Prelease brings suburban Atlanta development With a prelease for 80% of the building, Tampa, Fla.-based Opus South Corp. will develop Royal Centre Four, a six-story, 300,000 sq. ft. office building in Alpharetta, Ga. The new building will be the fourth Opus South has developed in the Royal 400 office park in the past four years.

Atlanta Casualty Co. and The Windsor Group - both insurance companies that are part of Cincinnati-based American Financial Group - will lease 240,000 sq. ft. at Royal Centre Four. Occupancy for the $40 million building is expected by fall 2000.

Embarcadero Center just not enough for Boston Properties Boston-based Boston Properties has acquired two Class-A office buildings totaling approximately 506,000 sq. ft. and two development sites in downtown San Francisco. The properties were acquired for $113 million in cash and a $4.5 million promissory note from a fund managed by New York-based Morgan Stanley Dean Witter and Houston-based Hines. The acquisition marks Boston Properties' second San Francisco deal after acquiring Embarcadero Center earlier this year.

Boston Properties acquired 601 and 651 Gateway Boulevard, the development site at 611 Gateway Boulevard and an additional two-acre development site, all located on a 22.3-acre parcel. One of the development sites is entitled for a 275,000 sq. ft. office building. The acquired property is part of Gateway Commercial Center in South San Francisco.

Avenue of the Americas remains hot property A joint tenancy managed by New York-based W&M Properties Inc. has sold the leasehold on 1185 Avenue of the Americas to an investment group led by New York-based Goldman Sachs & Co. The 1.1 million sq. ft. Rockefeller Center district tower is fully leased. New York-based Rockwood Realty Associates served as sales agent for 1185 Avenue of the Americas.

The deal was a Section 1031 exchange which allows tax-deferred transactions under certain conditions.

McShane sells Houston office building Rosemont, Ill.-based McShane Corp. has sold the 3100 Main Street office complex to the Houston Community College System (HCCS) as a turnkey redevelopment project. HCCS will use the $44 million facility as its administrative and communications headquarters.

The 3100 Main Street development, formerly the headquarters of Southwestern Bell, is a 12-story, 531,000 sq. ft. office building in downtown Houston. McShane purchased the property in January for redevelopment into a speculative, multi-tenant office property. The company has also acquired an adjacent parcel of land for a parking garage and retail space to support 3100 Main.

C&W arranges New Jersey deal The Financial Services Group of Fairlawn, N.J.-based Cushman & Wakefield of New Jersey Inc. has arranged the $65 million sale of 111 Sylvan Avenue in Englewood Cliffs, N.J., on behalf of MSGW Real Estate Fund LLC. A German investor advised by Lend Lease Real Estate Investments purchased the 410,000 sq. ft. suburban office building, which is fully leased.

Located on 27 acres approximately 1 mile from the George Washington Bridge, 111 Sylvan Avenue was originally built in 1953 and has undergone extensive expansions and upgrades, including a complete building and systems renovation in 1998. The property can also accommodate an additional 80,000 sq. ft. building.

Since 1995, nearly 60 million sq. ft. of office space has changed hands in central and northern New Jersey's 143 million sq. ft. total inventory, according to Cushman & Wakefield.

Northwestern Mutual originates $92.7 million loan Milwaukee-based Northwestern Mutual Life Insurance Co. has closed a $76.7 million loan to PPR Redmond LLC to finance the corporate headquarters of AT&T Wireless in Redmond, Wash. The 14.8-acre site is located in the Redmond Town Center development in downtown Redmond and currently consists of five buildings totaling 486,900 sq. ft. and parking facilities that can accommodate 2,000 cars. Construction also has begun on an additional 95,560 sq. ft. office building that will be funded as construction progresses by an additional $16 million loan. AT&T Wireless leased the entire complex.

The borrower is an affiliate of The Macerich Co., Santa Monica, Calif., and the Ontario Teachers Pension Plan Board, Toronto.

Beat Box II: Where were you when the capital markets blinked? About this time a year ago I visited a friend and college roommate who is in the mortgage business in St. Louis. Wade, it seems, was a little disturbed by the events of that week - the credit collapse that crippled mortgage-backed securities markets and jeopardized his job. In the end, Wade came out okay, but he wasn't the only one sweating. Far from it.

"I should have that date tattooed on my head," says Stephen B. Siegel, chairman and CEO of Insignia/ESG. "We'd gone through a couple of frenzied years for investment sales and the business in general. It didn't slow down. It hit a wall with the capital markets collapse."

With a few exceptions - notably CBS removing its headquarters from the market in New York - Siegel reports a solid rebound with aggressive sales and a steady flow of "intelligent" capital.

Tim Ballard, managing partner and CFO at Newport Beach, Calif.-based Buchanan Street Capital, attributes last year's crisis not to real estate fundamentals, but to an economy that, overall, was too leveraged. One year later, the result is a more cautious approach.

"What separates it from crises of before is that this was really a blink of the eye," Ballard says. "Previous crises went on for years and years and were generally related to economic cycles or changes in legislation, real estate taxes or banking regulations. Here, we continue to have a strong demand for real estate almost across the board."

"There is a little more tenuous attitude in the market in terms of people's aggressiveness in underwriting real estate transactions," Ballard continues. "In early 1998 and 1997, there were a variety of players doing very well, like the Credit Suisse First Bostons and Nomuras of the world, who provided very highly leveraged financing to their clients in order to securitize debt. Those kinds of investors have been pushed out of the market, either going out of business or facing restrictions in terms of their balance sheet and what they can do."

On the CMBS side, the credit collapse may have ended the branding trend where billion-dollar issues were owned and offered by one company. Issuers are diluting their risk, Ballard says.

"What people found is that, as they held real estate debt securities on their balance sheet, they held a tremendous amount of risk," he says. "Today, you'll find a lot more people on the real estate debt origination side really emphasizing going to market with their securitizations much sooner. You're finding a lot more cooperation between various issuers of debt, so that they can pool their portfolios together and clean up their balance sheets much faster."