Philip Blumberg Blog

Blumberg Grain in the News

Philip Blumberg and Blumberg Grain were recently featured in an Africa Agriculture Business article titled "Blumberg Grain: Bringing Opportunities to Africa’s Agriculture Market," in which the advantages of the Blumberg Grain storage system are explored, as well as the future of agriculture in Africa. An excerpt follows:

Recently Africa Agribusiness Magazine had the pleasure of speaking with Philip Blumberg, Chairman and CEO of Blumberg Capital, to discuss how their agriculture initiative, Blumberg Grain, can provide innovative solutions to Africa.

Blumberg provides countries and companies with state of the art and comprehensive storage units for post harvest food safety and security. Mass produced in the United States, the lightweight, scalable warehouses use one-third the steel of conventional warehouses, making them the most cost effective storage facilities in todays market. However, the simple design does not hinder the structures expected lifespans, which is estimated at 25-50 years.

Furthermore, each self-contained facility can be customized for farmers needs. "Despite their simple design, these warehouses are quite sophisticated. Its what we can do inside that makes all the difference," said Philip Blumberg.

By design, Blumberg warehouses can be divided for multiple products, and each area can have its own sophisticated temperature, insulation and humidity controls. To operate the facilities, countries may choose from generator, solar or wind power. Whats more, Blumberg structures are designed to work in rural areas, close to the farmers and their crops, so that harvested crops are stored as quickly as possible. The units also serve as large distribution and collection facilities.

After the modules are shipped to the host country, assembly begins. One key advantage is that these warehouse buildings can be installed and working in as little as 3 days. Blumberg works directly to train the local workforce to assemble and run the facilities. "We are committed to hiring the majority of employees from the local job market," says Mr. Blumberg.

To read the full article, click here to visit the Blumberg Grain website. For more news and information visit Blumberg Capital Partners.

Mack-Cali Sells New Jersey Office Building for $72.3M

Mack-Cali Realty Corporation announced this week that is had sold 55 Corporate Drive in Bridgewater, New Jersey in an all cash deal for $72.3 million. The four-story, 205,439-square-foot class A property was sold to a subsidiary of Cole Corporate Income Trust, Inc., an entity managed by Cole Real Estate Investments. Adam Spies, Kevin Donner and Neill Wessell with Eastdil Secured in New York represented the seller.

Mack-Cali developed the building in 2011 as a build-to-suit for Sanofi-Aventis. Building IV sits on 154 acres in the Route 78 East submarket of Somerset County, and is fully occupied by the diversified global healthcare leader.

"What appealed to us is a combination of investment-rate credit, it's a long-term lease (still 13 years), a strategically important asset—part of their U.S. headquarters, and it's a good-quality location," Robert Micera, Cole's chief investment officer for office and industrial, told Commercial Property Executive. "It's in good proximity to the major highways in New Jersey and in good proximity to New York. All of these things combined make this fit right in with our parameters of seeking long-term lease transactions that have great creditworthy tenants and good rent growth."

Mitchell E. Hersh, president and chief executive officer of Mack-Cali, commented, "The sale of this property continues our strategy of monetizing non-core assets." Mack-Cali Realty owns or has interests in 278 assets, including 269 office and office/flex properties totaling 31.1 million square feet and nine multi-family rental properties containing more than 3,300 residential units, all located in the Northeast.

For more news and information visit Blumberg Capital Partners.

Cousins Properties Pays $102.4M for Austin Office Tower

Cousins Properties, an Atlanta-based diversified real estate company, picked up 816 Congress Avenue in downtown Austin, Texas this month for $102.4 million, or $236 per square foot. According to a company press release the acquisition was funded with cash proceeds from Cousins’ recent follow-on stock offering. Cousins Properties also has plans to build an office tower at Colorado and Third streets. Previous Austin projects include the Frost Bank Tower and Palisades West.

"This represents another attractive acquisition for Cousins as we continue to target quality urban office assets in the best southeastern submarkets at valuations below replacement cost," said Larry Gellerstedt, President and Chief Executive Officer of Cousins. "We have a long, successful history in Austin and are very excited about the opportunity to create value at 816 Congress Avenue."

The 434,000-square foot Class A office building was 78% leased at the time of sale, with major tenants including Teachers Retirement System of Texas, Lloyd Gosselink, and AT&T Services. Originally completed in 1983 and designed by Holt, Fatter, Scott, previous owners Lehman Brothers Holdings Inc. invested $3 million into the office building last summer to build an outdoor terrace and lounge on the 15th floor, according to an Austin Business Journal article.

For more news and information visit Blumberg Capital Partners.

Fowler Building in Charlotte Sold to Adolfson & Peterson

Adolfson & Peterson Construction (A&P), a Minneapolis-based general contractor offering construction management services, has purchased the Fowler Building for $2.5 million. A&P purchased the property from Boulevard at 1447 South Tryon Street, a limited liability company managed by Chris Branch, that previously acquired the building for $1.5 million in 2003. Josh Beaver of The Nichols Co. represented A&P, and Greg Pappanastos of Argos Real Estate Advisors represented the seller.

A&P moved its Charlotte operations into the building last year, leasing roughly 8,300 square feet of office space in the 18,000 square foot building. "We moved into the building a year ago and since then we have continued to hire team members and really needed the additional space," said John LaPenta, who heads the local office, in a release. "We hope that by purchasing the building, we show our commitment to the city and to being a North Carolina contractor."

According to a Charlotte Business Journal article, The firm is expanding to about 15,000 square feet and will take the vacant section of the third and basement levels in the building for additional space. IT consulting firm Systemtec will continue to lease about 3,000 square feet on the third floor.

For more news and information visit Blumberg Capital Partners.

MPG Office Trust To Be Acquired By Brookfield

In a deal that will make Brookfield Office Properties the biggest office owner in downtown Los Angeles, MPG Office Trust has agreed to be acquired. The deal is valued at more than $2.2 billion, including debt and after cash proceeds from the planned sale of MPG's U.S. Bank Tower, said Wilkes Graham, a senior vice president at Compass Point Research & Trading LLC. Brookfield and its partners agreed to pay $3.15 a share for MPG Office Trust Inc.'s common stock, a 21% premium to Wednesday's closing price, and will take control of four skyscrapers totaling five million square feet. Taken with a purchase of preferred stock, the Brookfield-led group would pay more than $425 million in cash for the company, which has about $1.9 billion in debt, according to a Wall Street Journal report.

"We have found a strategic buyer who has the capital and the market presence to appreciate the potential long-term value of our assets," MPG Chief Executive Officer David Weinstein said in the company's statement. "This transaction potentially offers both our common and preferred shareholders a liquidity event that would remain uncertain if the company were to continue on as an independent entity."

"It's the best outcome for downtown L.A. because we now have a well-capitalized ownership, which can at least reinvest in the buildings and in the community," said Carl Muhlstein, a managing director at brokerage Jones Lang LaSalle Inc. "Whereas a nearly insolvent MPG never had enough money to even take care of day-to-day stuff."

"Brookfield buying the rest of MPG's portfolio is like putting together Chrysler, Ford and General Motors. It's that impactful," said John Cushman, the Los Angeles-based chairman of real estate brokerage Cushman & Wakefield. "They will totally control the high end of the market."

For more news and information visit Blumberg Capital Partners.

FSP Picks Up Denver Office Tower for $183M

Pearlmark Broadreach 1999 LLC has entered into a definitive agreement to sell a 43-story office building in the central business district of Denver, Colorado for $183 million. FSP 1999 Broadway LLC, a wholly-owned subsidiary of Franklin Street Properties, will take ownership of the property in a sale expected to close on July 1, according to SEC filings. A joint venture led by Broadreach Capital Partners and Transwestern previously acquired the property in November 2005.

The sale includes the 680,277-square foot office building at 1999 Broadway and a nine-story, 177,472-square foot garage at 2099 Welton Street. The property is currently 95% leased with major tenants including the Internal Revenue Service, Berry Petroleum Co. and Mercy Housing. Built in 1984 and 1985, the office tower is Energy Star rated and LEED Silver certified.

For more news and information visit Blumberg Capital Partners.

Rexford Industrial Buys Glendale Industrial Complex for $56M

Rexford Industrial, a Los Angeles-based industrial real estate investment firm, has purchased a 473,345-square-foot institutional quality industrial complex in Glendale, California for $56.2 million. Rexford purchased the property from Australian real estate company Dexus Property Group, which has offices in Newport Beach, according to a San Fernando Valley Business Journal report. Stephen Silk, Jay Borzi and Adam Pastor of Eastdil Secured LLC represented both the buyer and the seller. The sale means that Dexus no longer holds any properties in the US.

"This is one of the best industrial parks serving the high demand Glendale/Burbank market area and has consistently demonstrated strong occupancy,"said Howard Schwimmer, co-founder and Senior Managing Partner of Rexford Industrial. "The project contains tenant spaces ranging from 3,000 to 50,000 SF offering high ceiling clearance and dock-high loading; both are a rare commodity in this market."

Located at 3550 Tyburn Street & 3332-3424 North San Fernando Road, the property includes both single and multi-tenant buildings as well as two retail frontage buildings. According to press releases regarding the sale, the 7-building complex was 100% leased at the time of sale to 27 tenants, including Staples, Anderson Printing, Nordstrom and Pep Boys.

For more news and information visit Blumberg Capital Partners.

CMBS Research Shows Rebound to Pre-Recession Levels

A new report from the CoStar Group examines the trends and latest information yielded from the April CMBS bondholder remittance reports to evaluate the state of CMBS loans, which now see to be rebounding to pre-recession levels. Data shows that net operating incomes on almost all yearly vintanges of CMBS loans are now near or above underwritten financial levels. An excerpt follows:

Based on the loans that have reported year-end 2012 financials, NOI growth was strong in 2012 rising 4.5% on average. For the 2010 and 2011 vintages about 30% of the loans reporting year-end 2012 financials are showing lower NOI than was underwritten. The 2012 vintage is showing a higher percentage, with around 40% of the loans having lower NOI compared to the underwritten amount.

While they plan to revisit the topic again in a few months once the majority of the loans have reported, based on the early look at NOI (net operating income) trends among loans that have reported year-end 2012 financials, Jan de Beur said NOI growth was strong in 2012, rising 4.5% on average.

"While preliminary, the 2012 NOI growth rate is noticeably higher than the 3% increase in NOI experienced in 2011 on average," said Marielle Jan de Beur, managing director and head of Structured Products Research CMBS and Real Estate Research for Wells Fargo Securities.

For more news and information visit Blumberg Capital Partners.

Warehouse Demand Off to Strongest Start Since 2008

A new article from CoStar titled Don't Look Now But Warehouse Demand Off to Strongest Start Since 2008 has been released, noting the strong start of the warehouse market in 2013 as the growing pace of construction remains in check with a demand for growth. A survey of transaction data by CoStar's Property & Portfolio Research shows warehouse supply and demand at its strongest levels in at least five years. An excerpt from the article follows:

"Speculative new construction is still not a threat to the ongoing recovery as it is still heavily concentrated in markets that also have strong demand, such as the Inland Empire, Phoenix, and more recently Memphis," said Rene Circ, director of U.S. research/industrial Property & Portfolio Research (PPR), a CoStar company.

"The industrial market is enjoying a recovery in line with historic trends," said Robert Bach, national director of market analytics for Newmark Grubb Knight Frank. "The leasing market is performing better than the investment market, only because it’s harder for investors to source industrial product to match their appetites."

"Housing has emerged from its recessionary slump and is once again driving demand for both warehouse and flex product," said Jason W. Tolliver, vice president of research, Cassidy Turley. "The manufacturing sector continued to expand in the first quarter, although the pace of growth seems to be slowing. Despite this, factory hiring has continued and this bodes well for future CRE demand."

For more news and information visit Blumberg Capital Partners.

Miami's Sabadell Financial Center Sold for $185M

The Sabadell Financial Center traded hands this month as Testa American Real Estate Corporation, an affiliate of Madrid-based Testa Inmuebles en Renta SA., sold the office tower for $184 million. Prudential Real Estate Investors, on behalf of investors in Prudential Financial, Inc.'s flagship fund, purchased the property at 1111 Brickell Avenue with legal representation from Chicago-based Mayer Brown LLP, while Robert Allen Law represented Testa.

"We look at Brickell Avenue as one of the premier office and residential markets in the country. Brickell is a hot market,'' said Jim Mehalso, a managing director with Prudential Real Estate who worked on the off-market transaction, in a Miami Herald article. "Residential is doing great, and 1111 [Brickell] is one of the top buildings in the market with an excellent roster of tenants.

Charles Foschini, vice chairman of capital markets for CBRE who wasn't involved in the transaction, said Prudential got a good deal. "I believe the seller left a lot of money on the table. The reproduction cost of a building of that quality could easily eclipse $500 a square foot. With the three newest office buildings leased or leasing at a strong clip, Brickell rents are bound to increase to all time highs.''

"With Miami growing in stature among the top business and financial hubs in the Americas, the timing was ripe for PREI’s entrance into the Brickell market," said Cathy Marcus, managing director at Prudential Real Estate Investors and senior portfolio manager for the firm’s core open-ended equity commingled real estate strategy. "With a location in the sought-after Brickell district and an enviable tenant base, Sabadell Financial Center is a perfect fit with our investment strategy."

Built in 2000, the 30-story tower is located in the northern Brickell Financial District of Miami offering roughly 525,000 square feet of space. With the ground floor dedicated to retail, the rest of the building comprises office tenants, reportedly 85% leased at the time of sale to tenants including Sabadell United Bank, Hunton & Williams, Credit Suisse, Baker & McKenzie, and Telefónica.

For more news and information visit Blumberg Capital Partners.