RealEstateFlux

After a history of delay and neighborhood opposition, Essex Property Trust is in lease up of Phase 1 of the 275 unit Los Angeles Belmont Station project. The key to victory for Essex was the research and renewal of the site’s historic characteristics in and their incorporation into the final design of the project.

Los Angeles Downtown News | Ryan Vaillancourt | August 18, 2008

“The recognition of the site’s role in Los Angeles history is not lost on Essex, said Don Kinney, the company’s regional portfolio manager. “We welcomed that with open arms, the history,” Kinney said. “Obviously, it was a challenge because when we first saw it, it was all graffitied. But watching it progress, we decided we were going to take this theme and run with it.” The company tapped the archives at the city’s Office of Historic Resources for photographs of the site in its heyday and other images related to the Pacific Electric Red Cars. The photos, some in black and white, others in color, adorn the newly finished lobby at Belmont Station. Apartment doors are also painted red on the outside.”

W. P. Carey, the New York based specialist in long-term sale-leaseback and build-to-suit financing has announced another sale leaseback with Sabre Industries Inc., a Sioux City, IA manufacturer of infrastructure products. The transaction brings the total SF of Sabre leased spaced owned by W. P. Carey to over 500,000 SF.

Globe St. | Connie Gore | August 15, 2008

“Sabre bought 147 acres about two years ago in Alvarado. It has reserved 60 to 80 acres to develop an industrial park around its manufacturing complex, which makes steel pipes for the cell phone industry. Craig Hughes, director of Cushman & Wakefield of Texas Inc., tells GlobeSt.com that the tentative plan is to divvy the surplus land into six tracts, each capable of supporting 50,000 sf to 100,000 sf, for lease, sale and build-to-suit projects. Ground will break before the year ends, he says.”

The industrial sector has performed so well in Southern California in the last several years that over concentration in this product type posed no problems. Apparently Storm Properties believes that the prudent course today is to diversify into a variety of products types and to reduce risk.

LA Times | Annette Haddad | August 14, 2008

Real estate developer Storm Properties Inc. of Torrance said Wednesday that it had sold more than 1.4 million square feet of industrial and office buildings to Thompson National Properties for about $110 million.

Panattoni Development Company today announced the sale of a seven property Nevada portfolio with the goal of “recycling capital”. Perhaps Pannatoni will be seeking LEED certification for their balance sheet? The industrail developer missed a deadline last Friday to execute the acquisition of a former Ingersoll Rand plant in  Phillipsburg , PA after the city council had named them the redeveloper of the 135 acre site. Last week Pannatoni also put their Longmont, CO Twin Peaks Mall redevelopment project on hold citing the need for better financial tools to execute their value add strategy.

Globe St. | Brian K. Miller | July 29, 2008

Panattoni is selling seven class A industrial buildings totaling 2.02 million sf in Reno and Las Vegas in order to recycle the capital. The Sacramento, CA-based real estate company has retained CB Richard Ellis to market the portfolio for sale to one buyer or in a couple of different pieces to multiple buyers.

The pro forma NOI for 2009, which assumes 95% occupancy, is $7.9 million. Pro Forma NOI for 2011, which assumes 99% occupancy, is $8.53 million. If acquired at a 6% cap rate based on 2009 pro forma NOI, the sale price would be approximately $130 million, or $64.35 per sf. There is no assumable debt as part of the deal.

The Morning Call | Harley Rissmiller | July 28, 2008

The company that wanted to buy the vacant land at the former Ingersoll Rand tract in Phillipsburg did not make the purchase by Friday’s deadline, forcing council to reconsider its options. Panattoni Development, an international development company with an office in Edison, N.J., was unable to reach an agreement to buy the 135 acres from Preferred real Estate of Montgomery County, officials said.

”I knew we wouldn’t be at the building phase, but we had hoped that Panattoni would acquire the land,” Mayor Harry Wyant said.”It’s always a disappointment when you don’t get something done that the town needs to get done.”

Longmont Daily Times-Call | Rachel Carter | July 24, 2008

The Twin Peaks Mall draft urban renewal plan is off the table. Or at least the agenda. At least for now.

The Longmont Planning and Zoning Commission was scheduled to review the plan Wednesday night, but Panattoni Development Co., which bought the mall last summer, asked to pull the plan from the agenda. Planning commission members unanimously agreed to do so.

National industrial markets are faring relatively well according to Marcus and Millichap. A key result of their mid-year industrial report is that “elevated fuel prices and rising production costs have made it increasingly important for companies to create logistics efficiencies. As a result, newer industrial properties that offer the most modern features, including higher clear heights, larger truck bays and advanced fiberoptic wiring for logistics management, are in strong demand.”

Another interesting result of the survey is that speculative developers have increased their activity in this product type. “Speculative developers have increased activity over the past year, with roughly 70 percent of total square footage under construction not yet leased. Industrial demand is easing, and the vacancy rate is expected to rise 70 basis points to 10.2 percent in 2008 as tenants relocate to newer space.”

The complete report is available here.

Jeffrey H. Schwartz, Chief Executive Officer of US based Prologis began his Q2 earnings commentary by saying “We’re doing our call from Tokyo this evening.” “…the rest of the world does look a whole lot better.” Mr. Schwartz went on to say “this year 90% of our investment is expected to be outside of the US, as we noted last call, where we can focus our capital on the highest risk adjusted returns, thus our current focus on Asia.” A full transcript of ProLogis’ commentary can be found at Seeking Alpha.

Mr. Schwartz might have been given pause by the headlines at FT.com: “Inflation brakes Asian construction”. The Financial Times went on to say:

Asian governments, faced with the highest inflation for a decade or more, are shelving billions of dollars worth of landmark infrastructure projects and shifting funds to more immediate economic assistance.

Given the threat presented by surging food and fuel prices, “the long-term projects go by the wayside in favour of short-term sops to keep people happy”, said Edward Teather, an economist at UBS in Singapore. “Clearly, inflation now affects everybody.”

Chicago Real Estate Daily | Todd J. Behme | July 24, 2008

First Industrial Realty Trust Inc.’s second-quarter funds from operations beat analyst estimates, but an investment bank downgraded the company’s shares, in part because of the risk of rising vacancies in second-tier cities. “Occupancy in the company’s secondary markets continued to decline and face further challenges heading into a consumer-led recession,” RBC Capital Markets said.

Globe St. | Carl Cronan | July 22, 2008  02:07pm

ATLANTA-ProLogis has leased 540,000 sf of industrial space to JVC of America Inc. at its New Manchester Distribution Center, on Camp Creek Parkway two miles south of Interstate 20. The electronics manufacturer plans to make and distribute media products at the facility.

Source: PR Newswire

In recent years, with lower-cost manufacturers emerging in other countries and minimizing its global competitiveness, Mexico’s maquiladoras [foreign-owned manufacturing plants] have succeeded in sidestepping potential threats to its export market by moving up the value-added ladder and producing more customized, higher-priced goods as reported in PR Newswire. New high-value industries have emerged in the country and are thriving, including aerospace, custom-order electronics and pharmaceuticals.

Source: Boston Globe

The supervisory board approved an investment of as much as $1 billion in the factory, which will begin production in early 2011, employ 2,000 workers, and initially build a midsize sedan developed for the United States, the Wolfsburg, Germany-based company said yesterday reports the Boston Globe.

Source: CPN

The 1,350-acre Enterprise South Industrial Park, owned by the City of Chattanooga and Hamilton County, will be the site of the new facility reports CPN. The park sits just 12 miles from Downtown Chattanooga and is just a stone’s throw from I-75. While specific details of the project have not yet been disclosed, environmental sustainability will be a key factor in its design.