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Posts Tagged ‘industrial’

MediaDex (traditional|digital|research)

Central Business District

ROC Group – Morgan Building | 720 SW Washington St | 1,357 RSF

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

Central Business District

Stephen Vincent Jewelers – Fifth Avenue Building | 1400 SW Fifth Ave | 5,787 RSF

Vancouver

Clark CountyProsecuting Attorneys, Child Support - Franklin Building | 800 Franklin St | 6,000 RSF

Ray Krueger – East 18th Street Biz Pk | 5601 E 18th St | 2,400 RSF

Westside

Cleland Woolworth Capital – Kruse Way | 5800 Meadows Rd | 3,313 RSF renewal

AMS Legal PC – Kruse Woods II | 5005 Meadows Rd | 2,827 RSF

Premier Property Group – Kruse Way | 5000 Meadows Rd | 2,801 RSF

Riverside Homes – Tanasbourne Commons | 17933 NW Evergreen Pkwy | 3,571 RSF

NonProfDex (charitable|educational|trade assoc)

Westside

Northwest College – 4200 SW Watson and 4225 SW Hall St | 13,400 RSF

Encore Performing Arts Center – Parkside Biz Ctr | 7700-7704 SW Nimbus Ave | 3,745 RSF

Central Business District

Disability Rights Oregon – 610 SW Broadway St | 6,767 RSF

HealthDex (hospital/provider|managed care|equipment)

Westside

Metropolitan Pediatrics – Commons Building/Cornell Oaks | 15455 NW Greenbrier Pkwy | 17,439 RSF

Eastside

OsteoArthritis Centers of America – Sunnyside Plaza | 10001 SE Sunnyside Rd | 3,766 RSF

SustainDex (environmental|sustainable|clean/bio tech)

Central Business District

Anchor QEA – Commonwealth Bldg | 421 SW Sixth Ave | 4,621 RSF

 

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

Vancouver

Fiji Sales & Marketing – Quad 205 |  10906-11012 NE 39th St | 1,875 SF renewal

Lee & Hayes PLLC – Main Place | 1111 Main Place | 2,439 SF

Vancouver Defenders – 500 W Eighth St | 4,944 SF

Washington Federal Savings Bank - Columbia Square II | 13411 SE Mill Plain Blvd | 1,500 SF

Eastside

NW Property Wholesalers – 16834 NE Mason Court | 4,000 SF

TechDex (apps|provider|hardware|var)

Westside

Applied Technical Services – 7015 SW McEwan Rd | 5,750 SF

Central Business District

Deck Monitoring – Pang Building | 830 SW 10th Ave | 5,696 SF sublease

Vancouver

Intelligent Technologies – Quad 205 | 10906-11012 NE 39th St | 4,425 SF renewal

DirecTV – Pacific Industrial Commons | 14511 NE 13th Ave | 20,130 SF

Renaissance Learning – Greenwood Office Bldg | 7710 NE Greenwood Ave | 688 SF sublease

Eastside

Sprint – Halsey Corners | 1762 N 181st Ave | 1,700 SF

HealthDex (hospital/provider|managed care|equipment)

Westside

Restore Vision Centers – 17400 SW Upper Boones Ferry Rd | 2,363 SF

NonProfDex (charitable|education|trade assoc)

Westside

Oregon Manufacturing Extension Partnership – Pacific Pkwy Ctr | 12909 SW 68th Pkwy | 1,941 SF

SALE

Location: 12360 E Burnside Street, Portland, Oregon

Seller: Fidelity National Title Insurance Co.

Buyer: Watumull Properties

Size: 16,120 RSF

Price: $1.35 Million ($83.75/SF)

Tenant in Place: NARA (Native American Rehabilitation Association) NW

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TechDex (apps|provider|hardware|var)

Central Business District

Ebay – Fifth Avenue Bldg | 1400 SW Fifth Ave | 28,000 RSF

Triton Technical – Postal Building | 510 SW Third Ave | 1,716 RSF sublease

Westside

Mobile Power Solutions - Twin Oaks | 1815 NW 169th Pl | 2,129 RSF expansion

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

Central Business District

Baron Zeuthen Gutzler - Market Square |1515 SW Fifth Ave | 5,340 RSF

Robert J Neuberger – Union Bank of Cal | 707 SW Washington St | 3,629 RSF

Adecco – Bank of America Financial Ctr | 121 SW Morrison St | 3,621 RSF

Vancouver

General Conf Auditing Services – Park Tower Biz Ctr | 201 NE Park Plaza Dr | 3,048 RSF

DesignDex (A/E|apparel|graphic d)

Westside

Golder Associates – Oswego Town Square | 9 Monroe Parkway | 4,806 RSF

HealthDex (hospital/provider|managed care|equipment)

Central Business District

OHSU – Fifth Avenue Building | 1400 SW Fifth Ave | 6,000 RSF

Westside

Braden Partners – Parkside Biz Ctr | 7979 SW Cirrus Dr | 2,519 RSF

NonProfDex (charitable|education|trade assoc)

Central Business District

Oregon Community Foundation – 1221 SW Yamhill St | 22,264 RSF renewal

GovDex (government agencies)

Eastside

Oregon Dept of Human Svs – 305 NE 102nd Ave | 4,750 RSF

Westside

Metro Multifamily Housing Assoc – Fanno Creek Place | 16083 SW Upper Boones Ferry | 3,600 RSF

SustainDex (environmental|sustainable|clean/bio tech)

Central Business District

Renewable NW Project – Commonwealth Bldg | 421 SW Sixth Ave | 3,138 RSF

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Ok, so it’s no Ferrari-like speeds for the commercial real estate market recovery, but the first signs of some promising momentum comes on the distressed properties track.

For the past 2+ years distressed property offerings have sat pretty much untouched while buyers tried to determine the best time to re-enter the market (ie. when values hit bottom and stabilized).  It looks like 2010 is it.  In the First Quarter,184 transactions closed compared to 102 in the First Quarter of 2009, a nearly 45% increase year over.  2010′s number is more in line with transaction volume during the first quarters of 2008 (187) and 2007 (189). A good indicator that buyers with cash have decided the timing is right to pursue deals.

While the activity level among distressed properties is a good sign, it must be noted that  assets in good standing are not moving without considerable discounts. Take, for instance, the recent sale of One Main Place in Portland. This Class A office tower had 97% occupancy and a strong tenant roster. It was purchased in 2006 for $69 million and recently sold for $59 million. 

OFFICE AND INDUSTRIAL PRICES – CLOSING THE GAP

Distressed office prices have been trending down from their 2007 peak.  But lately the price gap has narrowed with top prices declining and bottom prices slightly increasing. Since late Third Quarter 2009, distressed office properties have sold for anywhere from $70 to $140/SF.  During the same time period, nondistressed office properties sold for between $110 and $200/SF.

Three years ago, distressed industrial properties were trading anywhere from $20 to $80/SF.  In late 2008 and early 2009 there was a brief rally in industrial prices, but today the price bottom is back around $20/SF.  The top of the price scale is around $40/SF, narrowing the gap between high and low by $40/SF.  Nondistressed flex and industrial properties have been selling for between $40 and $85/SF.

THE ACTIVE BUYER POOL TENDS TO BE LOCAL/REGIONAL

The mix of buyers of distressed office properties during the recession years breaks down as follows:

  • Regional developer/owners – 26%
  • National developer/owners –  17% 
  • Individuals – 14%
  • Corporations – 14%14% 
  • Investment managers – 11%

Over the last six months, investment managers have decreased their share to less than 5%, while banks and government entities have increased their share of purchases. No doubt a portion of the  government increase comes from assumption of numerous corporations with considerable real estate holdings.

The mix of buyers of distressed flex and industrial properties since 2007 breaks down as follows:

  • Regional developer/owners- 23%
  • Corporations – 20%
  • National developer/owners – 16%
  • Investment managers - 11%
  • Individuals – 11%

Over the last six months, corporations have become the most active buyers accounting for 3 out of every 10 purchases. Regional developer/owners follow closely at 28% while investment managers’ share has fallen to 8%. Individuals now account for less than 4%.

source: CoStar

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According to a new report from Costar News, the number of properties under distress and delinquent loans are up by 50% in 2009.  Some eye-popping statistics include:

Specially Serviced CMBS Loans  – loans that are delinquent or reached maturity without pay off or have ongoing issues with credit problems involving tenants or borrowers.

Jan. 2009 – $8.2 Billion

Sept. 2009 – $46.9 Billion

Number of distressed office buildings in U.S. – Buildings that were 60% vacant or more.

Jan. 2009 – 19,600

Sept. 2009 – 31,000

Plummeting Property Values – Office, retail and industrial/flex properties have lost between 15% and 35% of their value since 2007.

Year         Office Bldgs                Retail Bldgs               Industrial/Flex Bldgs

2007        $219/SF                    $178/SF                     $61.50/SF

2009        $142/SF                    $132/SF                     $52.00/SF

As businesses have disappeared or made major cutbacks, the demand for space has declined significantly. In the first two quarters of 2007, office properties saw a net absorption of 41.8 million square feet. By comparison, in the first two quarters of 2009, tenants have returned 40.9 million square feet of space, nearly wiping out any gains over the past two years. Industrial/flex (think close in Eastside or the Sunset Corridor) properties have faired worse nationally, with net absorption of 94.1 million in the first two quarters of 2007, but gave back even more in the first two quarters of 2009 with 97.5 million.

All of this negative activity has created a swelling inventory of buildings with 60% vacancy or more. Oregon ranks 25th for the number of distressed properties (office, retail, and industrial/flex) by state.  With 994 total properties under distress, we are fairing much better than the number one position holder, California, which has 80,734 total distressed properties. The lowest is Wyoming with 41 distressed properties. Our neighbors to the north (WA)  are number 19 on the list with 1,404 distressed properties.

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The Investment Team at Pacific Real Estate Partners distributes a monthly report to clients updating them on the latest activity in the market. This report covers disposition (sales) activity for the enitre Pacific Northwest.  Personally, I think the IKEA store is the best buy option on the market right now, but that’s based purely on my love of swedish meatballs and contemporary napkins.

PROPERTIES IN THE MARKET: SEATTLE

OWNER

PROPERTY

SIZE

SUBMARKET

BlackRock First & Stewart Building 90,700 RSF Seattle CBD
BlackRock Canyon Park Heights 144,400 RSF Eastside/Bothell
BlackRock Landmark East & West 273,900 RSF Southend/Renton
AMB IKEA Store 760,000 RSF Southend/Renton
Legacy Seattle P-I Building 100,000 RSF Seattle CBD
Legacy Seattle Tower 159,000 RSF Seattle CBD
Principal Lincoln Plaza 148,000 RSF Suburban Bellevue

PROPERTIES IN THE MARKET: PORTLAND

OWNER

PROPERTY

SIZE

SUBMARKET

Bank of the Cascades (REO) Sunnybrook Ridge 64,400 RSF Clackamas
Dermody Partners Portal Way 265,000 RSF East Columbia Corridor
National Government Properties Robert Duncan Plaza 350,500 RSF CBD
Schnitzer Investment Corporation 217 Distribution Center 445,000 RSF 217/Beaverton

 

CLOSED TRANSACTIONS: SEATTLE

Costco Wholesale Corporation, headquartered in Issaquah, Washington, recently purchased the 95,000 SF Lake Place II office building. Adjacent to their world headquarters, the property was purchased from Dayhu Investments for $20,327,750 or $214/SF.   

CLOSED TRANSACTIONS: PORTLAND

Manchester Capital Management, LLC of Manchester, VT closed on the purchase of Felton Properties’ historic Spalding Building in downtown Portland. The purchase price for the 99,000 RSF property was $12.5 million or approximately $127/SF. The assumable debt totaled $5.3 million and the property was 93% leased at the time of sale due in part to a large tenant that signed while the property was under contract. The estimated cap rate on in-place income is approximately 8% increasing to 9% for Year 2 when the property benefits from a full year of income on the recent leases. 

Lucas Oregon Properties purchased three office buildings in Portland’s Airport Business Center for $4 million, or $103 per square foot, from Airport Business Center Inv. Located at 6601, 6623 and 6645 NE 78th Court, the 38,806 square foot office portfolio is 65% occupied.

Upcoming…. details on the sale of the 46,216 RSF Willamette Wharf Building, located at 4640 SW Macadam Avenue in Johns Landing.

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According to National Real Estate Investor, an industry tracker, the climate among buyers and sellers of commercial real estate is a chilly one to say the least. With the credit crunch at full throttle, you have to be Warren Buffett in order to secure financing, and he doesn’t really need it.

Denise Kalette of NREI writes, “Commercial and multifamily mortgage lending slowed to a trickle in the fourth quarter,” said Jamie Woodwell, vice president of commercial real estate research at MBA, in a statement. “Originations for all of 2008 were down approximately 60% from 2007 levels. Between the worsening economy and the continued credit crunch, lenders are extremely cautious about lending and borrowers are likely to hold onto the assets and the loans they already have.”

In short, if you own commercial real estate – hold it if you can and if you want to buy – come with cash in hand.

Compared to Q407, the 80% decline  in loans for all property types breaks down as follows:

  • 99% decrease for hotel
  • 82% decrease for retail
  •  76% decrease for industrial 
  • 72% decrease for office
  • 62%  decrease for multifamily
  • 47% decrease for health care

For the full story, visit http://tinyurl.com/dkej2g

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