C&W buys Premisys,grows asset mgmt. portfolio Consolidation continues to strike at the heart of the asset management business, with the latest announcement coming from New York-based Cushman & Wakefield and its acquisition last month of Premisys Real Estate Services Inc. from the Prudential Insurance Co. of America.
Obviously the move strengthens C&W's asset management business, growing its portfolio from 140 million sq. ft. to over 200 million sq. ft. But more importantly, it positions the firm to take on other recent movers and shakers in the property management arena, including CB Commercial's recent purchase of Koll.
C&W has been growing its Asset Services division over the last two years, with the hired of Leonard Helbig to head the division and most recently the acquisition of MS Management Services and its 20 properties totaling more than 14 million sq. ft.
"This undertaking sets another milestone in our commitment to the strategic growth of our Asset Services Group and affords new opportunities to showcase our depth of services and expertise to new and existing clients," says Arthur Mirante, president and CEO of C&W.
From the Pru perspective: "Premisys has been built into one of the industry's major national players, and expect it to continue to attract new business. However, we've now decided that's really not a stand-alone business in which we have a long-term interest, considering our investment portfolio strategy," says Byron K. Atkinson, managing director for Prudential's General Account real estate investment operations. "We wanted to ensure, however, that both the Premisys associates and business would go to a top-flight organization."
LaSalle commences IPO,joining a crowded market After much anticipation, LaSalle Partners based in Chicago commenced its initial public stock offering last month on the New York Stock Exchange (NYSE: LAP) with four million shares priced at $23 per share. The IPO amounts to about 25% of the company's total common stock after the offering. Morgan Stanley & Co., William Blair & Co. and Montgomery Securities are the the managing underwriters for the. Net proceeds of $83.5 million will be used to pay down LaSalle's outstanding debt and to further its international expansion, selective acquisitions and co-investment activities.
S&P creates REIT index,CMBS strength continues Wall Street's surprisingly strong bull market has helped real estate investment trusts (REITs) to hitch up their belts after a disappointing first quarter. IPOs for LaSalle Partners, Equity Office, CCA Prison Realty Trust and Boston Properties have given the sector renewed vitality.
Now Standard & Poor's has created a new benchmark REIT Composite Index, following its popular S&P 500, designed to track REIT performance. "The REIT market has grown substantially over the last few years, and there's a growing demand for a high-quality index," says Jack Zwingli, S&P's group vice president. The index includes 100 REITs which have a market value of at least $100 million, and covers 80% of the securitized real estate market. The basket of equity, mortgage and hybrid REITs breaks out with roughly 25% in retail, 23% in residential, and about 16% in office and industrial.
Also on the REIT front, a report from Montgomery Securities, San Francisco, affirmed that for the REITs it tracks, FFO grew by 12% in the first quarter, which was generally in line with the firm's expectations. And REIT stock prices have stemmed their lackluster first quarter performance.
On the commercial mortgage-backed securities (CMBS) front, Morgan Stanley Fixed Income Research, New York, has issued a report on the strong performance of the CMBS market through June. According to the firm's CMBS index, B-rated securities showed a near-15% return for the first six months, while BB-rated securities produced a 12%+ return.
"Total return from non-investment grade CMBS doubled that of similarly rated corporate bonds over the first six months of the year," says Howard Esaki, Morgan Stanley principal. Through July 15, total CMBS issuance stood at $16.2 billion, compared to $13.6 billion at this time last year.
Fun Expo celebrates family entertainment niche One-stop shopping will soon be available for shopping center owners and managers that are looking for ways to entertain their customers. They need only look as far as Fun Expo -- the superstore for family entertainment products and services.
Now in its seventh year, Fun Expo, the International Family & Location-based Entertainment Center Show, will showcase the latest in family entertainment technology as well as feature a comprehensive educational program for both newcomers and veterans. Fun Expo is being held Sept. 23-26 at the Sands Expo Center in Las Vegas.
"The Superstore of Family Fun" exhibit area, where attendees can make side-by-side comparisons of all the latest and most innovative games, rides, merchandise and services, will be open Sept. 24-26 and will feature such entertainment options as video games and coin-operated rides, virtual reality, simulators, carousels and miniature golf. In addition, family entertainment center development consultants as well asand design professionals will be in the exhibit hall.
Shopping center owners and managers will want to come early to Fun Expo to participate in the educational program, which begins on Sept. 23 and continues throughout the duration of the show.
One of the highlights of the Fun Expo seminar program is a comprehensive, location-based entertainment (LBE) conference, which will be held Sept. 23-24 at the Mirage Resort and Convention Center. Location-based entertainment is the buzzword of the minute, but what does it really mean? What's the next new project to pull people away from their in-home theater? And where are the opportunities for long-term success? Seating is limited for this special program, which requires a separate registration. However, LBE conference attendees will be Fun Expo's guests in the exhibit hall.
For those that are looking for a shorter session or basic primer on the LBE phenomenon, the topic also will be addressed on Sept. 25 at the Fun Expo site.
Another topic of interest is the Developers' Forum -- FEC Development for Long-Term Success. Family entertainment centers (FECs) continue to evolve, but the rules of successful development remain constant. Panelists will include owners and operators of FECs as well as consultants and builders who will describe the ups and downs of developing and operating a family fun center.
Some of the topics that will be discussed in the half-day forum on Tuesday, Sept. 23, will include choosing the best location, business plans that get financing, indoor and outdoor FECs, children's entertainment centers and high-tech fun centers.
In addition, seminars will be held on facility design and layout, sports-themed FECs and packaging a fun center in a small space as well as a number of others geared primarily toward family entertainment center operators.
According to show manager Bailey Beeken, approximately 9,000 attendees are expected at Fun Expo '97. For more information about the show, please contact Fun Expo at 383 Main Ave., Norwalk, Conn. 06852; or call toll-free 1-888-FUN EXPO (386-3976). Early-bird registration ends Aug. 20.
Industry stars will shine at NAIOP's annual conference
From coast to coast, the real estate market is performing phenomenally well in both office and industrial product. But in such a strong and competitive market, how do you maximize profit and how do you go beyond just being a well-leased property?
These are the sort of questions that Herndon, Va.-based National Association of Industrial & Office Properties (NAIOP) hopes to answer at its 1997 NAIOP Annual Conference and Marketplace, co-sponsored by National Real Estate Investor. The conference will be held Oct. 15-18 in San Francisco.
"The primary focus is going to be on profitability and enhancing profitability," says James Shapiro, president of Peter Lawrence Commercial Real Estate Inc. and a member of both NAIOP's national board of directors and its education committee. "The past few years have been more on the 'we're going to hang on' approach. Well, all that's behind us. The market is better. We are back. Now the question is how do we take advantage of it and maximize the profit potential in our various industries?"
To offer some of these solutions, the conference has lined up leaders in the industry to speak at such provocative programs as Bust to Boom: Development Activity from Coast to Coast, International Intrigue: Growing in a Global Market, and Leasing in a Strong Market: If It's Too Easy, You're Missing the Gravy!
Attendees of the Bust to Boom session will receive first-hand information about industry events, trends, transactions and deal structures outside one's immediate area of activity, says Gregory Specht, president and CEO of Specht Properties Inc., Beaverton, Ore., and moderator of the session. The panelists, including Opus U.S. Corp. President and CEO Keith Bednarowski and CarrAmerica's President, COO and CEO Tom Carr, will discuss their methodologies for forecasting market demand, underwriting criteria, capital structuring, yield requirements and exit strategies.
"We targeted this topic to discuss what we would classify as a much needed return to appropriate 'business as usual' activity in the development world," Specht says. "However, we also will specifically address the very real concern that the development community may easily (or conveniently) forget the painful lessons of the past decade, wherein developments were undertaken for reasons that had everything to do with the availability of capital, and nothing to do with demand for our products in a specific marketplace."
Shapiro, who will be the moderator for Leasing in a Strong Market, and other panelists -- David Latvaaho, president of Heitman Properties; Julien Studley, president of Julien J. Studley Inc.; and Gary Beban, president of CB Commercial -- "want to show the attendees at this particular element of the conference how to maximize the profit potential of properties during a strong market and maximize it not just for the current leasing year, but in leasing years to come," Shapiro says. "You can't just sit on your laurels saying, 'We're well-leased.' Everyone's well-leased. If that's all you're doing, then you're leaving a lot on your plate; you're missing the gravy."
And for those companies trying to gain an understanding of doing business internationally and the pitfalls of doing such deals, NAIOP is providing an informal Q&A session International Intrigue being moderated by Michael Pittana, managing director at V&A Properties Ltd., Toronto. Pittana; Simon Milde, chairman and CEO of the Greenwich Group; Bradley Olsen, president of Atlantic Partners; and Bill Rothe, COO of Koll; will provide attendees with personal examples and experiences in dealing at an international level, as well as suggest ways for others to participate at this level.
"Although real estate still has a number of local characteristics (i.e. market knowledge, leasing particulars, etc.), the flavour for real estate has really become one of globalization of both capital and its perspective," says Pittana. "This globalization as it relates to the U.S./North America is reciprocal, not only are international players interested in investing in developing strategic alliances in North America but, additionally, North American firms are seeking out alliances in other areas around the world."
And anyone in commercial real estate can benefit from attending the conference, Shapiro says. "Certainly over 90% of our membership is involved in local real estate," he adds. "The programs are geared for the developer, owners and managers, people involved in office and industrial real estate whether you own just one business park in one city or many business parks in many cities; it's of equal benefit to you."
For more information about the conference, visit NAIOP's website at www.naiop.org or call the NAIOP Educational Foundation at (703) 904-7100 ext. 108.
Chicago-based Heller Financial Capital Funding and Morgan Stanley have completed a $618 million securitization of commercial and multifamily mortgage loans. The pool includes manufactured housing, self-storage, retail, multifamily, office, industrial, congregate care and hotel properties, located in 33 states, with a heavy concentration in California. Heller originated $505 million of the loans. The transaction was rated by both Fitch Investors Service and Moody's.
Commercial prices are high and rising, but the rate of increase is slowing in the markets that have been most popular with investors, according to the latest current issue of the Korpacz Real Estate Investor Survey published quarterly by The Korpacz Co., based in Frederick, Md. Contact Peter F. Korpacz at (301) 829-3770.
Office construction starts are still rising as vacancies drop, while rents reach new heights throughout North America, according to the 1997 mid-year market data just released by Oncor International. The report says that 305 new buildings were started in first-half 1997, compared to 155 a year ago. Contact Great Ink Communications at (212) 741-2977.
W.S. (Bill) Garland, president and owner of Daniels Associates Inc. of Canada and RPS Resource Property Services Ltd. in Toronto, is the new president of the Building Owners and Managers Association (BOMA).
Lawrence Jacobson has been promoted to Director for Commercial Real Estate Finance at the MBA.