Global Viewpoints

JLL Takes Outsourcing Lead for Third Year

Edited: Jennifer Brenner
Source: Jones Lang LaSalle

Jones Lang LaSalle has been selected in the Leaders category for The 2010 Global Outsourcing 100, the annual ranking of high-quality service providers across all industries as determined by the International Association of Outsourcing Professionals(IAOP).This marks the third time Jones Lang LaSalle has been selected for the Global Outsourcing 100 list.

The 2010 Global Outsourcing 100 recognizes the world's best outsourcing service providers and advisors. These rankings are based on applications received and evaluated by an independent judging panel organized by IAOP. The 2010 panel is led by IAOP Chairman Michael F. Corbett.

"As the economy recovers, partnering with the world's best outsourcing providers and advisors will be more important than ever," Corbett said. "The Global Outsourcing 100 helps companies easily identify those partners that will help them emerge as leaders."

"Corporate real estate departments around the world choose our firm as their strategic alliance partner for our integrated service delivery platform, total client focus and ability to align around their interests to deliver value," said Stuart Hicks, CEO of Corporate Solutions at Jones Lang LaSalle. "The Global Outsourcing 100 serves as recognition that we rank among the world's best outsourcing organizations not only within commercial real estate but across all industries."

M1 Real Estate Pays £175m for Victoria House in London’s West End

Edited: Jennifer Brenner
Source: Jones Lang LaSalle

After the acquisition of Credit Suisse’s headquarters in Canary Wharf, the Lebanese group M1 Real Estate have continued their acquisition trail by purchasing Victoria House, Bloomsbury Square, from Irish based Moritz Group. At circa £175m, this is the largest office deal in the West End market since 2007 and M1 secured the deal in front of ten other institutional bidders due to its funding capacity, its track record, and its team credibility.

Victoria House is a 300,000 sq ft office, retail and leisure investment occupying the east side of Bloomsbury Square. The art deco Midtown office block was built in 1929 and fully redeveloped by Garbe in 2003 to a class A standard office building, spending in excess of £50million. It is more than 50% let to government backed tenants, with a weighted average term of 9.5 years.

The property, a prominent island site, is the latest addition to M1 Real Estate’s existing portfolio of income-generating and development-oriented assets in London. These include properties in Cadogan Square, Cadogan Gardens, Grosvenor Place, Pall Mall, and the recently acquired freehold of 20 Columbus Courtyard, part of the Credit Suisse UK Headquarters Complex. M1 Real Estate’s international assets include investments in the US, Europe, and the Middle East.

Moritz have being investing in the London market over the past eight years and have bought and sold a number of property investments in this period. The group intends to keep a foothold in the London property market and continues to hold a number of other prime investment properties in the capital city. The Group has it main base in Ireland but also holds assets in Bucharest, Romania.

Moustapha El Solh, M1 Real Estate CEO, commented: “Victoria House sits perfectly within our strategy to build upon our portfolio of prime assets in major cities around the world. We’re extremely pleased with the acquisition, the real estate and investment fundamentals make sense and most importantly Victoria House has an imposing history and architecture.”

Jones Lang LaSalle advised M1 Real Estate, CBRE advised Moritz.

Aberdeen’s European Balanced Property Fund Acquires Shopping Centre in Finland

Edited: Jennifer Brenner
Source: Aberdeen Property Investors

Aberdeen European Balanced Property Fund has acquired a shopping centre in Finland from Rockspring PIM, acting on behalf of Rockspring TransEuropean III. The city of Kokkola, located on the western shore of Finland, is the regional capital of the Central Ostrobothnia province. The Chydenia-I shopping centre is situated in the heart of Kokkola. The entire shopping centre, Chydenia -I, -II, and –III, has an area of 18,000 m². Chydenia -I comprises a lettable area of 7.852 m². Main tenants in Chydenia-I are: Hennes & Mauritz, Clas Ohlson, Mick’s, JC, Pukumies, Specsavers and Rosso. The property also includes a car park with free access for the shopping centre customers.

The Aberdeen European Balanced Property Fund currently has properties with a total asset value of some €271 million under management in Finland, France, Belgium, the Netherlands and Germany. The Fund has further deals in the pipeline in all of these countries.

To date, Aberdeen European Balanced Property Fund has raised €262 million in equity from institutional investors and is open for new capital.

Nico Tates, Fund Manager for Aberdeen European Balanced Property Fund, commented:
“The asset fits the core investment strategy of the Fund well, strengthening its presence in the Finnish retail market. It was a rare opportunity to buy a modern and well-functioning shopping centre at an attractive yield level and with upward potential. This combines both cash returns and long term capital growth.”

The Buyer was advised by Aberdeen Property Investors Finland. The seller was advised by Catella Corporate Finance.

Brookfield Properties Completes 1.2-MSF Lease Renewal and Expansion with KBR at Cullen Center in Downtown Houston

Edited: Jennifer Brenner
Source: Brookfield Properties Corp.

Brookfield Properties Corp. has completed a lease renewal and expansion with KBR for a total of 1.2 million square feet of office space at KBR Tower and 500 Jefferson St. in downtown Houston.

“Successfully completing an office transaction of this size – involving a significant expansion – speaks to the increase in tenant activity we are beginning to see around our major markets,” said Dennis Friedrich, president & CEO of Brookfield Properties’ U.S. Commercial Operations.

KBR renewed its existing 700,000 square feet of space at KBR Tower as well as nearly 300,000 square feet at 500 Jefferson St. and is expanding its presence in both buildings by a combined 234,000 square feet.

“We are thrilled that KBR has chosen to renew and expand office space at two of our properties in the Cullen Center complex, including the tower that bears the company’s name,” said Paul Layne, regional head for Brookfield Properties’ Houston operations.

“Expanding our downtown Houston presence is not only a good business decision, but also brings the added benefit of contributing to our City’s continued downtown revitalization,” said Klaudia Brace, SVP, administration for KBR.

Dan Bellow and Mike Boehler of Jones Lang LaSalle represented KBR in lease negotiations. Brookfield was represented in-house by Mr. Layne and Paul Frazier.

The Cullen Center complex consists of four office towers: the two mentioned above as well as Continental Centers I & II. These towers offer a unique combination of office space in one mixed-use complex. Amenities include a food court, the Crowne Plaza Cullen Center Hotel, full-service banking facilities, along with numerous other retail amenities and conference facilities. The complex is situated adjacent to the downtown YMCA and the Metropolitan Business and Sports Club. Abundant parking in four attached garages, convenient access to the freeway system, and numerous adjacent Metro stops add to the prominence of complex. Cullen Center is inter-connected by an overhead walkway and is accessible via the extensive downtown tunnel system.

Brookfield Properties owns, manages and operates 9.1 million square feet of commercial space in Houston.

Brookfield owns, develops and manages premier office properties. Its current portfolio is comprised of interests in 110 properties totaling 75 million square feet in the downtown cores of New York, Boston, Washington, D.C., Los Angeles, Houston, Toronto, Calgary and Ottawa, making it one of the largest owners of commercial real estate in North America. Landmark assets include the World Financial Center in Manhattan, Brookfield Place in Toronto, Bank of America Plaza in Los Angeles and Bankers Hall in Calgary.

GGP Responds to Simon Property Group and Reaffirms Bankruptcy Emergence Process

Edited: Jennifer Brenner
Source: General Growth Properties, Inc.

General Growth Properties, Inc. (“GGP”) recently sent a letter to Simon Property Group, Inc. in response to Simon’s unsolicited indication of interest to acquire GGP.

In the letter, the Company reiterates its process for exploring all potential alternatives for emergence from bankruptcy and maximizing value for all of GGP’s stakeholders. These alternatives include a stand-alone restructuring funded with institutional equity capital as well as potential business combinations.

GGP has invited Simon to participate in the Company’s process, so that GGP may evaluate Simon’s indication of interest in the context of other strategic options. The Company intends to complete this process in an efficient and expeditious manner.

The full text of GGP’s letter to Simon follows:

February 16, 2010

Simon Property Group, Inc.
225 West Washington Street
Indianapolis, IN 46204

Attention: Mr. David Simon, Chairman of the Board and Chief Executive Officer

Dear David:
Thank you for your letters dated February 8 and 16, 2010 in which you indicated Simon’s interest in acquiring General Growth Properties, Inc. (the “Company”). We appreciate that you took the time to meet in person with management, UBS and Miller Buckfire to explain your indication of interest, as well as provide your view on the timing and diligence process you require in order to convert your indication of interest into a fully documented definitive proposal. We have been discussing your letter with your financial advisors during this past week. Our advisors have also discussed our position with you as recently as yesterday. We and our board of directors have given considerable thought to your indication of interest and have concluded based on discussions with other interested parties that it is not sufficient to preempt the process we are undertaking to explore all avenues to emerge from Chapter 11 and maximize value for all the Company’s stakeholders.

As we indicated during our meeting, we are about to commence a process to explore several potential options for the Company’s emergence from Chapter 11, including a sale of the entire Company as you have proposed as well as a capital raise. The Company and its advisors have been working over the past several months to prepare the Company to launch this process. We will be providing detailed information on the Company, including a confidential information memorandum, financial projections, and asset level information to participants. We will also provide access to an electronic data room. As we are committed to fully exploring all potential options available to the Company, we would like to include Simon as part of this process. We believe the information we would provide to you as part of this process will enable you to better understand the Company, get to a higher valuation, and provide a fully documented offer.

We understand from our meeting with you and the press release you issued this morning that time is of the essence. We feel the same, and intend to run our process in an efficient and expeditious manner. We are currently finalizing the information memorandum and plan to send materials to participants in the process by the beginning of March. We would expect to receive indications of interest within 4 weeks of the launch of the process. In order to expedite your participation and evaluation of due diligence information, we will be sending to you shortly a markup of the NDA you provided to us during our meeting in Chicago.

Again, we appreciate your interest and we recognize the potential value that Simon could bring as an option for the Company to emerge from Chapter 11. The Company intends to pursue the process described above and we look forward to your participation. However, we reserve the right to pursue any proposals that we receive prior to or after formally launching the process so that we can maximize value for all stakeholders of the Company, and we reserve the right to change the process at any time we determine appropriate and without notice.

We would be happy to discuss this response further. To that end, you should feel free to contact either UBS or Miller Buckfire.

Sincerely,
Adam Metz

Simon Property Group Makes $10 Billion Offer to Acquire General Growth Properties

Edited: Jennifer Brenner
Source: Simon Property Group, Inc.

Indianapolis-based Simon Property Group, Inc. has made a written offer to acquire General Growth Properties, Inc. in a fully financed transaction valued at more than $10 billion, including approximately $9 billion in cash. The text of Simon's February 8, 2010 offer letter to General Growth, as well as a letter Simon sent today to General Growth, are below.

Simon's offer would provide a 100% cash recovery of par value plus accrued interest and dividends to all General Growth unsecured creditors, the holders of its trust preferred securities, the lenders under its credit facility, the holders of its Exchangeable Senior Notes and the holders of Rouse bonds, immediately upon the effectiveness of a definitive transaction agreement. This consideration to creditors totals approximately $7 billion.

General Growth shareholders would receive more than $9.00 per General Growth share, consisting of $6.00 per share in cash and a distribution of General Growth's ownership interest in the Master Planned Community assets valued by General Growth at more than $3.00 per share. Simon is also prepared to offer Simon common equity instead of the cash consideration, in whole or in part, as payment to those General Growth shareholders or creditors who would prefer to participate in the upside of owning stock in Simon. Under Simon's offer, the existing secured debt on General Growth's portfolio of assets would remain in place.

The Official Committee of General Growth's Unsecured Creditors has advised Simon that it supports the Simon offer, and encourages General Growth to engage with Simon promptly to allow the proposed transaction to be considered by General Growth's creditors and shareholders as soon as possible.

David Simon, Chairman and Chief Executive Officer, said, "Simon's offer provides the best possible outcome for all General Growth stakeholders. Simon is in the unique position of being able to offer General Growth creditors and shareholders full, fair and immediate value. Our offer provides much-needed certainty to conclude General Growth's protracted reorganization process. We are confident it is the best option for all General Growth constituencies and far superior to any other third-party proposal or stand-alone plan that could be completed."

Mr. Simon continued, "This acquisition also offers a compelling value-creation opportunity for Simon shareholders. Simon's strong track record of successfully completing large acquisitions and our history of delivering superior property-level performance ideally position Simon to create additional value with General Growth's portfolio."

Michael Stamer, counsel for the Official Committee of General Growth's Unsecured Creditors, said, "Full cash payment to all unsecured creditors and the substantial recovery for equity holders that Simon has proposed would be a great result. We fully support and encourage prompt engagement by the company with Simon."

The transaction is not subject to a financing condition and would be financed through Simon's cash on hand and through equity co-investments in the acquisition by strategic institutional investors, with the balance coming from Simon's existing credit facilities. Simon expects the transaction to be immediately accretive to its Funds From Operations in the first year after closing.

Simon's offer is subject to confirmatory due diligence, which it believes can be completed within 30 days, and customary proceedings in the General Growth bankruptcy process, including bankruptcy court and creditor approvals. The transaction is also subject to negotiation of a definitive transaction agreement between Simon and General Growth which would provide for reasonable certainty of closing. Simon believes this can be accomplished promptly, simultaneously with the completion of confirmatory due diligence.

Lazard Ltd., J.P. Morgan and Morgan Stanley are acting as financial advisors to Simon and Wachtell, Lipton, Rosen & Katz is serving as legal advisor.

Following is the text of Simon's February 8, 2010 offer letter to General Growth, as well as a letter Simon sent yesterday to General Growth:

February 16, 2010
Board of Directors
General Growth Properties, Inc.
110 North Wacker Drive
Chicago, Illinois 60606

Ladies and Gentlemen:

It has now been more than a week since we met with your lead director, your CEO and your financial advisors and formally proposed to acquire GGP in a transaction that would provide a full cash recovery (par plus accrued interest and dividends) to GGP's unsecured creditors, the holders of its trust preferred securities, the lenders under the GGP credit facility, and the holders of Exchangeable Senior Notes, and in which holders of GGP common stock would receive both $6.00 per share in cash and all of GGP's ownership interests in the MPC assets, for a total value of more than $9.00 per GGP share. As we advised you, we are also willing to discuss consideration consisting (in whole or in part) of Simon common equity in lieu of the cash portion of the consideration to GGP's stockholders, and perhaps certain of its unsecured creditors, for those who would prefer to participate in the upside associated with owning Simon stock. As you also know, our transaction would not be subject to any financing contingency.

We have not received a substantive response to this offer from GGP or its advisors, nor any indication that you are prepared to enter into serious discussions so as to make our offer available to your shareholders and creditors. Accordingly, we are today making our offer public. The official committee of unsecured creditors of GGP strongly supports our offer and will encourage GGP to engage with Simon without delay, so as to allow our proposed transaction to be made available to GGP's creditors and shareholders, and GGP to achieve a prompt and successful conclusion to its reorganization proceedings.

We urge you to instruct your management and financial and legal advisors to immediately engage seriously with us, so that GGP and its creditors and shareholders can obtain the benefit of our proposed transaction – which provides for full and fair payment to all constituencies, is not subject to an extended period of market risk or other unforeseeable contingencies, and does not entail dilution of GGP's existing equity interests – and GGP can achieve a prompt and successful conclusion to its reorganization proceedings.

As we have previously stated, our offer is not open-ended, particularly given the uncertain economic environment that exists today. We look forward to hearing from you forthwith and to working together to consummate a transaction.

Very truly yours,
David Simon
Chairman of the Board and Chief Executive Officer

cc: Official Committee of Unsecured Creditors

February 8, 2010
Mr. Glenn Rufrano
Lead Director
Mr. Adam Metz
Chief Executive Officer
General Growth Properties, Inc.
110 North Wacker Driv
Chicago, Illinois 60606
Dear Glenn and Adam:

We are prepared to acquire General Growth Properties, Inc. ("GGP") in an all-cash transaction which will result in a favorable outcome for all of GGP's creditors and shareholders, and a prompt conclusion to GGP's reorganization proceedings. This letter is intended to provide you with the specifics of our proposal which are outlined below.

Consideration. Simon Property Group, L.P. ("Simon") would provide a full cash recovery (par plus accrued interest and dividends) to GGP's unsecured creditors, the holders of its trust preferred securities, the lenders under the GGP credit facility, and the holders of Exchangeable Senior Notes. Simon would also pay the holders of GGP common stock $6.00 per share in cash, and distribute to them all of GGP's ownership interests in the MPC assets. We are willing to discuss consideration consisting (in whole or in part) of Simon common equity in lieu of the cash portion of the consideration to GGP's stockholders, and perhaps certain of its unsecured creditors, for those who would prefer to participate in the upside associated with owning Simon stock.

We believe the current trading value of GGP's common already includes a takeover premium, and given its high percentage of insider ownership and the fact that the stock trades in an over-the-counter securities market, reflects a price that cannot be realized in a stand alone reorganization. Any reorganization has a highly uncertain outcome which can be achieved only after an extended period of time, while incurring considerable additional expense, and may result in significant dilution of the current equity holders to the extent creditor claims are satisfied through the issuance of additional equity and/or GGP is recapitalized with proceeds from the issuance of new equity.

No Financing Contingency. We have, or have access to, all of the financial resources required to consummate this transaction, and the transaction would not be subject to any financing contingency or condition.

Due Diligence. The terms described above are based on publicly available information and subject to confirmatory due diligence. We and our team of advisors have thoroughly analyzed GGP, its assets and the ongoing bankruptcy proceedings, based upon publicly available information, and we are prepared to proceed immediately to undertake and complete confirmatory due diligence and to enter into and consummate this transaction as promptly as possible. Simon has an unmatched track record of completing large and successful acquisitions, and we are prepared to commit the resources necessary to address all issues and finalize a mutually beneficial transaction between our two companies.

We are convinced that a transaction with Simon is superior to any proposal you may be contemplating. We trust that when considering our proposal, you will take into account the many benefits of having GGP's equity holders receive full and fair compensation for their interest versus the uncertain value in any other scenario. The fact that the proposal is all cash and pays unsecured creditors in full will bring certainty to the reorganization process and accelerate its completion which will have the added benefit of eliminating GGP's significant bankruptcy related expenses.

Our proposal is not open-ended, particularly given the uncertain economic environment that exists today. We look forward to hearing from you soon and working together to consummate a transaction.

Very truly yours,
David Simon
Chairman of the Board and Chief Executive Officer
cc: Official Committee of Unsecured Creditors