Philip Blumberg Blog

NAR Commercial Market Forecast

The National Association of Realtors released its Commercial Real Estate Outlook report this week, expecting no meaningful recovery in commercial real estate before 2011. "Because of the lingering impact from the deep recession over the past two years, vacancy rates will trend higher and many commercial property owners will need to make rent concessions," said Lawrence Yun, NAR chief economist.

An excerpt from the Office Market Outlook:

With a lot of sublease space currently on the market, vacancy rates in the office sector are forecast to rise from 16.3 percent in the fourth quarter of 2009 to 17.6 percent in the fourth quarter of this year; the longer term outlook is for vacancies to average 17.4 percent in 2011.

Annual office rent is projected to decline 7.2 percent in 2010, following a drop of 12.7 percent last year. In 57 markets tracked, net absorption of office space, which includes the leasing of new space coming on the market as well as space in existing properties, should be a negative 27.3 million square feet in 2010.

For more news and information, visit Blumberg Capital Partners.

Blumberg Capital Partners in the News

Blumberg Capital Partners was recently featured in an article on Daily Finance titled "People@Work: Washington's Birthday Off? Many Would Prefer Their Own". An excerpt:

A recent survey shows just how few employers observe some federal holidays. While 95% of businesses close their doors on Memorial Day, only about a third give employees a paid break on Martin Luther King Jr. Day in January, or Monday's holiday, which is frequently, if erroneously, called Presidents' Day.

The poll, conducted by the Society for Human Resource Management, shows that even fewer employers honor the autumn holidays of Columbus Day and Veterans Day, with only 13% and 16%, respectively, closing for business on those days.

But do private-sector employees really care that they don't get those holidays off? When asked to rank their top choice of company-sponsored holidays among several days typically included among "floater" days, nearly half of office workers surveyed said they preferred to take off their own birthdays, according to a 2007 poll conducted by Blumberg Capital Partners. At 46%, that choice easily outdistanced others such as Veterans Day (14%), "Presidents' Day" (10%) or Martin Luther King Jr. day (8%).

To read the full article, click here.

Philip Blumberg on CNBC Arabia 02/18

Blumberg Capital Partners in the News

Blumberg Capital Partners was recently featured in a Property Week article titled "Homes Rule for India", which comments on the pressures felt in the commercial property market in India and opportunities in real estate. An excerpt:

Despite these obstacles, India offers stable and higher returns in the longer term and this has caught the attention of Philip Blumberg, chairman and chief executive of US-based Blumberg Capital Partners. Blumberg is raising a $1bn fund for the US, of which $300m will be deployed overseas.

He told the conference he would prefer to invest in income-producing assets but Indian law prevents this. “Unlike Dubai, India is a powerful revenue-producing country. If the country wants more money for development, it needs to allow investment in income-producing assets. This will help rotate capital and developers can free up the equity tied into completed projects.”

To read the full article, click here.

KBR Staying in Houston, Inks Largest US Office Lease Since Fall 2008

Defense contractor KBR, employing over 50,000 people worldwide, has completed a lease renewal with Brookfield Properties for a total over 1.2 million square feet of space at Houston's KBR Tower and 500 Jefferson Street, taking on an additional 234,000 square feet in both office buildings. KBR has been headquartered in Houston for some 20 years and this agreement allays any concerns over the company's previous plans to move its base to nearby Katy, TX, potentially disrupting the financial and employment impact of its presence in downtown Houston.

"We are thrilled that KBR has chosen to renew and expand office space at two of our properties in the Cullen Center complex, including the tower that bears the company's name," said Paul Layne, regional head for Brookfield Properties' Houston operations. "Expanding our downtown Houston presence is not only a good business decision, but also brings the added benefit of contributing to our City’s continued downtown revitalization," said Klaudia Brace, senior vice president of administration at KBR in a CoStar article.

For more news and information visit Blumberg Capital Partners.

AEW Set to Win Boston Property Bid

AEW Real Estate Investment Management, a Natixis Global Asset Management subsidiary, has been announced as the victorious bidder in a nearly closed auction for a desirable Boston office complex in the Longwood Medical area.  One Brigham Circle, the 200,000 sq-ft center was the prize offered by New Boston Fund.  The full details of the deal have not yet been released, however Partners HealthCare System Inc. holds the current lease on the property.

The auction was handled by Cushman & Wakefield.  “We don’t comment on potential buyers before a deal is complete, however we will say that we are very pleased with the level of interest and the number of qualified prospective purchasers that were generated by Cushman & Wakefield for One Brigham Circle," Jon Gillman, of New Boston Fund said.

For more news and information visit Blumberg Capital Partners.

Research Shows London Undergoing Property Boom

A new report featured in the Wall Street Journal shows city leasing is back on the rise in London at levels not seen since the last property boom. Offices in central London are set to record double-digit rental growth in 2010, according to Knight Frank. James Roberts, head of central London research, Knight Frank said: "Although the situation in the UK economy is fragile and will remain so, I view developments in the global economy and financial markets as more important for the London office market. This is due to the international profile of companies operating here. Many of the largest office occupiers in the capital earn most of their revenues overseas, and I believe recovery for the world economy will lead to increased office demand in 2010."

Knight Frank's found that there were 626,461 square feet of financial occupier deals in the last three months of the year - and 807,530 square feet of deals in the preceding quarter. A significant proportion of this came from a 541,000 sq ft letting at the Watermark Place development next to the Thames by Japanese bank Nomura, which now owns the European operations of Lehman Brothers according to the Journal.

For more news and information visit Blumberg Capital Partners.

General Growth Properties Receives $10B Bid

Simon Property Group, Inc. has made a written offer to acquire General Growth Properties, Inc. in a fully financed transaction valued at more than $10 billion, including approximately $9 billion in cash. Simon made the unsolicited bid for the rival agency seeking to emerge from bankruptcy proceedings and disclosed it publicly this week, sparking speculation that a bidding war would ensue as reported in the Baltimore Sun.

David Simon, Chairman and Chief Executive Officer at Simon, said, "Simon's offer provides the best possible outcome for all General Growth stakeholders. Simon is in the unique position of being able to offer General Growth creditors and shareholders full, fair and immediate value. Our offer provides much-needed certainty to conclude General Growth's protracted reorganization process. We are confident it is the best option for all General Growth constituencies and far superior to any other third-party proposal or stand-alone plan that could be completed." General Growth's public response to Simon's offer can be read here.

For more news and information visit Blumberg Capital Partners.

Spirt of Cooperation In Downtown Des Moines

Wellmark Blue Cross and Blue Shield has scored a remarkable real estate coup.  In 2007 Wellmark was able to locate and acquire from various owners a 6.6 acre land parcel in downtown Des Moines, IA for its new headquarters.  This December it plans to complete the 600,000 sq-ft complex after 30 months of construction and a $250 million price tag. "This is great news for Des Moines, and for Iowa," said Governor Chet Culver. "Wellmark's new national headquarters will create and support many new high-quality, high-salary jobs in our state. Iowa is now home to many insurance and financial giants and is widely known as a major center for the insurance and financial services industries."

At a total of about four years from start to finish, this is the development equivalent of a sprinter.  Although speedy by most downtown standards, Des Moines typically gets events in place quickly.  According to city officials, Des Moines has added 3.8 million sq-ft of office space within the last 10 years, or a net increase of 45%.

For more news and information visit Blumberg Capital Partners.

Butler Named Director For Hall

Kim Butler has been named the new director of leasing for Hall Financial Group.  Butler, a former Transwestern employee, has over 25 years of commercial real estate experience.  "She's highly regarded and respected by the broker community, and she has excellent negotiating skills," Mark Depker, executive vice president for Hall said.

Butler is an active member of the north Texas real estate community and holds numerous awards for excellence.  "It's a challenging market," she said. "But it is in times like these that there's a flight to quality, and I think that will be a huge advantage for Hall Office Park." Hall Office Park is Hall Financial Group's 162-acre development in Frisco, Texas planned for 3 million square feet of Class A space.

For more news and information visit Blumberg Capital Partners.