DALLAS — Blockbuster has announced its plans to voluntarily enter into Chapter 11 bankruptcy as a way to clean up the struggling company's balance sheet. The recapitalization plan the company submitted to its senior noteholders aims to reduce its corporate debt from its present size of approximately $1 billion to $100 million or less. As part of the restructuring process Blockbuster has secured a $125 million commitment in new “debtor in possession” financing from its senior noteholders what will allow it to continue normal day-to-day operations. The senior noteholders comprise a group of bondholders that possess approximately 80.1 percent of the prinicple amount of Blockbuster's 11.75 percent senior secured notes. Upon its exit from bankruptcy, the company's senior secured notes will be exchanged for equity in the reorganized company. The capital drawn down from the $125 million commitment will convert to an exit loan facility, and a new $50 million exit revolving credit facility will be created. Finally, there will be no recovery from holders of Blockbuster's outstanding subordinated debt, preferred stock or common stock. The company did not disclose how it plans to reduce its debt, only stating that “the company will evaluate its U.S. store portfolio with a …
For those who were expecting some market relief by now, there is not a great deal of positive prognosis to provide. Despite the slow rise in the stock market since its fall, the market continues to suffer from mediocre progress with its continuous ups and downs. There is still much change needed in the global economy to sustain the stock market growth we need to realize a full and effective recovery of other markets, including commercial real estate. But I would like to say that we are now bouncing off the bottom with an ability to understand where market corrections have settled in terms of value, cap rates, absorption and development, which is all but non-existent. With historic high unemployment and the uncertainty of what new pothole we might hit while we are finding our way out, it may still be a rough year or more ahead of us. Much depends on how the commercial lending industry plays out the myriad transactions that still linger in their portfolios. The penalties for a defer-and-deny or an extend-and-pretend philosophy may not yet to been fully realized. On a positive note, if consumer confidence continues to eek up, while other economic indicators remain …
WHITTIER, CALIF. — Marcus & Millichap has brokered the $3.5 million sale of two commercial office buildings located at 8109 Greenleaf Ave. and 8034-8040 Comstock Ave. in Whittier. The new owner/user intends to establish a community church on site. Marcus & Millichap’s Michael Lawrence represented the private REO seller of the approximately 34,049-square-foot complex, which was built in 1990.
The commercial real estate recoverythat’s underway took approximately less than 2 years because there’s much more of a rush to mark-to-market than in previous recoveries. There is also better information and research as well as more institutional influence in the market both by the public market REITs and by the private market pension funds. What this means is that we've gotten to a point where it's much more attractive to buy commercial real estate. There is still some uncertainty where prices are still high, but there has been much more of a methodical effort to get the process right. The banks are doing the same because of the pressure from the regulatory agencies. Capital is very selective,and that’s a challenge, but it should be a challenge. There should not be the easy money that we saw in the peak of the first quarter of2007. The re-pricing of rents has been as significant as the re-pricing of assets in sustaining this recovery. As challenges go, we are surprisingly less concerned about the next 2 to 3 years because the Federal Reserve Systemis providing tremendous liquidity and low interest rates to the market. The United States is becoming a favored nation again …
AUSTELL, GA. — McWhirter Realty Partners is developing a 7,000-square-foot surgery center in Austell for Physicians of Pinnacle Orthopaedics. The property will house an outpatient procedure room and two operating rooms stocked with state-of-the-art equipment. Delivery is expected this fall.
PHILADELPHIA — Brandywine Realty Trust has acquired a leasehold interest in a trophy office tower located in downtown Philadelphia. Formerly known as the Bell Atlantic Tower, the building is located at 1717 Arch St. The property rises 53 stories and contains 1.03 million square feet of Class A space. It also includes a 309-space parking garage. Occupancy for the property was 63 percent at the time of closing. Verizon holds a long-term land lease for it, which has been prepaid through August 2022. The company also recently signed a lease for floors two through seven of the building — a total of 121,945 square feet. To acquire the property from the seller, The Blackstone Group, Brandywine provided $51.2 million in cash as well as 7.11 million operating partnership units, which are part of its new Continuous Equity Offering Program. As part of the arrangement, Blackstone will receive 7.11 million shares of what Brandywine has designated Class F units. These units do not accrue a distribution for the first year after the property's closing. After one year, the units receive a payment equivalent to the dividend Brandywine pays on its common shares. The holder of the units will have the right …
EXETER TOWNSHIP, PA. — A joint venture between Toronto-based RioCan Real Estate Investment Trust (REIT) and Port Washington, N.Y.-based Cedar Shopping Centers has closed on the $53 million acquisition of Exeter Commons shopping center in Exeter Township. The 361,000-square-foot center was completed in 2009. Its anchors include a 171,000-square-foot Lowe's Home Improvement Warehouse and an 82,000-square-foot Giant Food Stores, both of which are under 20-year leases. Other tenants include Staples, Petco, Famous Footwear, Five Below, Sleepy's, Five Guys Burgers & Fries, Hallmark, Red Robin, Affinity Bank and Sonic. Occupancy was 98 percent at the time of closing. The purchase was funded, in part, by a $30 million loan provided by New York Life Insurance Co. The loan carries a 10-year term, a 30-year amortization schedule and a 5.3 percent interest rate. Marcus & Millichap's Brad Nathanson represented the undisclosed seller. RioCan REIT holds an 80 percent stake in the joint venture, with Cedar Shopping Centers holding the other 20 percent. The partnership was formed last October with RioCan's $181 million acquisition of an 80 percent stake in a portfolio of seven grocery-anchored shopping centers located in Connecticut, Massachusetts and Pennsylvania that were previously wholly owned by Cedar. The portfolio contains …
San Francisco is not immune to the forces of gravity, but sometimes it appears that might be true for the city's apartment market. Across the country, the multifamily sector has weathered the Great Recession better than other asset classes. Availability of capital — both equity and debt — has resulted in relatively modest value declines compared to office, industrial and retail investments. Transaction volume has been relatively robust, largely attributable to the disassembly and re-sale of the former Lembi portfolio. Research indicates that in excess of 50 apartment sales were completed in the first half of 2010, for a total value representing about $120 million. Among the most active buyers were Flynn Investments, Klingbeil Capital Management and Tribeca Cos. Expect market activity to remain level or even increase, as buyer appetite has yet to be satisfied. The rental market also seems to have stabilized. According to Novato, California-based RealFacts, a national leader in apartment industry research, rents in San Francisco are only down modestly since second quarter of 2009, but they are up slightly in the first half of 2010. While occupancy is reported to be at a relatively low 94 percent, we believe this state may be a temporary …
NEW YORK CITY — Brookfield Properties Corp. has announced a plan to reposition itself as a global office property company. As part of the plan, the company will acquire an interest in an Australian office portfolio and divest itself of its residential land and housing business. Brookfield Properties is acquiring its stake in the office portfolio from Brookfield Asset Management for$1.4 billion (US). The portfolio contains 16 office buildings totaling 8 million square feet of space. Ten of the properties are located in Sydney, four are located in Melbourne and two are located in Perth. Portfolio occupancy averages 99 percent. The estimated value of the portfolio is $3.4 billion (US). Brookfield Properties plans to fund the transaction from $1.3 billion in available liquidity and from a $750 million subordinate bridge acquisition facility, which will be provided by Brookfield Asset Management. Brookfield Properties already has a presence in Australia's office market. It currently has a development pipeline of 15.6 million square feet, which includes City Square, a 926,000-square-foot office tower under development in Perth. The company also has the right of first offer to develop or purchase three development sites: The Foundry in Melbourne, Bathurst Street in Sydney and Bishops See …
RICHMOND, VA. — Stella360 has purchased a commercial building from Rhino Enterprises for $1.5 million and plans to convert the structure into apartments. The property, which is located at 310 Stockton St. in Richmond, will include 33 units and space for a 19,000-square-foot tenant. Thalhimer's John Myers and Gregg Beck brokered the sale.