This is a company blog used by the New Jersey Jones Lang LaSalle Team to keep track of current events within the real estate sector. All items posted on this website are originally written by other authors from various sources. This is simply used as a searchable tracking system for news we found relevant to our business.
The New York City Opera announced today that it would not proceed with a project that would have relocated the opera company to a new theater at the base of a residential tower to be built at 150 Amsterdam Ave., the former site of the American Red Cross Building. The opera had been in talks with the site's developer, A & R Kalimian Realty, to build a 1,800-seat theater at the base of a new rental building. In a joint statement, both parties said an agreement could not be reached on a number of legal, financial and design issues.
City Opera has been searching for a way to have its own home for a long time. It currently shares the New York State Theater at Lincoln Center with the New York City Ballet, and has complained that the theater is not ideal for opera. The opera was a strong contender to build a home at Ground Zero, but lost out to The Joyce Theater, which presents dance, and the Signature Theater Company. A spokeswoman for City Opera says the company will keep looking.
posted by Jones Lang LaSalle NJ News Blog at 10:38 AM
BioMed Realty, Human Genome In $425 Mln Sale/leaseback Deal - Update Wednesday, May 03, 2006; Posted: 01:51 AM
(RTTNews) - Tuesday evening, BioMed Realty Trust, Inc. (BMR) said it agreed to acquire the Maryland-based manufacturing, headquarters and laboratory facilities of Human Genome Sciences (HGSI) for about $425 million. The purchase price excludes estimated closing costs. HGS would lease back the buildings from BioMed.
The acquired portfolio based in Maryland spans about 925,000 rentable square feet of existing laboratory, office and manufacturing space, as well as an undeveloped 500,000 rentable square feet of additional land. BioMed expects the initial capitalization rate for the acquired portfolio to exceed 9%.
HGS would enter into 20-year leases for the two facilities, with options to renew the lease and the right to repurchase the properties under certain circumstances.
The transactions are expected to add about 380 million in net additional cash available for HGS operations. This amount includes $220 million in new cash and $160 million in cash that would be freed up by eliminating the cash restriction associated with the previous lease for the headquarters facility.
The deal is slated for close in the second quarter, subject to customary closing conditions. BioMed also said it closed the buy of its eleventh property in the Boston market for about $13.2 million.
BMR closed Tuesday's regular trade at $26.85, down 35 cents, while HGSI closed down 3 cents at $10.96. In the extended session, HGSI was seen trading 25 cents or 2.28% higher.
Copyright(c) 2006 RealTimeTraders.com, Inc. All Rights Reserved
posted by Jones Lang LaSalle NJ News Blog at 10:37 AM
Healthcare Property Investors, a real estate investment trust, purchased CNL Retirement Properties in a blockbuster deal valued at $3.6 billion. The Wall Street Journal reports that the deal creates an "industry behemoth" controlling the nation's largest portfolio of medical real estate, including healthcare facilities, nursing homes and medical office buildings. The reasoning behind the deal? While some of the interest is no doubt due to the popularity of medical real estate, it's more about the attractiveness of long-term housing for seniors, a sector analysts are convinced will heat up as baby boomers enter their golden years.
posted by Jones Lang LaSalle NJ News Blog at 10:36 AM
Mack-Cali Realty Corporation Announces First Quarter Results CRANFORD, N.J.--(BUSINESS WIRE)--May 4, 2006--Mack-Cali Realty Corporation (NYSE:CLI) today reported its results for the first quarter 2006.
Highlights of the quarter included:
-- Reported net income per diluted share of $0.52; -- Reported funds from operations per diluted share of $1.05; -- Earned $16 million from investment and sale of marketable securities; -- Acquired a seven-building office complex in Maryland for $162 million; -- Signed definitive agreements for the Gale transactions; and -- Declared $0.63 per share quarterly common stock dividend.
FINANCIAL HIGHLIGHTS
Net income available to common shareholders for the first quarter 2006 equaled $32.6 million, or $0.52 per share, versus $22.4 million, or $0.36 per share, for the same quarter last year. Funds from operations (FFO) available to common shareholders for the quarter ended March 31, 2006 amounted to $80.8 million, or $1.05 per share, versus $67.1 million, or $0.89 per share, for the quarter ended March 31, 2005.
Included in net income and FFO for the 2006 period was $16.0 million ($13.0 million, after deduction for minority interest) resulting from the investment and sale of marketable securities available for sale during the period, which represents $0.21 per share in net income and FFO per share.
Total revenues for the first quarter 2006 increased 7.4 percent to $163.5 million as compared to $152.3 million for the same quarter last year.
All per share amounts presented above are on a diluted basis.
The Company had 62,230,447 shares of common stock, 10,000 shares of 8 percent Series C cumulative redeemable perpetual preferred stock ($25,000 liquidation value per share), and 15,558,056 common operating partnership units outstanding as of March 31, 2006.
The Company had a total of 77,788,503 common shares/common units outstanding at March 31, 2006.
As of March 31, 2006, the Company had total indebtedness of approximately $2.1 billion, with a weighted average annual interest rate of 6.10 percent. The Company had a total market capitalization of $5.9 billion and a debt-to-undepreciated assets ratio of 41.6 percent at March 31, 2006. The Company had an interest coverage ratio of 3.6 times for the quarter ended March 31, 2006.
Mitchell E. Hersh, president and chief executive officer, commented, "During the quarter we continued to strengthen our position in the Northeast through strategic acquisitions and build-to-suit development." He continued, "We look forward to completing our pending acquisition of The Gale Real Estate Services Company and interests in 20 New Jersey office properties, and to pursue revenue growth through new business platforms."
The following is a summary of the Company's recent activity:
ACQUISITIONS
In March, the Company completed its acquisition of all the interests in Capital Office Park, a seven-building class A office complex totaling approximately 842,300 square feet in Greenbelt, Maryland, for approximately $161.7 million. In addition to the assumption of approximately $63.2 million of mortgage debt, the Company issued 1,942,334 common operating partnership units in Mack-Cali Realty, L.P. valued at $87.2 million, and paid the balance in cash. The agreement also provides the Company the option to acquire approximately 43 acres of adjacent land sites to accommodate the development of up to 600,000 square feet of office space for $13 million. Capital Office Park is 83.9 percent leased to 88 tenants.
Also, in March, the Company signed definitive contracts for its previously announced agreements in principle to acquire The Gale Real Estate Services Company and interests in approximately 2.8 million square feet of office properties in New Jersey.
Pursuant to the contracts, the Company will:
-- Acquire The Gale Real Estate Services Company for $12 million in cash, $10 million in common operating partnership units, and up to an additional $18 million in cash based on an earn-out formula. The Company will also acquire from affiliates of The Gale Real Estate Company stakes in certain development/joint ventures with institutional investors on terms to be determined prior to closing;
-- Acquire substantially all the ownership interests in 13 class A office properties, valued at $378 million, and totaling 1.9 million square feet in Northern and Central New Jersey; and
-- Acquire approximately one-half of the ownership interests in seven class A office properties, valued at $127.5 million, and totaling approximately 900,000 square feet, also in Northern and Central New Jersey.
The transactions will be financed through a combination of the assumption of existing, and placement of new, mortgage debt, credit facility drawings, cash and the issuance of common operating partnership units.
DEVELOPMENT
In March, the Company entered into a joint venture agreement with The PRC Group to develop a 92,878 square-foot class A office building in Red Bank, New Jersey. The entire building has been pre-leased to Hovnanian Enterprises, Inc. for 10 years, and will be developed by the Company. Expected to be completed by the third quarter of 2007, the building includes 88,000 square feet of office space, 4,878 square feet of retail space, and a four-story parking garage. The property will be developed on a 3.4-acre land site located at 141 West Front Street in downtown Red Bank contributed to the joint venture by The PRC Group.
FINANCING ACTIVITY
In January, the Company's operating partnership, Mack-Cali Realty, L.P., sold $200 million of senior unsecured notes, comprised of $100 million of six-year notes and $100 million of 10-year notes. The six-year notes bear interest at 5.25 percent, are due January 15, 2012, and were priced to yield 5.48 percent. The 10-year notes are a re-opening of previously-issued $100 million, 5.80 percent notes due January 15, 2016, which were re-opened at 101.081 to yield 5.65 percent, plus accrued interest. Following the re-opening, the outstanding size of the 5.80 percent notes is $200 million. The proceeds from the issuance of both series of notes of approximately $200.8 million were applied to the repayment of outstanding borrowings under the Company's $600 million unsecured revolving credit facility.
DIVIDENDS
In March, the Company's Board of Directors declared a cash dividend of $0.63 per common share (indicating an annual rate of $2.52 per common share) for the first quarter 2006, which was paid on April 17, 2006 to shareholders of record as of April 5, 2006.
The Board also declared a cash dividend on its 8 percent Series C cumulative redeemable perpetual preferred stock ($25 liquidation value per depositary share, each representing 1/100th of a share of preferred stock) equal to $0.50 per depositary share for the period January 15, 2006 through April 14, 2006. The dividend was paid on April 17, 2006 to shareholders of record as of April 5, 2006.
LEASING INFORMATION
Mack-Cali's consolidated in-service portfolio was 90.4 percent leased at March 31, 2006, as compared to 91.0 percent at December 31, 2005.
For the quarter ended March 31, 2006, the Company executed 170 leases totaling 814,512 square feet, consisting of 663,919 square feet of office space and 150,593 square feet of office/flex space. Of these totals, 358,087 square feet were for new leases and 456,425 square feet were for lease renewals and other tenant retention transactions.
Highlights of the quarter's leasing transactions include:
IN NORTHERN NEW JERSEY:
-- Allstate Insurance Company signed a 34,142 square-foot transaction at 61 South Paramus Road in Paramus, New Jersey, representing a five-year expansion of 11,118 square feet and a four-year extension of 23,024 square feet. 61 South Paramus Road is a 269,191 square-foot office building which is 97.4 percent leased.
-- True Partners Consulting LLC, a tax and business advisory firm, signed a new 10-year lease for 13,236 square feet at 105 Eisenhower Parkway in Roseland, New Jersey. 105 Eisenhower Parkway is a 220,000 square-foot office building which is 80.7 percent leased.
-- Ameriprise Financial Services, Inc., a financial advisory firm, signed a new five year, six-month lease for 12,968 square feet at 5 Sylvan Way in Parsippany, New Jersey. 5 Sylvan Way is a 151,383 square-foot office building which is 98 percent leased.
-- Garban, LLC, a subsidiary of ICAP plc, expanded its presence at Harborside Financial Center Plaza 5 in Jersey City, New Jersey by 11,809 square feet for 11 years and seven months. The firm now leases 159,834 square feet at the 977,225 square-foot office building which is 97.6 percent leased.
-- PricewaterhouseCoopers, LLP, a global accounting firm, signed a new four year, six-month lease for 11,624 square feet at 101 Hudson Street in Jersey City, New Jersey. 101 Hudson is a 1.25 million square-foot office building which is 100 percent leased.
IN CENTRAL NEW JERSEY:
-- Lomurro, Davison, Eastman & Munoz, PA, a law firm, signed a four-year renewal of its lease for 19,023 square feet at 100 Willowbrook Road in Freehold, New Jersey. The 60,557 square-foot office building is located in the Monmouth Executive Center which is 74.8 percent leased. -- Allstate Insurance Company renewed 18,538 square feet at 65 Jackson Drive in Cranford, New Jersey for five years. 65 Jackson Drive is an 82,778 square-foot office building which is 100 percent leased.
-- Rutgers University signed a new seven-year, seven-month lease for 12,482 square feet at 500 College Road East in Plainsboro, New Jersey. 500 College Road East is a 158,235 square-foot office building which is 91.1 percent leased.
IN SUBURBAN PHILADELPHIA / SOUTHERN NEW JERSEY:
-- Allstate Insurance Company signed a 31,013 square-foot transaction at 224 Strawbridge Drive in Moorestown, New Jersey, representing a renewal of 25,497 square feet and expansion of 5,516 square feet. 224 Strawbridge Drive is a 74,000 square-foot office building which is 92.8 percent leased.
-- Quaker Chroma Imaging, a digital imaging and photographic services company, signed a new eight-year, three-month lease for 20,000 square feet at 225 Executive Drive in Moorestown, New Jersey. The 50,600 square-foot office/flex building is located in the Moorestown West Corporate Center which is 48.6 percent leased.
IN WESTCHESTER COUNTY, NEW YORK:
-- Progressive Casualty Insurance, a subsidiary of The Progressive Corporation, signed a transaction totaling 27,105 square feet at 1 Executive Boulevard in Yonkers, New York. In addition to a five-year expansion of 10,254 square feet, Progressive's existing lease of 16,851 square feet was extended for three years and eight months. 1 Executive Boulevard is a 112,000 square-foot office building located in the South Westchester Executive Park which is 100 percent leased.
-- Wachovia Bank, N.A. renewed its lease of 22,500 square feet at 50 Main Street in White Plains, New York for 10 years and five months. 50 Main Street is a 309,000 square-foot office building located at the Westchester Financial Center in downtown White Plains which is 100 percent leased.
-- Montefiore Medical Center renewed its lease for 19,000 square feet at 200 Corporate Boulevard South in Yonkers, New York for 10 years. 200 Corporate Boulevard South, also located in the South Westchester Executive Park, is an 84,000 square-foot office/flex building which is 99.8 percent leased.
IN OTHER MARKETS:
-- The State of Colorado signed a three-year renewal of its lease for 15,341 square feet at 400 South Colorado Boulevard in Denver, Colorado. The building is a 125,415 square-foot office building which is 87.9 percent leased.
Included in the Company's Supplemental Operating and Financial Data for the first quarter 2006 are schedules highlighting the leasing statistics for both the Company's consolidated and joint venture properties.
The supplemental information is available on Mack-Cali's website, as follows:
The Company expressed comfort with net income and FFO per diluted share for the second quarter and full year 2006, as follows:
Second Quarter Full Year 2006 Range 2006 Range ---------------------------------------------------------------------- Net income available to common shareholders $0.30 - $0.32 $1.40 - $1.56 Add: Real estate-related depreciation and amortization 0.53 2.12 Funds from operations available to common shareholders $0.83 - $0.85 $3.52 - $3.68
These estimates reflect management's view of current market conditions and certain assumptions with regard to rental rates, occupancy levels and other assumptions/projections. Actual results could differ from these estimates.
An earnings conference call with management is scheduled for today, May 4, 2006 at 11:00 a.m. Eastern Time, which will be broadcast live via the Internet at: http://www.corporate-ir.net/ireye/ir_site.zhtml?ticker=CLI&script=1010&item_id=1298806 (Due to its length, this URL may need to be copied/pasted into your Internet browser's address field. Remove the extra space if one exists.)
The live conference call is also accessible by calling (913) 981-4910 and requesting the Mack-Cali conference call.
The conference call will be rebroadcast on Mack-Cali's website at http://www.mack-cali.com beginning at 2:00 p.m. Eastern Time on May 4, 2006 through May 11, 2006.
A replay of the call will also be accessible during the same time period by calling (719) 457-0820 and using the pass code 7624128.
Copies of Mack-Cali's 2006 Form 10-Q and Supplemental Operating and Financial Data are available on Mack-Cali's website, as follows:
In addition, these items are available upon request from: Mack-Cali Investor Relations Dept. 11 Commerce Drive, Cranford, NJ 07016-3501 (908) 272-8000 ext. 2484
posted by Jones Lang LaSalle NJ News Blog at 9:35 AM
Hooper Holmes Names New CFO Brian Quinlan NJBIZ Staff 5/3/2006
Michael Shea has been named chief financial officer of Hooper Holmes, a Basking Ridge-based risk-assessment firm. Shea, 46, served as a corporate services executive in various management positions for the last 24 years. Before joining Hooper Holmes, Shea was CFO of Computer Horizons, a publicly traded IT company based in Mountain Lakes. Before that, Shea managed consolidations and corporate services for Booz-Allen & Hamilton. He began his career as a staff auditor for Ernst & Young.
posted by Jones Lang LaSalle NJ News Blog at 9:27 AM
Law Firms Get Green Light for Subsidiaries Mary P. Gallagher New Jersey Law Journal 05-02-2006
Law firms have just been handed a tool from the corporate playbook that marketing consultants predict will greatly enhance their ability to expand and tout their services.
Firms now have the go-ahead to form and own other law firms as subsidiaries, under an opinion issued jointly as Opinion 704 of the New Jersey Supreme Court Advisory Committee on Professional Ethics and Opinion 37 of the Committee on Attorney Advertising.
"Such an arrangement does not violate the general prohibition on the corporate practice of law," whose "central goal ... is to keep the rendition of legal services from being under the control and direction of nonlawyers," say the committees in their opinion, published Monday.
Moreover, Rule of Professional Conduct 5.4(a), which prohibits fee sharing with nonlawyers, does not bar a firm from turning over its net profits to a parent company also made up of lawyers, states the opinion.
The subsidiary firms, which could be organized as limited liability companies or professional corporations, would operate under separate names that would have to include the name of one or more of the lawyers working there.
To avoid misleading clients and the public, the relationship between the firms would have to be disclosed on initial contact between the subsidiary and a new client. The relationship would also have to be disclosed in the subsidiary's advertising and marketing. Specifically, the phrase "a subsidiary of X law firm" would have to appear beneath or next to the subsidiary's name.
The opinion responded to an inquiry from an unnamed firm that wants to form a subsidiary for a specialized practice area and plans to employ one or more existing shareholders in the subsidiary to direct its operations. The subsidiary might share office space with the parent, but it would keep its own books, records and files and maintain its own bank accounts and trust accounts.
The firm that made the inquiry also indicated it would cross-reference all conflict searches with the subsidiary and refrain from representation where it found a conflict.
While more law firms are operating such ancillary businesses as companies that do lobbying work and provide insurance-related services, the idea of subsidiary law firms is a novel one.
NEW TERRITORY
Ethics committee Chair Melville Miller Jr. calls the issue "absolutely a matter of first impression" and "not even hinted at" in previous inquiries.
Legal marketing consultants say they are not aware of any other jurisdiction to give the green light to subsidiary firms. They see the opinion as a boo n to lawyers and part of the increasing corporatization of the practice of law.
At a minimum, firms have more options, says Elizabeth Granoff, of Granoff Ethics Consulting in Chicago. A large firm with multiple areas of concentration could form subsidiaries for different practice areas, she notes.
The opinion "reflects what has been going on in legal markets for some time now, the real segmentation of the market, with firms competing around specialties," says James Jones, a consultant with Hildebrandt International in Washington, D.C., who specializes in ancillary businesses for law firms. "The idea of clients hiring one large firm to do everything is a thing of the past," at least for large sophisticated businesses, he says.
Probably the most enthusiastic response comes from law-firm marketing consultant Larry Bodine in Glen Ellyn, Ill., who terms the opinion "a potential gold mine."
For one thing, it means law firms can buy and sell other firms as investments, he says. They can pick up a firm in a hot practice area -- say, toxic torts -- and spin it off once the area cools, suggests Bodine.
The process of acquiring and jettisoning a boutique practice would be simplified not only from a business perspective but from a cultural one as well, he says. Keeping the entities separate would minimize disruptions associated with hiring and firing professional colleagues and allow retention of different fee and compensation structures that might be appropriate to different practice areas and clientele, he says.
In addition, there is "a lot of work that big firms leave on the table" that the subsidiary option might encourage them to pursue, says Bodine.
For example, some white-shoe firms averse to matrimonial work, even though their executive clientele might sometimes require those services, might handle such matters through a subsidiary, he says. Or a firm representing banks could also do collections work through the subsidiary.
Subsidiaries would broaden the marketing possibilities by allowing law firms to emulate companies like General Motors, which operates through different divisions, or General Mills, which sells its wares under various brand names.
"I expect to see a lot more states adopt this kind of approach," says Bodine, calling it "a logical extension of what law firms are doing already."
Managing lawyers at some of the state's largest firms who were asked their reaction to the opinion Friday had not seen it or were trying to digest its implications.
For instance, Mitchell Rait, chief operating officer for Budd Larner in Short Hills, N.J., says his first thought was how conflicts and malpractice issues would be handled.
Opinion 704/37 is predicated on the assumption of cross-firm conflict checks, but it does not address the question of whether a parent firm would be insulated from malpractice claims based on work done by the subsidiary.
If the separate structure does limit upstream liability, "it might be very attractive indeed," says consultant Jones.
posted by Jones Lang LaSalle NJ News Blog at 9:26 AM
The Kaufman Organization has acquired an 11-story asset in the Flatiron District for approximately $87 million. The site is currently 66% occupied.
The sale of the 256,220-sf commercial loft-office building at 11 West 19th St., was arranged by teams from Eastern Consolidated. Brian Ezratty, vice chairman and principal, together with Scott Ellard, director financial services, acted for the seller, the Goodstein family, while Deborah Gutoff, senior director and also a principal in the firm, represented Kaufman.
Gutoff says Kaufman, lead by Robert Savitt, is "bullish on the long-term viability" of area. "Savitt is betting on the area’s strong office leasing market. Due partially to the number of commercial buildings that have been converted to luxury condominiums, office rents in the District have been steadily rising and the availability of office space is diminishing."
The building has frontage on 19th and 20th streets and features a separate entrance on 20th. Also known as 10-16 West 20th Street, the property occupies the entire block-through site between West 19th and West 20th Streets. Current tenants include Time Warner Cable, Nautica Design, BMG Music, Universal Music; Sam Flax occupies the ground floor retail space.
Ezratty says the property "sold swiftly and at a price commensurate with today’s heady market." Key factors included roster, in-place below market rents, and "upside potential as vacant spaces lease up and existing leases gradually expire over the next several years." Andrew L. Herz and Russell Wohl of Patterson, Belknap, Webb and Tyler, LLP represented the buyer, while Wayne Lopkin repped the seller. The Bank of New York was the lender.
posted by Jones Lang LaSalle NJ News Blog at 9:23 AM
Mergers for Small Companies On the Rise Industrial sector breaks out of 19-year lull. Helen Shaw, CFO.com May 03, 2006
A total of 76 merger and acquisition deals were announced for smaller companies in the first quarter of 2006, which represents a 17 percent increase above the first quarter of 2005. If the deals continue apace, this year could witness an estimated 304 deals worth $117 billion, according to a report by Merrill Lynch small-cap strategists.
In their study, Merrill strategists Satya Pradhuman and Michael Kantrowitz note a rising trend in merger and acquisition activity for companies with market capitalizations between $200 million and $1.0 billion. Further, the duo contends that the trend is likely to continue given the companies' pursuit of growth and the lack of organic growth.
Indeed, more than 80 percent of the companies responding to the Merrill Lynch Smaller Firms Survey for the first quarter rank sales or revenue growth as the most important corporate initiative currently. About 62 percent cited a growing market share as most important; 26.9 percent named cost cutting as their prime directive; and 16 percent cited foreign expansion as the most important initiative.
The sectors with the most surprising study results were the basic industrials and biotechnology segments. A total of nine deals were announced for the basic industrials sector in the first quarter of 2006—a sharp increase compared to the average four deal-per-quarter tally that has existed for the past 19 years. In the long-run, the basic industrials sector should benefit from the overall trend of relatively low supplies and the high oil prices, according to the report.
The biotechnology sector also departed from its average deal activity. Only two biotech merger announcements surfaced in the first quarter of this year, compared to the average five deals announced in each of the last two quarters of 2005. However, the pursuit of growth by large pharmaceutical companies should prompt acquisitions in the near future, say the report authors.
Additionally, the number of leveraged buyouts (LBOs) of small companies continues to rise, with 13 deals announced in the first quarter of 2006. (The report defines small companies as those with a market cap below $2 billion.). If activity keeps pace with the first three months of the year, there could be 52 leveraged buyouts this year, a level that has not been reached since 2000. In the small-cap universe, there were 39 leveraged buyouts in 2005, compared with 29 in 2004, and 23 in 2003. About $33 billion flowed into private equity in the first quarter.
posted by Jones Lang LaSalle NJ News Blog at 9:21 AM
Bayonne mall gets OK to build Thursday, May 04, 2006 By STEVEN LEMONGELLO JOURNAL STAFF WRITER
The long-planned Power Center Mall on Route 440 in Bayonne has finally gotten the green light to begin construction, according to a statement by Michael O'Connor, executive director of the Bayonne Economic Development Corp.
Cameron Group, the conditional developer for the site, will soon begin construction on two large anchor stores of 140,000 and 90,000 square feet, three mid-size anchors of between 30,000 and 50,000 square feet, and several smaller shops and restaurants, O'Connor said. Completion is expected in fall 2007.
The BEDC estimates the project will yield more than $1.5 million per year in tax receipts, increase property tax revenues from the site by 500 percent, and add more than 250 jobs to the local economy, O'Connor noted.
Retailers said to be interested in the site include Target, Kohl's and Best Buy, according to city officials.
The breakthrough comes after the city completed its negotiations with AGC Chemicals America, owner of part of the 30-acre "area in need of development." Bayonne has been attempting to acquire the land through eminent domain, claiming the land was vacant and environmentally compromised.
AGC opposed the move, saying it had expansion plans of its own for the site. It also claimed the action was not for any public purpose and would only benefit developers. The company, also known as Asahi Glass Co., dropped its lawsuit against the city in December.
The deal "secures the land necessary to commence construction of the shopping center," O'Connor said, "as well as providing the room for AGCCA to accommodate its planned expansion. AGCCA has worked in close cooperation with the city and Cameron Group. That cooperation is appreciated."
"It was an amicable arrangement," said Sue Baer, vice president of AGCCA. "We appreciate the city's and Cameron Group's efforts to provide additional land for AGCCA to expand in the future."
Corporate Real Estate Execs Should Brace For Disasters April 27, 2006
Citing the feared outbreak of avian flu in the United States as an example, disaster planning experts and corporate real estate executives at the CoreNet Global Summit in Philadelphia yesterday urged companies to prepare for catastrophes. Panelists cited best practices instituted before recent natural calamities and urged commercial property owners and tenants to establish processes in order to mitigate human and economic losses. In fact, Jones Lang LaSalle's International Director Bruce Ficke convinced his client, American Financial Realty Trust (AFRT), to prepare in advance of the 2005 hurricane season and to "be a little more prepared" for the storm season to come.It wasn't a hard sell.
With over 1,100 buildings in the Southeast region, AFRT's Chris Lindberg determined that "something will hit us somewhere," and deployed a Jones Lang LaSalle Web-based tool called "4site" to help protect AFRT's considerable bank assets in the region.The proprietary software product helped AFRT with planning, safety, compliance and preparation for what became Hurricanes Katrina and Rita, and helped stem what would have been much more severe property losses from those storms.Ficke and Lindberg urged other property owners and tenants to adopt disaster plans for their businesses, communicate openly and clearly up and down the decision chain, lock in fuel vendors, practice disaster plans frequently and consider the human factor when disaster strikes.Another panelist, Ian Marlow, president of Gale Global Facilities, which prepares clients for being "in the eye of a storm," also had recommendations for businesses with critical systems.
Marlow recommended redundant communication systems including voice over Internet protocol, satellite phones and simple "phone trees," to easily locate displaced colleagues during disasters.With the possibility of an Avian flu pandemic spreading in the United States, Ficke urged businesses to begin planning for the possibility of large numbers of employees working at home for two weeks at a time. The reason, he said, is to ensure that, "there is enough technology to enable work, while access to the building is restricted and surfaces are being sanitized," to prevent the flu from spreading.
posted by Jones Lang LaSalle NJ News Blog at 10:15 AM
Unlocking Hidden Value... "There's evidence that Computer Sciences Corp has excess space in its portfolio and, to the extent it can be excised economically, the enterprise value could easily increase by $1 billion."
"In 1998, CSC had 177 square feet per person. Today it has 227 square feet per person and, after the 5,000-person layoff it announced this week, it will have 243 square feet per person. This is a negative trend, but these metrics point to opportunity."
Here's the math: "Using the potential savings of $100 million as a benchmark, and applying CSC's Forward P/E ratio of about 16, the enterprise value would potentially increase by $1.6 billion. Netted against this would be the liabilities of the excess property."
Is this a realistic plan? Search me. But it's fun to read the candid insight of an expert in the field. When Cook posted his article, Goldman Sachs had recently been selected to find a buyer for CSC. Did Goldman reach the same conclusion? Does anybody know?
Spread the Word... Many thanks to Marcus & Millichap, sponsors of this week's Dispatch! Their new book, &How to Build a Real Estate Empire, features the story of four prominent Marcus & Millichap clients.
-- Peter Pike
posted by Jones Lang LaSalle NJ News Blog at 8:41 AM
State Creates Fort Redevelopment Body By Eric Peterson
EATONTOWN, NJ-When BRAC sealed the fate of the 89-year-old Fort Monmouth last year, it opened up all sorts of possibilities for 1,126 of the most valuable acres in the Garden State. Now, the state has set in motion the process of redeveloping the sprawling installation once it’s closed, slated for 2011. Its functions and 5,000 jobs are being relocated to Aberdeen, MD.
That first step has come in the form of signed legislation to create the Fort Monmouth Economic Revitalization Planning Authority. The 10-member body will be organized within the New Jersey Department of Treasury, but will be independent of control by the department.
"First and foremost, the work of the authority will be to examine how we take this valuable asset and use it to meet the needs of the local community and our state," Gov. Jon Corzine said while signing the legislation at Fort Monmouth’s Gibbs Hall. "As we deal with issues regarding the disposition of property and the retention and creation of good jobs, the authority’s answer will be guided by the fact that the future of our entire community depends on creating sustainable economic growth."
The 10-member body will be made up of four members appointed by the Governor, two of which will be from the private sector, one a representative of land conservation and environmental concerns and one a representative of organized labor. No more than two of the appointees will be from the same political party, under the terms of the new law.
One member, meanwhile, will be appointed by the Monmouth County Board of Freeholders, another will be the New Jersey Secretary of Commerce and one will be a representative of Fort Monmouth, appointed by the US Secretary of Defense. The final three members will be the mayors of the three communities in which the installation lies, Eatontown, Oceanport and Tinton Falls.
The property is expected to be redeveloped by multiple developers and will likely include a variety of uses. While the emphasis will be on "creating jobs," Corzine says, the final mix is expected to include a combination of commercial uses, including potentially a CBD for Tinton Falls. Other uses that have been mentioned include residential and open space. And given the site’s high-tech infrastructure, R&D uses and an extension campus--Rutgers has been mentioned--could be part of the plan.
JLL Will Manage 340,000 SF of Offices By Eric Peterson
PARSIPPANY, NJ-Jones Lang LaSalle’s New Jersey office here has picked up two separate property management assignments totaling 637,380 sf of class A office space. The properties are separately owned by Lexington Corporate Properties Trust and by Wells REIT.
The two assignments will be overseen by Ian King, the firm’s executive vice president, and by vice president David Steinthal. For the New York City-based Lexington, JLL will manage the 340,000-sf 379 Interpace Parkway building here. For the Atlanta-based Wells REIT, the firm will manage 400 Crossing Blvd. in Bridgewater.
"Both 379 Interpace Parkway and 400 Crossing Blvd. are premier office buildings," King says. "They are both highly visible and in attractive areas."
The 379 Interpace Parkway building, also known as Morris Corporate Center IV-Building, encompasses five floors with approximate 60,000-sf floorplates. The building features a four-story atrium, sits on 35 wooded acres and has a four-level parking garage, according to King. The building’s tenants include Sanofi-Aventis, Reckitt Benckiser and Cadbury-Schweppes.
The 400 Bridgewater Crossing, meanwhile, is part of a two-building office complex totaling nearly 600,000 sf. The 297,380-sf 400 building covers eight floors and is mostly occupied by Sanofi-Aventis, which uses the space as its North American headquarters. King Pharmaceuticals is also in the building.
Wells had just acquired the 400 building earlier this year from Capital Partners. As reported by GlobeSt.com, the sale price was not disclosed, but industry sources put the final number in the $80-million range. The Texas-based Hines originally developed the Bridgewater Crossing complex in the early 2000s, and Wells now owns both buildings, having acquired the 400 building’s twin a couple of years ago.
N.J. economy shows signs of slowing By JEFFREY GOLD The Associated Press
NEWARK -- Economic growth in New Jersey slowed in the first three months of the year -- burdened by an increase in initial unemployment claims, the Federal Reserve Bank of Philadelphia reported Monday.
The regional bank's latest monthly forecast projected moderate economic growth of 2.2 percent through the end of the year.
"Basically, the first quarter in New Jersey was a little slower on most measures, but overall, the economy is in pretty good shape," said a bank economist, vice president Theodore M. Crone. Initial unemployment claims in March were 40,988, up about 300, he said.
The housing industry continued cooling, with new home permits up 0.5 percent in March, to 2,261, from February, Crone said.
"Housing was a big driver previously, and now it's going to level off," as it is doing nationally, he said. "It is sort of the exhaustion of a rapid expansion."
The state unemployment rate dropped to 4.5 percent in March, from 4.7 percent in February, with nonfarm employment rising to 4,069,000 in March, from 4,065,000.
The New Jersey unemployment rate remained below the national average, which dropped from 4.8 to 4.7 percent in March.
Another indicator of economic activity, average hours worked by manufacturing employees, remained steady at 42.4 per week.
The bank's forecast that the Garden State economy will grow by 2.2 percent from March through December is the lowest rate since 1.5 percent was predicted in December.
The bank's nine-month forecasts, issued each month, have generally been above 2 percent growth since last March. The forecast in February saw 2.3 percent growth over the following nine months, and 2.9 percent in January.
The bank's index of current economic activity rose 0.3 percent from February to March, within the range of recent months. The economy has grown by 1 percent in the last three months and by 3 percent in the last year.
The 3 percent growth trailed the national average of 3.2 percent, Crone said. from the Courier News website www.c-n.com
posted by Jones Lang LaSalle NJ News Blog at 8:39 AM
Signs of an Upturn in New Jersey By ANTOINETTE MARTIN
It has been a long, hard climb back to reasonable health for the New Jersey commercial office market since the Sept. 11 attack in New York.
In the weeks after the attack, there was a belief that businesses in Lower Manhattan and elsewhere in New York City might consider moving to New Jersey, and a number of companies offered a flood of space for sublease.
But New Jersey landlords apparently anticipated a much greater need for temporary space than materialized, mistakenly thinking that mass relocation might occur. Then, consolidation and cutbacks by telecommunications and technology companies in 2002 and 2003 emptied out more offices, and a two-year economic slowdown amplified the effect.
It wasn't until the second half of 2005 that the situation began to move in the right direction. The average vacancy rate for office space, which soared to nearly 20 percent from about 14 percent in the six-month period after Sept. 11, stayed at 19 percent or above through last year. For the first quarter of 2006, the rate was 18.4 percent, according to Cushman & Wakefield, a commercial real estate company.
In addition, average annual asking rents for office space rose to $25.18 a square foot in the first quarter of this year, up 55 cents from the preceding quarter, and up $1.04 a square foot from a year earlier, according to CB Richard Ellis, another major company in commercial property. Analysts there termed the higher rents "a sure sign the market is gaining momentum."
Still, Andrew Merin, who is vice chairman of the metropolitan area capital markets group of Cushman & Wakefield, which brokers sales of commercial real estate to investors, summed it up: "It has not been a pretty picture for office space over the last four years, any way you look at it. Things will take a while longer to straighten out."
Mr. Merin said that while his group continued to execute numerous significant deals each year on office properties, it was currently most bullish on multifamily rental properties.
"The amount of capital chasing multifamily assets has reached record levels," he said. "During 2006, we expect to see a renewed focus on urban redevelopment projects as families look to move to more urban areas."
New Jersey commercial office developers uniformly insist that they are bullish on the office market, given the signs of improvement. Speculative office space construction has started up again, with one million square feet under construction around New Jersey, as GVA Williams pointed out in its first-quarter market analysis, and another half-million square feet is planned. Nevertheless, Hartz Mountain Industries, which helped to build up the state's largest concentration of office space, in Jersey City, decided sometime last year that that riverfront city could not absorb the additional office space it had planned to build and began trying to sell sites to residential developers.
In 2000 to 2005, about seven million square feet of new office space was created in Jersey City, but currently there is not a single project on the drawing board, according to city officials. On the other hand, about 15,000 new apartments are in the construction pipeline.
Without commenting publicly, Hartz sold one of two major downtown sites that it owned to the home-building giant K. Hovnanian just last month. Hovnanian announced it had purchased the site near the Hudson riverfront at 77 Hudson Street for $65 million and would act as a co-developer of the property to create a condominium tower and a rental tower, with a combined 1,300 units.
Hartz has been reported to be near a deal to sell a second Jersey City site to Roseland Properties for a residential project in Jersey City, and it is also known to be trying to sell a site near the Lincoln Tunnel in Weehawken.
A number of big developers of office space have, meanwhile, hedged their bets by opening new divisions that build apartments, or by starting redevelopment projects that include housing and stores along with office space.
SJP Properties of Parsippany, which is known for building high-end office developments around New Jersey, including the two-building Waterfront Corporate Center in Hoboken, seems to be waiting for the right moment to break ground for a third building.
At the same time, SJP's residential division, established in 2004, has moved forward with construction of two condominium towers in Manhattan: one with 250 units at Eighth Avenue and 46th Street, and another at 45 Park Avenue on the site of the former Sheraton Russell. SJP also has a plan to build 68 very-high-end town house condominiums, each with 4,000 square feet of living space, in Peapack, N.J.
Two other office developers have big mixed-use projects in the works. The Matrix Development Group is at work on a $400 million waterfront development in Newark that will create 500 residential units in four towers in addition to a hotel, retail space and a 14-story office building. The Advance Realty Group is developing a center in adjacent Harrison, planned to include more than 700 residential units next to a new professional soccer stadium, 140,000 square feet of stores and 190,000 square feet of office space.
Mr. Merin predicts a major surge in rental apartment sales in New Jersey, especially along the Hudson. After several slower years, the rental market has been increasing, he said: "Occupancy rates have increased to the low- to-mid 90 percent range in the region."
He also said that "concessions" — like several months of free rent, or free amenities and upgrades that were being offered at many higher-end buildings while interest rates stayed at record lows and home-buying fever was at high pitch — are becoming less common.
"As condominium developers become slightly less aggressive with pricing, and interest rates begin to rise," Mr. Merin said, "more people will opt to move into rental apartments, and they will become a better and better investment."
posted by Jones Lang LaSalle NJ News Blog at 8:38 AM
NYC law firms rank among most profitable by Tommy Fernandez May 01, 2006
Manhattan law firms remained amongst the most profitable per partner in the country hands-down, according to the latest edition of The Am Law 100.
New York City law firms remained amongst the most profitable per partner in the country hands-down, according to the latest edition of The Am Law 100, published by The American Lawyer.
Manhattan firms are faring well for two reasons: one, they are being run more like profit-driven corporations, and two, a variety of corporate practice areas are hot now, including mergers and acquisitions, private placements, public offerings, real estate and structured finance, says Michael Lord, president of the legal recruiting firm Michael Lord & Co.
The Am Law 100 ranks American law firms according to a number of criteria: including annual gross revenue; number of lawyers and average profits generated by partner. Only three New York City law firms were in the top ten according to gross revenue: Skadden Arps Slate Meagher & Flom at number one, White & Case at number six and Weil Gotshal & Manges at number seven.
However, it was in profitability per partner where Manhattan firms really shined. These firms accounted for nine out of the top ten firms in this category, including Wachtell Lipton Rosen & Katz, Cravath Swain & Moore and Cadwalader Wickersham & Taft at the top three positions. Manhattan law firms also accounted for 22 out of the 33 law firms that earned over $1 million per partner. This was the first year in the survey that the average profitability per partner topped $1 million.
"The economic climate for deal making is very good now," says Mr. Lord.
posted by Jones Lang LaSalle NJ News Blog at 10:00 AM
Toys R Us to account for 80% of Vornado profits by Catherine Tymkiw May 01, 2006
The real estate investment trust said income from the toy retailer would add $52.8 million, or 35 cents a share, to its first-quarter.
Vornado Realty Trust, a real estate investment trust, said income from Toys "R" Us would add $52.8 million, or 35 cents a share, to its first-quarter profit.
Manhattan-based Vornado and private-equity firms Bain Capital and Kohlberg Kravis Roberts & Co. acquired the Wayne, N.J., retailer last year for about $6.6 billion.
Vornado's first-quarter funds from operations - a closely watched measure of a REIT's operating performance - will include $62.3 million, or 36 cents a share, from Toys "R" Us's fiscal fourth quarter, which ended Jan. 28.
Vornado said that Toys "R" Us will account for about 80% of its first-quarter profits, mainly due to robust shopping during the 2005 holiday season.
The REIT has been faring well lately. Just last month Goldman Sachs & Co. analyst Jonathan Haberman upgraded the stock, citing a favorable outlook for office properties and a stable economy. Rents for office space in Manhattan, where Vornado has a heavy focus, are expected to grow 15% a year for two years, according to Mr. Haberman's report.
Vornado's stock is up 11% from the start of the year, trading between $94.55 and $95.64 a share during intraday trading on Monday.
posted by Jones Lang LaSalle NJ News Blog at 9:59 AM
Alexander's reports loss on stock expenses by David Jones May 01, 2006
Alexander's Inc., a real estate investment trust, reported a quarterly loss as higher expenses offset a gain from the sale of residential condominium Alexander's Inc., a real estate investment trust, reported a quarterly loss as higher expenses offset a gain from the sale of residential condominium units at a midtown building.
The Paramus, N.J.-based REIT, which has six properties in the New York metropolitan area, logged negative funds from operations -- a closely watched measure of operating performance -- of $13.6 million, or $2.70 per share, compared with FFO of $35.8 million, or $7.06 per diluted share, a year ago.
REIT's calculate funds from operations by factoring depreciation and amortization expenses into net income. Alexander's reported a loss of $18.9 million, or $3.75 per share, compared with a profit of $31.2 million, or $6.15 share, in the year-earlier period.
The net loss and negative funds from operations include a $37.5 million stock compensation expense, which was partially offset by a $5 million after-tax gain on the sale of residential condominiums at 731 Lexington Ave.
In addition to the Lexington Avenue property, Alexander's owns the Kings Plaza Regional Shopping Center -- a two-level mall in Brooklyn anchored by Sears and Macy's; the Rego Park I property in Queens, comprising Sears, Circuit City, Bed Bath & Beyond, Marshalls and Old Navy; as well as Ikea's Paramus site and a property in Flushing, which contains a 177,000-square-foot vacant building.
Vornado Realty Trust, which owns 33% of Alexander's, manages the properties.
posted by Jones Lang LaSalle NJ News Blog at 9:58 AM
Extreme makeovers for hospitals Patients seeking quality care and comfort are force behind overhaul Sunday, April 30, 2006 By TRACEY L. REGAN Staff Writer
After years of hospitals nursing sickly patients back to health, many aging facilities are finally getting a powerful dose of modern medicine designed to make them medically and financially well again too.
Recent surveys document a national boom in hospital construction not seen since the end of World War II. In Mercer County, for example, two of the four hospital systems have plans for new facilities. And a third is planning a multimillion-dollar expansion and renovation.
What has changed in the past decade is a sharp leap in patient expectations for quality of care, comfort and the latest-generation medical technology amid growing competition for paying customers among what were once sleepy community-care centers.
The hospitals now being designed to meet those rising expectations are substantially different in look, layout and amenities from those built even 20 years ago.
They are sleek structures with hotel-like lobbies, wide corridors uncluttered by dinner or trash carts, and light-filled rooms filled with cutting-edge communications and medical technology. Treatment areas, such as cancer centers, cardiac-care centers and labor and delivery departments, are self-contained.
In addition to their own specialty equipment, they have all of the imaging technology and diagnostic devices they need so that patients don't have to be wheeled around the hospital to other departments.
Barry Rabner, chief executive officer of the University Medical Center at Princeton, had unsparing words for the hospital he oversees in downtown Princeton Borough.
"It's dead," Rabner said of the 86-year-old building, which less than a decade ago underwent extensive remodeling, including the construction of a new emergency department.
But like a growing number of hospital executives around the country, Rabner has looked at a rapidly changing marketplace and concluded that UMCP's landlocked brick facility cannot be adapted to meet contemporary demands for care.
Instead, the company has decided to abandon the building and build a new one from the ground up.
And he and the hospital's board are not thinking small. The $350 million facility they are designing more closely resembles the sprawling campus of a grand teaching institution -- with physician offices, an ambulatory-care center and a cutting-edge acute-care facility on a 155-acre site -- than the small community hospital that the medical center was just a decade or so ago. Meanwhile, Trenton-based Capital Health Systems is planning to build a new hospital in suburban Lawrence that will include two 800-square-foot rooms to accommodate "robotic surgery," hospital executives said.
Architects and health-care workers say such modifications are not just desirable but enhance operational efficiency while reducing the risk of infections, hospital accidents and patient stress -- all leading to better outcomes.
That sort of efficiency reduces hospital stays, which has a significant impact on the bottom line. The money-makers in health care are quick procedures that involve specialty doctors, cutting-edge technology and short hospital stays.
Other hospitals, including Robert Wood Johnson University Hospital at Hamilton, are opting for the expansion of existing facilities and adoption of cutting-edge medical and support technology to give themselves an edge.
RWJ-Hamilton, for example, currently a 204-bed facility, is spending $63 million to build 96 new private rooms for patients.
Each of the new single-occupancy rooms, which are expected to be ready next March, will have more chairs for visitors as well as a couch "so that family members can stay overnight," said Christy Stephenson, the Hamilton hospital's CEO.
The rooms also will be "completely wireless so people can have computers there" and connect to the Internet, Stephenson said.
She said RWJ-Hamilton also was an early adapter of full digital mammography, and an all-digital radiology system for X-rays.
The latter allows a patient's X-rays to be reviewed instantly on computer screens simultaneously by doctors and other medical staff without requiring the traditional hard-copy of the X-ray image.
"As these kinds of technologies become available, we are early adapters of all of these so we stay ahead of the curve," Stephenson said, adding that the incentive is to provide patients the best quality care possible.
The notion of technology coming to the patient governs the design of operating and emergency rooms as well.
"Rather than wait for the lab and X-ray results to come down from the fourth floor, you bring the lab and the X-ray facility into the center of the ER," said Ron Czajkowski, spokesman for the New Jersey Hospital Association.
In general, health-care managers say they want to minimize patient transfers and design departments accordingly.
A patient coming into the emergency room would have a quick ride to the operating room. Following surgery, the patient would be wheeled to a room close by.
Patient rooms themselves are highly adaptable to avoid transferring patients.
The labor and delivery rooms at the recently built Jersey City Medical Center, for example, have panels in the ceiling that contain operating room lights to allow physicians to perform minor surgery on a patient there if necessary.
"It's not just a big rectangular building made of bricks," said Czajkowski.
There is not only more sophisticated technology in hospitals but more of it in general. Operating rooms are now being designed in some cases to be twice as large as the traditional 450-square-foot rooms, in part to accommodate technology that does not yet exist. Because of the growing competition among hospitals for well-heeled customers, the newest facilities are not only technology-saturated but steeped in amenities as well.
So much of the bustle of hospitals is now hidden or squelched. Medical specimens, for example, travel in pneumatic tubes from one department to another. Overhead public announcement systems are being scrapped in favor of wireless technology that is worn in lanyards around the neck, allowing staff to silently page one another.
A new hospital in Dublin, Ohio, has even scrapped the reception desk in the lobby. It has greeters instead, with hand-held computers and headsets, who usher patients to the proper department.
"It's about understanding how the culture has changed," said Rosalyn Cama, a Connecticut-based interior designer and chairwoman of the board at the Center for Health Design, adding, "It doesn't cost more money."
Hospitals are now suffused with natural light, which is believed to aid in the healing process. When designing the Jersey City hospital, for example, architects put a hollow in the middle of the building to bring in natural light to the ICU.
Major changes in hospitals' attitudes about comfort and service began with birthing centers, industry watchers say.
"These were well patients with six to seven months to shop for services," Cama said. Once one hospital upgraded, "They all did." The next thing was palliative care to "create a comfortable and healing environment."
"Now that baby boomers are starting to have health problems, couple that with a lot of choices," Cama said. There is an effort by community hospitals to retain those patients.
According to a 2004 survey by the American Hospital Association, 60 percent of hospitals and 68 percent of health systems said they needed to replace aging facilities. At that time, about 800 new hospitals were planned.
"There was a stay-the-course mindset where hospitals adjusted and adapted to community needs by expanding and renovating," Czajkowski said.
"It costs about 5 percent more to build in the additional amenities," Cama said. "But if you look at the outcomes -- operational efficiencies and increased revenues -- then you can get that back in a year or two."
Jonathan Metsch, CEO of the Jersey City Medical Center, said the hospital's revenues jumped immediately after it abandoned its 1930s hospital, a drafty monster with capacity for 1,500 beds and highly inefficient infrastructure.
"Our first year, admissions were up 15 percent," Metsch said.
Unless they are operating in poor neighborhoods and can qualify for backing by the U.S.
Department of Housing and Urban Development, hospitals must look to the private investment banks to sell their bonds. As nonprofits, they qualify for tax-exempt bonds, however.
"Hospitals traditionally have had a life cycle of 40 to 50 years," Cama said. "In 40 or 50 years, who knows how care will be delivered. We may not even need hospitals."
Staff writer Robert Stern contributed to this report.
"The faster the future arrives -- with all its weird new technology, disruptive economic models and shifting alliances -- the more opportunity there will be."
That's Rich Karlgaard urging readers of his Forbes column (May 8, 2006), Digital Rules, to focus on future opportunities, not present-day problems. And you can read more of his comments at his daily blog.
His message is that our economy (and the real estate market) is inextricably linked to global economic forces, which we ignore at our peril. According to Karlgaard, the hyper-competitive world economy will demand extreme efficiency, resulting in better business processes and directly impacting real estate transactions, management and facilities.
posted by Jones Lang LaSalle NJ News Blog at 9:51 AM
Jamestown Closes on $1B-Plus Sale By Barbara Jarvie Last updated: April 27, 2006 09:09am
NEW YORK CITY-Hudson Waterfront Associates has closed on its acquisition of 1290 Ave. of the Americas. The nearly two-million-sf office tower traded for approximately $1.25 billion. Jamestown 1290 LP, a joint venture of Jamestown and Apollo Real Estate Advisors, was the seller.
"We sold this more quickly than most of our assets," Matt Bronfman, managing director of Jamestown, explains. "We are generally hold an asset for seven to 12 years." He adds that the company sold more quickly in this case because "they approached us with a compelling number. We did have discussions with Apollo before we were approached wherein we discussed a sale. But we had not hired a broker or taken very serious steps." Jamestown’s proceeds will be returned to its investors.
The purchaser is a newly formed affiliate of entities that recently announced an agreement to sell properties at Riverside South on Manhattan’s West Side for $1.76 billion. CB Richard Ellis’ Stephen B. Siegel, chairman, global brokerage, David Maurer-Hollaender, vice chairman, and Doug Lehman, first vice president, represented Hudson.
Both buyer and seller agreed that the sale indicated the continuing strength of the commercial real estate market in Midtown. Other sales that have rivaled this one include Macklowe’s purchase of the GM Building for $1.4 billion in 2003 and Tishman Speyer’s acquisition of the MetLife Building at 200 Park Ave. for approximately $1.7 billion last spring.
"Hudson Waterfront Associates is expressing its confidence in the commercial real estate market in Manhattan with this purchase," says Barry Gross, who represents the firm. Bill Mack, Apollo’s founder and senior partner, says that this sale is emblematic of the cyclical recovery of New York real estate. "Apollo’s investment in 1290 dates back to 1993 and the bankruptcy of its former owner, Olympia and York. During that time, the market value of this single building has increased by close to $1 billion." And Jamestown paid $745.5 million when it acquired the property in 2002.
The tower is approximately 96% leased. It has a tenant roster that includes AXA/Equitable Financial, Bank of New York, Microsoft, Wenner Media and law firms Bryan Cave LLP and Morrison & Foerster.
posted by Jones Lang LaSalle NJ News Blog at 9:50 AM
Rutgers Plans $81M Acquisition/Conversion By Eric Peterson Last updated: April 27, 2006 08:44am
NEWARK-Rutgers University is set to spend $31 million to buy the lower 11 floors of the 17-story 1 Washington Park office tower and another $50 million to convert that portion of the building into a new location for its Newark campus business school. According to Stephen Diner, provost of the state university’s local campus, the purchase, now under contract, will amount to 266,500 sf, of the 400,000-sf tower.
The current owner of the building, Fidelco Realty Group of Millburn, will retain ownership of the top half-dozen floors for multi-tenant use. Fidelco, headed by Rutgers-Newark grad Marc Berson, bought the entire then-vacant building from Siete Urban Associates in September 2004 for $26.5 million, or $66 per sf. The sale price for the lower 11 floors factors out to $116 a foot.
The building went vacant in early 2003 when original tenant Verizon moved its regional headquarters across the street. After buying the asset out of default proceedings against Siete Urban Associates by Midland Loan Services, Fidelco launched a $20-million renovation program and listed the vacant space with Newmark of NJ. Gann Law Books, Conti Enterprises, Makro Technologies and North Star Academy Charter Schools have since taken small blocks of space, and the remaining vacant space is listed on Newmark Knight Frank’s website with an asking price of $23 per sf.
According to details released by Diner, Rutgers’ planned $50-million expenditure to turn its part of the building into the university’s business school will include a series of tiered lecture halls. A new pavilion in front of the building is also part of the plan, and Diner says that the university is seeking federal tax credits and other assistance to buy and convert that portion of the building. Officials on both sides say they hope to have the deal concluded this summer.
For the Rutgers Business School, the pending move may be expensive, but not far. The school currently occupies multiple buildings centered around a main building at 111 Washington St., just down the street from 1 Washington Park. According to Diner, school officials had been eyeing the building even before Fidelco bought it in 2004.
And Fidelco might have another major Rutgers-related project to deal with in this city. As reported by GlobeSt.com earlier this year, the company is one of five finalists to convert Rutgers’ long-vacant, 17-story former law school building at 15 Washington St. into apartments for graduate students. The law school had moved up the street to 123 Washington St. in 2000.
posted by Jones Lang LaSalle NJ News Blog at 9:48 AM
IDT opts to shut Newark facility, meaning layoffs Thursday, April 27, 2006 BY TOM JOHNSON Star-Ledger Staff
IDT, the Newark telecommunications and entertainment company, yesterday said it will close down its call center in the city, a decision that will cost more than 300 employees their jobs. "This was a difficult decision, no doubt about it," IDT Chief Executive Jim Courter said. "We have been thinking about it for a period of time."
In the end, the job cuts were probably ordained after the company stopped marketing bundled phone services to consumers after an adverse regulatory decision involving leasing of local phone lines. The layoffs will be effective in 60 days, "We don't need the number of people in the call centers that we used to," Courter said. "That business is being slowly curtailed over time."
The company's consumer phone services business has been declining ever since federal regulators allowed the Baby Bells to charge more to lease their local phone networks. In the past year, the number of customers buying its unlimited bundled local and long-distance service dropped to 188,000, from 300,000.
The workers who will be laid off were notified yesterday as they arrived to work at the three scheduled shifts at the call center at 540 Broad St.
Courter said they will be offered severance packages ranging from a couple of months' pay to higher amounts, depending upon their length of service.
The company plans to bring in an outside consultant to help workers with future job placement and the state Department of Labor closer to when the layoffs will actually occur, he said.
IDT, which posted a loss of $58.7 million in the second quarter, has about 5,000 employees, about half of whom work in New Jersey. Its core business is selling prepaid phone cards, but in recent years, it has branched out into the entertainment field, including making animated feature films.
The company is expected to report a future charge against earnings of as much as $3 million to account for the cost of the layoffs.
"It's important for IDT to be an efficient company and to be operationally profitable," Courter said. "This will go a ways toward achieving that."
Tom Johnson covers utilities and telecommunications. He may be reached at tjohnson@starledger.com or (973) 392-5972.
Wachovia to Buy American Property Tuesday April 25, 11:16 am ET Wachovia Plans to Acquire Commercial Real Estate Lender American Property Financing
CHARLOTTE, N.C. (AP) -- Financial services provider Wachovia Corp. said Tuesday it plans to acquire American Property Financing Inc., a subsidiary of Emigrant Bank. Terms were not disclosed.
New York-based American Property has a multifamily loan portfolio of more than $8 billion and is a top Fannie Mae and Freddie Mac lender. Multifamily loans provide financing for apartment buildings and other dwellings for more than one family.
Wachovia expects the deal to close in the second quarter.
American Property chief executive Alan Wiener will stay on and will head Wachovia's multifamily lending business with managing director Ed Hurley.
Wachovia provided more than $67 billion in commercial mortgages last year. It also services about $198 billion in commercial mortgage-backed securities and agency mortgages and $40 billion in portfolio loans.
posted by Jones Lang LaSalle NJ News Blog at 9:46 AM
M&A lifts acquisition loan volume to $347B, up 91% on year By Marietta Cauchi
Last Update: 12:06 PM ET Apr 25, 2006 NEW YORK (MarketWatch) --
Global merger and acquisition activity has boosted acquisition financing loan volume to $347 billion, up a massive 91% from $181.6 billion this time last year, according to data published Tuesday by Dealogic.
Meanwhile refinancing loan volume stands at $212.7 billion year to date, down 35% from $327 billion last year.
The figures aren't surprising because of the very favorable lending environment for acquisitions, say experts.
"Financial institutions from banks to hedge funds are all very willing to put money to work in good acquisitions and are willing to do it at very high cash multiples," says Bob Filek, partner in PricewaterhouseCoopers' Transaction Services group.
While lenders are offering up to six or seven times EBITDA for acquisitions, rising interest rates are reversing last year's refinancing trends, he adds. EBITDA is earnings before interest, taxes, depreciation and amortization.
Loans to finance acquisitions in Germany accounted for 27% of acquisition loan financing so far this year, including the top three loans - $38.2 billion to finance E.ON AG's (EON) purchase of Endesa SA (ELE), $19.2 billion for Merck KgaA's (MRK.XE) planned acquisition of Schering AG (SCH.XE) and $18 billion for Linde AG's (LIN.XE) purchase of BOC Group PLC (BOC.LN). Only the U.S. topped Germany, with U.S. companies accounting for 43% of loan volume related to acquisitions, said Dealogic.
Deutsche Bank (DB) is the top bookrunner for global rankings for acquisition related loans, accounting for 30% of volume share, leading on 19 deals with an aggregate deal value of $104 billion.
JPMorgan Chase & Co. (JPM) leads the global rankings for refinancing loans, accounting for 19.9% of volume share.
Aon heads back downtown Displaced firm signs for Water St.; leasing activity picking up By Julie Satow Published on May 01, 2006
A major World Trade Center tenant that relocated to midtown after the terrorist attacks is returning to lower Manhattan.
Aon Corp., which had occupied 400,000 square feet in the south tower, is moving its entire New York City workforce to 199 Water St.
The insurance and consulting company lost 176 employees on Sept. 11, and soon thereafter moved its headquarters to 55 E. 52nd St., between Park and Madison avenues. It also leased a smaller office at 199 Water, between John and Fulton streets. Now it will consolidate the two offices in 400,000 square feet at 199 Water, which will be named for Aon, and give up the 270,000-square-foot midtown office in a sublease.
"Aon's decision to consolidate its workforce in lower Manhattan is a testament to the vitality of downtown," says Eric Deutsch, president of the Alliance for Downtown New York. He called the move "fantastic."
The lease is one of downtown's largest in nearly five years. It comes on the heels of last week's agreement, between government officials and developer Larry Silverstein, aimed at spurring the construction of five towers at Ground Zero by 2012.
In another positive sign for downtown, the Royal Bank of Canada is negotiating for an additional 200,000 square feet at the World Financial Center. The bank already occupies 155,000 square feet at 1 Liberty Plaza.
At 199 Water, Aon is adding 200,000 square feet to double its space. Aon's new lease, a sublet from Wachovia Corp., runs through 2017.
Aon edged out the city's Office of the Comptroller, which was preparing to move into 199 Water. It backed out at the behest of the city's Economic Development Corp., which was eager to lure Aon downtown. Jones Lang LaSalle, which represented Wachovia, declined to comment.
The comptroller, housed in the municipal building at 1 Centre St., is in the market for 250,000 square feet and is looking at several spots, including 100 Church St., 25 Broadway and 26 Broadway. The Staubach Co., which represents the comptroller, declined to comment. The space Aon has vacated in midtown has an asking rent of $79 a square foot and is being marketed by CB Richard Ellis, which declined to comment.
Bayonne Bay gets tentative developer BLRA gives okay to Horton/Trammell in $100 million deal By Al Sullivan Reporter senior staff writer
In a move that could generate $100 million in sale of land, the Bayonne Local Redevelopment Authority unanimously approved a resolution conditionally designating D.R. Horton/Trammell Crow Residential as developers of the Bayonne Bay District at The Peninsula at Bayonne Harbor (the former Military Ocean Terminal).
But critics blasted the BLRA demanding to know what criteria was used in selecting the firm and questioning whether or not the BLRA violated the Open Public Meetings Act by deciding the developer behind closed doors.
The Bayonne Bay section of the former Military Ocean Terminal is about 65 acres with almost 33 acres of waterfront property, and designated for residential development.
The resolution passed at the April 6 BLRA meeting Executive Director Nancy Kist to negotiate a final redeveloper agreement with D.R. Horton/Trammel Crow Residential. The approved proposal includes 1,769 units of age-restricted and age-targeted for-sale and rental housing organized around a sweeping waterfront park and walkway that will be open and accessible to all Bayonne residents.
"The D.R. Horton/Trammell Crow proposal pairs two of the nation's leading real estate companies," said Howard Fitch, Chairman of the BLRA Board of Commissioners. "They met all our criteria in terms of experience, financial strength and willingness to build and market age-restricted housing."
In requesting proposals for the site, the BLRA gave strong preference to those proposals that offer age-restricted sales to people whose head of household is 55 years or older. Although Gerry McCann, representing one of the nine other rejected proposals, claimed the Horton/Trammel failed to meet the requirements of the development plan in providing age restricted housing, Kist said the company has plans to provide more than 900 of the units as age restricted.
The district is intended for low- to mid-rise buildings that are organized around a waterfront park. The redevelopment plan called for 12.15 acres of open space, including the 4.39-acre Crescent Green neighborhood park facing the water, and the 1.38-acre Village Common located in the interior of the peninsula.
The BLRA had set a minimum purchase price for the Bayonne Bay section at $60 million, sources said the deal will likely bring the BLRA $100 million.
D.R. Horton, the number one homebuilder in America, constructs and sells high quality single-family and multi-family homes through operating divisions in 26 states and 77 metropolitan markets of the United States. Trammell Crow Residential is the nation's premier multi-family real estate firm operating in more than 50 cities nationwide. With combined assets of $14 billion, the two firms have sold and rented 190,000 homes in the last five years.
"This proposal reflects our redevelopment plan's vision for a mixture of waterfront and urban living in a park-like setting," said BLRA Commissioner and City Council member Maria Karczewski.
The BLRA conducted public information sessions on August 29 and 30 at the Bayonne City Council Chambers where each of the ten respondents introduced their project team and described key elements of their proposal, including site concepts and phasing. The presentations were open to the public and media and were broadcast on the local government access channel.
McCann questioned the decision, saying that the matter should have been open to the public so that the criteria was clear and that changes were made to the criteria during the closed door sessions.
Kist, however, in a phone interview, said no changes were made and that the details of all ten proposals are considered confidential, because if the BLRA cannot come to agreement with Horton/Trammell, the BLRA will select another developer from the remaining nine.
"We received high quality proposals from many of the nation's leading real estate developers. This clearly demonstrates the value and marketability of The Peninsula at Bayonne Harbor," said Nancy Kist, Executive Director of the Bayonne Local Redevelopment Authority.
"Coming less than a month after the BLRA approved plans for development of Harbor Station North, the Bayonne Bay proposal "signals the fact that development of The Peninsula is in full swing," said BLRA Commissioner and City Council President Vincent Lo Re, Jr.
"Once again," said Bayonne Mayor Joseph V. Doria, Jr. "we have achieved our original objectives - improving quality of life by extending our community onto the Peninsula, creating jobs, and creating new tax ratables that will provide tax relief to all of Bayonne's homeowners."
The developers estimate that the total Bayonne Bay development will be valued in excess of a half billion dollars.
Since the U.S. Army transferred complete ownership of the former military base in 2002, the BLRA has raised more than $50 million in government grants and interim lease payments to make infrastructure improvements needed to attract development. These improvements include new bulkheads along the base's south side and environmental remediation that was completed this year, ahead of schedule.
Other projects include the installation of a new sewer system and planning for a new electrical grid and new roads.
The private Trammell Crow company -- which is owned by the Crow family, but does business on a local basis through partners -- opened a mid-Atlantic office two years ago in Rockville, Md., is developing two rental projects, the 504-unit Avalon Cove and the adjacent 269-unit Tower, on the Jersey City waterfront.
"We're very lucky that we got to choose from among 10 very qualified entities," Kist said. "What it came down to it the size and experience of the joint venture. What we were looking at was the ability to handle a project of this size and the revenue to survive an economic downturn."
Kist said the BLRA felt comfortable that Horton/Trammell had the experience and the financial background to deal with the project.
"We liked the professional team and the fact that they had a proven record with waterfront development," she said. "The board was impressed with all of the proposals and it was a tough decision to make. But the board conditionally designated Horton/Trammell as the developer. If we can't come to an agreement then we will have to go back to the other nine."
Kist also said the other proposals impressed the BLRA board enough that they will be sought out for proposals for the remaining development sections when they come on line.
"We like these guys, we still would like to do business with them, and there will be opportunities down the road for that to happen," Kist said.
McCann, however, claimed the BLRA should have held discussions in public.
Under Open Public Meetings Act, citizens have a right to attend meetings at which any business affecting the public is discussed or acted upon.
Public bodies, however, can exclude the public for closed sessions under certain conditions. Although McCann and attorney Mike M--- claimed the BLRA violated the law, state officials said matters that involve the purchase, lease or acquisition of real property with public funds - under which the BLRA was operating.
