Demand for real estate product not only benefitted sellers in 2004, but it also proved to be a boon for the nation's largest commercial real estate brokerages. Investment-grade office properties, for example, surpassed the $200 per sq. ft. sales mark for the first time ever, reports CoStar Group. On average, sale prices climbed 5.25% for the year.
“Real estate today is more liquid than ever before, and by a wide margin,” says Nicholas Buss, senior vice president of real estate market research at PNC Real Estate Finance. “This weight of capital, and the competition it has created, pushed prices up and yields down.”
Buss notes that total sales of institutional real estate jumped 50% to $180 billion in 2004. Meanwhile, the commercial debt market increased 10% to $2.2 trillion. The reason, says Buss, is that yield-oriented investors continued to flock to real estate in record numbers.
Case in point: Manhattan-based Cushman & Wakefield posted a record year for investment sales thanks to $17.5 billion worth of deals. According to executive managing director Tim Welch, that volume was more than double what Cushman & Wakefield transacted in 2003.
“We did $7.3 billion worth of deals in 2003,” says Welch. “And now in late March, we are 50% ahead of where we were in 2003 in terms of our deal pipeline,” he adds.
CB Richard Ellis easily maintained its top spot on NREI's list of top brokerages. The total value of investment sales and leasing transactions generated in CBRE's shop in 2004 was valued at $127.4 billion, up from $83 billion in 2003.
Notable deals
A combination of limited offerings and aggressive buyers helped several owners fetch sky-high prices in 2004. Real Capital Analytics reports that a Beverly Hills property on Rodeo Drive sold for a whopping $2,667 per sq. ft. The second largest deal of 2004 on the basis of sq. ft. was 517-521 Lexington Ave. in Manhattan, which sold for $1,779 per sq. ft.
On the leasing side, the largest deal of the year was signed at Manhattan's Bank of America Tower, a 1.1 million sq. ft. building under development. Jones Lang LaSalle, No. 6 on this year's ranking, represented anchor tenant Bank of America in that deal.
The third largest leasing deal of 2004 was signed in the nation's stronghold office market, Washington, D.C. Cushman & Wakefield brokered corporate Executive Board's 625,062 sq. ft. lease at Rosslyn's Waterview building.
Ranking changes
Some firms slipped in this year's rankings. NAI Global, for example, lost its No. 4 spot to Grubb & Ellis. The Northbrook, Ill.-based brokerage was ranked No. 5 in last year's survey, but a strong showing helped the company improve by one notch.
The tide may be turning for Grubb & Ellis, too. In March the firm finally named a CEO, Mark Rose, after 12 months without one in place. Rose previously spent 12 years at Jones Lang LaSalle.
It's anyone's guess whether the torrid market of 2004 will live on or be remembered as the beginning of the end. For his part, PNC's Buss believes that moderate job growth this year should help shore up fundamentals in the office market.
He projects that the office vacancy rate in most major markets will dip below 15% by the end of 2005. Still, he doubts that this improvement will be enough to give landlords pricing power.
“The office sector was the most challenged in 2004, but it has steadily improved,” says Buss. “But real estate in general must be cautious in 2005 about potentially finding itself vulnerable if fickle investors chase better returns in another sector.”
| Rank | Building | Region | Price (Millions) | Price/sq.ft. | Buyer |
|---|---|---|---|---|---|
| 1 | Grand Canal Shoppes | Las Vegas | $766 | $17.21/sq. ft. | General Growth Properties |
| 2 | Providence Place | Providence, R.I. | $510 | $510/sq. ft. | Rouse Co. |
| 3 | 729 N. Michigan Ave. | Chicago | $250 | $11.52/sq. ft. | JP Morgan Invest. Management |
| Source: Real Capital Analytics | |||||
| Rank | Building | Region | Lease/sq.ft. | Tenant | Tenant Rep |
|---|---|---|---|---|---|
| 1 | Bank of America Tower | NYC | 1.1 million | Bank of America Corp. | Jones Lang LaSalle |
| 2 | 300 Madison Ave. | NYC | 789,243 | PricewaterhouseCoopers | CLW Real Estate/CBRE |
| 3 | Waterview | DC | 625,062 | Corp Executive Board | Cushman & Wakefield |
| Source: CoStar Group | |||||
TOP 25 BROKERAGES
The Top 25 Brokerages listing is based on responses to NREI's Top Brokerage survey, which was conducted via e-mail in February and March 2005. Brokers were asked to provide the total dollar value of leasing transactions and investment sales during 2004. The totals were combined to determine the company's ranking. While NREI made every attempt to ensure the final survey was comprehensive, some companies chose not to participate.
- CB Richard Ellis Inc.
865 South Figueroa St., 34th Floor
Los Angeles, CA 90017
Phone: (213) 438-4880
E-mail: [email protected]
Web site: www.cbre.com
Ray Wirta, CEO; Brett White, President
Total Amount of Investment Sales & Leasing Transactions: $127.4 billion - Cushman & Wakefield Inc.
51 West 52nd St.
New York, NY 10019
Phone: (212) 841-7500
Web site: www.cushwake.com
Bruce Mosler, President/CEO; John Cushman, Chairman of the Board; Tony Marano, COO
Total Amount of Investment Sales & Leasing Transactions: $52.3 billion - Colliers International
50 Milk St.
Boston, MA 02109
Phone: (617) 722-0221
E-mail: [email protected]
Web site: www.colliers.com
Margaret Wigglesworth, President/CEO; David Kahnweiler, Chairman; Richard Kimball, EVP
Total Amount of Investment Sales & Leasing Transactions: $36.9 billion - Grubb & Ellis Co.
2215 Sanders Rd., Suite 400
Northbrook, IL 60062
Phone: (847) 753-7500
E-mail: [email protected]
Web site: www.grubb-ellis.com
Maureen Ehrenberg, President, Global Client Services; Robert Osbrink, President, Transaction Services; Mark E. Rose, CEO
Total Amount of Investment Sales & Leasing Transactions: $37.7 billion - NAI Global
4 Independence Way, Suite 400
Princeton, NJ 08540
Phone: (609) 945-4000
E-mail: [email protected]
Web site: www.naiglobal.com
Gerald Finn, Chairman/CEO; Jeffrey Finn, President/COO; David Blanchard, EVP
Total Amount of Investment Sales & Leasing Transactions: $30.5 billion - Jones Lang LaSalle
200 East Randolph Dr.
Chicago, IL 60601
Phone: (312) 782-5800
Web site: www.joneslanglasalle.com
Colin Dyer, President/CEO; Lauralee Martin, COO/CFO; Peter Roberts, CEO, Americas
Total Amount of Investment Sales & Leasing Transactions: $24.92 billion - The CORE Network
15150 Preston Rd., Suite 300
Dallas, TX 75248
Phone: (972) 980-3992
E-mail: [email protected]
Web site: www.corenetwork.org
Edward A. Cross II, Chairman of the Board, CORE Network; Pat Hall, Vice Chairman of the Board, CORE Network
Total Amount of Investment Sales & Leasing Transactions: $21.45 billion - The Staubach Co.
15601 Dallas Pkwy., Suite 400
Addison, TX 75001
Phone: (972) 361-5000
Web site: www.staubach.com
Roger Staubach, Chairman/CEO; Elysia Ragusa, President/COO; Ka Cotter, Vice Chairman
Total Amount of Investment Sales & Leasing Transactions: $17.7 billion - GVA Worldwide
1569 Sherman Ave., Suite 201C
Evanston, IL 60201
Phone: (847) 733-0883
E-mail: [email protected]
Web site: www.gvaworldwide.com
Michael T. Cohen, Chairman; Michael Corbett, Vice Chairman; Betsy Baer, COO
Total Amount of Investment Sales & Leasing Transactions: $17.1 billion - Marcus & Millichap
16830 Ventura Blvd., Suite 352
Encino, CA 91436
Phone: (818) 907-0600
E-mail: [email protected]
Web site: www.marcusmillichap.com
George M. Marcus, Chairman; William A. Millichap, Chairman; Harvey E. Green, President/CEO
Total Amount of Investment Sales & Leasing Transactions: $14.4 billion - Trammell Crow Co.
2001 Ross Ave., Suite 3400
Dallas, TX 75201
Phone: (214) 863-3000
E-mail: [email protected]
Web site: www.trammellcrow.com
Robert E. Sulentic, Chairman/CEO; Michael J. Lafitte, President, Global Services Group; Robert K. Shibuya, Executive Director, National Brokerage
Total Amount of Investment Sales & Leasing Transactions: $12.4 billion - TCN Worldwide
2419 Coit Rd., Suite A
Plano, TX 75075
Phone: (972) 769-8701
Web site: www.tcnworldwide.com
H. Ross Ford III, President/CEO; Neil H. Siderow, Chairman; David C. Wagner, Vice-Chairman
Total Amount of Investment Sales & Leasing Transactions: $11.6 billion - Coldwell Banker Commercial
1 Campus Dr.
Parsippany, NJ 07054
Phone: (800) 222-2162
Web site: www.coldwellbankercommercial.com
George E. Slusser, President/COO; Jacklene Chesler, SVP; Fred Schmidt, SVP, Business Development
Total Amount of Investment Sales & Leasing Transactions: $9.9 billion - Newmark
125 Park Ave.
New York, NY 10017
Phone: (212) 372-2000
Web site: www.newmarkre.com
Jeffrey Gural, Chairman; Barry Gosin, Vice Chairman/CEO; James D. Kuhn, President
Total Amount of Investment Sales & Leasing Transactions: $9.5 billion - Sperry Van Ness
18881 Von Karman, Suite 800
Irvine, CA 92612
Phone: (949) 250-4100
E-mail: [email protected]
Web site: www.svn.com
Mark Van Ness, Co-Founder; Rand Sperry, Co-Founder; David Frosh, President
Total Amount of Investment Sales & Leasing Transactions: $6.3 billion - Lee & Associates Commercial Real Estate
3991 MacArthur Blvd., Suite 100
Newport Beach, CA 92660
Phone: (909) 241-7904
E-mail: [email protected]
Web site: www.lee-associates.com
Steve Jehorek, President; Ed Indvik, President; Chuck Noble, President
Total Amount of Investment Sales & Leasing Transactions: $5.7 billion - Transwestern Commercial Services
1900 West Loop South, Suite 1300
Houston, TX 77027
Phone: (713) 270-7700
E-mail: [email protected]
Web site: www.transwestern.net
Robert Duncan, Chairman; Larry P. Heard, CEO; Mark Doran, COO
Total Amount of Investment Sales & Leasing Transactions: $5.7 billion - Holliday Fenoglio Fowler LP
2000 Post Oak Blvd., Suite 2000
Houston, TX 77056
Phone: (713) 852-3500
Web site: www.hfflp.com
John Pelusi Jr., Executive Managing Director/Managing Member; Mark D. Gibson, Executive Managing Director; John P. Fowler, Executive Managing Director
Total Amount of Investment Sales & Leasing Transactions: $5.5 billion - CRESA Partners
200 State St., 13th Floor
Boston, MA 02109
Phone: (617) 758-6000
E-mail: [email protected]
Web site: www.cresapartners.com
J. Michael Dow, President; Bill Goade, Founding Chairman; Gerald A. Porter, Vice Chairman
Total Amount of Investment Sales & Leasing Transactions: $5.3 billion - CORFAC International — Corporate Facility Advisors
2000 N. 15th St.
Arlington, VA 22201
Phone: (703) 528-3500
E-mail: [email protected] Web site: www.corfac.com
Todd Payne, SIOR, Vice President; David Bruce, SIOR, Vice President; Thomas P. Bennett, Executive Director
Total Amount of Investment Sales & Leasing Transactions: $4.4 billion - Apartment Realty Advisors (ARA)
717 17th St., Suite 2000
Denver, CO 80202
Phone: (303) 260-4336
E-mail: [email protected]
Web site: www.ARAusa.com
Jeff Hawks, Chairman/Past President; David Oelfke, President; Derrick Bloom, President Elect
Total Amount of Investment Sales & Leasing Transactions: $4.3 billion - Century 21 Real Estate Corp.
1 Campus Dr.
Parsippany, NJ 07054
Phone: (973) 496-7433
Web site: www.century21.com/commercial
Van Davis, President/CEO; Jacob Stepan, COO; John Greenleaf, SVP, Marketing
Total Amount of Investment Sales & Leasing Transactions: $3.3 billion - Advantis Real Estate Services Co.
3455 Peachtree Rd., Suite 400
Atlanta, GA 30326
Phone: (404) 262-2828
E-mail: [email protected]
Web site: www.advantisgva.com
Petch Gibbons, President/CEO; John Hutcheson, COO/CFO; Bruce Ford, VP, Management Services
Total Amount of Investment Sales & Leasing Transactions: $2.4 billion - Burnham Real Estate
4435 Eastgate Mall, Suite 200
San Diego, CA 92121
Phone: (858) 452-6500
E-mail: [email protected]
Web site: www.burnhamrealestate.com
Stath Karras, President/CEO; Malin Burnham, Chairman; Jim Munson, Managing Director, Transaction Services
Total Amount of Investment Sales & Leasing Transactions: $1.6 billion - Molinaro Koger
1676 International Dr., Suite 575
McLean, VA 22102
Phone: (703) 760-9600
E-mail: [email protected]
Web site: www.mkhotels.com
Robert T. Koger, President; Jonathan Propp, COO; Rick Harris, Chief Information Officer
Total Amount of Investment Sales & Leasing Transactions: $1.3 billion