Global Viewpoints

Parkway Properties Renews 190,000-SF GSA Lease In Chicago

Edited: Jennifer Brenner
Source: Parkway Properties

Parkway Properties, Inc. has signed a 190,000 square foot long-term lease renewal with the General Services Administration ("GSA") at 233 North Michigan in Chicago. The GSA's lease was originally set to expire November 30, 2009, and has now been extended through November 30, 2020. The lease economics reflect fair market value and include an effective rental rate of over $30.50 per square foot with 10 months of free rent and approximately $7.8 million in tenant improvements or additional rental rate concessions. Additionally, approximately $3.0 million in leasing commissions will be paid in the fourth quarter of 2009 related to this renewal. The building is 91.0% occupied as of November 23, 2009.

Steven G. Rogers, President and Chief Executive Officer, stated, "We are pleased to announce this important renewal by General Services Administration at 233 North Michigan which secures valuable occupancy in a highly competitive environment. The U.S. Department of Health and Human Services has been a longstanding Parkway customer since 1999, and we are pleased to have retained our relationship with them. Their decision recognizes the long-term attractiveness of the Chicago East Loop market and our building and gives Parkway a stronger market position as we move through the recovery."

Parkway Properties, Inc., a member of the S&P Small Cap 600 Index, is a self-administered real estate investment trust specializing in the operation, leasing, acquisition, and ownership of office properties. The Company is geographically focused on the Southeastern and Southwestern United States and Chicago. Parkway owns or has an interest in 65 office properties located in 11 states with an aggregate of approximately 13.4 million square feet of leasable space at November 23, 2009. Included in the portfolio are 21 properties totaling 3.9 million square feet that are owned jointly with other investors, representing 28.8% of the portfolio.

Florida Law Firm Reveals 'Secret Weapon' in Attack on Distressed Real Estate Market

Edited: Jennifer Brenner
Source: Greenspoon Marder, P.A.

The Fort Lauderdale law firm of Greenspoon Marder, P.A. is taking an unconventional approach to an unusual real estate market. The firm recently hired a director of real estate services to capitalize on real estate opportunities developing in the commercial and multi-family markets. Jeffrey H. Cannon, who has three decades of experience in real estate, banking and financial services, will utilize his varied experience and bank contacts to identify, analyze and present opportunities to clients of the firm.

"There's a home for every real estate asset," said Cannon. "We just need to find it. There are many instances where buyer and seller haven't met, or they're just not sure how to put together a lucrative deal. It's our job to come up with a strategic - even out-of-the-box - solution to benefit buyer and seller."

"It's a win-win," added Gerald Greenspoon, co-managing partner of Greenspoon Marder. "We can now offer our clients the knowledge and experience of a law firm deeply rooted in real estate, combined with the expertise of a seasoned real estate and financing professional. It's a powerful team, which is vital to putting together deals in this market."

Cannon, who is not a lawyer, has an extensive, 27-year career in the commercial real estate, financial services and banking industries. He has served as executive vice president of commercial banking at CNL Bank in South Florida and executive vice president for commercial real estate for Regions/Union Planters Bank in the Broward and Palm Beach County markets. Prior to that, Cannon established and managed the residential construction lending department for SouthTrust Bank in South Florida and served as senior vice president responsible for commercial real estate lending for First Union and Barnett banks in Broward, Palm Beach and Lee counties.

"Over the years, Jeff has developed impressive analytical skills in real estate," said Michael Ross, senior partner at Greenspoon Marder. "He'll capitalize on that skill set in identifying valid opportunities in the commercial and multi-family markets and then present them to potential investors."

Cannon holds a bachelor's degree in business administration from Washington University in St. Louis, Mo. and a master's degree in business administration from Florida Atlantic University. He is involved with the Urban Land Institute, International Council of Shopping Centers and the National Association of Industrial and Office Properties. A Boca Raton, Fla. resident, Cannon is actively engaged with the SOS Children's Village in Coconut Creek, Fla. and is a graduate of the Leadership Fort Lauderdale.

CBRE Names Maureen Ehrenberg as Global Facilities Management Leader for Global Corporate Services Business

Edited: Jennifer Brenner
Source: CBRE

CB Richard Ellis Group, Inc. (CBRE) has named Maureen Ehrenberg as the head of Global Facilities Management for the company’s Global Corporate Services (GCS) group. The appointment of Ms. Ehrenberg, who recently joined CBRE as senior managing director in its strategic consulting division, reinforces the firm’s management diversity and depth. GCS provides transaction, facilities and project management and strategic consulting services to major occupiers around the world.

In this role, Ehrenberg will lead the firm’s Global Facilities Management service line, assisting CBRE’s corporate, healthcare, and public sector clients who seek transformational change in managing their facilities and related functions as a means to streamline operations and reduce operating expense. CBRE’s global facilities management clients benefit from the firm’s global footprint, technical expertise and significant sourcing leverage.

Ehrenberg brings considerable and far-reaching corporate real estate experience to this position. Previously, she led the Global Client Services business for Grubb & Ellis, which included property and facility management, transaction management, project management, lease administration and strategic consulting services. She was recently recognized by the Illinois Real Estate Journal’s “Women in Real Estate” with a Career Achievement award for her making significant contributions to the commercial real estate industry, delivering extraordinary results for her clients and serving as a role model to her peers.

“Moving Maureen into this role is a tremendous win for CBRE,” said William Concannon, president of Global Corporate Services. “Facilities management is a highly successful service line that we expect to grow more quickly under Maureen’s leadership.”

“Our corporate clients are looking for every advantage,” said Karen Ellzey, executive managing director and head of Strategic Consulting for CBRE. “Maureen’s combination of technical and strategic expertise will enable us to develop the next generation of solutions for our facilities management clients. I look forward to partnering with her in her new role.”

“I am honored and delighted by this appointment,” Ehrenberg said. “CBRE’s global facilities management professionals are first rate. Our opportunities to continue to grow and lead in this space are unlimited.”

Ehrenberg is a Fellow of The Royal Institution of Chartered Surveyors (FRICS) and serves on its Americas Board. She is a Counselor of Real Estate (CRE), a member of Lambda Alpha International (LAI) and a licensed real estate broker in Illinois. She conducted graduate-level research in international economics at The City University in London, England, where she completed her bachelor's degree with joint honors in economics and accounting.

Duke Inks 500,000-SF Lease In Chicago Spec Development

Edited: Jennifer Brenner
Source: Duke Realty Corp.

Duke Realty Corporation’s Chicago office has leased its 503,200-square foot Crossroads 5 industrial building in Romeoville to RTC Industries Inc., a company providing store-ready solutions to the retail industry including planning and design, manufacturing, program management, global logistics, and retail technology. Crossroads 5, a speculative building that was completed in June of this year, is located at 801 N. Schmidt Road.

“When we started this building in early 2008, it wasn’t clear how drastically the market was going to change,” said Steve Schnur, senior vice president of Duke Realty’s Chicago operations. “We certainly feel fortunate to attract such a strong company as RTC to this building. The location works well for them, and we were able to structure an attractive long-term deal. I applaud them for their foresight to capitalize on today’s marketplace and make a move that will improve their efficiencies and work to their advantage.”

RTC was represented by Bill Frain, Todd Lippman and Jim Whalen with CB Richard Ellis, while Larry Johnson and Mike Mangan of CB Richard Ellis represented Duke Realty in the transaction.

In the greater Chicago area, Duke Realty owns, manages, or has under development nearly 11 million square feet of office, industrial and healthcare properties and has land available for sale or development. Duke’s local offices are located at 6133 North River Road, Suite 200 in Rosemont. Duke Realty Corporation specializes in the ownership, management and development of office, industrial, and healthcare real estate. The company owns, manages, or has under development more than 135 million rentable square feet in 20 U.S. cities.

HEI Hotels & Resorts' Fund III Acquires Doubletree Guest Suites in Waltham, Mass.

Edited: Jennifer Brenner
Source: HEI Hotels & Resorts

HEI Hotels & Resorts (HEI), the nation's fastest growing private owner/operator of hotel real estate, has acquired the 275-room Doubletree Guest Suites in Waltham, Mass. for an undisclosed amount. The all-suite hotel will undergo a renovation program totaling approximately $16 million to upgrade all public and private spaces. HEI will oversee the renovation, as well as manage the hotel.

"This is the second acquisition of our $515-million HEI Hospitality Fund III, L.P. in the past 90 days," said Steve Mendell, EVP--acquisitions and development. "There are a number of hopeful signs that the hotel acquisition market is thawing, and HEI is well positioned to be a major player in the coming months. Our acquisition pipeline is building, and we expect our acquisition activity to pick up markedly in 2010."

Located at 550 Winter Street in Waltham in the Route 128-West submarket, the hotel is convenient to Brandeis University and Bentley College and 30 minutes west of downtown Boston and Logan International Airport. Situated in the heart of Waltham's technology, pharmaceutical and professional business communities, the property is surrounded by more than 26 million square feet of corporate office space. It also is proximate to top Boston attractions and within minutes of historic Lexington and Concord.

"We approached the previous hotel owner regarding this hotel and completed the all-cash transaction," said Roger Clark, HEI's SVP - acquisitions and development. "We have significant expertise in the Boston metro market, and we see major potential in creating additional value in the asset through the implementation of our industry-leading management programs."

The renovation will touch upon all aspects of the hotel. The project will focus primarily on the guest suites, and will include the replacement of most case and soft goods, the addition of flat-screen televisions, and significant improvements in the guest bathrooms. The capital program will also address areas of the hotel's exterior, entrance, lobby, restaurant, and meeting space.

Barclays Capital Acquires Crescent in Joint Venture with Goff Capital

Edited: Jennifer Brenner
Source: Barclays Capital

Barclays Capital has formed Crescent Real Estate Holdings LLC , a joint venture with Goff Capital, Inc., to acquire Crescent Real Estate Equities Limited Partnership (“Crescent”) from Morgan Stanley Real Estate Funding II. Crescent is a real estate investment company that owns and manages over 17 million square feet of premier office space, as well as investments in resort residential developments, luxury hotels and Canyon Ranch®. Terms were not disclosed.

The firm also announced the appointment of John C. Goff as chairman and CEO of Crescent. The appointment marks Goff’s return to Crescent, a firm he formerly led as vice chairman and CEO until its sale to Morgan Stanley in 2007.

“We are pleased to welcome John back to Crescent as a joint owner and chief executive,” said Iain Abrahams, managing director, member of Barclays Capital Executive Committee.

“Given his extensive knowledge of the Crescent portfolio, John is well suited to manage the company going forward,” said Haejin Baek, managing director, head of commercial real estate capital markets at Barclays Capital.

“The quality of Crescent’s portfolio is strong and I look forward to partnering with the Crescent and Barclays Capital teams to manage the company through the current cycle and ensure that we are well positioned for the market recovery,” said Goff.

Goff's reputation as one of the leading commercial real estate investors in the industry has been established over a career that spans more than 20 years. Goff co-founded Crescent Real Estate Equities in the early 1990s. He led the company as vice chairman and CEO during its IPO in 1994 and until its sale to Morgan Stanley in 2007. In 1998, Goff founded Goff Capital Partners, L.P., a private investment firm focused on real estate which currently has more than $5.0 billion in assets under management.

ING Real Estate Development and Apsys Reach Agreement on Quartier de l’Amphitheatre Scheme with City of Metz, France

Edited: Jennifer Brenner
Source: ING

ING Real Estate Development and Apsys have signed contracts with SAREMM (the Metz Metropolitan land development company) on Quartier de l’Amphitheatre, a 42,500 sq m retail and leisure scheme in the Amphitheatre urban regeneration district.

This new inner-city district is located next to the Metz Central high-speed train terminal and to the Centre Pompidou-Metz modern art museum scheduled to open in 2010. The shopping and leisure centre will include ten mid-sized units, a food supermarket, and a wide range of smaller shops. This new type of urban shopping centre is expected to open in 2014.

Commenting on the signing, Menno Maas, CEO of ING Real Estate Development said: “The signing of the Quartier de l’Amphitheatre scheme in Metz is an important signal of the return of confidence in the European market for new retail developments. The project is also a perfect example of our focus on retail-led mixed use development.”

ING Real Estate Development is a leading pan-European developer with a project pipeline of around EUR 9 billion. The company focuses on retail-based mixed-use projects. ING Real Estate Development is a business of ING Group, a global financial institution of Dutch origin offering banking, investments, life insurance, and retirement services to over 85 million private, corporate and institutional clients in more than 40 countries.

ARGUS Software Taps European Director to Lead Global Development

Written By: Jennifer Brenner

ARGUS Software is pleased to announce that Paul Broadley BSc has been selected as the firm’s new Chief Development Officer and will manage all of ARGUS Software’s global development efforts. In addition to his new responsibilities, Paul will retain his previous position as Managing Director with oversight for ARGUS Software’s activities within the European region.

Paul has over 15 years of experience in the field of commercial property software development joining ARGUS in 2006 as the director of software development when ARGUS merged with Circle Software.

“After the merger between ARGUS and Circle, Paul Broadley was instrumental in the integration of the worldwide development team and strategy,” notes Mark Kingston, ARGUS Software president and CEO. “Paul’s deep knowledge of the commercial property market combined with his unmatched track record of product delivery, make him the ideal leader for our global development efforts. His location in Europe and ability to build and bring together global teams is an important step in creating a company that is truly responsive to the needs of a global market.”

Prior to his tenure with ARGUS, Paul formerly held the position of IT director for the core team that shaped the successful European firm, Circle Software. He directed the development of the groundbreaking valuation system Visual Investor, now rebranded as ARGUS Valuation - Capitalisation, and most recently, ARGUS Development - Budget.

“In the near future, the shape of technology solutions within the commercial property markets will change dramatically, and ARGUS is doing the work now to provide a seamless, global platform that will create unforeseen efficiencies for its clients,” adds Broadley.

RICS: Sentiment Toward Hong Kong Real Estate Shows Signs of Improvement

Edited: Jennifer Brenner
Source: Royal Institution of Chartered Surveyors

The latest RICS Global Property Survey shows that sentiment in Hong Kong is noticeably more upbeat than the second quarter report both in terms of the lettings environment and investment activity.

Confidence in the outlook for tenant demand over the next three months moved into positive territory in Hong Kong particularly with a big swing in sentiment for rental expectations. In the second quarter of the year, a net balance of 67% of respondents from Hong Kong expected rents to fall further; by contrast in the latest survey, a net balance of 16% of respondents suggest rents are likely to rise over the next three months.

Similar trends also found in other parts of the world, Peru, Columbia and Brazil also reported positive net balances on rental expectations while South Korea, China, Thailand and India were only moderately negative. Australia, UAE and the UK also saw rental expectations become less negative over the quarter but the weak results from the US and Japan were not far from the lows touched in the second quarter report. Interestingly, a number of European countries including Ireland, France and Spain have the worst readings on the rental outlook.

The mood amongst real estate investors also appears to have perked up according to the survey with capital values expected to increase in a number of countries including Brazil, Hong Kong, South Korea, China and India. This more positive mood has also been reflected in activity indicators with number of investment bidders per property picking up sharply not just in Asia and Latin America but also in a number of European countries. This is consistent with the latest data from Real Capital Analytics which shows either a steadying or a modest increase in transaction levels around the globe.

Sentiment towards capital values in the US is, however, still very negative with 53% more surveyors expecting further declines (rather than increases) in the run-up to Christmas. In the UK, the net balance on capital values expectations is still in negative territory although only marginally so and there has been a noticeable increase in transaction activity.

RICS Hong Kong Vice Chairman David Faulkner said, "The rebound in Asian economies is clearly being reflected in the more positive responses to both rental and capital value expectations throughout the region. By way of contrast, the relatively sluggish economic revival through much of Europe and the US is consistent with the more downbeat results for these regions."

"This contrast could become even more pronounced through 2010 as any unwinding of the monetary and fiscal stimulus presents a further challenge to the tentative recoveries being experienced in most western economies."

324,000-SF Lease Transaction Inked at Chicago’s Franklin Center

Edited: Jennifer Brenner
Source: Tishman Speyer

William Blair & Company has signed a 324,700-square-foot lease extension to remain at Chicago’s Franklin Center through August 2017. The lease transaction is believed to be downtown Chicago’s largest to date in 2009.

Designed by Skidmore, Owings & Merrill, Franklin Center is considered one of Chicago’s most architecturally significant properties. The West Loop complex consists of two connected buildings at 222 West Adams Street and 227 West Monroe Street totaling nearly 2.5 million square feet, making it one of Chicago’s largest and most distinctive Class A commercial office properties. Tenants enjoy a host of on-site amenities, along with nearby first-class restaurants, shopping and cultural options, and easy access to public transportation. The property is managed by Tishman Speyer on behalf of a joint venture that includes the Australia-based Tishman Speyer Office Fund.

Commenting on the transaction, Tishman Speyer senior managing director Casey Wold said, “At a time when the competition for blue-chip tenants has never been more intense, we are pleased to retain William Blair & Company at Franklin Center well into the next decade. Our ongoing aim is to maintain and operate Franklin Center as a signature property, and we believe this transaction reflects our success in meeting that objective.”

Tishman Speyer president and Co-CEO Rob Speyer added, “We’re proud to have William Blair & Company, one of Chicago’s great companies and one of the world’s great investment organizations, remain at Franklin Center . We’re pleased to be able to continue accommodating their headquarters space needs.”

Steve Stratton regional managing director for Jones Lang LaSalle, said, “The renewal transaction was the right answer for William Blair, given the challenging environment, and the Tishman Speyer team delivered a comprehensive business solution that met our objectives.”

Along with Steve Stratton, the Jones Lang LaSalle team representing William Blair & Company in the transaction included Robert Schmidt, Pamela Stamataky, Jack Keenan and Michael Tirpak. Vickie Noonan, Joe Gordon and Ellen May of Tishman Speyer represented building ownership.