By Kevin Assef, Marcus & Millichap The diverse markets comprising the Western commercial real estate region have been impacted in varying degrees by the credit crunch and subsequent devaluation of the U.S. dollar that manifested itself in the last half of 2007. Despite fallout from the subprime mortgage crisis, prices for well-located Class A product have remained relatively stable and will continue to increase steadily in 2008, particularly in cities such as San Francisco, Los Angeles and Seattle. Investors will monitor smaller, secondary markets and the performance of Class B/C assets closely this year as pricing shifts become more apparent. APARTMENT INVESTMENT TRENDS Denver Renter demand for Denver apartment properties will remain strong in 2008, supported by an expanding pool of renters and the metro’s fifth consecutive year of healthy employment growth. While job gains will be more modest in 2008 than in recent years, population growth will generate additional renter demand, with an annual average of 29,000 new residents forecast to enter the metro in the next 5 years. On the supply side, apartment builders will accelerate construction activity this year, particularly in the Aurora-South submarket, where deliveries will result in a 5 percent inventory gain by year’s end. …
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DULUTH, KENNESAW, SMYRNA, SNELLVILLE AND WOODSTOCK, GA. — Florida-based Ram Realty Services has acquired an 11-property portfolio of Home Depot Landscape Supply stores totaling 74 acres in Atlanta and Dallas from Atlanta-based Home Depot, for $22 million. The properties range from 4.5 to 9 acres and include 25460 Satellite Blvd. in Duluth; 16840 Old Hwy 41 in Kennesaw; 4600 South Cobb Dr. in Smyrna; 1582 Janmar Rd. in Snellville; 475 Parkway 575 in Woodstock, Ga.; and six properties located in the Dallas-area. The seller was represented in-house by Ken Baye, and Mike Folio of Corporate Property Divisions represented the buyer. Home Depot closed its landscape stores last November; Ram Realty will evaluate the portfolio to determine future uses for the sites.
By Paul White, Professional Investment Advisors As a real estate professional and financial advisor, you pride yourself in providing unique solutions for your clients. One of the most powerful tax saving tools you can use with your clientele is a 1031 Exchange. One day, you receive a phone call from a client asking for your help in finding a replacement property to complete their 1031 Exchange. The client has sold property and has placed the proceeds with a qualified intermediary. Their tax advisor estimates taxes to be in excess of 30 percent due to the Federal and State Capital Gains Taxes, as well as a 25 percent Federal Depreciation Recapture. Your client is in one of the fastest growing demographics in the nation, aging baby boomers, that prefer passive to active ownership seeking to rid themselves of property management and the 3 T’s: Tenants, Toilets and Trouble. This appears to be the ideal set of circumstances for a 1031 Exchange — except one small detail — the amount of your client’s exchange equity is only $500,000. Knowing that this amount of equity may limit your client’s choices, you begin to search for a suitable replacement property. Your client wants the …
SAN DIEGO — Jamison Properties has acquired The Chamber Building, a 23-story, 177-725-square-foot office tower in downtown San Diego, from Barker Pacific Group and PNC Realty Advisors for $29.25 million. Located at 110 West C St. and built in 1963, the property is 86 percent leased by major tenants including Legal Reprographics, Alternate Public Defender, First Choice Executive Suites and law firm Stock Stephens. Louay Alsadek, Kevin Shannon, Ken White, Evan August and Scott Schumacher of CB Richard Ellis, along with Tim Cowden of Colliers International, represented both parties in the transaction.
What area is your expertise? • Orlando/Central Florida What trends do you see presently in retail development in your area? • Orlando is still very much on an upward trend for retail development. With the population growth we have experienced over the past few years, the need for consumer services still exists which is being met by numerous local and national developers. What type of retail product is doing well in your area? • Big box with some smaller in line space centers are doing very well along with smaller strip centers ranging from 10,000 to 20,000 square feet that have a majority of regional national tenants. Some owners of older shopping centers are also doing well because they have committed funds to major capital improvements, which have given their dated centers a facelift to compete with newer retail. They remain competitive by having a good-looking product, but at a lower rental rate. What retailers are new to your area? • Two of the most promising and innovative retailers are Dagwood’s Sandwich Shoppes and Teriyaki Experience. Both of them are franchises that will see major growth throughout Central Florida in the next 1 to 2 years. They truly offer a …
NEW YORK CITY — Gramercy Capital Corp. has entered an agreement to acquire American Financial Realty Trust for $3.4 billion, including the assumption of American Financial’s debts. Gramercy will acquire, under the merger agreement, all of American Financial’s common stock for a per-share consideration of $5.50 in cash, as well as 0.12 shares of Gramercy common stock. The acquisition creates an integrated commercial real estate finance and operating company and transforms Gramercy into a more than $7 billion diversified enterprise. Gramercy is expected to own 27 million square feet of commercial real estate in 37 states upon the transaction’s completion, in addition to its $3.5 billion of debt investments. The transaction is expected to close near the end of first quarter 2008.
CARMICHAEL, CALIF. — Grubb & Ellis Co. has brokered the sale of 5 Points Shopping Center in Carmichael. LaeRoc Funds, a Los Angeles-based investment fund, has acquired the 50,140-square-foot retail center from Progenitor Holdings Co. of Stockton. Tenants at the fully leased property, located at 5100 Arden Way, include 24 Hour Fitness, Hollywood Video and Coldstone Creamery. Grubb & Ellis’ capital advisory services group in Sacramento, consisting of Heath Charamuga, Erik Neese, Ken Noack Susanne Baker and Ben Prater, represented both parties in the transaction. The purchase price was undisclosed.
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