Archive for August 21st, 2008
by David Bodamer August 21st, 2008
I just linked to S&P’s latest numbers (through May) from earlier this week. Today, Moody’s has reported their latest (through June) and it shows a bit bleaker picture.
Commercial real estate prices continued to decline in June, according to Moody’s/REAL Commercial Property Price Indices, Moody’s Investors Service said Wednesday.
The index fell 3.3 percent from May, and was down 9.6 percent from the year-ago level.
June was the fourth consecutive month that the index declined, Moody’s said. The CPPI now stands 11.8 percent below its peak in October 2007.
The index is based on repeat sales of the same properties across the U.S. at different points in time.
All four property types measured by the index went negative during the second quarter, Moody’s said. The national industrial market saw the largest price drop, down 9.3 percent during the quarter. National apartment market prices fell 7.1 percent, while office prices slipped 5.9 percent and retail declined 4.6 percent.
Link.
Related Topics: Investment, News, Research, Retail Real Estate, Trends |
by David Bodamer August 21st, 2008
The mailboxes of Shoreway Shopping Center owners Marc Levin and James Ratner should soon be stuffed full of mail from Sheffield Lake.
Postcards preprinted with their addresses were passed out to hundreds of Sheffield Lake residents who flocked to the shopping center Monday in an effort to convince the owners to sell what many called a defunct “eyesore” ravaging the city’s economy.
“A lot of the signs you’re carrying make reference to slumlords holding the city hostage,” said Sheffield Lake Mayor John Piskura from atop a flatbed semitrailer. “The truth of the matter is they’ve been playing games with this city for over 30 years.”
Piskura asked residents to fill out the cards, supplied by a city resident, to help spur a reaction from the owners.
“It’s one of the last things we haven’t tried,” he said after the rally. “We need to raise awareness because I don’t think the beneficiaries of the trust (who own the shopping center) know what’s going on here. I think when they do, they’ll take interest and do something.”
Link.
Related Topics: Management & Leasing, News, Quirky, Retail Real Estate |
by David Bodamer August 21st, 2008
Brinker International Inc. will sell a majority stake in restaurant chain Romano’s Macaroni Grill to an affiliate of private equity firm Golden Gate Capital for $131.5 million, Brinker said on Monday.
Brinker, which also owns the Chili’s Grill & Bar chain, said it would retain a 20 percent interest in the brand. It expects the deal to close by year-end.
KeyBanc Capital Market Inc analyst Lynne Collier called the announcement “a slightly positive event” for the company.
“While we are encouraged that an agreement has finally been reached for the sale of Mac Grill, we believe that the final sale price was slightly lower than investors had expected,” Collier said in a client note.
Link.
Related Topics: Investment, News, Retail |
by David Bodamer August 21st, 2008
Standard & Poor’s announced the latest numbers on its commercial real estate indices. Retail prices for the second straight month and are up just 0.5 percent over the past 12 months.
The latest readings:
| Property Type |
May 2008 Index |
May/April Change (%) |
April/March Change (%) |
1-Year Change (%) |
| Apartments |
145.16 |
0.6% |
-2.3% |
5.8% |
| Office |
149.27 |
1.7% |
0.5% |
3.1% |
Retail
| 161.23 |
-0.2 |
-0.2% |
0.5% |
|
| Warehouse |
Standard & Poor’s announced the April results of its S&P/GRA Commercial Real Estate Indices. Retail was down 0.2 percent from March to April.
161.54 |
-0.4% |
0.2% |
3.2% |
Previous posts on the S&P/GRA Indices can be found from July 25, June 18, May 21, April 22, March 18, January 22, January 2, November 28, September 18 and August 21.
Related Topics: Investment, News, Research, Retail Real Estate |
by David Bodamer August 21st, 2008
We haven’t seen one of these in a while. Private equity firms Versa Capital Management and Crystal Capital purchased Bob’s Stores from TJX for an undisclosed sum.
TJX also raised its full year forecast for fiscal 2009 earnings as a result of the sale.
It said the sale is expected to generate cash proceeds of about $23 million, which primarily represents anticipated tax benefits, as well as the proceeds from the sale, partially offset by fees and expenses related to the transaction.
“Our decision to sell the business reflects our vision to grow TJX as a global, off-price company,” TJX Chief Executive Carol Meyrowitz said in a statement on Tuesday.
Related Topics: Investment, News, Retail |
by David Bodamer August 21st, 2008
Someone told me recently auto parts stores are counter-cyclical and tend to do well in recessions. That’s because people aren’t buying new cars. Instead, they focus on keeping their existing cars in good shape. Apparently, however, that’s not the case for Goodyear. The company announced it is closing 92 stores.
Goodyear Tire & Rubber Co. has disclosed plans close 92 retail stores by the end of the year.
The company did not say which targeted locations are underperforming when it announced its plans on Tuesday.
A Goodyear vice president for retail operations, Scott Vogel, says the company is not announcing the store locations involved. Goodyear intends to first communicate the decision with their approximately 500 full-time and 100 part-time employees and property owners of leased facilities.
Related Topics: News, Retail |
by David Bodamer August 21st, 2008
Bleak news on the Centro front. The company has posted a huge quarterly loss. Centro says its U.S. properties have lost 8.8 percent of its value. It also said it may not be able to continue as a “going concern” given all the problems it is facing.
Centro Properties Group, the Australian owner of more than 650 U.S. malls, said the unit that manages U.S. assets acquired last year for $5.2 billion posted a second-quarter loss after writing down the value of the business.
Centro NP had a net loss of $299 million for the three months ended June 30, the Melbourne-based parent said today in a statement to the Australian stock exchange. The unit booked a $95 million charge for writing down properties and a $173.5 million impairment in the company’s goodwill and the value of its property management business.
“There is substantial doubt about the company’s ability to continue as a going concern given that the company’s liquidity is subject to, among other things, its ability to negotiate extensions of credit facilities,” Centro NP said in a statement filed yesterday with the U.S. Securities and Exchange Commission.
Link.
Past stories:
- July 16, 2008, Centro Clears Minor Hurdle With First Asset Sale
- July 1, 2008, Centro to Sell Five Australian Malls
- May 29, 2008, Report: Centro Close to Big Sale
- May 14, 2008, Centro’s Shield
- May 9, 2008, Centro Reaches Debt Agreement, Shares Surge
- April 3, 2008, Centro Takeover Rumors Cause Share Surge
- April 1, 2008, Centro Clears a Hurdle
- Feb. 29, 2008, Report: Blackstone, GE, Mulpha, Mirvac Bidding for Centro.
- Feb. 28, 2008, Centro Shares Surge
- Feb. 15, 2008, Centro Wins Extension
- Jan. 15, 2008, Scott Out, Rufrano In at Centro
- Jan. 10, 2008, Daily Centro Update
- Jan. 9, 2008, UBS Cuts Stake in Centro
- Jan. 3, 2008, Centro: Morgan Stanley, Westfield Have Approached Firm
- Jan. 2, 2008, Centro Says Its Getting Offers
- Dec. 18, 2007, Another Round of Centro Coverage
- Dec. 17, 2007, Centro Hit by Credit Crunch
- May, 10, 2007, Centro’s Structure
- Feb. 28, 2007, Centro To Buy New Plan
Related Topics: Finance, International, News, REITs, Retail Real Estate |
by David Bodamer August 21st, 2008
Could this be a new trend in the works? Boston Mayor Thomas Menino wants to require developers of large projects to prove they have financing in place before they’re allowed to move ahead with projects. Apparently this is being triggered by two high-cost projects that have run into financing problems after construction already began. Menino wants to avoid any other eyesores on his city’s landscape.
His call follows financial problems for two high-profile developments that have already begun construction in Boston: the $650 million redevelopment of the Filene’s building in Downtown Crossing and the $800 million Columbus Center complex over the Massachusetts Turnpike.
Menino is having city planners devise a regulation that would delay approvals for developers who cannot show adequate financial backing to proceed with construction. The regulation is an attempt to prevent city streets from being at the mercy of credit markets that can suddenly stall or upend projects.
“We already have two or three holes in our landscape; we don’t want any more,” said Menino. “We don’t want to stifle development, but we don’t want developers to take advantage of the city.”
The mayor spoke yesterday after the Globe reported that the developers of the 38-story commercial and residential tower on the former Filene’s property have been unable to raise financing because credit markets have severely tightened in the wake of the subprime mortgage debacle.
Related Topics: Development, Finance, News, Retail Real Estate |
