AFL-CIO investment program tops milestone with $2 billion Two union pension funds, the AFL-CIO Housing Investment Trust (HIT) and the AFL-CIO Building Investment Trust (BIT), have attained a milestone in exceeding $2 billion in fund assets. AFL-CIO funding is responsible for financing more than 55,000 housing units and 5 million sq. ft. of commercial and industrial space while creating 42,000 jobs. In 1996, HIT was the first labor organization to be a member in the National Partners in Homeownership, a presidentially created partnership, with a mandate to increase homeownership to 8 million by the year 2000. Over the last five years, HIT has financed more than $890 million in multifamily loans. HIT has committed more than $250 million over five years to the project.
Bryant & Associates merges with Mid-Atlantic powerhouse Norfolk, Va.-based Goodman Segar Hogan Hoffler GVA has merged with Atlanta-based Bryant & Associates to create the largest commercial real estate company in the Mid-Atlantic and one of the largest in the Southeast. Collectively, the group has 320 real estate professionals and 25,000 sq. ft. under management. The new group operates under the name Goodman Segar Hogan Hoffler GVA.
G.S Wilcox & Co. finances $50 million in transactions Morristown, N.J.-based G.S Wilcox & Co. financed nine deals in August for $50.7 million in New York, New Jersey and Pennsylvania. The largest of the transactions are $25 million in loans to Morgan Stanley & Co. to finance a 225,000 sq. ft. shopping center in Long Island City, N.Y., and a 273,000 sq. ft. industrial/distribution facility in Syosset, N.Y.
FINOVA Group acquires Belgravia Capital Corp. Phoenix-based FINOVA Group (NYSE:FNV) reached an agreement in September to acquire Irvine, Calif.-based Belgravia Capital Corp. uniting two powerful financial groups with 16 offices nationwide. Belgravia generated more than $1.2 billion in loans for 1996 and anticipates loan originations of $1.7 billion for 1997. The agreement calls for an initial payment to Belgravia's shareholders of approximately $90 million in FINOVA stock and cash up to $30 million in "earnout" payments over the next three years. For the first six months of 1997, FINOVA reports a net income of $65.4 million ($2.34 per common share) and total managed assets of more than $8.2 billion.
Cushman & Wakefield acquires Florida realty company Cushman & Wakefield of Florida's Miami office purchased Venturvest Realty Corp., a retail property management, leasing and sales company based in Miami, in a deal that brought C&W 39 retail properties and nearly 3.7 million sq. ft. throughout the Florida marketplace. The terms were not disclosed.
CRIIMI MAE purchases $211 million of CMBS CRIIMI MAE Inc., a full service commercial mortgage company based in Rockville, Md., purchased approximately $211 million in face amount commercial mortgage-backed securities (CMBS) for $159 million. In a deal that closed in September, CRIIMI MAE purchased 100% of the BB rated, B/B- rated and unrated securities from Merrill Lynch Mortgage Investors Inc. To date, CRIIMI MAE will have purchased CMBS with a face amount of $481 million for $317 million in 1997.
September was a hot month for international deals The month of September was very active with major deals happening all around the world in commercial real estate. First of all, Columbus, Ohio-based Crown NorthCorp. Inc. has teamed up with Stockholm, Sweden-based Catella, the leading property advisory firm in Sweden, in a $614 million transaction completed in September. The firms are providing asset management, financial and advisory services to the investment group Stenvalvet Fastighets AB, which is the consortium of Credit Suisse First Boston, the Swedish National Pension Insurance Fund, Fifth Fund Board and Crown NorthCrop., that purchased the single-largest real estate portfolio in Sweden to date. The portfolio acquired by Stenvalvet comprises 188 properties located in 98 municipalities and communities throughout Sweden.
Secondly, Draper & Kramer Realty Advisors (DKRA), a Chicago-based real estate services firm, has been appointed exclusive investment adviser to Frontier Fund of International Investment, a pension fund for the Republic of Chile. The fund will be offered the fourth quarter of 1997 and the incepted value will be nearly $50 million. DKRA will act as asset manager for the recommended investments to pursue properties with a low- to moderate-risk profile in the $2 million to $20 million range. Only private investors will be focused on for the fund, and the three other investment markets besides the United States are Brazil, Argentina and Venezuela. According to DKRA, Chilean pension funds are currently estimated at approximately $30 billion.
Thirdly, Willingsboro, N.J.-based Hill International has been retained to design and construct a $250 million hotel/office mixed-use complex in South Korea.The project is the first privately funded project in Korea using a foreign firm to supply the construction. The 42-story, five-star hotel will be called The Shangri-La in Seoul, Korea, and will have 700 rooms with an adjacent 22-story office tower that will span an entire city block. The Shangri-La is slated to be opened in June 2000. Tong Yang Hotels and Resorts, based in Seoul, is the owner of the massive hotel and office project.
LaSalle Partners reports 83% increase for second quarter Chicago-based LaSalle Partners reports for the second quarter ending June 1997 revenue totaling $63.4 million, up 83% from $34.7 million during the same time period last year. The second quarter net income was recorded at $6.9 million vs. the loss of $645,000 dollars in the second quarter last year. In July 1997, LaSalle Partners converted its operations from partnership to corporate form and completed its IPO of 4 million shares of common stock at $23 per share.
Kennedy-Wilson finances more than $200 million in loans Kennedy-Wilson Inc., a commercial real estate financing company based in Los Angeles, has arranged $202 million in five transactions to strengthen its portfolio so far this year. In the deals, $100 million for acquisition debt went to Nomura Asset Capital Corp., $12 million went to East West Bank, $6 million went to Hawthorne Savings, FSB and $24 million went to Heller Financial Inc.
Staubach Retail Services forms new strategic alliance Dallas-based Staubach Retail Services (SRS) and The Buxton Co. of Fort Worth, Texas, one of the largest market research firms in the Southwest, formed a strategic alliance to offer the marketing and retail expertise of both companies to their clientele. The alliance is designed to make Buxton's unique services available to Staubach's clients, who have customer-driven businesses and are looking for new site locations to pursue commercial real estate ventures. The alliance delivers Buxton's services, including sales forecasting, site models, demographic analysis and market summaries, to Staubach's clients as well.
Insignia Financial Group acquires new properties Insignia Financial Group, a fully integrated commercial real estate services company based in Greenville, S.C., has purchased Portland, Ore.-based Forum Properties Inc. The purchase of Forum Properties marks Insignia's seventh acquisition for 1997 and its fifth in the commercial real estate arena. In total, the six acquisitions have augmented Insignia's commercial property services portfolio by more than 15 million sq. ft. and added 10,300 multifamily units to its residential base. Forum has annual revenue of $3 million and represents a 2.5 million sq. ft. portfolio.
Insignia also purchased 60% of the stock in CAGISA, one of the leading privately held property management companies in Italy. Currently, CAGISA manages nearly 10,000 apartment units in Rome and Milan.
Republic and Knudson Elevator Cos. form new group Alliance Elevator Group LLCprincipals include (left to right)Kenneth Margherini, David Talbott,CEO and Richard Galdieri.
Alliance Elevator Group LLC has been formed by the managements of Republic Elevator Co. and Knudson Elevator Co. and is based in Long Island City, N.Y. The merger creates a new organization that constitutes the largest privately owned elevator group in the New York metropolitan area, and possibly the largest in the nation. Alliance will merge with 150 employees and service maintenance contracts, covering nearly 3,000 elevators in 1,000 commercial and residential buildings. Market share for the new group is estimated at 5% of of the elevator installations in the New York metro area.
Noresco awarded $75 million federal construction contract Noresco, a leading national energy services provider based in Framingham, Mass., has been awarded a $75 million maintenance and construction contract by the U.S. Army Corp of Engineers, located in Huntsville, Ala. The firm will supply both energy and non-energy related maintenance, repair and rehabilitation services to federal facilities across the country. Noresco has a potential five-year duration on the contract with four one-year options. At present, Noresco is rehabilitating classroom facilities at Ft. Benning, located in Columbus, Ga.
Parallel Capital Corp. finances $33 million in loans New York-based Parallel Capital Corp. financed 11 commercial mortgage loans that closed in July totaling more than $33 million. The properties were financed nationwide and represent retail, multifamily, mobile home parks, office and industrial product. The largest deal was a $15 million loan for Encino Town Center, a 140,994 sq. ft. retail facility, that was written at 8.7% for 10-year term with 25-year amortization. In another transaction, a $7.1 million loan was financed for Fallard Court, located in Upper Marlboro, Mass., a 207,384 sq. ft. industrial facility, that is 100% occupied. The deal was at 9.15% for 15 years at 20-year amortization.
Grubb & Ellis reports increased revenues and earnings Northbrook, Ill.-based Grubb & Ellis Co. (NYSE:GBE) reports earnings and revenue for its fiscal year ending June 1997 up 18% from the previous year. Net income for fiscal year 1997 was $19 million, or $0.93 per share on a fully diluted basis, compared with $2.1 million, or $0.10 loss per share, in fiscal year 1996. For the fourth quarter net income rose to $8.5 million, or $0.38 per share vs. $1.3 million, or $0.06 per share in 1996. The benefits of the revenue increase in 1997 include eliminating long-term debt.