Global Viewpoints

BOMA International Releases Preparedness Top Ten List for National Preparedness Month

Edited: Jennifer Brenner
Source: BOMA International

September is National Preparedness Month and the Building Owners and Managers Association (BOMA) International has released a list of ten proactive steps property professionals can take to ensure their tenants, staff and buildings are safe in an emergency or natural disaster. With hurricane season in full swing and experts predicting an increase in cases of the H1N1 virus this fall, now is the time to revisit preparedness plans. To help property professionals, BOMA has compiled a preparedness best practices list.

“Preparedness is essential for property professionals as they strive to protect tenants, buildings and business operations against a variety of threats,” said BOMA International Chair and Chief Elected Officer James A. Peck, RPA, FMA, senior director of asset services, CB Richard Ellis. “A well thought out, regularly reviewed and practiced emergency preparedness plan is the best defense we have against any emergencies.”

An effective preparedness plan includes an emergency response plan, a communications strategy and a blueprint for business continuity. Here is a list of tips to help property professionals start planning now:

1. Review your plan. Regularly go over your building’s emergency preparedness plan with your team to ensure everyone is familiar with all aspects of emergency protocol.
   
   
2. Practice makes perfect. Have your preparedness team take part in tabletop exercises, in which team members walk through various emergency scenarios and propose responses to “what if” questions.
   
   
3. Involve your tenants. Make certain all of your tenants are aware of the building evacuation procedures and encourage them to participate in evacuation drills.
   
   
4. Communicate. Develop a multi-layered crisis communication plan that is fast and effective in reaching tenants, local authorities and agencies, and the media.
   
   
5. Stay alert. Sign up for daily alerts to monitor weather conditions and cases of pandemic influenza in your area.
   
   
6. Work with authorities. Review local evacuation procedures and identify the agency that will issue evacuation orders.
   
   
7. Cross-train staff. Identify and provide cross-training essential personnel to provide critical services.
   
   
8. Revisit HR policies. Determine how your company’s leave and salary policies will apply in emergency situations, such as a pandemic flu outbreak, when a significant portion of your workforce may be unable to come to work.
   
   
9. Operate remotely. Consider identifying off-site work facilities or telecommuting capabilities to ensure business continuity in the event of a disaster.
   
   
10. Find the latest resources. For the latest information and resources on H1N1, visit BOMA’s Pandemic Flu Resources site. BOMA knows buildings. Visit the BOMA bookstore to order these publications: "The Property Professional’s Guide to Emergency Preparedness"; "Are Your Tenants Safe? BOMA’s Guide to Security and Emergency Planning"; "Pandemic Influenza: Are You Prepared?"; and "When Disaster Strikes, What Really Matters?. "
    
    

Prudential Mortgage Capital Closes $108 Million Loan for Kimco Realty Corporation

Edited: Jennifer Brenner
Source: Prudential Mortgage

Prudential Mortgage Capital Company has closed a $108 million loan on behalf of its general account client for a portfolio of retail properties owned by Kimco Realty Corporation. Prudential Mortgage Capital is the commercial mortgage lending business of Prudential Financial, Inc.

The portfolio consists of seven grocery-anchored retail centers and one non-grocery-anchored community center located in Florida, New Hampshire, New Jersey, North Carolina, Pennsylvania and Texas. Constructed between 1967 and 2002, the properties total more than 1.5 million square feet.

Tom Goodsite, a principal in Prudential Mortgage Capital’s Atlanta office, arranged the seven-year fixed-rate loan.

“We were delighted to work with Kimco Realty on this transaction, which was an excellent investment opportunity for Prudential Mortgage Capital because of the borrower’s real estate expertise and the portfolio’s strong grocery-anchored properties,” said Goodsite. “We look forward to working with Kimco over the life of this loan and remain committed to providing excellent service to our borrowers.”

Prudential Mortgage Capital Company is a national full-service, commercial and multifamily mortgage finance business with $62 billion in assets under management and administration as of June 30, 2009. Leveraging a 130-year history of real estate finance, the company offers one of the most comprehensive lines of real estate finance products and originates loans for Fannie Mae DUS™, FHA and Freddie Mac Targeted Affordable programs; Prudential’s general account; and other institutional investors.

KBS Real Estate Investment Trust II Closes on 570,038-sq.-ft. Office Complex in Prime Washington, D.C., Submarket

Edited: Jennifer Brenner
Source: KBS REIT II

KBS REIT II, a publicly offered, non-traded real estate investment trust has purchased Willow Oaks Corporate Center, a high-profile, high-demand office complex offering 570,038 square feet of Class A space in the prime Washington, D.C., submarket of Merrifield in Fairfax County, Va., 10 miles west of the Nation’s Capital.

KBS REIT II purchased the three-building property for $112,173,598, or $196.78 per square foot, and represented itself in the transaction. William E. Kaye, Bill Prutting, Jr., and Randall Heilig of CBRE represented the seller in the acquisition, which closed late Aug. 26, 2009.

Willow Oaks Corporate Center is currently 93.2 percent leased to such tenants as SRA International, ACS, General Dynamics and Computer Science Corporation. Of the complex’s total leasable space, 60 percent is occupied by companies listed on the NYSE, and a sizeable percentage is taken by government contractors providing services for various public agencies.

“We continue to see Washington, D.C., as a market with above-average potential thanks to a gradual rebounding of the government and service sectors,” said Senior Vice President Robin Burke of KBS’ Washington, D.C. office. “Willow Oaks offers an excellent balance of price, location, access and amenities, allowing us to price the building very aggressively relative to the competition.”

Located near the intersection of Route 50 and the Capital Beltway (I-495), two of Northern Virginia’s busiest commuter routes, the property is convenient to Tysons Corner and Washington Reagan and Dulles International Airports. The 11.4-acre site is supported by a conference center, fitness center, café and shuttle service to the Dunn Loring METRO station. Each building features its own parking structure, and a range of restaurants and full- and limited-service hotels are located nearby.

The three buildings, 8260, 8270 and 8280 Willow Oaks Corporate Drive, were completed in 1986, 1989 and 2003, respectively. 8270 Willow Oaks Corporate Drive has been fully leased since its initial lease-up in 2005.

ProLogis to Develop 503,000-Square-Foot Facility for a Leading UK Retailer in Scotland

Edited: Jennifer Brenner
Source: ProLogis

ProLogis, a global provider of distribution facilities, recently announced plans to develop a new, 503,000-square-foot distribution facility in Scotland for a leading UK retailer. The existing ProLogis customer currently occupies more than 300,000 square feet at ProLogis Park Coventry in the West Midlands, UK.

"ProLogis has recently refined its approach to development, and we are extremely pleased to announce another transaction that reflects our efforts to monetize our land bank while also meeting the distribution space needs of a repeat customer," said Philip Dunne, president of ProLogis in Europe. "It was a combination of best location, security of delivery and customer service that enabled ProLogis to capture this significant piece of new business."

As a part of this third-quarter development agreement, ProLogis will construct the facility on a 32-acre parcel of land it currently owns in Newhouse, Scotland, subject to planning consent. The company has entered into an agreement to sell the facility upon construction completion to Canada Life Limited, a wholly owned subsidiary of Great-West Lifeco, one of the largest Canadian life and health insurance companies.

"Canada Life is pleased to commit to the purchase of this distribution facility," said Michael White, investment director at Canada Life. "ProLogis has an impeccable reputation for its high-quality, energy-efficient design and development. As such, we have been committed to this project early on and look forward to adding this facility to our growing portfolio upon its completion next summer."

The facility is located immediately adjacent to junction six of the M8 motorway, Scotland's primary east-west route connecting the capital city of Edinburgh to the city of Glasgow. The distribution center will include green features, such as rainwater harvesting and a sustainable urban development drainage system. Construction of the facility will begin in the fall of 2009 and is expected to be completed in mid-2010.

This transaction represents the largest new build-to-suit agreement signed in the UK in more than 10 months. Andrew Griffiths, UK managing director for ProLogis added, "With our combination of attractive land positions and unparalleled construction expertise for grade A, sustainable facilities, we are uniquely suited to satisfy our customers' ongoing needs and capture new development business, despite a stressed economy."

ProLogis is one of the largest providers of distribution space in the UK with a distribution portfolio totaling approximately 18.5 million square feet. Other major customers in the country include ASOS.com, Bosch-Siemens, Debenhams, DHL, GEFCO, Honda Logistics, Sainsbury's, Screwfix, Spec Savers and Superdrug.

LaSalle Investment Management announces Global CEO relocation to Asia

Edited: Jennifer Brenner
Source: LaSalle Investment Management

Today LaSalle Investment Management announced that Jeff Jacobson, CEO will relocate to LaSalle’s Asia headquarters in Singapore effective 1 January 2010.

LaSalle Investment Management, Inc., a member of the Jones Lang LaSalle group, is a global real estate investment manager, with approximately $36 billion of assets under management (as at Q1 2009) of private and public property equity investments. LaSalle is active across a range of real estate capital and operating markets including private and public, debt and equity and its clients include public and private pension funds, insurance companies, governments, endowments and private individuals from across the globe.

Announcing these changes, Jeff commented: “Asia is an increasingly important part of our global business, and represents some of LaSalle’s greatest future growth opportunities both in terms of investment activities and identifying new sources of capital. We currently have over $3 billion worth of committed equity capital representing $7 to $10 billion of investment capital for this region. We believe this capital will provide LaSalle and our investors with unprecedented investment opportunities over the coming years, and we are committed to supporting this region with our most senior and experienced global investment professionals.”

Jeff's move will allow him to work more closely with the senior management team of LaSalle Asia in executing its business and investment strategies. Having worked in the U.S. for over 15 years and in Europe for almost a decade, the move allows Jeff to increase his knowledge of, and involvement with, the third main region in LaSalle's global business. The existing Asian management team will remain in their current roles and responsibilities.

Jeff will continue to execute his responsibilities in his global role as CEO. With regards to Europe where Jeff has been located for the past nine years, the teams will continue to be led by LaSalle's European co-heads, Charles Maudsley and Simon Marrison. Jeff will continue to remain on the European Investment Committees to ensure continuity in LaSalle's investment governance in the region.

ADAPT: The ARGUS Distressed Asset Plan & Technology

In today’s economic climate, we are all faced with many challenges. In many ways CRE participants have been left to stand alone while enduring previously unknown pressures and pitfalls. Some common challenges include:

• Disconnected property market participants and transaction processes
• Misalignment of distressed asset supply and demand
• High search and transaction costs
• Limited pricing information

No one is providing us with the solution we need to move forward… until now.

ADAPT (The ARGUS Distressed Asset Plan & Technology) is comprised of a significant group of executives from across the commercial real estate industry. As a group, we recognize that the problems of the market are also our problems. We understand that unless we come together to solve the problem of the mounting number of distressed commercial real estate assets, the severity and duration of the drain these assets are placing on the commercial real estate industry and the larger economy will be needlessly extended.

The largest accumulation of distressed assets our industry has ever seen deserves an answer.

Our solution enables holders of distressed assets, within minutes and with total anonymity and security to:

• Triage toxic assets,
• Prepare them for sale,
• Determine highest and best use,
• Project an asset’s or portfolio’s current and future health,
• Determine real-time current and future pricing, and instantly and confidentially align your supply with national qualified buyers currently looking to acquire your specific asset or portfolio.

All of this leads to a centralized marketplace for distressed assets. This patented distressed asset solution has been formed through a partnership of ARGUS Software, the leading provider of management solutions that optimize the value of commercial real estate investments, RIISnet, LLC, Resolve Technology, Fidelity National Title and leading national asset management firms.

ADAPT provides real time and forward looking analytics to create pricing and workout models combined with an electronic communication center that links buyers and sellers instantly and provides access to all relevant information 24/7.

The platform is free to deploy, creates and defensibly legitimizes disposition solutions. ADAPT is a turnkey solution that immediately and confidentially meets FDIC lender analysis and disposition requirements.

ADAPT, accessible through the ARGUS Transaction Zone powered by RIISnet is free to access and use, the only fee is a nominal success fee, paid from closing proceeds.

Benefits of ARGUS Transaction Zone powered by RIISnet:

• Automated Alignment of Buyers, Sellers and Capital
• Anonymous Access to Real-time Market Pricing and Analytics Unavailable Elsewhere
• Transparent Process with Uniform Data Enabling Faster, More Efficient Transactions
• Portfolio and Asset Management Forecast Capabilities Unavailable Elsewhere
• Secure Platform with Global Communication and Market Reach
• Upfront Title Services
• Integrated Access to Asset Management and Transaction Support Services

We will be holding informational webinars this week to delve further into the action plans and benefits of ADAPT.

Live site demonstrations are held each Tuesday via WEBEX at 3:00 pm central time. To access that demo simply click on:

https://RIISnet.webex.com and join the 3:00 pm cst Tuesday meeting.

Below is a link to an eight minute voice over PowerPoint focused on ARGUS Transaction Zone powered RIISnet functionality, a brief message from Mark Rose, a respected CRE brokerage leader:

• http://riisnet.com/Flash/RIISnetoverview.html
• http://riisnet.com/Flash/RIISnetRealcomm.html

RIISnet website quick reference guide: http://riisnet.com/welcome/QuickReferenceGuide.pdf

Average Deal Size Tumbles As Large Lot Size Deals Dry Up in European Commercial Property Market

Edited: Jennifer Brenner
Source: CBRE

The average transaction size completed in the European commercial real estate market in the first half of 2009 has fallen by more than half since the peak of the market in 2007, reflecting the extent to which the credit crunch has affected the ability of investors to complete large deals in today’s market.

The average size of transactions agreed in H1 2009 in Europe fell to €18.4 million, a 59% decline from the €44.4 million average deal size recorded at the peak of the market in H1 2007, according to new research recently released by CB Richard Ellis.

The most significant development in H1 2009 was the precipitous fall in the number of the very largest transactions being agreed. When the market was at its strongest, investors keen to get capital into the market were prepared to pay a premium for portfolios. As a result there were 115 transactions of €200 million or more completed in H1 2007, with a total value of over €51 billion.

In H1 2009, the number of transactions in this value segment had fallen to just nine, with a total value of €4.2 billion. Accordingly, smaller deals of below €50 million accounted for 48% (by value) of transactions completed in the European property market in H1 2009, compared to 25% of the total market in 2007.

Of the small number of larger deals completed this year, the retail sector has dominated the bigger lot size deals, accounting for approximately 35% of the total investment volume transacted in H1 2009. The largest transaction in Europe during the first half of 2009 was the sale of the mostly retail former Dawnay Day portfolio in the UK for over £600 million (€669 million).

Clearly the fall in capital values has had an impact on average deal size. In the UK, IPD data shows that capital values have fallen by 44% from their peak in mid 2007 and other European countries have also seen substantial falls – although in most cases not to the same extent. However, even this is not sufficient to explain the fall in the average deal size. The other explanation is the difficulty in financing the largest transactions now that banks are unable to securitise large loans.

Jonathan Hull, Executive Director of EMEA Capital Markets, CB Richard Ellis, said: “The banks’ appetite for lending on large transactions has been very limited since the second half of 2007. However, in recent months we have seen greater willingness to lend. It is now possible to find lenders willing to get involved in transactions up to €100 million and this threshold continues to increase.”

LaTour Signature Group and IndoChine Group Launch Hospitality Management JV; Industry Veterans Collaborate on First Project in Thailand

Edited: Jennifer Brenner
Source: LaTour Signature Group

Bustling with affluent leisure and business travelers, Asia has become an exemplary model for the hospitality industry, with many successful luxury hotels and lifestyle brands. Realizing the potential of this market and other areas around the globe, LaTour Signature Group, a joint-venture enterprise with ResortCom Elite that provides management services to small, luxury fractional ownership properties, and IndoChine Group, an international lifestyle brand, have teamed up to create the LaTour IndoChine Hotel Group. The newly formed hotel management company is also announcing its first project, the IndoChine Resort and Villas, in Phuket, Thailand.

Based in Singapore, the LaTour IndoChine Hotel Group will provide comprehensive specialized services to developers entering the realm of boutique hotels and six-star hotels, as well as whole and fractional ownership villas. The group plans to expand further into Asia, in addition to the Middle East, New Zealand and Australia.

"By combining the strengths of the LaTour Signature Group and the IndoChine Group, we are able to further assist developers and manage properties with global influence," said Tom LaTour, founder of LaTour Signature Group. "For example, the IndoChine Resort and Villas represent an ideal opportunity to create a premier hybrid luxury resort for the region and Middle East overall."

The first property in the LaTour IndoChine Hotel Group's portfolio, the IndoChine Resort and Villas in Phuket, Thailand, promises to be a haven of contemporary Asian living. Overlooking Kalim Beach and the Andaman Sea, the resort consists of one- to six-bedroom villas, ocean view studios and a large entertainment complex. The property will include elevated terraces, a stunning waterfall, two natural pools and five spacious spa treatment rooms, along with full-time butler service and high-speed wireless Internet throughout all accommodations.

"The IndoChine Resort and Villas is the first of many LaTour IndoChine properties to come," said Michael Ma, chief executive of the IndoChine Group. "And by providing all the necessary services and expert advice luxury resorts and hotels need, the LaTour IndoChine Hotel Group will help them successfully launch into the Asian market."

McDonald's Reups Contract with Jones Lang LaSalle; Goes Green

Edited: Jennifer Brenner
Source: Jones Lang LaSalle

Oak Brook-based McDonald's renewed its strategic alliance partnership with Jones Lang LaSalle for transaction management and project management for 25 leased regional offices throughout the United States as well as facility management and project management on 831,000 square feet of space within five buildings throughout Chicago's western suburbs. Further, Jones Lang LaSalle announces that McDonald's world headquarters became the 18th building nationally to earn the prestigious LEED EB Platinum certification.

"McDonald's has been a valued client of ours for nearly a dozen years," said Ted Glimp, Managing Director of Jones Lang LaSalle's Corporate Solutions group. "In that time, we have successfully partnered with McDonald's to optimize the value of its office holdings, establish a more effective environment for its office workers, and extend its leadership position in environmental sustainability."

Since July of 1997, Jones Lang LaSalle has provided facility management and project management services to McDonald's 88-acre Oak Brook campus, which includes its U.S. headquarters, world headquarters and Hamburger University; its audio/video production facility in Elk Grove Village; and the McDonald's museum, its premier restaurant, in Des Plaines. Today, Jones Lang LaSalle represents McDonald's in more than 1.2 million square feet of leased or owned properties throughout the U.S.

Sustainability Efforts Lead to LEED Platinum Certification at McDonald's World Headquarters

In April 2009, the global food services' 704,000 gross square-foot, four-story world headquarter facility earned the prestigious Leadership in Energy and Environmental Design (LEED) EB Platinum certification by the U.S. Green Building Council, its highest certification level. Only 17 other buildings achieved LEED EB Platinum certification since the program began in 2004.

Among the green initiatives at the McDonald's world headquarters:

• The office layout and building design allow natural daylight penetration and exterior views of the wooded campus.
  
  
• Low mercury, energy-efficient interior lighting is used throughout the building.
  
  
• Exterior lighting helps minimize light pollution.
  
  
• Enhanced metering is used to monitor building systems for maximum efficiency.
  
  
• Preferred parking is offered for Alternative Fuel Vehicles.
  
  
• Project management staff ensures the use of indoor air quality compliant paints and cleaning products.
  
  
• 100 percent of all landscape irrigation on the Home Office Campus is done with reclaimed storm water.
  
  
• Fry oil from the McDonald's restaurant located inside the world headquarters building is recycled to make bio-diesel fuel to power a transportation shuttle to other nearby McDonald's buildings.
  
  
• 75 percent of the property is comprised of native or adaptive vegetation.
  
  
• 45 percent of the total building energy consumption is procured from offsite, renewable energy sources (solar/wind).
  

LEED Green Building Rating System(TM) encourages and accelerates global adoption of sustainable green building and development practices through the creation and implementation of universally understood and accepted tools and performance criteria.

Brandywine Inks Nearly 500K SF in Leases in Metro DC

Edited: Jennifer Brenner
Source: Brandywine Realty Trust

Brandywine Realty Trust, which owns and manages more than 7.5 million square feet of office space in Metro DC, announced today that it has signed over 428,000 square feet of new and renewed leases year-to-date.

"Despite the challenging economic environment, we have been able to maintain a high level of lease renewals and new tenant leases," stated Bob Wiberg, Executive Vice President and Senior Managing Director for the Metro Washington DC Region of Brandywine Realty Trust. "We attribute this success to the quality of our real estate portfolio and the high level of service offered by our leasing and management personnel."

Leasing highlights include the following transactions:

• Serco renewed a 34,623 square foot lease at 11781 Lee Jackson Highway in Fairfax, VA. Serco was represented by Harry Klaff of Jones Lang LaSalle.
  
  
• URS renewed a 13,258 square foot lease at 13825 Sunrise Drive in Dulles Corner, VA. URS was represented by Laurent Myers of Studley.
  
  
• Digital Sandbox, Inc. renewed a 7,279 square foot lease and signed a 6,535 square foot lease expansion at 8260 Greensboro Drive in Tysons Corner, VA. Digital Sandbox was represented by Kelly McBride of Jones Lang LaSalle.
  

In addition to these leases, Brandywine Realty Trust previously announced new, renewed and expansion leases of:

• AT&T Government Solutions renewed a 105,172 square foot lease at 1900 Gallows Road, Vienna, VA. AT&T was represented by Cathy Delcoco and Brad Davis of CBRE.
  
  
• National Rural Utilities Cooperative Finance Corporation extended two leases, one at 2201 Cooperative Way (92,284 square feet) and the other at 2121 Cooperative Way (7,316 square feet) in Herndon, VA.
  
  
• The existing tenant signed a lease expansion for 29,939 square feet at 13820 Sunrise Valley Drive, Herndon, VA to occupy 99.5% of the building. Meredith LaPier and Brad Davis of CBRE represented the tenant.
  
  
• Lockheed Martin renewed a 20,667 square foot lease at 2411 Dulles Corner, Herndon, VA. Lockheed Martin was represented by Traci Morris Cole of Jones Lang LaSalle.
  
  
• Lockheed Martin signed a new 22,311 square foot lease at 2275 Research Boulevard, Rockville, MD. Lockheed Martin was represented by Traci Morris Cole of Jones Lang LaSalle.
  
  
• Red Hat signed a renewal and lease expansion totaling 23,879 square feet at 8260 Greensboro Drive, Tysons Corner, VA. Red Hat was represented by Brad Davis of CBRE.