Features

By Mark Bhasin, Palisades Financial As U.S. policymakers attempt to navigate through America’s greatest financial and banking crisis since the Great Depression, the amount of regulation in America’s financial markets is becoming a major topic of discussion. The current systemic financial crisis is a vicious circle between a contracting real economy and massive credit and financial losses feeding off each other in a downward spiral. This financial crisis will likely imply total credit losses of somewhere between $1 and $2 trillion. Recent governmental intervention in America’s financial markets includes the bailout of the Bear Stearns creditors, the bailout of Fannie Mae and Freddie Mac, the use of the Fed balance sheet — hundreds of billions of safe and liquid U.S. Treasuries swapped for toxic illiquid private securities, the use of the other government sponsored enterprises’ to provide hundreds of billions of dollars of liquidity to distressed, illiquid and insolvent mortgage lenders, the creation of a new set of bailout facilities to prop up and rescue banks. Not to mention bailing out non-bank financial institutions, the bailout of AIG and a $700 billion U.S. rescue package. These actions come from the most ideologically zealot free-market, laissez-faire administration in American history. The …

By Cara Aliek Despite sharing the same name, Hollywood, Florida, is distinguishing itself from its California sister when it comes to making transit-oriented development (TOD) environmentally chic. A new $500 million mixed-use project called Sheridan Station will be located adjacent to Tri-Rail’s train station and will be Broward County’s first TOD. Attracting residents and shoppers alike, the project will feature 1,050 residential units, 300,000 square feet of retail and restaurant space, 299,000 square feet of office space, a 150-room hotel, 2,500 parking spaces, a 6-acre public park, and a dog park. Fort Lauderdale, Fla.-based Ram Development Co. and Miami-based Pinnacle Housing Group are developing the 40 plus acre project, while landscape architecture duties have been named to Hollywood, Fla.-based Witkin Hults Design Group. “The most important part of the project is that it’s going to be a very walkable community,” says Juan Pacheco, senior project manager with Witkin Hults. “It’s very urban — not your typical South Florida architecture project.” Located west of Interstate 95 between Sheridan and Taft streets, the project will be the largest shopping destination between Fort Lauderdale and Miami. Developers hope to attract professionals, who work in either of these cities, to the residential units by …

By Thomas A. Rizk, chairman and CEO, TractManager Real estate professionals are quickly learning that in this current fiscal environment, any transaction must be undertaken in an expeditious manner. Closing sales, signing leases, even just keeping financial documents in order, requires having up-to-the-minute knowledge of current market activity. And with the market moving faster than ever, it’s imperative that professionals keep the pace. Lenders are being impacted on a daily basis by what’s going on in the marketplace. We saw Lehman Brothers file for bankruptcy overnight. We saw Washington Mutual get acquired very quickly by JP Morgan. Sometimes, when these transactions happen, there arises an opportunity — a real estate owner can purchase his own debt at a discount or a building could be sold in order to avoid a default on a maturing mortgage. Given that today’s climate makes it incredibly difficult to refinance real estate, lenders and owners need to be able to take advantage of new opportunities, and they must do so quickly. But it’s impossible to take advantage of such a situation without the proper information in place. The process of performing due diligence can be time consuming and arduous. In the past, all due diligence …

By Ruta Greiner, ka architecture With the current state of the economy and slowdown in new development, many development and asset management organizations are now focusing on investment in existing properties to compete with lifestyle centers for tenants and customers. Neglected existing properties have become outdated and out of position with the current shopping demographic. The use of graphics in a mall renovation can have an enormous effect on its revitalization. The redesign of a signage, identity and way-finding system can create the perception of a new community destination drawing more tenants and customers and, in turn, increasing profits for the developer. Expanding and Rebranding Identity repositioning can be very useful as the demographics of communities change, as is shown with Brookfield Square Mall in Brookfield, Wisconsin. This CBL & Associates Properties (CBL) asset is located in a region that was once considered more rural, but over the past decade, the demographics changed making it a wealthier community with a very progressive new group of residents whose needs could not be met with the old facility. The community was ready for upscale restaurants and a more dynamic atmosphere. A high standard was anticipated for the repositioning from planning, to image …

By John W. Colagrande Jr., P.E.,Vice President of Engineering, Whitman When it comes to purchasing a commercial property, there are definite benefits to performing a pre-purchase assessment of the property. Commercial property investors have two potential tools available to them. A Property Condition Assessment (PCA), which can provide information on the condition of an existing building, and an Environmental Phase I, to evaluate potential environmental risks associated with the property. PCA’s can assist buyers of commercial real estate by providing information on the physical condition of the building and internal components prior to acquisition. This information allows the purchaser to factor the existing conditions of the building into their evaluation and may also provide an opportunity to further negotiate with the seller. This is accomplished by having a PCA conductor observe the physical features of the property as outlined in the American Society for Testing and Materials Standard. Depending on the complexity of the project and the size of the structure, a typical PCA can take a few days or several weeks and consists of four parts: Documentation review and interview A walk through The preparation of opinions of probable costs to remedy any physical deficiencies The property conditions report …

By Leland Hahnel, CresaPartners St. Louis While at first glance the correlation is anything but obvious, the need to protect dwindling populations of blue crab and striped bass in Chesapeake Bay earlier this decade is making it more costly to develop, maintain and purchase goods at a shopping center in St. Louis County today. Late in 2006, the St. Louis Metropolitan Sewer District (MSD) adopted new standards which significantly changed the ground rules for the planning and design of new commercial and residential developments. Prompting the overhaul were wide-ranging new Environmental Protection Agency (EPA) guidelines governing the treatment and release of storm water — a perpetual concern for the regulatory body. It turns out the new guidelines adopted by MSD parallel those employed by the state of Maryland late in 2000 as it sought to halt the ecological decline of iconic Chesapeake Bay. The good news is that even though eco-improvement is slower than originally projected, the measures are producing positive, quantifiable results. Underwater grasses — a prime habitat — improved to cover 65,000 acres of the bay in 2007. Striped bass populations have rebounded, in part due to the re-opening of 2,266 miles of freshwater stream habitat for migratory …

By Amy Bigley RIALTO, CALIF. — The City of Rialto Housing Authority and National Community Renaissance, known as National CORE, have transformed a troubled neighborhood in Rialto into Citrus Grove, a 152-unit affordable housing community. “The area was severely blighted and was infested with gangs, drugs and violence, and the properties were not being maintained by the absentee property owners,” says Greg Lantz, economic development manager of the city of Rialto. “The area was unsafe, and the only way to rid the community of the cancer was to take decisive and effective action.” Originally developed in the 1960s as low-cost condominiums for first-time buyers, neglect and absentee landlords caused the area to become less desirable. The city used a combination of acquisition negotiations and eminent domain to purchase the condominiums for the redevelopment project. The city and National CORE raised $37 million to fund the project through numerous sources, including $14 million in Redevelopment Agency housing set-aside funds, tax-exempt bonds, tax credits, HCD Multi-Family Housing Program funds, San Bernardino County HOME funds and other public sources. “The timing of this redevelopment project was inspired primarily by the city’s redevelopment agency’s desire to turn what had become a troubled neighborhood into …

By Jay Goldstein In economic times such as these, when cutting costs is necessary yet client service is critical, creative solutions can make or break your bottom line. From developers, brokers, tenants and property managers, outsourcing is a viable solution. It may be time to outsource segments of your business. Benefits A variety of proven benefits of outsourcing include reduced overhead and workload adaptability. However, there are also many obscure advantages to outsourcing, which are specific to real estate. Here are just a few: • Limit your financial exposure to costs attributed directly to your projects. Real estate developments are intermittent and for finite periods of time. Outsource certain day-to-day aspects of your development process so in-house staff can find and negotiate more future deals. • Concentrate on your company’s core competencies. Utilize the core competencies of service providers to supplement your business. Keep the dealmakers in-house and outsource project execution. • Focus on multiple projects without spreading yourself too thin. If several of the deals that you’ve been chasing suddenly all hit at once – no worries. Supplement your in-house staff with outsourced service providers. • Engage the experts. With constantly changing codes, requirements, technologies, etc., rely on an …