For Reckson, build it and they will come to Long Island Melville, N.Y.-based Reckson Associates Realty Corp. has leased 157,772 sq. ft. in its Reckson Business Center at Airport International Plaza 2000 in Bohemia, N.Y., to Hauppauge, N.Y.-based Atkins Nutritionals Inc. The transaction, which finalized before completion of the 206,000 sq. ft. AIP 2002 building, represents a leasing trend at the park, where the previous two buildings were leased to single tenants before construction was completed. AIP 2002 is expected to be completed this fall.
Reckson received the Developer of the Year Award from the Commercial Industrial Brokers Society of Long Island for developing Airport International Plaza, a 517,000 sq. ft. speculative industrial park.
Voit/Majestic raise the ante in Los Angeles area Irvine, Calif.-based Voit Commercial Brokerage and Los Angeles-based Majestic Realty Co. have completed a 335,000 sq. ft., $16.8 million 10-year lease for Seattle-based Pacific Coast Feather Co. at 8550 and 8500 Rex Road in Pico Rivera, Calif. Majestic and Voit are the development/marketing partners for Pico Rivera Business Park.
Upon completion, the development will total 856,000 sq. ft. The first phase - three buildings totaling 520,000 sq. ft. - was completed in May.
Also under the Voit umbrella, Voit Development Co. has sold its final two buildings at Van Nuys Center at The Plant, a 788,800 sq. ft. business park in Panorama City, Calif. Sales terms were not disclosed.
The larger building, a 190,000 sq. ft. manufacturing and distribution center, was a build-to-suit sale for Jerry Leigh of California Inc. The local office of New York-based Cushman & Wakefield represented Voit, while Los Angeles-based Lee & Associates represented Jerry Leigh. Also a build-to-suit deal, Los Angeles-based Delphi Properties represented Voit in the sale of a 108,000 sq. ft. headquarters facility for Veratex Inc., while the local office of Northbrook, Ill.-based Grubb & Ellis represented Veratex.
Miami continues to draw aviation-linked development Locally based Pasquale Properties has signed a lease with Miami-Dade County to develop a 178-acre mixed-use business park adjacent to Opa-Locka Airport in Miami's Northwest submarket. The investment in the Class-A development, known as Renaissance Airpark, is estimated at between $450 and $500 million.
The 3.6 million sq. ft. development, which will include 35 buildings, will provide storage, maintenance and repair services for commercial aircraft as well as warehousing, manufacturing and distribution facilities for aviation businesses. The mixed-use park will also include office and retail space.
Construction of the park's first building, a $10 million, 200,000 sq. ft. warehouse, is expected to begin early this summer.
Spectrum Astro aims for the skies after Pivotal sale Phoenix-based Pivotal Group has sold an 80-acre parcel of its Fortune Center property in Gilbert, Ariz., to Gilbert-based aerospace firm Spectrum Astro Inc. The $6.6 million sale includes an assumption of improvement district needs.
Spectrum Astro will develop the property as its new corporate headquarters and satellite manufacturing facility. Phase I of the new facility will include three separate buildings totaling 274,000 sq. ft. of engineering, manufacturing, test, support and office space. During the next two decades, Spectrum Astro plans to build out to a total of 750,000 sq. ft. to accommodate 3,000 employees.
AMB grabs more Bay-area space in Oakland San Francisco-based AMB Property Corp. has acquired Edgewater Industrial Center in Oakland, Calif., from Bellevue, Wash.-based Paccar Inc. for $16 million. The San Jose, Calif., office of Colliers International brokered the transaction.
AMB acquired the 406,000 sq. ft., 18.9-acre development for investment and redevelopment. According to Colliers' senior vice president Greig Lagomarsino, redevelopment will add 270,000 sq. ft. of Class-A industrial space to a market that has a 4.2% Class-A vacancy rate. The property is adjacent to Interstate 880 and the Oakland-Alameda County Coliseum.
PREIT drops Virginia industrial development Philadelphia-based Pennsylvania Real Estate Investment Trust (PREIT) has sold a 294,000 sq. ft. industrial property in Alexandria, Va., to Philadelphia-based Preferred Real Estate Investments Inc. Proceeds from the sale totaled $12 million. In connection with the sale, PREIT terminated the lease of the building's sole tenant, Woonsocket, R.I.-based CVS Drug Co., which otherwise would have terminated April 30. Primarily a retail and multifamily investor, PREIT considered the Virginia industrial property non-core.
The building's $8 million sale to Preferred Real Estate Investment will result in a gain of $6.6 million this quarter. The lease termination payment of $4 million will be recorded as income this quarter and account for a $3.8 million gain in FFO for 2000. The lease termination will cause a $300,000 decrease and a $100,000 decrease in FFO in 2001 and 2002, respectively.
Northeast Atlanta gains another big-box tenant In a deal assembled by locally based The Walker Cos., Atlanta-based Rooker & Associates will develop a 758,000 sq. ft. distribution center in Hall County, Ga., for Continental General Tire Inc., a subsidiary of Continental AG of Hanover, Germany. The $20 million facility will be located at the Gainesville Industrial Park West.
Construction has begun on the development, with a projected completion date of August.
Home Shopping Network leases the whole thing St. Petersburg, Fla.-based Home Shopping Network (HSN) has leased an 817,750 sq. ft. industrial building in Fontana, Calif., four months prior to the building's planned completion. HSN inked a 10-year, $32 million lease, and plans to occupy the order fulfillment center in August.
Newport Beach, Calif.-based Western Realco is developing the facility on behalf of Des Moines, Iowa-based Principal Capital Management.
Corporate Realty goes coast to coast for Best Buy St. Louis-based Corporate Realty Inc. represented Minneapolis-based Best Buy Inc. in the leasing of three warehouse/distribution facilities. Best Buy leased 220,800 sq. ft. from Denver-based ProLogis at the Meadow Ridge Business Park in Elkridge, Md.; 200,000 sq. ft. from Indianapolis-based Duke-Weeks Realty Corp. in the Glenwillow Business Park in Glenwillow, Ohio; and 87,772 sq. ft. from Foster City, Calif.-based Legacy Partners in the Lincoln Amador Business Center in Livermore, Calif.
Archon/Whitehall bringing telecom hotel to Philadelphia A joint venture between Dallas-based Archon/Whitehall Street Real Estate Funds has acquired the 625,000 sq. ft. former operations building from locally based Philadelphia Newspapers Inc. for more than $15 million. Archon/Whitehall will convert the building at 440 N. Broad St. and 440 N. 15th St. into a telecom hotel.
Locally based Binswanger represented Philadelphia Newspapers Inc., while locally based Smith Mack & Co. represented the buyer.
AMLI adds more spec space in Chicago suburbs Itasca, Ill.-based AMLI Commercial Properties Trust has begun construction on two spec industrial developments in suburban Chicago. At Windham Industrial Center V in Romeoville, Ill., AMLI is building a 450,000 sq. ft. facility that will be completed this fall. In Crystal Lake, Ill., AMLI is building a 142,000 sq. ft. industrial facility at Parkway Industrial Center IV that also will be completed this fall.
The local office of New York-based Insignia/ESG will lease the Romeoville site, while locally based Darwin Realty & Development will lease the Crystal Lake development.
Mallory expands Midwest holdings Milwaukee-based Mallory Properties has acquired the Beloit, Wis., and Rockton, Ill., real estate assets of Beloit Corp., which is emerging from federal bankruptcy proceedings. The Beloit property includes a 500,000 sq. ft. manufacturing plant and 240,000 sq. ft. of office space on 41 acres. The Rockton development includes a 284,310 sq. ft. industrial building on 142 acres and a 140,158 sq. ft. research and development building on 60 acres.
According to the Rockford, Ill., Register Star, Mallory paid $22 million for a total of five Beloit Corp. plants in the United States and Canada, including machinery, equipment and land.
Speed kills Maybe it's the across-the-Bay proximity to Oakland and Al Davis' Raiders, or maybe it's just a clear vision - one way to do it - of where to take a public real estate company. Either way, San Francisco-based AMB Property Corp. plans to continue to narrow its focus after selling $1 billion in retail properties over the past year. For AMB, the mantra is high-throughput distribution.
"Speed matters, and storage doesn't," says Blake Baird, president of AMB. "Looking back 50 years, with the Interstate Highway System, growth in air cargo, the advent of the Internet and the availability of information, what's happened is information has been substituted for inventory. So what do we want to invest in?
"We want to invest in buildings that facilitate the movement of goods," Baird concludes.
Baird swung through Atlanta, NREI's hometown, last month to discuss AMB's plans with analysts and show off some of the company's prime developments - a distribution for Internet grocer Webvan in Gwinnett County, Atlanta's Northeast submarket, and a distribution center for Emery Worldwide near the Atlanta airport. The company now owns 5.5 million sq. ft. of distribution space in Atlanta, with an additional 450,000 sq. ft. under development.
Atlanta and its airport submarket exemplify AMB's focus on the top-six distribution markets and infil locations. More than half of AMB's holdings are in the top six markets - northern New Jersey, Chicago, Los Angeles, Dallas, Atlanta and the San Francisco Bay area. These markets - and a handful of others - are AMB's targets for growth. The company actually has withdrawn from the Philadelphia and Wilmington, Del., markets because of a lack of growth potential. Baird expects the company to dispose of an additional $1 billion in industrial real estate that is not in AMB's core markets in the next three to five years.
"We don't need to be everywhere," says Baird. "We're growing our company, but we're reducing the number of markets where our capital is deployed."
Naturally, a focus on high-throughput distribution attracts logistics and e-commerce tenants in need of fulfillment. With the Internet companies, AMB takes a standard approach to development and the buildings it owns, and also applies that approach to tenant improvements.
"Our view is that we lease the customer a very generic building," says Baird. "Location and functionality are the protection. We try do all the right credit underwriting, to look at the backers of the company, look at its balance sheet and get a good security deposit, but at the end of the day, that doesn't matter."
One thing that certainly does matter to Baird and AMB: performance of the company's stock. Despite the Nasdaq's and New York Stock Exchange's gyrations of the past two months, AMB's shares have increased in value about 15% since the beginning of the year, outperforming the REIT index and the Nasdaq. Late in May, AMB's shares were approaching their 52-week high of $23.50 per share.
"I think you can make an argument that investing in the last few years has been about momentum more than fundamentals," says Baird. "We think the real estate companies - the ones that have good real estate, growth in cash flow, earnings and a relatively low valuation compared with other sectors - might be a good place to be."