Home

People Blog

Houston Deals

Leasing Briefs

Texas Roundup

Residential Topics

In-Depth Stories

Photo Gallery

Bivins Blog: Real Estate Log

David S. Jones Column

Multi-Family Magazine

International Dispatch

About Us

$73.1 Million Buys New York Quartet

NEW YORK – Four transactions, totaling $73.1 million, have closed in New York's metropolitan marketplace, with one deal netting $1,213 per sf for the seller.

Marcus & Millichap Real Estate Investment Services' teams in Manhattan packaged the quartet of plays, which included a $17.37 million sale of a 14,320-sf, mixed-use building at 355 Seventh Ave., just one block from Penn Station and Madison Square Garden. A Brooklyn investor paid $1,213 per sf to a seller from Manhattan for the three-story building. The seller was represented by Barry Kimchy, a senior associate, and investment specialist Christopher Sjurset. The buy side's brokers were Ross Mezzo and Benjamin Bottner, also investment specialists in the Manhattan office.

Kimchy also handled the $21.5 million sale of a 30,848-sf parking garage at 150 W. 83rd St. in the heart of the Upper West Side. In a breakdown of the sale price, the seller pocketed $697 per sf.

The $73.1 million sales pile also included 37 Kenmare St., 240 West 38th St., 1961-1967 Amsterdam Ave., 150 West 84th St., 2722 Eighth Ave., 493 Second Ave. and 131 West 80th St. The properties at 131 W. 80th St., 150 W. 83rd and 150 W. 84th St. were bought by private investors from Manhattan. The parking garage's seller was from Kings Point, NY while the West 80th Street property was sold by an investor from Palisades Park, N.J., and the West 84th Street holding by a Manhattan investor.

The deals' brokers from the Manhattan office were Peter Von Der Ahe, vice president investments and senior director of the national multi-housing group; Stephen Matri, a senior associate; Joe Koicim and Sjurset, both multifamily investment specialists, and Scott Edelstein, an investment specialist. Ben Sgambati, an associate vice president investments and director of the net-leased properties group and Jin Lee, a retail investment specialist, both in the New Jersey office, also participated in the closings.

......................................................................

Charles Dunn, Figueroa Targeting

Financial Institutions' Asset Pools

By Connie Gore

LOS ANGELES – Outsourcing business development for the first time in its 87-year history, Charles Dunn Real Estate Services Inc. has put Figueroa Capital Group in charge of building an asset management business with financial institutions.

Los Angeles-based Figueroa Capital Group's president and CEO, Walter F. Conn, resigned five years as COO of Charles Dunn to establish a financial services platform. Conn said the strategy targets the foreclosure markets in Charles Dunn's established territories in California and Phoenix.

"Other than previous receivership assignments in the last several downturns, they have not actively pursued this marketplace," Conn said. "This is the first time they have committed capital and resources toward business development with a specific target like this in mind."

Figueroa plans to source financial institutions that need assistance with management of real estate assets, specifically services like property management in terms of repositioning, disposition, long-term investment or risk analysis assessment.

"With foreclosures on the rise for all property types, financial institutions have a greater need for guidance and services," Conn said. He added that Figueroa's banking relationships and Charles Dunn's "deep asset management expertise and resources" are "a natural fit" for today's economic conditions.

"We are confident that Figueroa's extensive relationships within the financial community and unique knowledge of our firm's strengths and abilities will effectively help us grow our asset management portfolio," said Florence Wang, CFO of the Los Angeles-based Charles Dunn. The brokerage and property management firm has offices downtown and west L.A. and six other major cities in the state and one in Phoenix.

......................................................................

Seven-Year Deal Nabs 323,345-SF Warehouse

PHOENIX – Armed with a seven-year lease, Furniture Values International LLC will light the 323,345-sf Valley West distribution center, gaining 175,345 sf of additional operating space with the relocation.

Bill Bayless and Andrew Brigham, a CB Richard Ellis team in Phoenix, represented the local tenant in its site search and talks for the full-building lease at 601 N. 75th Ave. Property owner Myron Zimmerman Investments of Oakland, Calif., used an in-house representative, Paul Schifman, to negotiate its terms.

The furniture wholesaler will vacate a 150,000-sf warehouse at 2929 N. Grand Ave. The move takes place this month.

......................................................................

Jackson Lewis LLP Plans Fall Move

CHICAGO – The law firm of Jackson Lewis has leased 18,424 sf of class a office space at 150 N. Michigan Ave., an iconic diamond-shaped office tower in the East Loop.

The 51-year-old firm, with 530 attorneys nationwide, will relocate its Chicago headquarters team in the fall from 320 W. Ohio Ave., getting a prized class A office in one of the city's most photographed buildings. “Since 1984, 150 N. Michigan Avenue has been among the most recognizable buildings along Chicago’s skyline," said Monica Moore, a vice president of agency leasing with Jones Lang LaSalle. She and JLL senior vice president Brad Despot represent the building owner, Frankfurt-based SEB Investment GmbH.

Studley's corporate managing director Tiffany Winne and executive managing director Lisa Davidson led the search for Jackson Lewis, which has offices in 40 U.S. cities. Winne said the chief consideration was finding "a more central downtown location that could accommodate its immediate space needs and meet future expansion requirements." The 41-story, 625,000-sf landmark met the requirements with "better access to public transportation and amenities," she added.

......................................................................

Virginia Wins Hilton's HQ

FAIRFAX COUNTY, Va. – With a $4.6 million incentive package as the bait, Hilton Hotels Corp. has tapped Fairfax County, Va., as the new headquarters location. Hilton will invest $17 million into its relocation from Beverly Hills, Calif., and create 300 full-time jobs within 36 months.

In a press release, Hilton's executive team says the headquarters office location is still under negotiation. As would be expected, several prospective landlords are jockeying for the win.

The Fairfax County Economic Development Authority and the Virginia Economic Development Partnership bundled a $4.6 million incentive package to secure the win for Virginia. The package included a $1 million grant from the Governor's Opportunity Fund and a $1 million match in incentives from the county. A state incentive grant program yielded in $2.5 million. Hilton also qualifies for a major business facility job tax credit. The state's business assistance department will provided $162,500 in training assistance.

Fairfax County is touted as a business and technology center. It has marketing offices in San Francisco, Bangalore, Frankfurt, London, Seoul and Tel Aviv. In a 2007 coup, Fairfax County won the headquarters of Volkswagen Group of America and CSC, formerly Computer Sciences Corp.

Hilton Hotels Corp. controls more than 3,200 hotels and 545,000 rooms in 77 countries and territories from its headquarters at 9336 Civic Center Dr. in Beverly Hills.

......................................................................

172,000-SF HQ Lease Crosses Finish Line

By Connie Gore

ROSEMONT, Ill. – After nine months of weighing the decision, Central States Fund has renewed and extended a 172,000-sf headquarters lease in the O'Hare submarket, where it holds fast to its ranking as the lead tenant in Riverway II.

The administrator of pension, health and welfare funds right-sized its footprint, ending with six full floors instead of 10.5 floors in the 250,034-sf Riverway II at 9377 W. Higgins Rd. "We were looking for the best deal and the best space that works for the business," says John Musgjerd, managing director for Jones Lang LaSalle in Chicago. "This complex has great amenities and Duke, who owns and manages it, is a good landlord."

Central States Funds has been a Riverway tenant at least 15 years.Musgjerd says the deal was in the market nine months. "We wouldn't have made any deal with anybody without any due diligence," Musgjerd stressed. "It's a big tenant. A lot of people were interested in it." The JLL team included Tim Hart and Ben Erskine.

Indianapolis-based Duke Realty Corp.'s Ryan O'Leary represented the owner of the class A trio of office buildings totaling 858,711 sf. The 28-acre development sports a 200-seat conference auditorium, fitness center, 10,000-sf daycare center, retail shops and Carlucci's restaurant.

In Massachusetts, Jones Lang LaSalle teams finalized 43,963 sf of office leases in the 3/93 Greater Boston Portfolio of Manhattan-based Gale International and Mack-Cali Realty Corp. of Edison, NJ. Lockheed Martin took 13,910 sf on the first floor of 3 Federal St. and Vertica Systems Inc. leased 19,537 sf of first-floor space at 8 Federal St., both in Billerica, and Insulet Corp. signed for 10,516 sf of street-level space at 7 Oak Park in Bedford.

JLL managing director Tamie Thompson, vice president Flory McCarthy and assistant vice president Tyler Spring represented the JV owner in all three transactions. JLL senior vice president Dan Cordeau and vice president Matt Sonne negotiated for Lockheed Martin while Roy Hirshland and Michael Taylor from T3 Realty in Boston represented Vertica Systems. Insulet's tenant rep was Michael Dalton of DTZ FHO Partners Inc.

"Gale's strong reputation, multiple floor plate options and flexible lease terms attracted all three tenants to this area," Spring says. "Their deep experience and understanding of the current real estate climate helps immeasurably when working with tenants to pinpoint their real estate needs."

......................................................................

Centro Completes 259,056-sf Trade

HARTFORD, Conn. – A New Jersey-based REIT has claimed the 259,056-sf Charter Oak Marketplace. Tied to a ground lease with the city of Hartford, the asset was listed at $19.25 million or $74 per sf.

The shopping center REIT bought the class A property at 475 Flatbush Ave. from Centro Properties, which was represented by Sharon Bands, a vice president and senior director in Manhattan for Marcus & Millichap Real Estate Investment Services' national retail group. Among the selling points is existing financing with interest-only terms at nearly 4.9 percent until June 2015, the broker said.

Charter Oak Marketplace, situated on 34.7 acres, was developed in 2004. Since 2006, Bands said tenant sales showed a 16 percent increase. A 149,551-sf freestanding Wal-Mart anchors the center, which has 76,750 sf of inline retail space leased to Dollar Tree and Marshall's. Pad sites hold McDonald's, Taco Bell, Popeye's, Polo Tropical and Texas Roadhouse.

In other Marcus & Millichap sales, Alan Cafiero and Ben Sgambati in the New Jersey office represented buyer and seller of a 24,000-sf, single-tenant, net-leased medical office building at 155 Berkeley Ave. in Newark. The deed changed hands for $3.4 million.

On Merritt Island, Fla., a 21,600-sf medical office building at 595 N. Courtenay Parkway drew $3.03 million, according to Dan Colachicco, sales manager of Marcus & Millichap's Orlando office. Orlando Agents Kevin Yaryan, Patrick Skinner and Michael Donaldson represented buyer and seller of the net-leased asset.

......................................................................

Axway Finds New HQ Office

SCOTTSDALE, ARIZ. – Axway Inc. will move in May to 38,109 sf of class A office space in the 152,249-sf North Scottsdale Corporate Center II, ending a long search for a new headquarters location. Talks produced an eight-year lease.The three-building complex's location at a full-diamond interchange of Loop 101 most likely carried weight on the decision to move from 8388 E. Hartford Dr., also in Scottsdale. Not only is North Scottsdale Corporate Center at 6811 E. Mayo Blvd. on the freeway's doorstep, but it's within walking distance of retail shops and restaurants.

The Denver-based building owner, Miller Global Properties LLC, was represented by Jim Fijan and Jerry Roberts in the Phoenix office of CB Richard Ellis Inc. Pat Williams with Jones Lang LaSalle's Phoenix office was Axway's point man for the talks.

.............................................................................

FEATURED PROPERTY

For Sale: Veyance's Global HQ

FAIRLAWN, OHIO – The net-leased global headquarters campus of Veyance Technologies Inc. has come to market for $27.1 million.

Regional developer Fairlawn Office Park One LLC delivered the first of three buildings in the 97,845-sf complex in 2007 and recently wrapped up work on the newest pieces, the three-story, 43,286-sf Innovation Center and a single-story, 4,122-sf connector building. The headquarters structure, totaling 50,437 sf, is a three-story design at 703 S. Cleveland Massillon Rd.

Veyance, a former subsidiary of Goodyear Tire & Rubber Co., is holding a 10-year lease for the buildings, a class A mix of office and research and development space. The net-lease terms include two five-year options, each including a 10 percent rent increase, according to Marcus & Millichap Real Estate Investment Services. The brokerage firm's Cleveland team of associate vice president investments Dan Burkons, senior associates Scott Wiles and Erin Wiles-Patton and associate Aaron Snyder are marketing the asset.

The complex's R&D space features an 18-foot clear height to accommodate a five-ton overhead crane, two-ton crane in the mechanical room and acoustical block-and-glass wall construction with foam-fill backup in the main lab. Laced with fiber optic, the complex includes a global conference center. Veyance is one of the world's largest producers of industrial power transmission products. In first quarter 2007, the Carlyle Group of New York City bought Veyance from Goodyear for $1.4 billion.

"This asset presents an excellent opportunity for an investor to acquire a newly constructed, premier corporate headquarters occupied by a high-credit tenant with international exposure in one of the prime Northeast Ohio office submarkets," Burkons says in a press release.

.............................................................................

AT&T Renews 171,386-SF Office Lease

CHICAGO – In a vote of confidence for the Downtown office market, AT&T Inc. has renewed a 171,386-sf office lease for the long term. The transaction is one of the largest office leases signed this year in the city.

AT&T's renewal for the Chicago Apparel Center at 350 N. Orleans St. keeps intact a training center, call center and other support functions for its telecommunications and U-verse products. Jones Lang LaSalle senior vice president George Kotrogiannis and associate Kurt Kittner represented the Dallas-based AT&T, which is the largest tenant in the 1.7-million-sf building. CB Richard Ellis represented the building owner, Merchandise Mart Properties Inc., a subsidiary of New York City-headquartered Vornado Realty Trust.

According to the Jones Lang LaSalle team, AT&T considered other options as part of its decision-making process. The telecommunications giant has been an Apparel Center tenant since 1989.

"Working closely with AT&T's transaction and asset management groups, we evaluated other space in AT&T's existing leased/owned portfolio as well as additional opportunities in the market," Kotrogiannis says. "But this building, in addition to location, offers the functionality and flexibility that a major tenant such as AT&T needs. We were also able to leverage AT&T's credit and generate rent reduction."

.............................................................................

Hines REIT Buys

Denver Buildings

DENVER - The Denver office of Hines, the international real estate firm, announced that Hines Real Estate Investment Trust, Inc. (Hines REIT) has acquired two Class A office/flex complexes, 345 Inverness Drive South and Arapahoe Business Park, from SVN Equities, LLC. The projects contain a total of 10 buildings representing 484,737 sf.

Hines is the sponsor of Hines REIT, and is responsible for the acquisition, management and leasing of the majority of its assets. Hines REIT has engaged Frederick Ross Company, a local real estate company, to manage these properties.

345 Inverness Drive South is situated on 16 acres in the southern portion of Inverness Business Park, east of Interstate Highway 25. The property contains three single-story buildings totaling 175,287 sf. It was developed in 2001, and is currently 90 percent leased to tenants including Honeywell International, Zykronix, Nestlé-USA and Luzenac America, Inc.

Arapahoe Business Park is situated on 25 acres at the entrance to Centennial Airport Center, fronting the south side of East Arapahoe Road, approximately 2.5 miles east of Highway 25.

The park contains seven, single-story buildings comprising 309,450 sf, ranging in size from 44,050 to 48,677 sf. The business park was developed from 1998-2001, and is 100 percent leased to tenants including American Honda Motor Co., ViaWest Interne t Service, Vistar Corporation and Pulte Mortgage, LLC.

..........................................................................

ULI Spotlights Housing Crisis

 By Connie Gore

 WASHINGTON, DC – With the housing crisis chief on the nation's to-do list, the US Senate confirmed Shaun Donovan as secretary of Housing and Urban Development just as the Urban Land Institute was weighing in on the complex issues of the devastated residential markets.

 In a one-hour webinar, a ULI panel delved into the present and future housing policies for President Barack Obama's administration. Moderator John K. McIlwain, senior resident fellow and the J. Ronald Terwilliger chair for housing, was joined by Nicolas P. Retsinas, director of the joint center for housing studies and a member of Obama's transition team, and Barry Zigas, director of housing policy for the Consumer Federation of America.

 "It's not the apocalypse, but at the same time the crisis facing this country is one of the largest and deepest in the history of this country," Retsinas said. To date, more than one million owners have lost their homes. The prediction is another two to four million will lose their homes "before we get through this housing crisis," he added.

 The challenge before policymakers is to find a model that will, over the long term, include a private sector delivery system and not put the full burden on the government although recent steps effectively have nationalized the mortgage industry, according to Retsinas.

 "HUD's challenge is to not only sit at the table, but contribute … to make a case for the communities that have been battered," Retsinas continued. "Housing will play a central role in the overall recovery." And, he added that affordable housing must be part of the outcome.

 Zigas called for "quick legislative changes to rebalance and align servicer/investor/borrower interests." He advocated modifications to bankruptcy proceedings that would keep more homeowners in place and encourage loan workouts.

 Zigas also recommended easing the tax consequences of loan modifications for owners and investors; making the tax status for real estate mortgage investment conduits contingent upon changes to pooling and servicing agreements; and setting standards for loan modifications and asset sales while indemnifying servicers who act in good faith.

 What can't be avoided is the restructuring of Fannie Mae, Freddie Mac and Federal Home Loan Banks, the experts agreed. The "key necessary outcomes" are liquidity, stability and standardization and access and affordability. Ideas now being kicked around are creating a government utility for housing; fully nationalize the mix and include Ginnie Mae; and a mixed public-private model with government investment and oversight. With the reinvention, the experts agreed that government will have to decide what its role will be.

 The experts said it is equally critical to balance multifamily and single-family sectors, recognizing that the home-building industry has an 11-month overhang of unsold inventory that impacts the rental market.

 According to Austin-based Mission Residential LLC, housing starts totaled 902,000 in 2008: 617,000 as single-family dwellings and 285,000 as multifamily units.  "While builders have made dramatic cutbacks in new construction, the reality is that the bottom they are aiming at is a moving target, as will continue to be the case as long as home sales continue to decline," wrote Mission Residential's chief economist Richard F. Moody. "Given that job market conditions are likely to continue to deteriorate over the remainder of 2009, if not into early 2010, while credit markets remain in a dysfunctional state, there is little to suggest that home sales will show appreciable improvement any time soon."

 The ULI panel pointed out the housing recovery must be a united effort by all agencies rather than allowing them to work in isolation. Transportation, employment, health care and housing are intertwined more deeply than was commonly perceived, Zigas said. 

The Obama administration's plan to create an Office of Urban Policy could be the key to recovery. "In theory, this office will help build bridges among these various offices," Retsinas said. "The wrong way to do it is to look at these things in isolation."

Hotel Industry Steels Itself for 2009

By Connie Gore

DALLAS – In yet another belt-tightening move for the hospitality industry, Interstate Hotels & Resorts Inc.'s actions this week could be the bellwether for this year: personnel layoffs at corporate levels, pay freezes and elimination of 401 (k) matches.

"I think we're going to see more of that as in corporate business," says David Loeb, senior research analyst for Milwaukee-based Robert W. Baird & Co. He says the industry has been prepping for hits, but "I think it's been worse and there have been more issues than they expected and it's coming faster than they expected."

The Washington, DC-based Interstate expects to save $13 million annually from cuts aimed at the corporate level rather than the property level. Hotel companies, large and small, have been positioning themselves for a tough 2009 in light of predictions that RevPAR could fall to minus 10 percent as Corporate America slows business travel and travelers of all types stay at less expensive hotels.

Earlier this week, Dallas-based Ashford Hospitality Trust Inc.'s board authorized an additional $200 million of share purchases, a move that gave pause to analysts like Loeb. "It made us stop and think," he says, adding the anteing up is "very big relative to its market cap."

Ashford's stock closed at $1.42 per share when the NYSE's bell rang yesterday. Its 52-week high was $7.02 per share. Ashford has 86,555,249 of outstanding common stock, more than 16 million shares of outstanding preferred stock. In fourth quarter 2008, Ashford repurchased 23,436,236 shares of common stock and slightly more than 1.7 million of preferred stock.

With today's time weighing on minds, Ashford this week deviated from past practice to issue an early preliminary guidance although its quarterly conference won't be held until Feb. 26. The REIT's team reported a 2 percent drop in RevPAR for 2008 and an 8.8 percent drop in the fourth quarter year-to-year comparisons. Ashford CEO and president Monty J. Bennett said in a press release that the preliminary results "indicate our strategies are working to offset unprecedented lodging industry challenges."

Loeb, who covers the nation's 18 hotel REITs, says Sunstone Hotel Investors Inc. of San Clemente, Calif., and Host Hotels & Resorts Inc., DiamondRock Hospitality Co. and LaSalle Hotel Properties, all based in Bethesda, Md. are "positioned for the long haul almost under any circumstance." Ashford, he added, has a lower risk-tolerance, but its "chances of survival are still pretty good, but somewhat lower."

Bennett reported Ashford has about $195 million cash on hand and $29 million of hard-debt maturities coming this year. Part of its positioning in advance of the storm was swapping floating-rate debt for fixed-rate last year and recent restructuring of its revolving credit facilities.

Ashford has one of the more diversified portfolios among its peers. No one state has more than 17% of the 26,000 rooms. In addition, more than half of its 114 properties are located in the Top 25 markets in the US.

If 2009's RevPAR sinks lower than projected, Loeb says Ashford won't be the only hotel company in jeopardy. He predicts the hospitality industry won't see its first positive signs until late in the third quarter. "But, the recovery is unlikely to begin until next year," he concluded.

...........................................................................

Audubon Society

Gets Green Building

Going green is not for the birds. So demonstrates the National Audubon Society as it unveils its recent LEED Platinum Certification for its eco-friendly New York City headquarters. The U.S. Green Building Council gave its highest marks ever to this commercial redesign of a 27,000 sf space at 225 Varick St.in Manhattan's Hudson Square. The price tag for choosing green did not leave much red ink. The sustainable design choices were estimated to cost about 10 percent more than less environmental friendly materials and systems. That cost differential is expected to be absorbed in energy savings over the next decade or so depending on energy costs. Key design elements include:
• Low flow and automatic fixtures to reduce water usage
• An under floor air distribution system
• A daylight harvesting system that automatically dims light as natural light increases
• Rapidly renewable (cork and bamboo), recycled, and locally produced materials.Before and after images on: http://web1.audubon.org/video/player_leeds.html.

..............................................................

Hines Gets Energy Star in Phoenix

The Phoenix office of Hines, the international real estate firm, announced that Renaissance Square’s two buildings received ENERGY STAR labels from the Environmental Protection Agency (EPA) in recognition of exemplary energy conservation.

With ENERGY STAR scores of 90 and 89, respectively, One and Two Renaissance Square use over 40 percent less energy and emit 40 percent fewer carbon emissions than the buildings would if they were operating at the national average for energy performance. Therefore, together these buildings generate annually more than $1,200,000 in energy cost savings, and carbon emissions savings equivalent to the CO2 emissions from the electricity use of over 1,000 homes.

Renaissance Square is located in the heart of Phoenix’s CBD on a full-city block. The property is comprised of two towers connected by a pedestrian sky bridge: One Renaissance Square, which contains 26 stories and 492,116 sf; and Two Renaissance Square, which contains 28 stories and 473,392 sf.

Upon acquisition, Hines’ management team sought to identify measures that would improve energy efficiency and eliminate deferred maintenance.

“The ENERGY STAR labels were achieved through the diligent efforts of our engineering and management personnel, who focused on adding value for the building’s tenants and operating as responsible stewards of our natural resources,” noted Hines Group Property Manager Darwyn Harp.

“Energy management is a top priority for us and our tenants,” said Hines CEO Jeffrey C. Hines. “Since our early involvement in the ENERGY STAR program over a decade ago, ENERGY STAR has proven to be good for our bottom line and good for the environment.”

Designed by Emery, Roth & Sons, Inc., the buildings were completed in 1987 and 1989, respectively. Today, the project is more than 93 percent leased to a prominent list of tenants including: Bryan Cave LLP, which is a Partner in the American Bar Association / Environmental Protection Agency Law Office Climate Challenge; Ernst & Young US, LLP; Gammage & Burnham PLC; the General Services Administration; Greater Phoenix Economic Council; Lewis & Roca LLP; Quarles & Brady LLP; and Squire Sanders & Dempsey LLP.

The Hines US Core Office Fund LP (Core Fund) purchased Renaissance Square in December of 2007.

.......................................................................................

NAREE Real Estate

Journalism Competition

BOCA RATON, Fla. -- A new category for investigative reporters and more prize money for freelance journalists highlight NAREE’s 59th Annual Journalism Competition aimed at staff writers, columnists, editors, and freelancers covering mortgage finance, foreclosures, commercial and residential real estate, green building, home design and myriad other topics in the broad field of "real estate." With a reach much wider than its name, the National Association of Real Estate Editors has earmarked $9,000 in awards for first place winners in 30 categories.

Entry deadline is Feb. 20, 2009 for work published or aired in 2008.

A first place award of $1,500 will go to the best overall individual entry and $500 is available the best freelance collection.

The prestigious competition is targeted to recognize leading journalists from daily metropolitan newspapers; weekly business newspapers; mortgage publications; trade, shelter, business and personal finance magazines; wire services; and broadcast and online news outlets.

Individual and team honors have included topics from the credit crisis, affordable housing, property taxes, investments and acquisitions, to disasters mitigation and sustainable urban design, new construction and remodeling.

Journalists from newspapers; business, trade and shelter magazines; Internet and broadcast outlets enter this prestigious real estate journalism competition recognizing excellence in writing, reporting, and editing since 1949.

“Best Entry by a Young Journalist” reco gnizes work from individuals 30 years or younger.
All professional journalists, both NAREE members and non-members, may enter. Entry forms are on www.naree.org.

First- and second-place winners will be recognized in categories including: “Best Residential Report in a Daily Newspaper,” “Best Report in a Weekly Business Newspaper,” “Best Spot News Report,” “Best Home Design Feature,” “Best Commercial Real Estate Magazine,” “Best Blog,” “Best Real Estate News Web site,” and more.
Winners will be invited to NAREE's Awards Banquet on June 19, 2009 and receive complimentary admission to NAREE's Annual Journalism Conference in Washington, DC from June 18-21, 2009.

Founded in 1929, NAREE is a nonprofit professional association of writers, columnists, editors and authors covering residential, commercial and financial real estate and urban and home design.

........................................................................................................

Geftman: Restaurants Should Go Green

Sustainable restaurant design – what is it and why should consumers and restaurateurs take a serious look? South Florida-based architect and designer Marc Geftman of TurnKey Concepts says, "Going green saves energy, money and the planet."

Geftman advises that those building a restaurant from the ground up should look at everything from how the building is situated on the land and building overhangs for shade to address direct sun exposure, to geothermal heating and cooling systems and a host of energy efficient equipment choices. When locating a new restaurant in an existing building, energy savings can result from careful selection of appropriate heating, ventilating, and air conditioning systems.

“Choosing the right one can result in big savings on the power bill every month," says Geftman. To get the most green for your money, restaurateurs should bring in their architects and engineers as early as possible to contribute to the design of the most efficient sustainable facility. “Of course kitchen design is at the heart of any restaurant project," says Geftman. His green kitchen plans include highly rated energy saving appliances and systems for recycling gray water and oil. Going green has marketing benefits for restaurateurs.

"People will come to a green restaurant to give it a try just because they are environmentally conscious. If the whole dining experience is good, they will come back,” Geftman said.

Choose sustainable surfaces such as bamboo flooring, eco-friendly countertops and eco-resin materials for ease of maintenance and longevity, Geftman said.

TurnKey Concepts is a leader in a growing constituency of design professionals in the food retail industry who see both the short and long term advantages of "going green." Founder Marc Geftman is an architect specializing in restaurant design, architecture and buildout. Geftman, a member of the USGBC-U.S. Green Building Council, is one of the first green architects in the country for sustainable restaurant design. His Lake Worth, Florida-based firm combines world-class architectural design and custom millwork expertise with food business operational know-how, to create designs that are functional and beautiful. Information: www.turnkeyconcepts.us.

..................................................................................................

Shula Moves From Coaching to Steak

Coach Don Shula, the winningest coach in the NFL, is scoring in the restaurant businesses.

The Shula's chain, which has over two dozen locations, is based in Florida. Shula has been making a splash in Texas also. A Shula's steakhouse just opened in the Hyatt Regency in downtown Houston and the new Sheraton Fort Worth Hotel in downtown Cowtown also sports a  Shula's steakhouse.

Another unit was just added in Jacksonville, Fla. in July. "The Shula's 347 Grill in Jacksonville is truly a gorgeous restaurant," said architect Marc Geftman, founder of TurnKey Concepts, which created the woodwork at the Shula's in the Sheraton Jacksonville. TurnKey Concepts, based in Lake Worth, Fla., specializes in restaurant concepts, designs, architecture and millwork.

Coach Shula is mainly involved in the promotional appearances for the restaurant chain. His son, Dave Shula, directs the company operations.

.....................................................................................

Henry Cisneros on New Orleans

With all eyes on New Orleans two years after Hurricane Katrina’s devastating impact on the region, CityView Executive Chairman and former HUD Secretary Henry Cisneros has issued an innovative challenge to private companies and public entities to provide a solution which will bring desperately needed housing to the area. Cisneros calls for more private capital investments and proposes collaboration that is not completely dependent on government funding. The uniqueness of this model also relies on unifying local stakeholders, including elected officials, financial institutions, employers, non-profit organizations, builders, developers and neighborhoods to create homes more rapidly than the present building cycle.

“The theme moving forward from the second anniversary should be that the time has come for the private sector to step up, partner with public entities and invest in New Orleans. Although the commemoration brings heightened attention to the area, America must focus on the urgency for private capital investments during the coming weeks and months to put New Orleans residents back into homes,” Cisneros said. “We must think out of the box to do everything we can to move faster to build quality housing. Nowhere else is a collaborative effort between the private and public sectors more important than in New Orleans and the Gulf Coast region.”

Cisneros points to the success of a recent collaboration in the area to rehabilitate 320 severely wind-damaged homes known as the Gates on Manhattan. Leading the partnership are his company, CityView, a national urban housing investor, American Sunrise Communities, a national non-profit organization founded by Cisneros and CityView President Joel Shine, and Le Triomphe Property Group, a Louisiana-based real estate company led by third-generation developer Stewart Juneau. Both Louisiana Governor Kathleen Babineaux Blanco and New Orleans Mayor Ray Nagin are excited and supportive of this new model and solution to the area’s housing crisis.

Le Triomphe brings established relationships within the New Orleans region, which allows the team to quickly identify additional partners for the collaboration. The national team also includes homebuilder partner Our Castle Homes. The homeowner outreach, education and services side of the project is being coordinated by American Sunrise Communities and includes participation from the region’s Desire Community Housing Corporation, Chase Bank, Fannie Mae, Dryades Savings Bank and the Jefferson Parish Community Development Department.

“The rehabilitation of an existing dilapidated apartment complex along with creative construction and financing by the partnership has resulted in newly reconditioned two- and three-bedroom condominiums with a market value between $65,000 and $85,000,” Juneau said. “The development expertise of the partners converted these former tax-credit units into condominiums which are more affordable than many of the area’s rental units. Partnering with CityView and American Sunrise Communities was an opportunity to show that new homes for the area’s working families can be created with no government subsidy and at the speed of business.”

The partnership is currently reaching out to major public and private employers, faith-based organizations and other community groups to provide low-interest mortgages, subsidies, homeownership education services and case management assistance to ensure buyers become solid stakeholders in the community.

“This collaboration with private builders, developers, community lenders, public institutions, major employers and non-profit community groups provides quality housing within the reach of working families who are actually part of the rebuilding effort themselves,” said David Grunwald, president of American Sunrise Communities. “This effort to provide them with housing ensures stable communities and creates important incentives for maintaining public and private resources. This is all necessary to guarantee the long-term health, revitalization and survival of the region.”

CityView, a national housing investor based in Santa Monica, California, has invested more than $700 million to build homes for working families across the nation. The firm has partnered with homebuilders and developers in more than 30 communities across 12 states. The total value of the 6,000-plus homes CityView has financed is more than $2 billion and growing. CityView has additional offices in New York, Dallas, and San Antonio.

In 2006, Cisneros and Joel Shine, president of CityView, formed the national non-profit American Sunrise Communities. Their mission is to create a national model, leveraging public, private and non-profit resources to facilitate large-scale homeownership opportunities for low-income and minority families excluded from the housing market. In 2007, the organization added offices in Denver, New Orleans, San Francisco, and Seattle and created partnerships with local stakeholders resulting in the potential development of over 5,000 affordable homes.

Affordable Housing:

A Must for Worker Retention

Concern is apparent within the business community -- particularly among larger employers -- about the lack of affordable housing for employees, with companies reporting the shortage as being problematic in hiring and retaining entry- and mid-level workers, according to a new survey released by the Urban Land Institute (ULI). The same survey showed interest by moderate-income workers in moving closer to work if affordable housing were available.

The survey, conducted between April 26, 2007 and May 1, 2007 by Harris Interactive, was taken to gauge perceptions by employers and commuters regarding the impact of long distances between housing and jobs on business operations and workers' quality of life. The employer portion polled employers from three groups - those with less than 50 employees; those with 50 to 100 employees; and those with more than 100. More than 300 companies from across the United States responded. The largest companies consistently reported the greatest awareness of problems resulting from long commutes and an inadequate supply of affordable housing -- ranging from high employee stress to high employee turnover. Overall, companies in the West were the most likely to acknowledge insufficient affordable housing as being a problem.   

The consumer portion, covering more than 1,200 commuters nationwide, included those with commutes of less than 30 minutes, 30 to 60 minutes, 60 to 90 minutes and more than 90 minutes. On the whole, the survey found that the majority of employees will tolerate living farther away from work if housing is more affordable; but there were noticeable differences in opinion when measured by commute time, income and age. Those with the longest commutes were the most willing to change jobs for a shorter commute, and the most apt to move closer to their jobs if more affordable housing options were available. Those with incomes of less than $50,000 - widely considered the "mainstream" workforce - were significantly more likely to move closer to work if affordable housing were available than those with higher incomes. When measured by age, those aged 18-34 were the most likely to uproot and change jobs,
likely reflecting fewer family obligations and fewer ties to their existing neighborhoods.

ULI Senior Resident Fellow William H. Hudnut III, discussed the survey results during a presentation June 2, 2007 at the National Association of Real Estate Editors annual real estate conference, held this year in Philadelphia. The responses, he said, indicate that larger employers understand the reality of moderately priced housing being scattered far from employment centers. And, while many consumers continue to equate success with being able to afford a larger home in outlying areas, he said the responses from moderate-income and younger workers show they are starting to "feel the pinch" of money and time spent commuting.

"What we're seeing from employers and lower to moderate-income workers signals a need for more housing to be built closer to jobs," Hudnut said.

Some highlights from the employer survey:
* Fifty-five percent of larger companies (those with 100-plus employees) reported a lack of affordable housing near their location.
* Sixty-seven percent of the larger companies that acknowledged a lack of affordable housing believe that it is having a negative impact on retaining qualified entry-level and mid-level employees.
* Fifty-eight percent of the larger companies that acknowledged a lack of affordable housing reported having lost employees at least in part to long commute times.
* Sixty-nine percent of the larger companies believe a long commute time increases employee stress; 63 percent believe it triggers negative emotion among employees; 48 percent said it causes more absenteeism; and 46 percent said it contributes to employee turnover/attrition.
* Thirty-six percent of the larger companies believe it is important to be actively involved in providing employee access to affordable housing.
* Awareness among larger companies regarding corporate and government housing programs remains relatively low (25 percent were aware of corporate programs and 34 percent were aware of government programs); but 42 percent of larger companies said they would participate in a government program.
* Forty-five percent of the larger companies offer flextime to reduce commuting time; 21 percent offer telecommuting.  

Some highlights from the consumer survey:
* Sixty-seven percent of those with annual household incomes of less than $50,000 would be at least somewhat likely to move closer to work if more affordable housing were available.
* Sixty-four percent of those earning less than $50,000 would be at least somewhat likely to make a lateral employment move in exchange for a shorter commute; compared to 60 percent earning more than $50,000.
* Seventy-six percent of those aged 18-34 would be at least somewhat likely to make a lateral employment move in exchange for a shorter commute; and 76 percent in that age group would be at least somewhat likely to move closer to work if affordable housing were available.
* Fifty-seven percent of all commuters surveyed said they would be at least somewhat likely to move closer to work if affordable housing were available.
* Eighty-five percent of respondents who commute more than 90 minutes daily said they would be at least somewhat likely to make a lateral job switch to cut their commute in half.
* Forty-seven percent who work in suburbs prefer to live closer to work even though it may mean higher housing prices and less disposable income; while 53 percent of suburban workers prefer to live in an area with affordable housing opportunities and more disposable income, even if it means living further away from work and having a longer commute.

One notable finding in the consumer survey suggests "a lingering gap between perception and reality," Hudnut noted. Of all consumer respondents, 42 percent said they would prefer to live closer to work to shorten their commutes, even if it meant higher housing prices. Fifty-eight percent said they would prefer to live in an area with more affordable housing, even it meant a longer commute. "Many consumers who don't perceive living closer to work as desirable are likely not factoring in transportation costs as a rising expense, and are likely not aware that desirable housing close to jobs is even an option. The reality is that moderate-income housing can be developed near employment centers in a way that provides a high quality of life, offering proximity to both amenities and work," he said.

Moreover, Hudnut said, the far-flung living environment many believe to be preferable is not sustainable, in terms of conserving land or energy. "Ever-increasing commutes are taking a heavy toll on our urban areas, from a social, economic, and environmental aspect. Something's got to give," he said.

To help raise awareness of the need for more housing affordable to moderate-income workers, ULI has established the ULI Terwilliger Center for Workforce Housing, funded with a $5 million commitment from former ULI Chairman J. Ronald Terwilliger, chairman and chief executive officer of Atlanta-based Trammell Crow Residential.

Plans call for the ULI Terwilliger Center to be based in Washington, D.C. Its staff members will work with ULI district councils, housing-related organizations, and various public- and private-sector representatives in several urban areas to create models of mixed-income workforce housing design, development and financing that can be applied to other cities. Initially, the center will focus on three markets - Atlanta, Washington, D.C., and Southeast Florida. In each, the center will develop a plan to increase the production of mixed-income housing over a specified time period; to expand available project financing where necessary; and to support developers in completing projects. The goal is to produce at least 3,500 units of new workforce housing in the three markets within five years.

As part of its overall program of work, the center will identify barriers to workforce housing production (such as inflexible zoning and building codes) and work to eliminate those barriers by raising awareness of the affordability gap and by advocating changes in public policy.  Hudnut noted that the center will advocate greater use of inclusionary zoning, which offers development incentives such as density bonuses in exchange for the provision of a certain percentage of below-market rate units. "Inclusionary zoning is one of the best tools to get housing built that people can afford, and it does this in a mixed-income housing context," Hudnut said. "Mixed-income is the only effective way to build affordable housing. Housing that is segregated by income is not conducive to a diverse, thriving community. A truly sustainable community is one that provides housing choices. "

To educate the public and help change public policy, the center will partner with local, regional and national organizations, including chambers of commerce, employer organizations, home builder organizations and housing advocacy groups. The center will publish best practices, organize conferences and provide competitions to recognize individuals and companies demonstrating excellence in the area of mixed-income housing production.

The workforce housing provided through the center will be oriented toward people typically making between 60 percent and 120 percent of the median income for the targeted market, and it will be mixed with housing offered at market rates. Those income boundaries will be kept flexible, however, to reflect variations of salaries and housing costs in individual markets. An emphasis will be placed on designing and building housing in ways that encourage long-term affordability.

....................................................................................

Eminent Domain: A Hot Topic

Eminent domain has become the nation's most legislated and emotionally inflamed property rights issue with 30 of the nation's state legislatures passing new eminent domain laws in the last year and more legislation on the way.

Voters in nine states approved some form of eminent domain legislation in November elections. Most of the new laws are designed to prevent eminent domain acquisitions that improperly deliver properties to private developers via the use of condemnation proceedings.

But the nation's most seasoned eminent domain company, Lewis Realty Advisors, says these new laws won't come into play very often. "I would not say all of these state legislators were wasting their time. But if you take a balanced look at the thousands of eminent domain cases that have occurred over the years, this power to take land has not been abused very often," said David Lewis, founder of Houston-based Lewis Realty Advisors.

Lewis, who founded his appraisal and consulting firm in 1961, has handled thousands of eminent domain cases. "Of course, governmental agencies make mistakes. But for the most part, the thousands of eminent domain cases that I have been associated with have been based on reasonable circumstances," Lewis said. "It's rare that this power is misused."

Eminent domain has been a hot topic nationally over the last year. In June 2005, the U.S. Supreme Court issued a ruling in the Kelo v. City of New London case giving governments the authority to condemn private property for development by private, for-profit investors. The City of New London, Conn. is taking waterfront property for a mixed-use development.

"The Supreme Court ruling in the New London eminent domain case was alarming to Americans," Lewis said. "Since the beginning of time, people have had strong feelings about their homes, farms and properties. It's part of who we are."

Given the fact that Americans care so much about their property, it is not surprising that so many states have taken action on eminent domain, Lewis said. Commercial property appraisals and negotiation in eminent domain cases is one of the specialties of Lewis Realty Advisors.

The company represents both private property owners and governmental agencies.

Hines Announces Second Office Building in Phoenix

The Phoenix office of Hines plans to develop a second office building at 24th At Camelback. The 11 story building, which is being developed jointly by Hines and a major U.S. pension fund represented by Morgan Stanley Real Estate, will be 300,000 square feet.

24th At Camelback is a mixed-use project located at the southwest corner of 24th Street and Camelback Road in Phoenix’s Biltmore area. The 10-acre site, has been planned to complement provide tenants with  views of Piestewa Peak and Camelback Mountain.

"We think that this new building will be a terrific addition to Phoenix as well as the Biltmore community," said Hines Senior Vice President Clayton Elliott.

The new building will include ground-floor retail space and a 1,040-space parking structure as well as a garden with native plants and materials.

Hines completed in an eight-story, 300,000 square feet office building including ground floor retail space, and a 1,175 space parking structure in June of 2000.

Hines: 'Real Estate Industry Ready for Green'

Hines/CalPERS in Green JV

Hines, the international real estate firm, announced today the closing of the Hines CalPERS Green Development Fund (HCG), capitalized with more than $120 million of committed equity and with leverage will have the ability to invest up to $500 million. HCG will concentrate on developing high performance, sustainable office buildings certifiable through the Leadership in Energy and Environmental Design Core and Shell Program (LEED-CS). The fund will focus on developing office projects throughout the United States.

The fund has already deployed capital to take controlling interest its first project, Tower 333 in Bellevue, WA. Completion for this Hines-developed 20-story, 410,000-sf office project is expected in the fourth quarter of 2007.

Hines President Jeff Hines, said, “The formation of this fund represents several significant events. First, the largest pension fund in the nation has acknowledged the importance and economic viability of sustainable building, which is a monumental step for the industry. Second, it is notable that CalPERS has selected Hines to create the nation’s first ‘green’ fund, based on our experience in sustainable development as recognized by the USGBC and the EPA. Third, it represents the continuation of a long, successful joint venture relationship between Hines and CalPERS.”

Hines Senior Vice President and fund manager Dan Rashin, added, “We have long tried to persuade tenants that there are significant bottom-line benefits to sustainable development and build out. Fortunately, the green movement is gaining steam as the public become more conscious of its benefits. The real estate industry is finally ready for green.”

Hines and CalPERS share five other joint ventures, including chronologically: National Office Partners, LP; Hines CalPERS Mexico Holdings, LP; Hines CalPERS Brazil Interests, LP; Hines CalPERS Spain Interests, LP; and Hines CalPERS China Interests, LP.

"CalPERS couldn't be more pleased about this venture with Hines," said Russell Read, the pension fund's Chief Investment Officer. "First, we have great confidence in Hines, based on many years of investments that have given us substantial returns. Second, we are fully committed to developing sustainable, high performance office projects to reduce our reliance on diminishing natural resources. Investing in buildings that conserve these resources perfectly complements our search for alternative energy sources."

......................................................

Major Industrial Deal

in California

Bakersfield, Calif. - Titan Real Estate Investment Group, a
private real estate investment firm, in partnership with Urdang Capital
Management, has acquired a six-building, 524,051-sf, multi-tenant
industrial portfolio located in Bakersfield, California. The seller was
Panattoni Development Co.

The purchase price was $22.5 million. The warehouse buildings are located on East Brundage Lane and on District Boulevard and are currently 98% leased. 

According to Stephen Haupt, Senior Vice President of Industrial Properties for Colliers Tingey International, "With the purchase of this large portfolio, Titan has made a major play in this growing industrial market.

  
"We are very bullish on the Bakersfield market and Panattoni develops excellent buildings.  Combining this with the lack of available space and continued demand in Bakersfield, we believe this acquisition will perform well", said Kevin Kaseff, Managing Partner of Titan.

The seller was represented by Bill Palmer and Russ Arnold of The Palmer Team.  Steve Haupt of Colliers Tingey has been retained to do the leasing.

................................................................

Solid Fundamentals in

Nation's Commercial Realty

WASHINGTON – Healthy demand for space is driving commercial real estate markets with solid fundamentals and strong investment activity, according to the latest COMMERCIAL REAL ESTATE OUTLOOK of the National Association of Realtors®.

David Lereah, NAR’s chief economist, said fundamentals are improving with tightening vacancies. “Rent growth in commercial space is gaining traction, although there is some softness in part of the retail sector,” he said. “Commercial real estate remains a bright spot in the economy, but there are concerns over energy costs, rising interest rates and slower-than-expected job growth which could dampen future demand.”

Lereah said investment considerations remain positive. “With tightening vacancies and a slowdown in speculative construction, the office market will offer respectable returns for investors,” he said. “Strong international trade is supporting warehouse and distribution space, especially near port facilities. In addition, demand for rental apartments and hotel rooms is on the rise.”
The NAR forecast for five major commercial sectors includes analysis of quarterly data for various tracked metro areas. The sectors include the office, industrial, retail, multifamily and hospitality markets. Metro data were provided by Torto Wheaton Research and Real Capital Analytics.

Office Market

Rising oil prices and slower job growth have dampened expectations for the office market, but vacancy rates are still likely to drop to an average of 12.7 percent in the fourth quarter from 13.6 percent during the same period in 2005. Office rents are forecast to rise 4.4 percent this year.

Areas with the lowest office vacancies currently include Ventura County, Calif.; New York City; Orange County, Calif.; Fort Lauderdale, Fla.; Riverside, Calif.; and Washington, D.C., all with vacancy rates of 8.8 percent or less.

Net absorption of office space in 56 markets tracked, which includes the leasing of new space coming on the market as well as space in existing properties, should be 64.1 million square feet in 2006, down from 89.5 million last year. High construction costs are putting a lid on speculative development.

Large institutional investors and pension funds returned to the office market during the first quarter, more than doubling what they spent on office buildings in all of 2005; total investment in the first quarter was $20.5 billion.

Over the last year, the top markets for office investment were Manhattan, Chicago, Los Angeles, San Francisco, Northern Virginia and Washington, D.C.

Industrial Market

Industrial vacancy rates are forecast to decline to an average of 9.5 percent during the second half of the year from 9.9 percent in the final quarter of 2005, with new construction increasing along with space absorption. Trade with China continues to fuel demand for warehouse and distribution space. Although market fundamentals appear to be healthy, industrial rents are likely to increase only 1.9 percent in 2006.

The areas with the lowest industrial vacancies are West Palm Beach, Fla.; Los Angeles; Fort Lauderdale; Las Vegas; Miami; and Orange County, Calif., all with vacancy rates of 5.4 percent or less.

Net absorption of industrial space in 54 markets tracked is expected to be 211.0 million square feet this year, down from 290.5 million in 2005. Most of the demand is coming from users and tenants involved with the distribution of goods, but rising industrial production could bolster demand for manufacturing space, which has been lagging in recent years.

Private investment also is occurring in the industrial sector, with transactions totaling $10.5 billion in the first quarter. The top industrial investment markets are Los Angeles; Chicago; Dallas; San Diego; San Jose, Calif.; and Northern New Jersey. Some older properties in urban areas are being converted to other commercial uses.

Retail Market

With absorption matching new supply, retail vacancy rates are projected to be fairly stable for the balance of the year, at an average of 7.6 percent in the fourth quarter, but higher than the 7.2 percent recorded in the fourth quarter of 2005.
Higher energy costs and slowing home price appreciation will hold back consumer spending, impacting the retail sector. Overbuilding and fallout from mergers and acquisitions have impacted certain markets, including regional shopping centers. Average rent is seen to grow 0.7 percent in 2006.

Retail markets with the lowest vacancies include Las Vegas; Miami; Orange County, Calif.; San Francisco; San Jose; and San Diego, all with vacancies of 3.9 percent or less.

Net absorption of retail space in 54 tracked markets should be 14.1 million square feet in 2006, down from 30.2 million last year.
Investment in retail space is cooling with just $7.4 billion spent in the first quarter, dominated by private investors; strip centers accounted for almost three-fourths of retail investment activity. The top markets for retail investment include Los Angeles, Chicago, Houston, Dallas, Phoenix, and Northern Virginia.

Multifamily Market

The apartment rental market – multifamily housing – is expecting vacancy rates in the fourth quarter to average 5.7 percent compared with 6.2 percent during the same period in 2005. Average rent is forecast to rise 4.1 percent this year compared with 2.9 percent in 2005.

Conversion of apartments into condos is waning, but a slight softening in the housing market is boosting rental demand. Concerns about sustainable job growth and job security are playing a role by keeping some people in the rental marketplace.
Total investment in multifamily property was $24.0 billion during the first quarter, up 30 percent from the first quarter of 2005; seven out of ten transactions were garden-style apartment complexes. Condo converters accounted for less than 15 percent of transactions, taking a little over 30,000 units from the rental market.

The top markets for apartment investment over the last year were Manhattan, Phoenix, Los Angeles, Tampa, Orlando and Atlanta.

The areas with the lowest apartment vacancies currently include Fort Lauderdale, Northern New Jersey, Washington, West Palm Beach, Miami and Tampa, all with vacancy rates of 2.5 percent or less.

Multifamily net absorption is likely to be 256,500 units in 59 tracked metro areas this year, compared with 351,000 absorbed in 2005.

Hospitality Market

With rising construction activity, hotel occupancies are forecast at 63.4 percent in 2006 compared with 64.5 percent last year, and revenue per available room (RevPAR) is projected to grow to $72.37 in 2006, up 7.5 percent from $70.47 last year. An additional 17,500 hotel rooms should be added to the inventory in 52 markets tracked in 2006, up from only 5,600 last year.
Markets with the highest RevPAR include New York City, Washington, Honolulu, West Palm Beach, San Francisco and Miami, with RevPAR in excess of $103, in contrast with the national average of $80 expected for the first quarter, which is the highest ever.

Hospitality markets with the highest level of construction include Houston, Orlando, Fort Worth, Washington, Atlanta and San Diego. Overall transaction activity during the first quarter totaled 660 hotels with a combined value of $23 billion; 2006 is expected to be a record for the number of properties changing hands.

The COMMERCIAL REAL ESTATE OUTLOOK is published by the NAR Research Division for the Realtors® Commercial Alliance. The RCA, formed by NAR in 1999, serves the needs of the commercial market and the commercial constituency within NAR, including commercial members; commercial committees, subcommittees and forums; commercial real estate boards and structures; and NAR affiliate organizations. These organizations include the CCIM Institute, the Institute of Real Estate Management, the Realtors® Land Institute, the Society of Industrial and Office Realtors®, and the Counselors of Real Estate.
..................................................

• Hines Buys Chicago Tower   click here

• Commercial Real Estate Draws Big Investment                  Dollars    click here

• Book Review of House Poor by June Fletcher   click here

• Orbitz leases in Chicago      click here

• Wastin' Away Again in Martha-Stewartville  click here

• Hines To Build Flordia Tower   click here
• Multi-Fam sold for $73,000 per unit   click here
• Hines Lands Tenant for 60-story Tower   click here
• Perseus Realty Investment Group Launched   click here

• TIC Buyer Pays Big Price For Memphis Office    click here

• Beame Designs Miami Project     click hereWeingarten Updates Buying and Selling    click here
• California Buildings Sold    click here

• Mayor Rudy Giuliani of NY Appealing to Building

  Owners     click here

• Crescent & Hines Developing Office In Orange County California      click here

• Commercial Real Estate Outlook:National Picture Bright

  for Next Two Years    click here

........................................................................

Hines Buys Chicago Tower

          CHICAGO — The Chicago office of Hines, the international real estate firm, announced today that a subsidiary of Hines-Sumisei U.S. Core Office Fund, L.P. (Core Fund) has acquired an approximate 80 percent interest in 333 West Wacker in Chicago from Kan Am Grund Kapitalanlagegesellschaft MbH, a German investment firm advised by Westwind Capital Partners (“KanAm-Westwind”).  The remaining 20 percent interest was acquired by institutional investors advised by General Motors Investment Management Corporation.  Hines will manage and lease the property.

            The Core Fund is an investment vehicle organized by Hines and Sumitomo Life Realty (N.Y.), Inc., to acquire a geographically diverse portfolio of core office buildings in the U.S.  The fund also has an interest in 101 Second Street and the KPMG Building in San Francisco; Golden Eagle Plaza in San Diego; 600 Lexington, 499 Park Avenue and 425 Lexington in New York; One and Two Shell Plazas in Houston; 1200 19th Street NW in Washington, D.C., Three First National Plaza in Chicago, and 720 Olive Way in Seattle.

           333 West Wacker is a 36-story office building containing 867,821 sf located in Chicago’s West Loop submarket in the city’s central business district. The building is located on a bend in the Chicago River and is surrounded by an array of amenities. Designed by Kohn Pedersen Fox Associates, the building was completed in 1983 and includes a four-level subterranean garage. 333 West Wacker is approximately 95 percent leased to tenants including: Skadden, Arps, Slate, Meagher & Flom, LLC; Nuveen Investments, Inc.; and Barack Ferrazzano Kirschbaum Perlman & Nagelberg LLP.

              "We are very pleased to have the opportunity to purchase a property with a superior location, timeless architecture, and a quality roster of tenants in a growing city like Chicago," said Hines Senior Vice President Tom Danilek.

              “This represents a unique opportunity for the Core Fund to acquire a perfectly located landmark asset in Chicago. We believe the attributes of 333 West Wacker position it to benefit from a growing demand in the market for view space and improving real estate fundamentals in the Chicago CBD,” said Charles Hazen, president of the Core Fund.

          KanAm-Westwind was represented in the sale by Eastdil Secured, LLC. Hines represented the Core Fund.

        Sumitomo Life Realty (N.Y.), Inc. is a wholly owned subsidiary of Sumitomo Life Insurance Company, one of Japan’s largest life insurance companies.

.........................................................................

Commercial Real Estate

Draws Big Investment Dollars

Investment in commercial real estate rose 44 percent in 2005 to a record $268 billion, (not counting transactions valued at less than $5 million), according to a study released by National Association of Realtors. Office: Nearly $100 billion of investment grade office buildings traded hands in 2005. The top suburban office markets for investment are Los Angeles; Northern Virginia; Orange County, Calif.; Dallas; and Northern New Jersey. Industrial: Investment transaction volume increased 65 percent in the industrial sector to $34.5 billion in 2005. The top industrial investment markets are Chicago, Los Angeles, Atlanta, Dallas and Seattle. Retail: Investment in retail space increased 16 percent to $46.4 billion in 2005, with strip centers accounting for two-thirds of the total. The top markets for strip center investment include Los Angeles, Phoenix, Houston, Chicago and Atlanta. Multifamily: Total investment in multifamily property rose 72 percent in 2005 to $86.9 billion, with $29.4 billion spent by condo converters who took 191,400 units out of the active rental market. The top markets for garden apartment investment are Phoenix, Tampa, Orlando, Los Angeles and Atlanta.

.............................................

Book Review                                

By Ralph Bivins                                                 

House Poor: Pumped Up Prices, Rising Rates and Mortgages on Steroids: How to Survive the Coming Housing Crisis. (Collins: $21.95) By June Fletcher

When you read the title of June Fletcher’s House Poor, you expect to see a futuristic scene  of real estate doom. I was looking for something like a cross between the tech-stock crash and the post-nuclear world of The Terminator.

Fletcher’s book does list some scary facts about the housing market. Somebody paid $250,000 over the asking price of $1.35 million for a two-bedroom apartment. And she notes the median price of a home in Orange County , Calif. recently hit $610,000.

But the book fails to really make the case that disaster is pending. Fletcher indicates that “fly-over” country in the middle of America will be spared from the crash, while the coasts might see troubled times.

Fletcher quotes a negative source, Dean Baker, co-director of the Center for Economic and Policy Research in Washington , DC . But she also quotes a more moderate economist, David Stiff of Cambridge , Mass. , who predicts a moderate flattening of the market, not a bubble bursting.

Fletcher goes on to note that overheated spots like Las Vegas , San Diego and Boston , are most vulnerable.

However, it seems like the “housing crisis” that is trumped up on the book’s cover, just doesn’t really match the writer’s manuscript.

From the negative beginning, the book shifts into more useful material, advice for the investors and help for homeowners. She covers broad ground ranging from investing in foreign real estate to making wise home improvements.

Fletcher also takes a side trip into economic statistics and terminology, offering the definition of gross domestic product, for example. There is informative material about various types of financing.

Fletcher knows her stuff and she packs a lot of valuable information into readable, compact paragraphs. This book is not a boring read and you can consume it without straining.

The reader is also given some useful reminders about finding good niches for real estate investment – REITs, land and commercial property. She also mentions investing in boat slips, a new concept for me. But there are 14 million boats in the nation and finding a place to dock a boat is not getting any easier.

Fletcher is a good reporter and it shows in this book. Her anecdotes are excellent and her writing is top-notch. You will find the book to be informative and useful. But I remain doubtful that a “housing crisis” is coming.

..............................................

Orbitz leases

in Chicago

Transwestern Commercial Services, one of the largest commercial real estate firms in the U.S., represented Cendant’s TDS’ Consumer Travel Americas Unit, including the U.S. based Orbitz.com, CheapTickets.com and Lodging.com brands, in its relocation of its global operations to 145,000 sf at Citigroup Center, 500 West Madison Street.

Currently located on seven noncontiguous floors served by two different elevator banks at 200 South Wacker, Orbitz, and other subsidiaries of Cendant Travel Distribution Network, will occupy the eighth, ninth and tenth floors at Citigroup Center. The office space will help accommodate and better organize the rapid growth of the Orbitz organization which, since its acquisition by Cendant TDS in November 2004, increased its Chicago-based employees from 400 to 800 personnel.

...................................................................

Wastin' Away Again

in Martha-Stewartville

Some People Claim

There's a Woman to Blame

KB Home and Martha Stewart Living Omnimedia have begun collaboration on the design of new homes, bringing together the high-quality and innovative architectural designs of one
of the country’s leading homebuilders with the inspiration of the leading provider of ideas and products for both inside and outside the home.

The first community designed by KB Home and Martha Stewart Living Omnimedia (MSLO) – to be called KB Home Twin Lakes: Homes Created with Martha Stewart – will feature approximately 650 homes in the Town of Cary, N.C. The community will include single-family homes, ranging from 1,500 to 4,100 sf and priced from the low $200s to the mid $400s, inspired by Martha
Stewart’s own homes in New York and Maine. Martha Stewart’s influence will be evident in many aspects of the homes, including the floor plans, exterior design, interior floor plans and furnishings.
Homebuyers will have the added advantage of choosing Martha Stewart’s favorites among the flooring, faucets, light fixtures, cabinetry, countertops, and other items available at the KB Home
Studio in Raleigh, N.C.

“After years of designing high-quality and stylish products for the home, it is the right time for MSLO to turn to the architecture and design of the home itself,” said Susan Lyne, President and CEO of
Martha Stewart Living Omnimedia. “KB Home, an industry leader in home building, is the ideal company to work with in this endeavor.

"Martha’s homes are warm, functional, and full of innovative
details that inspire our product design. The model homes at Twin Lakes will provide the opportunity for a broad base of consumers to see those home products in a total environment for the first time.”
Stated Martha Stewart, MSLO Founder: “I’m delighted to team with KB Home to create beautiful and functional homes that are filled with the design, colors, and high-quality materials that have
been the inspiration for my homes over the years. Each room in the home will be carefully constructed and handsomely appointed. We look forward to presenting them to communities across
the country.”

Model homes are scheduled to be completed in early 2006. At that time, prospective buyers will be able to view the model homes and select their favorite home site, floor plan and design studio
options. Although the homes will not come furnished, the models will be dressed and decorated with Martha Stewart Living Omnimedia products. Earlier this year, the Town of Cary, N.C. topped Money magazine’s rankings of the “most desirable
places to live in the eastern United States.” This beautiful town has 14 major universities within an
hour’s drive and North Carolina’s famed Research Triangle Park, whose tenants include Cisco,
Ericsson, IBM and Nortel.
.........................................................

Hines To Build Fla. Tower

Hines, the international real estate firm, along with South Shore Group Partners, is proceeding with plans to develop Northeast Florida’s tallest residential tower and the tallest building in the Southbank area of downtown Jacksonville .

The St. John will contain 261 condominium units within 43 stories and will rise 478 feet with the building’s west facade twelve feet from the edge of the river.

Hines’ Senior Vice President Michael Harrison said, “We are seeing a sustained trend towards urban living in all major U.S. cities, including Jacksonville , Miami , Orlando and Tampa . Empty nesters and younger professionals in particular are looking for a change in lifestyle and are moving back into downtowns where cultural and entertainment activities are plentiful.”

Designed by the world-renowned architecture firm Arquitectonica, all units will have floor-to-ceiling, tinted-glass exterior walls and clear-glass balcony railings that will frame spectacular views of the length of the St. Johns River as it winds its way through Downtown.

Preliminary plans call for one to three bedroom units ranging from 1,080 to 2,800 sf and 15 penthouses up to 3,750 sf. . The developers currently expect to offer pre-construction pricing from $380,000 to $1.3 million, excluding the penthouses.

..................................................................

Multi-Fam sold for $73,000 per unit

PHOENIX - Transwestern Commercial Services, one of the largest privately held, full-service commercial real estate firms in the U.S. , today announced the sale of the Villa Vallejo Apartments in Phoenix , Ariz.. The vintage property, built in the 1970’s, is located next to the Piestewa Peak Mountain Preserve, Biltmore Fashion Park and Resort, and one mile from 24 th Street and Camelback, Phoenix’s largest business district. G.M. Realty purchased the property for $5.25 million or $73,000 per two bedroom/one bath unit. Transwestern vice president of multi-family investment sales, Bobby Bull, exclusively represented the seller, Villa Vallejo and managing member Norman Roberts, and the buyer G.M. Realty.

................................................................

Hines Lands Tenant for 60-story Tower

CHICAGO – The Chicago office of Hines, the international real estate firm, announced today that the international law firm of Kirkland & Ellis LLP has signed a 600,000-sf lease, and will serve as the anchor tenant for 300 North LaSalle, a new downtown office tower to be developed by Hines. Located on the north bank of the Chicago River , the 60-story, 1.3-million-sf tower will break ground in Spring 2006. Upon project completion in early 2009, Kirkland & Ellis will relocate its 1,400 Chicago office employees to 300 North LaSalle from 200 E. Randolph Drive , where they have officed since 1973.

“We are fortunate to have partnered with a renowned developer on one of the last great development sites on the River, and are genuinely excited to provide a truly world-class new home for Kirkland lawyers and staff, one that will provide an environment in which the needs of our clients and people will be very well served,” said Stephen G. Tomlinson, a partner at Kirkland.

The firm will occupy 24 floors in the low-rise and mid-rise sections of the building leaving more than 400,000 square feet of high-rise space for speculative leasing.

“Since the vacancy rate for high-rise space is about two percent, we feel confident that we can attract other premier users to the building,” said Hines Vice President John McDermott.

Designed by the internationally recognized architectural firm Pickard Chilton, 300 North LaSalle will continue the extraordinary tradition of Chicago architecture. The tower will rise to 775 feet, making it one of the city’s tallest buildings.

...................................................................................................

............................................................................

TIC Buyer Pays Big Price

For Memphis Office

Transwestern Commercial Services recently brokered the sale of Renaissance Center in Memphis, Tenn. Located in the East Memphis Poplar corridor, the eight-story, 189,644 sf office property was 84% occupied at the time of the sale which included an attached, three-story parking deck. Developed in 2000 by Memphis-based The Weston Cos., the tower is primarily occupied by a mix of professional services firms.

Weston sold the property to DBSI Discovery Real Estate Services (DDRS), a full-service real estate investment company based in Boise , Idaho . A prominent Tenancy-In-Common (TIC) buyer, DDRS, acquired the property for $27,100,000 or $143 psf. Transwestern’s Jon Kleinberg and Kevin Markwordt represented The Weston Co.in the transaction.

Investor interest in the property was significant. According to Kleinberg, “Properties of this quality in any market are extremely attractive to investors and Renaissance Center is a real jewel in the Memphis market. Weston is a high-quality developer and they’ve been involved in all aspects of the property since its delivery which ensured that its value was not only sustained but heightened by the execution of a strategic lease-up program and an intensive property management program. Achieving a sale price of $143 psf is really a testament to their successful formula.”

 ...................................

Beame Designs Miami Project

Coral Gables, FL - Beame Architectural Partnership (BAP) has been commissioned to design the renovation of Miracle Market Place.  Located on Miracle Way in Miami, Florida the project is being developed by Talisman Companies, LLC of Miami, Florida, and involves the renovation of an existing vacated multi-level shopping center with over 900 parking spaces at the upper four
floors. David Herbert AIA is the design architect for Miracle Market Place; Richard Vanderburg AIA is the project manager.

A complete interior and exterior remodel will include a new helical ramp to access the parking levels and the lower four floors, which will be converted to a 263,000 sf, three-level, "big-box" retail shopping center. The project is an important component of the revitalization of the Coral Way corridor, the link between downtown Miami and Coral Gables, where significant residential construction is underway.

Included in the project will be a relocated, two-level 42,000 sf
Bally's Health Club, Bed Bath & Beyond, PetsMart, Office Max, DSW, Ulta Salon and Cosmetics, as well as other big box and restaurant tenants. Construction is expected to begin this fall and should be complete by the end of 2006.

Beame Architectural Partnership (BAP) is an architecture and planning firm whose corporate history dates back to 1935.

...........................................................

Weingarten Updates Buying and Selling

Weingarten Realty Investors announced that it has purchased five shopping centers adding 307,800 sf to the portfolio representing a total investment of $53.5 million. The Company also sold five shopping centers for a total of $71.1 million resulting in gains of over $36.8 million.

           The acquisitions include Lake Washington Crossing, purchased in May, located at the northwest corner of Wickham Road and Lake Washington Road in Melbourne, Florida, approximately 60 miles southeast of Orlando. The center is 118,800 sf and is currently 94.8% leased.
        Weingarten acquired Marshall's Plaza, a 78,800 sf shopping center located at the southeast corner of McHenry and Sylvan Avenues, in the city of Modesto, California, and is anchored by Marshall's. This 100% leased shopping center represents Weingarten's 25th acquisition in California.
       Weingarten also purchased a package of three properties in North Carolina.

        The company has also announced the disposition of five shopping centers in Texas; Bingle Shopping Center, Cypress Village Shopping Center and Williams Trace Shopping Center all located in the Houston area, McDermott Commons Shopping Center and Murphy Crossing are both located in the Dallas market. The sale of these properties aggregated 435,900 square feet and generated proceeds of $71.1 million, resulting in gains of $36.8 million.
        According to Drew Alexander, President and Chief Executive Officer of Weingarten, "We are pleased with both our success in finding quality acquisitions in such a competitive environment as well as our accelerated disposition program. Thus far in 2005 we have purchased eleven properties with a total investment of $232 million. Additionally, our disposition process is critical to improving the internal growth of our existing portfolio. Including the recent sale of the five properties mentioned above, we have sold over $141 million of non-core properties, thereby improving the growth potential of our existing portfolio. Year-to-date these sales have produced gains of approximately $63 million."
        Weingarten Realty Investors is a Houston, Texas based real estate investment trust with 352 income producing and new development properties in 20 states that span from coast to coast predominantly in the southern half of the United States. Included in the portfolio are 289 neighborhood and community shopping centers and 59 industrial properties aggregating 46.7 million sf.
.........................................................

Calif. Buildings Sold

A joint venture partnership of Sterling American Property. and Hines bought four San Francisco Bay Area office properties from Equity Office for $329 million.

The four properties, which contain six buildings are:

· 301 Howard Street, a 23-story, Class A office building located in the South Financial District and built in 1988. The 307,396-sf property is approximately 70% occupied.

· Foundry Square II, a 10-story, Class A office building located at 405 Howard Street in the South Financial District and built in 2002. The 502,424-sf property is approximately 59% occupied.

· Parkside Towers, a 398,460-sf office complex with two, 5-story buildings located at 1001-1051 East Hillside Boulevard in the Peninsula community of Foster City. Completed in 2001, the complex is 16% occupied.

· San Rafael Corporate Center, a 155,318-sf Class A office complex with two, 3-story buildings and 4.37 acres of land for potential development of an additional 230,000 square feet is located at 750 Lindaro and 781 Lincoln Avenues in the Marin County community of San Rafael. The property was completed in 2002 and is currently 38% occupied.
.................................................

Mayor Rudy Giuliani of NY

Appealing to Building Owners

By RALPH BIVINS

Washington, DC -- Former New York City Mayor Rudy Giuliani leading a group that provides building owners with protection from acts of bioterrorism, such as the release of anthrax.

"The threat of bioterrorism is a real one," Giuliani said at the recent National Association of Real Estate Editors annual conference in Washington. “The anthrax attacks were a shocking and difficult time for the country. It’s now possible to quickly restore buildings that were affected by bioterrorism attacks.”

Building owners reportedly have been slow to accept that insurance from terrorism is a necessary expense.

Even though a building owner may think that the chances of his building being targeted are small, ignoring the risk is not a wise option, Giuliani said. “We have to prepare relentlessly,” Giuliani said.

Giuliani Partners and Sabre Technical Services together formed Bio One Solutions, an Albany, N.Y.-based group that specializes in decontamination technologies based on treatment with chlorine dioxide gases. Bio One has formed an alliance with the AIG Environmental insurance firm to provide insurance coverage for environmental clean-ups from acts of biochemical terrorism.

The new program is designed to give building owners protection from contamination arising the release of anthrax and other biological agents. The insurance policies can guarantee that a targeted office building can reopen within less than 90 days after a biological on microbial attack.

The insurance also covers bodily injury, legal defense and the possibilities that the biological contamination could spread to other buildings, said Joseph Boren, president of AIG Environmental.

Bio One recommends that building owners store architectural plans and engineering documents off-site. Those documents can be damaged or contaminated, causing long delays in starting to clean-up the property.

...........................................................

Crescent & Hines Developing Office

In Orange County Calif.

Crescent has committed to co-develop a 260,000 sf office property with Hines Interests in Orange County, Calif. Crescent and Hines recently acquired a land parcel in the John Wayne submarket of Orange County, the same submarket as Crescent's Dupont Centre. The building will be constructed on that site. The structure is such that Crescent holds a 40% interest in the project. Upon completion of the project, Crescent expects to have invested approximately $9 million in equity. The development project is anticipated to break ground in the first quarter of 2006, with delivery scheduled for mid-2007. "We selected Hines as a co-developer based on its reputation and development experience on the West Coast," John C. Goff, Vice Chairman and CEO of Crescent, commented. "Orange County, particularly the John Wayne submarket, continues to be attractive to us due to the anticipated employment growth and demand for high-end office space. That, coupled with the fact that this site is one of the best in the area, makes this a good investment for us."
.................................................................

Commercial Real Estate Outlook:

National Picture Bright

for Next Two Years

WASHINGTON – The four major sectors of the commercial real estate market – office, retail, industrial and multifamily –can expect improvement over the next two years, according to a forecast presented at a commercial real estate forum at the National Association of Realtors® Midyear Legislative Meetings & Trade Expo.

David Lereah, NAR’s chief economist, said there are pluses and minuses affecting the projection for the uptrend in the commercial market. “Corporate profits are strong, but business spending has been hesitant of late,” he said. “On the other hand, jobs have been growing since the beginning of 2004.”

Lereah said some uncertainties could potentially impact commercial sectors. “The U.S. federal budget deficit poses a risk for the economy, as does the trade deficit and performance of the dollar,” he said. Other concerns include high oil prices and the possibility of inflation.

On balance, Lereah said the fundamentals for all of the commercial real estate sectors are improving. “We’ve seen a strengthening in the job market, capital has been flowing into commercial real estate at record levels, the modest rise in interest rates is not impacting long-term investment, and there’s been a healthy restocking of business inventories.”

So far this year, investment in office buildings has increased 30 percent over 2004. Ports and major distribution centers are leading the industrial sector. Commercial lending is up while delinquencies are down, and construction levels have stabilized.
Office vacancy rates have been falling with a slowdown in new supply. This sector has benefited greatly from the growth in jobs, and rents are gaining traction. “There’s strong investor interest in the office market, both for real estate investment trusts (REITs) and foreign investors – the strongest investment areas are in the West and Northeast,” Lereah said.

Vacancy rates in the office sector should average 14.1 percent this year, and 13.2 percent in 2006. Office rents are forecast to grow 2.3 percent in 2005, and 3.4 percent next year.

Net absorption of office space, which includes leasing of new space coming on the market as well as space in existing properties, is projected at 61 million square feet in 2005, and 56 million next year.

In the industrial sector, performance is divided by age and location; some markets have high vacancy rates as a result of obsolescence. “Rents are struggling in some areas but rising in others, such as in Southern California, while port markets – both traditional and inland – are showing the strongest performance,” Lereah said. Overall, the pace of restocking is barely keeping up with shipments.

Industrial vacancy rates are expected to average 10.3 percent in 2005 and 9.8 percent next year. Industrial rents should rise 0.7 percent this year and 1.8 percent in 2006. Net absorption of industrial space is forecast at 133 million square feet this year, and 153 million in 2006.

In the retail sector, merger activity is continuing while there’s been a growth in retailers targeting the youth market. Rent gains are strong, as consumer spending growth is holding steady. Most new construction is in strip malls and power centers. “REITS also have been very active in the retail market, which offers the best long-term investment return,” Lereah said.

The average retail vacancy rate is projected to average 6.3 percent this year and about the same during 2006; rent growth is forecast at 4.4 percent in 2005 and 4.0 percent next year. Net absorption of retail space is estimated at 34 million square feet in 2005, and 29 million next year.

The apartment rental market – multifamily housing – can expect a higher number of renters as modestly rising mortgage interest rates cause a slight slowdown in home sales over the next year, and job growth fuels demand and helps to support higher rents. “New construction is focused in markets that can support additional supply, while conversion to condos has surfaced as a big trend in areas such as Miami, Northern Virginia and San Diego,” Lereah said.

The apartment vacancy rate is expected to average 6.2 percent in 2005 and 5.2 percent in 2006. Average rent is forecast to rise 2.5 percent this year and 3.0 percent in 2006. Multifamily net absorption is projected at 237,000 units in 57 metro areas tracked in 2005, and 262,000 next year.
..................................................