Wednesday, December 30, 2009

Drug Developer Expands in Newtown Business Commons

"Clearview Printing Co. Inc. sold the warehouse building at 114 Pheasant Run in Newtown, PA, to KVK Biological Tech for $1.71 million, or about $70 per square foot.

Located in the Newtown Business Commons, the facility was built in 1973, and sits on over 2.5 acres of land. The buyer, a pharmaceutical company, plans to do renovations to the building before occupying the entire facility."

Commercial Real Estate in 2010

This is a great article with great professional opinions (good and bad) for 2010

"Hope and fear are overlapping in the commercial real estate industry on this eve of a new decade. The industry doesn't know whether to look out for it or look forward to it.

On the one hand, the industry is grateful that 2009 is coming at long last to an end. It was by many accounts the worst year in its history as values and incomes shrunk at precipitous rates. Whether that comment can be backed up by statistics is debatable, but few would argue that the hurt was deep and widespread.

On the other hand, much of the bad from 2009 will carry over into 2010. Investors are saddled with troublesome debt and weak fundamentals and 2010 presents very few elixirs for the pains of 2009.

Go back in time one year and remember that the industry felt it was chronologically closer to the beginning of a recovery than the beginning of the downturn. There were even a few fool-hearted souls who boasted that 2009 would present the greatest opportunities for wealth building that the industry would ever see.

The industry may seem a long way from those sentiments now. However, 2009 did give us surprises it never expected. REITs proved far more resilient than feared and even managed to raise abundant more capital and experience a mini bull market.

Still going into 2010, there is a sense the industry could mangle Franklin Roosevelt's famous quote: We have nothing to fear but fear itself. This year, the saying might go: We have nothing to fear but those things for which we hope.

"Most exciting about 2010? Unprecedented low priced buying opportunities," said Andrew Segal, president of Boxer Property in Houston. "Worries about 2010? Unprecedented low priced selling opportunities."

While that remark may come off sounding a bit contrived, it's not. We received many similar paralleled phrases in responses to our query of industry executives for this story.

"What most excites me [about 2010] is the prospect that commercial real estate may find its inflection point and start to turn upward in 2010," said Paul N. Arena, president of Venturi Capital Advisors Inc. in New York. "The last month of the year has brought greater optimism, and the investors with whom we have relationships are preparing to underwrite and invest in 2010. I'm further excited by a return to basics that we are witnessing-a move away from chasing vague or general opportunistic strategies, in favor of generous but realistic returns generated by specific, focused strategies that are; preferably, hard asset backed, and that can pay some form of current return."

Then Arena continued: "I am concerned that one, the commercial lending market will be slow to react to the increase in activity and to accommodate it, and two, that managers won't recall the restraint and lack of underwriting standards that got them in trouble in the first place."

And there in a nutshell is the irony that we are at a point in this recession where the dichotomy between hope and fear is so narrow that the two seem as one.

What follows are comments from industry executives and observers first about what excites them about 2010 and second what worries them about 2010.

What Most Excites Us About 2010

The prospects for 2010 are much brighter than we would have imagined even six months ago. Liquidity is returning to the market, as evidenced by the powerful resurgence of the public REITs, the ability of private REITs to raise capital from retail investors, increased lending activity by life companies and the successful execution of the market's first securitizations in more than 18 months.
Christopher T. Moyer, Associate, Cushman & Wakefield Sonnenblick-Goldman, New York, NY

Opportunities in the acquisition of REO as well as underperforming, nonperforming and distressed debt.
Donald A. Shapiro, President / CEO, Foresite Realty Partners, L.L.C., Rosemont, IL

Here in the Metro Detroit area, I am hopeful that residential housing market has reached a bottom which will hopefully translate into increased consumer confidence. I am optimistic that values will slowly increase over the next years. Our firm is very diversified and opportunistic so I believe there will continue to be buying opportunities that are unprecedented. I believe some of the well capitalized discount retailers will be conservatively looking at taking advantage of discounted rental rates and pursuing infill sites. 2010 will be a year to look to purchase as more REO opportunities will surface.
Harry Cohn, Director of New Business Development, Broder & Sachse Real Estate Services Inc., Birmingham, MI

I am cautiously optimistic about 2010 in that we could have a period of a stable bottom of the market place where deals trade at profitable cap rates for buyers - 9% to 12% - and that stays the new normal for the next few years. The downside of the new normal is that deals financed at 5% to 6% caps won't be able to refinance as the terms come due and there will continue to be defaults.
Stephen Karbelk, CAI, AARE, President/Broker, National Commercial Auctioneers, Tulsa, OK

I am most excited about the commercial real estate cycle bottoming out, which will probably occur about halfway through 2010. I think that the second half of the year will be when the smart money that has been sitting on the sidelines gets back in the game and these investors will be buying properties at historic lows once the cycle ticks back up. That will be good for brokers and investors.
W. Price Muir, Vice President, Raulet Property Partners Inc., Atlanta, GA

Perhaps, this year banks will be willing to sell assets at prices that make sense to buyers. Up until now the bid-ask delta has been too large for any velocity to make an impact on the marketplace.
George A. Arce, Jr., President & CEO, Centers Dynamic, Redwood Shores, CA

The potential for the banks, special servicers, and FDIC to make the process of buying their delinquent notes and foreclosed assets a reality in a more transparent, market-dictated-price process. We are excited about the fact that these bad debt holders might actually sell the notes/properties in 2010! We are excited about the potential to actually buy properties that make sense on today's terms and market fundamentals.
Steve McCrann, President, MB 35 LLC, Carrollton, TX

Transaction activity will be more prevalent than what took place in 2009 although transaction activity will begin at a slow pace through the first half of 2010.
Matt Tritschler, Senior Vice President, Colliers Investment Services Group, Atlanta, GA

What excites me the most in 2010 is that any day you can find that rare "home run." It doesn't happen every month or every year. It is the challenge to outwork everybody else and find that special property.
Steven Aberman, Senior Acquisition/ Leasing Manager, WBS Properties, Boca Raton FL

The ever-so-eagerly-talked-about possibility that 2010 brings a bleak and minute chance that not only will 2010 not be as bad as 2009, but that there may be blue skies appearing in the real estate world for 2010.
Matthew DePrato, Acquisition & Development Coordinator, PFG Capital LP, York, PA

Refinance opportunities for multifamily and health care facilities. We should start to see some conduit maturities toward the end of the year that will be seeking refinancing.
Ron Weis, Vice President, Gershman Mortgage, Springfield, MO

The opportunities that arise from this economic destruction that would not have been there otherwise. We are finally going "back to the basics" where accountability and performance are "King!"
Leigh C. Bower, CFO/Partner, US & Company Real Estate Advisors, Atlanta, GA

I think and hope we will finally be past the negative attitudes of 2009, in real estate and in general. If we are, people and companies will be able to get back to "business as usual" which will be good for everyone's psyche and good for our economy.
Howard Greenberg, Principal, Howard Properties Ltd., White Plains, NY

The hope that corporate decision makers will begin to "get off the fence" and make decisions regarding the growth of their businesses. Also, the decrease in unemployment which will have a positive effect on corporate growth, thereby stimulating expansion and relocation.
Barbara Bennett, Vice President, Thompson Realty Corp., Dallas, TX

We have experienced one of the longest recessions and constraints on our financial system. Hopefully 2010 will be a year when we see a measure of economic recovery and the full impact of the stimulus funds.
Carl J. Conceller, Principal, Coldwell Banker Commercial CRA, St. Louis, MO

Distressed properties. They're with us for a while and will provide opportunity and work for real estate professionals.
Kostas Stoilas, Associate - Industrial, Cushman & Wakefield Inc., Tampa, FL

The much anticipated "bottom" of the commercial real estate sector. Hopefully this will encourage sidelined investors to get back into the game and take advantage of the situation.
Laura Di Bella, Adams Property Consultants Inc., Coral Springs, FL

What Most Worries Us About 2010

Official U.S. government policy of "pretend and extend" is going to exacerbate the problems in the commercial real estate market What should have been a painful march towards normalization has not only been arrested, it's been partially derailed. Essentially, U.S. policy has taken what otherwise would have been a slow moving traffic jam, and turned it into a massive pileup.
Steven Sandler, CEO, Crosswind Capital LLC, Rye, NY

We are worried about market stagnation like in the first part of 2009. Some financial institutions are taking strong action to move forward with their inventory of loans and problem assets, but others are ignoring their problems and pretending they don't exist. I think banks are making a huge mistake in working-out too much of their loans rather than taking back the assets. Banks can mitigate losses by selling to people who know how to fix bad assets. A lot of what we see now is bad investors who have made bad decisions and are not being punished for their actions. These same individuals continue to invest while thinking that if they make mistakes it will ultimately fall back on the banks or their investors. This is bad situation. Real estate is not going to come-out of its slump any time soon. We have excess inventory on shopping centers and much less available dollars to spend in them. The general contraction of the economy will take a toll on all classes of real estate asset. For example, in multifamily products we have seen rents going down 15-25% in the Los Angeles core markets. Office occupancy is not going to improve in the next two years, and rents are been reduced.
Sagiv Rosano, Managing Partner & President, Rosano Partners, Los Angeles, CA

1) How much the high net worth segment of the market has not yet revealed the depth of its financial distress? 2) An over-recovered stock market. 3) A badly weakened US Dollar. 4) High natural resource and raw materials costs 5) The potential for future inflation and 6) That there has been too much money raised targeting high IRR equity returns that has already begun to overpay for the trickle of deals coming forth in an effort to do something, anything with the money, even if the realistic risk-adjusted returns don't justify the promises to investors.
Gabriel Silverstein, SIOR, President, Angelic Real Estate, New York, NY

Lack of liquidity on the debt side. The life companies have returned some liquidly to the market but CMBS and the banks are still a major question mark.
William L. Jackson, Senior Vice President/ Managing Director, Northmarq Capital, Dallas, TX

That uncertainty will reign. Until an "RTC 2" is created with FDIC and REMIC enforcement of loan terms forcing foreclosures to clear the system, we will likely be in a long period of limited activity. Investors typically want either "safe bets" or "steals" in times of confusion. Everything else is priced to the most conservative underwriting and as a result, does not trade.
Bernard Haddigan, Senior Vice President & Managing Director, Marcus & Millichap, Atlanta, GA

Unemployment. This is the single most important gauge of recovery. While, nationally, the rate of job losses appears to be slowing-- and that's good-- we're still losing jobs as opposed to gaining on a net basis. And the fact that workers 60 and older may be postponing retirement and others may be accepting shorter work weeks may be masking the true extent of the unemployment problem. Until we start adding jobs at a significantly net rate, it's going to be rough going.
Fredric J. Leffel, President, Kaufman New Ventures. New York, NY

This market for investment sales in 2009 was brutal. Even when motivated owners priced aggressively to move properties, investors were hesitant to buy given horrible market supply/demand fundamentals and falling values. No one wanted to catch a falling knife. There are preliminary signs that the investment sales market may start moving again in 2010. It looks like increasing vacancy and negative absorption may be ending. There are lender owners willing to sell at cheap prices. A few distressed sales have set badly needed price benchmarks. And we are working with many clients who have real access to cash and are saying they are ready to buy. But, are these buyers really willing to step up in 2010? Has the fear of investing in an uncertain market shifted to greed to capitalize on the historic value opportunity?
Steven K. Lindley, Senior Vice President Capital Markets, Grubb & EllisBRE Commercial, Phoenix, AZ

I think the biggest fear for most of us is that all we are really doing is replacing a few digits; 2009 to 2010. Economic fundamentals don't change just because the calendar does.
Barry C. Smith, President,, Scottsdale, AZ

What worries me most is that there has been a fundamental breakdown of the capitalist system and we won't be able to "re-boot" the system by the usual methods (government subsidies, loosening capital markets). I am concerned that the free market economy reached a critical mass in the 2004-2008 period and exposed an underlying core weakness or flaw in this system. Ours is a consumer based economy. Lack of savings, over extended credit, speculative investing, these are weak links in the capitalist chain. It worries me that we won't learn from our mistakes and adopt an attitude of systemic frugality and focused investment. It worries me that markets are dysfunctional at the core and the quick fix mentality just won't get the job done this time.
Rachel Maman, Acquisitions, Sales & Leasing, Hera Development Corp., Brighton, MA

I'm most worried by the massive amounts of maturing debt and the continued disconnect between buyers and sellers. The active investors today are focused on buying notes versus taking direct ownership in real estate. They get good upside without the "getting your hands dirty" element of owning real estate. The other thing that worries me is the bubble in the bond market. Junk bonds are now yielding as low as 7.5 %. Earlier this year these same bonds were trading at yields well above 10%. This can't continue.
Whitney E. Kerr, Jr., Principal/Vice President, Colliers Turley Martin Tucker, Kansas City, MO

Once again our wonderful politicians in DC do not understand that the "pork" has to be cut from the budgets. Yearly deficits will catch up with us all in the very near future. I'm very concerned that the bankers still have their heads buried in the sand and hope that we will not notice the huge bonuses being paid after a year of record setting profits. When will they open the lending for commercial properties? With $1T in commercial loans coming due before the end of 2012 something has to happen, the sooner the better.
Jerry Hall, CCIM, Sperry Van Ness Wilson Commercial Group, Columbus, OH

Looming loan maturities on commercial real estate concerns me greatly. TARP money with 3- or 5-year term does not adequately address the loan maturity issues. I hope our federal government will seek a long term solution versus short term solution. Complacency concerns me. In the last few days we have been reminded that we are not above another terrorist attack. We need to maintain our vigilance and never, ever forget 9/11.
Marshall De Wolfe, Senior Director, Mark One Capital, Palo Alto, CA

My biggest concern is that people may remain on the sidelines and not move forward. Businesses and consumers need each other to survive; and when either of them sits idle, they both struggle. There will always be reasons to sit still and do nothing. But those who are positioned to take advantage of opportunities-to grow, spend, hire, etc. and still don't because of the fear factor are delaying a recovery. Their reasons are understandable; however, we need to get the ball rolling.
Joan Earhart, Executive Vice President, Fullerton Community Bank, Fullerton, CA

Unemployment and the CMBS tsunami headed our way. We have started taking steps to address the CMBS "challenge" but I fear the timer is running down with no time outs left.
Kristin Hammond, Pacific Real Estate Partners Inc., Portland, OR

Unprecedented tenant concessions such as moving allowances, free rent, discounted rent, termination options, and turn-key tenant improvements. I anticipate these will get even more aggressive in 2010 and will force many Landlord's to sit on the sidelines because doing a lease deal simply won't pencil. Well capitalized landlords will have the advantage.
Matthew Hinrichs, Pacific Real Estate Partners Inc., Bellevue, WA

The nations growing debt. It has got to bite us in the near future. The banking industry is also still in for some hard times and the liquidity for commercial real estate shows little signs of improving. The banks are not showing or listing their inventory of homes because they would then have to write down the losses and increase their reserves.
Harry Bennetts, Olympia, WA

What really worries me about 2010 is that another bubble could burst. With government spending out of control, huge debt loads on companies and commercial properties, and high unemployment undermining consumer confidence, I expect there could be another event that triggers the marketplace to have another retraction. The retraction would most likely be short lived as a confidence disruption and buyers sit on the sidelines with deals put on hold. If the government raises taxes and pursues other social policies that undermine capital investment, prices will keep dropping since buyers will have to make more money to compensate for the higher costs of doing business.
Stephen Karbelk, CAI, AARE, President/Broker, National Commercial Auctioneers, Tulsa, OK

Friday, December 18, 2009

Facebook Adds to Stanford Research Park Leasehold

Great article. BTW-California rates are quoted on a montly per sqft number. The $1.25NNN quoted is actually $15NNN.

SAN FRANCISCO-Facebook has nearly tripled its leasehold at Stanford Research Park. Fourteen months after leasing 137,000 square feet at 1601 California the online social networking site has committed to subleasing from Beckman Coulter an additional 265,000 square feet in three buildings at 1050 Page Mill Rd., according to a recent post on
The sublease from the medical diagnostics firm consists of 135,000 square feet of space in a two-story R&D building, 43,000 square feet in another and 86,000 square feet of single-story warehouse space, according to the posting. The Palo Alto office of CBRE had the leasing assignment.

The company moved to 1601 California earlier this year after outgrowing several buildings in downtown Palo Alto.

At the time, a company source tells the company--which planned to grow from 600 employees to 1,000 by year’s end--may ultimately decide to maintain some Downtown office space to cover any overflow. “While the new building is large enough to hold all of our current employees, it may not be adequate to keep all of us together until we find a permanent headquarters,” said a company spokesperson. “To prepare for this contingency, we expect to retain some of our current space in downtown Palo Alto as well.”
Instead of continuing to occupy some of its Downtown space, the company decided to lease additional space near 1601 California, a former Hewlett-Packard building that later housed HP-spinoff Agilent. The property is slated for eventual conversion to housing under a 2005 agreement between the city and Stanford University. A leasing flyer for the building said it could be leased through mid-2013. The asking lease rate was $1.25 per sf per month, NNN.

Stanford Research Park is a 700-acre, 10-million-sf development on land owned by Stanford University. The park is home to 162 buildings housing approximately 150 companies predominantly scientific, technical and research oriented.

Thursday, December 17, 2009

Express Scripts scraps Bucks plan

"After receiving a Keystone Opportunity Zone designation on 15 acres in Bristol Township, Express Scripts has decided not to relocate and expand its local operations, according to a published report.

The company was set to expand into a 241,000-square-foot building off Rittenhouse Circle that once housed Jones New York. Express Scripts won approvals to designate the property as a KOZ, giving it steep breaks on state and local taxes for the next 10 years. It was expected to add 60 jobs beginning next year as part of its plans.

The St. Louis-based pharmaceutical distribution company told The Intelligencer newspaper that it won’t move forward with those expansion plans and has yet to decide what to do with its existing operations in Bucks. The company employs 950 people in two Bensalem sites.

The company’s plans started teetering after contract talks between the company and the Service Employees International Union faltered, according to the Intelligencer. The company couldn’t be reached for additional comment."

ESW America Renews in Montgomeryville

"ESW America, a company specializing in vehicle/engine emissions testing, recently renewed its lease at 200 Progress Drive, in Montgomeryville, PA. The renewal extends the company's presence for a period of roughly four and a half years.

200 Progress Drive is Building 2 in the Bethlehem Pike Industrial Center. The single-tenant facility measures 40,220 square feet and is situated on 3.1 acres. The building was initially constructed in 1973. It contains four loading docks and two drive-in bays"

Tosoh Bioscience Leases 13,500 SF

"Tosoh Bioscience, a global company that provides diagnostic systems to doctor's offices, hospitals and laboratories, has leased 13,493 square feet of office space at 3604 Horizon Blvd. in King of Prussia, PA.

The single-story, 22,500-square-foot office building sits on 3.9 acres in the Renaissance Park office campus. It was built in 1997. Tosoh Bioscience is taking occupancy in May 2010.

Bruce Hartlein represented the landlord, Liberty Property Trust, in-house."

Warren Buffet Completes Buy of Capmark's Servicing, Loan Business

I blogged on this earlier last month but I thought I'd share it again for anyone who missed it.

"Berkadia Commercial Mortgage LLC, a newly formed entity owned by Berkshire Hathaway Inc. and Leucadia National Corp., completed the acquisition of Capmark Financial Group Inc.'s (Capmark) North American loan origination and servicing business.

Capmark, which in October voluntarily filed for reorganization under Chapter 11, received approval from the U.S. Bankruptcy Court for the District of Delaware to complete the sale.

The sale includes a servicing portfolio of more than $240 billion - the third largest in the United States - as well as leading Fannie Mae, Freddie Mac, FHA, life insurance company correspondent lending and asset management operations. As of June 30, Capmark was named special servicer on 8,618 loans in 113 CMBS transactions with an outstanding balance of $47.5 billion. Capmark was actively specially servicing 280 CMBS loans totaling $2.4 billion and managing 57 CMBS real estate owned properties valued at $342.9 million.

Berkadia has more than 20 origination and servicing locations in markets across the country and will be based in Horsham, PA.

Berkadia has indicated that it will retain all of Capmark's servicing management and staff and intends to keep current business plans in place. Additionally, the company will retain Capmark's systems, vendor relationships and policies and procedures. Berkadia is in the process of hiring more than a thousand of Capmark's approximately 1,500 current employees.

Fitch Ratings said it views the completion of this transaction favorably as it removes the risk associated with Capmark Financial Group's financial instability."

Friday, December 11, 2009

CMBS: Back in Business?

Investors Showing an Appetite for Bonds Backed Even by the Weakest Real Estate Sector and No Government Support

Fullerton Metrocenter in Fullerton, CA, is benefitting from new CMBS issuance.
The commercial mortgage bond securitization window that has been closed for nearly two years during this recession has reopened for business in the last few weeks and investors have lined up encouragingly to take advantage of a new round of CMBS offerings.

Several investment banks have announced that they are firing up their conduit lending programs and will begin to originate and warehouse loans for multi-borrower securitizations, said Chris Moyer, an associate with Cushman & Wakefield Sonnenblick-Goldman in New York.

At least three have publicly announced, or are actively discussing, such programs, while others, have brought on senior managers who have experience building conduit-lending platforms. The active banks are Goldman Sachs, Bank of America and JPMorgan. Word on the street is that RBS and Deutsche Bank are also ramping up securitization activity.

As CoStar reported just before the Thanksgiving break, Developers Diversified Realty Corp. and Goldman Sachs Commercial Mortgage Capital got the ball rolling through a new $400 million securitization backed by bricks-and-mortar assets. That deal was driven in part by the availability of inexpensive funds from the federal government's Term Asset-Backed Securities Loan Facility (TALF), which the Federal Reserve initiated to help "jump-start" the securitization market.

The DDR deal was significant in that even though it was backed by retail, one of the weakest performing properties in this recession, it demonstrated strong investor demand and set a benchmark for potential issuers considering similar transactions. In fact, since then, two new deals have either come to market or will shortly, but importantly, neither is relying on government support.

Last Thursday, Bank of America priced a 7-year, $460 million CMBS offering for Flagler Development (controlled by Fortress Investment) without government / TALF support. The loan is secured by the borrowers' fee interest in 44 office and industrial properties in Florida, which collectively constitute 5.8 million square feet. The deal also includes easement interests along a 351-mile railway corridor, and fee interests in 23 parcels adjacent to the rail corridor.

"Obviously, the fact that a fully private CMBS deal got off the ground for the first time since mid-2008 is a positive for the market," said Charles Cecil, partner and CEO of Opin Partners in New York. "But the pricing -- a blended rate of 5.8% on the bonds -- was much wider than the TALF-supported DDR deal (which priced at a blended rate of 4.2% with a comparable 51% loan to value). The wider pricing can probably be attributed to a heavy geographic concentration in Florida and an unusual collateral mix that included cash flows from leases and usage rights from a railway and fiber-optic cables."

Next up is a new CMBS for the $500 million senior portion of a $625 million JP Morgan deal for Inland Western Retail Real Estate Trust Inc., which will also be issued without utilizing the TALF program and again is supported by retail property.

Inland Western Retail obtained the newly secured loan from JPMorgan Chase Bank on a portfolio of 55 retail properties in 23 states in a joint venture owned by Inland Western and principals of The Inland Real Estate Group Inc. The portfolio contains 22 grocery-anchored centers (32.3% by allocated loan amount).

"The closing of this non-recourse secured debt financing is a significant accomplishment, as we have now addressed virtually all of our 2009 maturing debt and a substantial portion of our debt maturing in 2010," said Steven Grimes, CEO of Inland Western.

All three new issues have involved single borrower entities, which have not made up the bulk of CMBS deals in the past. And single-borrower deals likely will be the case going forward, according to analysis by Standard & Poor's.

"In the near term, we expect to see single-borrower transactions as the first ones to be securitized," S&P wrote in a recent report. "The underlying loans will likely be to REITs and institutional owners/operators with unencumbered assets or assets with low leverage. Other potential issuers include finance and insurance companies with real estate holdings and seasoned loan pools on their balance sheets, or the ability to leverage their balance sheets to originate new loans."

"We expect the loans to be smaller than in the recent single-borrower transactions, with lower all-in leverage, little or no additional debt held outside the trust, five-year loan terms with 25- or 30-year amortization schedules, and terms and conditions that are more lender-friendly. The properties are likely to be underwritten more conservatively, with higher vacancy assumptions and in-place rents (without the projected upside that may have been factored into recent-vintage loans). In fact, it is possible that property values will reflect a downward trend or an expectation that rents and occupancies may fall further," S&P wrote.

Only time will tell whether these welcomed new transactions will mark a return to more normal levels of availability of credit for commercial real estate, the real estate finance and distressed asset teams of the California law firm Luce Forward commented to its clients. However, the firm wrote: "The timing could not be better with billions of dollars of CMBS maturing next year and beyond."

North American S. Broad has sewn up four leases

The North American building off South Broad Street in Philadelphia has sewn up four leases that brings its occupancy up to about 91 percent.

The building at 121 S. Broad completed the deals, all of which were renewals, with:

• DMi Partners, an Internet marketing company that expanded its headquarters into 8,219 square feet in a five-year deal. The company was in 4,983 square feet. DMi plans to hire additional employees.

• The Philadelphia Trial Lawyers, which extended its lease for 10 years on 6,610 square feet.

• Gerolamo McNulty Divis and Lewbart, a law firm that renewed on 6,610 square feet — a full floor — for another four years.

• And Mitchell & Ness, a sports nostalgia product company.

Meanwhile, Alstin Communications relocated from 1401 Walnut St. The firm took a full floor.

Market Street between 34th and 41st streets in University City is undergoing a seven-month makeover. The streetscape improvements are being funded by property owners and landlords along the targeted area of Market Street and a $2 million grant from the City of Philadelphia’s ReStore Philadelphia Corridors program. University City District came up with the project and the Science Center is overseeing it. Once completed, it is expected to change the look and feel of that area along Market Street in University City with new pedestrian lighting, sidewalks and plantings ...

U.S. Realty Capital arranged a $2.5 million construction loan for the acquisition and conversion of an historic elementary school at 137 Grape St. in the Manayunk section of Philadelphia. The 24,000-square-foot building will be turned into 22 apartments ... A five-unit apartment building at 2114 Pine St. in Philadelphia traded for $1.02 million, or $204,00 a unit. An undisclosed buyer from New York picked up the building. Marcus & Millichap arranged the sale.

Orleans Homebuilders gets NYSE Amex delisting notice

Orleans Homebuilders Inc. got word from NYSE Amex exchange that the company’s shares will be delisted since it’s not in compliance with certain continued listing criteria. The Bensalem homebuilder said that it received the letter from the exchange on Dec. 1.

Orleans (AMEX:OHB), like just about all homebuilders, has been struggling during the last four years as the housing boom went bust. The company failed to file its annual report in a timely manner for its fiscal year that ended June 30, which is a violation of the listing criteria. The company did submit a plan on Nov. 16 letting Amex know what it intended to do to bring the company back into compliance by this coming Feb. 10. However, Orleans didn’t file its fiscal first-quarter report either, another violation of the listing criteria.

The company said it didn’t file the annual and quarterly report because it would have required unreasonable effort and expense. It might submit a new plan to the exchange by Dec. 15 and hopes to file both reports early next year. The company’s stock is trading at around $2 a share.

Creative Child Care Leases in Plymouth Meeting

Creative Child Care Centers signed a long-term lease at 3037 Walton Road in Plymouth Meeting, PA, for 7,580 square feet.

The building was previously occupied by Chesterbrook Academy and was built in 1985. Creative Child Care Centers will continue to use the property for childcare purposes.

Philadelphia Multifamily Sells for $1M

Private investors acquired the multifamily building at 2114 Pine St. in Philadelphia for $1.02 million, or approximately $204,000 per unit.

The five-story building was built in 1900 and features two one-bedroom apartments, two two-bedroom apartments and a studio unit. The property is located in the Rittenhouse Square area and was fully occupied at the time of purchase. The reported net operating income of the property is $63,000 annually.

Friday, December 4, 2009

Neshaminy Mall owner General Growth files reorganization plan

"General Growth Properties Inc. filed a bankruptcy reorganization plan today in hopes that it can work out its $9.7 billion in secured mortgage loans.

The Chicago real estate company locally owns the Neshaminy Mall in Bensalem and the Christiana Mall down the road in Newark, Del.

Neshaminy Mall totals 1 million square feet and has 120 stores. Among its anchors is Macy’s, Barnes & Noble, Boscov’s and Sears. The mall opened in 1968 and was renovated in 1995 and 1998. Christiana, a 1.08 million-square-foot mall, has 130 stores of which Lord & Taylor, JCPenney and Macy’s are anchors. That mall was constructed in 1978 and renovated in 1990.

The filing highlights two big issues converging at the same time on retail property owners. One is the difficult credit market, where borrowers are having a tough time renegotiating debt, and the other is the challenging retail climate. The $9.7 billion exceeds previously announced agreements in principal to restructure $8.9 billion of mortgage loans.

General Growth filed for bankruptcy in April. The reorganization plan is set to be confirmed on Dec. 15 and will allow the company to emerge from bankruptcy by the end of the year. The company has over 200 regional shopping malls in 44 states."