The ft.² Report

According to latest Fitch Ratings’ weekly report on the status of the CMBS mess, larger batches of U.S. CMBS loans are moving to special servicing (meaning they are in default) at alpine downhill speeds. In January 2010, 248 loans worth a total of $4.27 billion moved to special servicing. This figure is more than four times the amount transferred in January 2009. The size of specially serviced loans increased 2.4 times from $17.2 million in 2009, with five loans greater than $100 million. Fitch’s index suggest CMBS will continue to decline despite any bottoming-out by the residential market, typical of the lag between the two markets.

As the practice of “pretend and extend” on loan calls has diminished, more of them are approaching final maturity without available refinancing, even for performing loans. This wave of financial trouble is a long one with momentum building behind it over the next two years.

Here is the distribution of property types in special servicing along with the total loans

Office

Total in special servicing: 509 ($7.5 billion)
Rated universe: 6,559 ($141.5 billion)

Hotel

Total in special servicing: 275 ($11 billion)
Rated universe: 2,131 ($49.5 billion)

Multifamily

Total in special servicing: 872 ($9.8 billion)
Rated universe: 9,320 ($62.2 billion)

Retail

Total in special servicing: 842 ($15 billion)
Rated universe: 12,837 ($127.3 billion)

source: The Watchlist Newsletter, CoStar

The Columbian Building Hand-Off

squarefeetpdx — Mon, 15 Feb 2010 19:02:47 +0000

The latest chapter in downtown Vancouver’s (Washington that is) Columbian Building (415 SW Sixth) saga has the property being offered to creditor Bank of America. The owners, Downtown Vitality Partners aka Scott Campbell, provided the deed to the building and some nearby property. In exchange, Bank of America will vote to approve The Columbian newspaper’s Chapter 11 bankruptcy reorganization plan.

The Columbian Building, listed for sale since October 2008, has asked as high as $41.5 million ($361/SF) but the latest valuation by the county in December 2008 roughly, came in closer to $22.19 million. At the time, the building was 90% complete and estimates have since hovered around $30 million.

The 114,800+ SF building is only 24.6% leased and has asking rates of $28.00/SF full service. Many floors remain in shell condition and, since the newspaper ran into financial trouble, have been extremely difficult to lease given the lack of available funds to complete improvements. Currently, there are only two tenants in the building, on the 5th and 6th floors.

Stay tuned to see if Bank of America decides to hold this asset or sell it and move on. The bank is currently the anchor tenant in the Bank of America Building in downtown Vancouver located at 805 Broadway, just a few blocks away from The Columbian.

Who’s On The Move – Week Ending 02/12/10

squarefeetpdx — Mon, 15 Feb 2010 18:30:56 +0000

HealthDex (hospital/provider|managed care|equipment)

Eastside

Grain Integrative Health – 4246 SE Belmont | 1,600 SF

Westside

Amedisys Hospice LLC – Enyeart Building | 12665 SW 69th Ave | 2,847 SF

Central Business District

Foundation Fitness – Marine Building | 1772 NW Quimby | 2,562 SF

Fitt Health – Dekum Building | 519 SW Third | 1,962 SF

GeneralBizDex (consulting|finance|insurance|legal|other)

Central Business District

Premier Turf Club – 1231 NW Hoyt St | 1,774 SF

Oden-Orr LLC – Pacific Continental Building | 519 S W Park | 1,523 SF

Gearing Rackner – Bank of America Financial Center | 121 SW Morrison St | 7,262 SF

Westside

Mindful Insights – 1750 SW Skyline Rd | 1,147 SF

MediaDex (traditional|digital|research)

Central Business District

Flying Horse Communication – 239 NW 13th | 1,130 SF

Sasquatch Advertising – Water Tower | 5331 SW Macadam Ave | 3,255 SF

DesignDex (A/E|consulting|graphic d)

Central Business District

Pearl Printing – 1017 NW Davis St | 2,940 SF

The Facade Group - Union Bank of CA Building | 707 SW Washington St | 3,439 SF

NonProfDex (charitable|educational|trade assoc)

Eastside

Calvary Chapel Oregon City – Harding Building | 507 Main St | 3,200 SF

Hotels Top the CMBS Delinquency List

squarefeetpdx — Thu, 11 Feb 2010 18:48:31 +0000

The trend of higher delinquency rates for commercial properties continued its storied climb this month, for the fifth month in a row, finishing at 6% last month. Hotels continue to be the hardest hit, with Extended Stay America now delinquent on a large loan and contributing greatly to the 129 basis-point increase.

Most analysts predict the increase will continue in the coming months. The delinquency rates compared to last month’s number are below:

Property Type This Month January 2010

Hotel 16.44% 9.13%

Multifamily 8.33% 7.54%

Retail 4.94% 4.25%

Industrial 3.73% 3.57%

Office 3.06% 2.66%

source: CoStar

Avatron Goes Big, Pink That Is

squarefeetpdx — Tue, 09 Feb 2010 23:28:00 +0000

Local iPhone app developer Avatron Software has made the leap across the river and up the elevator to the 41st floor of the US Bancorp Tower, more commonly referred to in Portland as “Big Pink”. The company made the move from Vancouver in January 2010. They have outstanding views from their new offices and some space to accommodate a few extra employees. Of course, while I was there, everyone was staring out the windows but I’m assured they haven’t suffered any productivity decrease

Avatron took advantage of the current market sluggishness and got a great sublease rate on this premium space. They even had some of the furniture tossed into the deal.

So, next time you’re visiting the SAO offices on the ground floor, take a quick ride up to the 41st floor and welcome Dave (@dshowell) and the rest of the gang at Avatron (@Avatron) to the city of Portland.

Office Space Stats: