commercial development depends on good infrastructure."

Of course, not everyone is so optimistic. Writing for Commercial Property News' "From the Inside" blog, NorthMarq Capital CEO Ed Padilla looks to Cuba for examples of the limitations inherent to government spending. "Ultimately the private sector will carry most of the weight to resolve the recession," he stated. However, most experts seem optimistic that government actions, including the recently proposed Homeowner Affordability and Stability Plan, will be sufficient to restore consumer confidence and revive the flagging markets.

For more news and information, visit Blumberg Capital Partners.

Brooklyn's Atlantic Yards Bright Spot in NYC Development

A massive 22 acre development in Brooklyn received a lifeline from a $161.9 million refinance on loans that would have been due this month. According to Commercial Property News Online, partners will continue their efforts for the $4 billion project in Downtown Brooklyn named Atlantic Yards. Locally-based Forest City Ratner Companies originally obtained funding to purchase the land from Gramercy Capital Corp and that institution provided the refinancing with other co-lenders. Slated to include the new 18,000 seat arena and home to the NBA's Nets, the complex will also include nearly 336,000 square feet of office space.

Renowned architect Frank Gehry provided the design for the buildings and surrounding environment while Laurie Olin, the landscaper who worked on Manhattan's Battery Park City, will plan nearly 8 acres of open space. The developers of the site have stated government funds committed for this development total $305 million, or about 8% of the total investment, coming from the City and State of New York. Those funds are dedicated to infrastructure development and include open space construction of streets, sidewalks, and public parking garages. The news of Atlantic Yards' refinancing comes as more and more developments in the New York metropolitan area are being delayed or cancelled.

For more news and information, visit Blumberg Capital Partners.

10 Story Tampa Tower Sells for $17.15 Million

A 130,000 square foot office building in the Westshore district of Tampa Bay has a new owner. Eola Capital, a privately held real estate investment company based in Orlando, acquired 500 N. Westshore Boulevard, a 10-story, Class A tower located adjacent to the Westshore Plaza mall. Regional Vice President of Eola Capital, Kyle Burd, announced that the "Westshore 500 is 90 percent leased and its diverse rent roll is comprised of smaller companies." The Tampa Bay Biz Journal found property records in Hillsborough County which indicated Eola Capital acquired a $20.1 million mortgage from M&I Bank and paid $17.15 million. In 1998, the building was purchased by Principal Mutual Life Insurance Co. for $16 million. According to Commercial Property News Online, Eola Capital plans to invest in substantial capital improvements to the property. CB Richard Ellis brokered the sale.

Eola Capital owns, operates and manages office buildings across the Southeastern United States from Richmond, VA to Ft. Lauderdale, FL. The purchase of the Westshore property brings their holdings in Tampa to over 1.6 million square feet. In April 2008, Eola Capitol purchased two office buildings totaling 171,111 square feet in the Northwest Hillsborough area of Tampa for $19.25 million. The loan was provided by Regions Bank and Eola Capital purchased the buildings, dubbed Buschwood I and Buschwood II, from Alder Realty Services.

For more news, visit Blumberg Capital Partners.

RFR Realty Sells Office Back to Sotheby's for $370M

Sotheby's of New York has re-acquired its New York headquarters from RFR Realty, six years after RFR first bought the 406,110 square foot office and auction facility from Sotheby's for $175 million, according to a CoStar report. Sotheby's will assume RFR's $235 million mortage, and will pay the remainder with two separate cash payments.

Located in the Upper East Side, Sotheby's headquarters at 1334 York Ave. was constructed in 1921 and received renovations in 1999. RFR originally placed the building on the market in 2007 at $500 million, but a year later agreed to sell it back to Sotheby's when they put up $50 million to secure the buy-back. Sotheby's President and CEO Bill Ruprecht called the York Avenue location "the premier auction facility in the world and integral to our business."

For more news and information, visit Blumberg Capital Partners.