Archive for the 'ICSC' category

2010 has marked the return of the large office trades. Here are some notable deals:

Boston Properties now owns the Iconic John Hancock Tower in Boston, MA

111 Eighth Avenue, NYC - $1.8B
Google purchased the asset at a 5.5% cap OR $618 PSF

John Hancock Tower, Boston - $930M
Boston Properties purchased the asset a 6.5% cap rate going in or $540 PSF

300 N. Lasalle, Chicago - $649.8M
KBS purchased the asset for a 6.2% cap or $499 PSF

Landmark Center, Boston - $530M
Samuels & Associates purchased the asset for a 5.7% cap or $558 PSF

(Market Data supplied by Real Capital Analytics)

Our prediction for 2011. Watch for core assets cap rates to continue to compress. We may see some sub 5% cap rate trades of core office assets in major Eastern Seaboard cities such as Boston, New York and DC. Large core multifamily assets will continue to have sub 5% cap rates for choice assets, while retail assets cap rates may return to peak 2007 levels. Core retail assets such as dominant supermarket anchored centers and necessity based centers such as well located CVS's and Walgreens will lead the charge.

To learn more about what your commercial asset is worth, please contact us.

As the industry has speculated for many months, Simon has made a $10B unsolicited bid to buy General Growth Properties.

Yesterday the Hanover Mall in Hanover, MA was sold at auction, back to the lender. Walton Street Capital of Chicago purchased the mall for just under $100M in 2003. The special servicer, CW Capital was the high bidder, the credit bid was $36,700,000---close to 65% less than the 2003 acquisition price.

Read the stories:

http://www.patriotledger.com/news/x1431749232/Hanover-Mall-sold-for-36-7M

http://www.boston.com/business/articles/2010/02/05/hanover_mall_auctioned_for_37m/

Retailer's Runway: 2009
This year's participants in the ICSC (International Council of Shopping Centers) Retailer's Runway were:

Auto Zone
Dollar Tree
Game Stop
Haloween Venture
Hobby Lobby
Kiddie Academy
Muscle Maker Grill
Planet Fitness
REI Sporting Goods
Rosa Mexicano Restaurants
Shoprite
Sonic
TD Bank
Wingstop Restaurants

The growth oriented segments in retail this year are value focused shopping, and appropriately so.  This line up is extremely reflective of this trend.

Retailer, Dollar Tree reporting opening 240 new locations in 2009 at the runway, having a total of 3,800 stores nationwide.  Their focus in
2010-2011 will be urban, in contrast to their typically suburban stores.

Sonic, the retro-future drive-in fast food restaurant reported opening
141 franchises in the 2009 fiscal year.  While this is down from their
2008 169 number, it still represents promising expansion.  Their current focus is on penetrating the northeast market.  Their new Peabody, MA location set the record for opening week revenue by more than 4 times the prior record holder.  With almost 3,600 locations across 42 states, the current #1 drive in chain in the U.S. shows promise.

TD Bank and Gamstop were amongst others with impressive growth statistics and substantial presentations.

For more information on retail real estate, please contact Jason Weissman here.

Stay tuned for more ICSC LIVE updates!  

Boston Realty Advisors and our affiliated auction company, Flynn | B.R.A., exhibited this week at the New England ICSC Annual Summer Show at the Boston Convention & Exhibition Center.

The turnout was light, consisting mainly of brokers and developers. The few retailers that were there (Family Dollar and Walgreens, to name a few) seemed very busy. The atmosphere at the show was positive with brokers and developers focused on leasing their centers and vacant spaces.

Unfortunately for the brokers and developers, few tenants were there to make deals, and the only ones doing so seemed to be pharmacies, supermarkets and discount retailers.

The few retail deals that seem to be happening in this climate are urban deals within the Boston city limits. The Manhattan retail market seems to be picking up, with some major lease signings occurring in Q2. Hopefully this activity will spread to other major cities in the Northeast.  

Surprisingly, no companies, except for Flynn, were talking about the collapse of the commercial real estate debt markets. No one seemed to acknowledge that this wave will take out many who currently own and develop retail properties. Most properties that have been bought or developed after 2005 that need to be refinanced in the next three years, will probably revert to the bank in most cases. That made Flynn | B.R.A.’s presence at the show that much more important.

Most folks who stopped by the booth were talking about Boston Realty Advisors’ announcement that Urban Outfitters had signed a lease in Allston. According to Costar, this represents the largest retail lease signing in the City of Boston in 2009! This shows that the fundamentals of the Boston retail market (from a lease/economic standpoint, not property value) are fundamentally strong.

The show was also buzzing about Legacy Place, set to open in the early fall. This project should defy gravity and have an amazing opening. We hear that it is nearly 100% leased, and we all agree that this will be a home run for the retailers opening. The well-capitalized developers will make this work, and make it the true trophy lifestyle center in New England.

Finally, the venue where the ICSC event was held, The Boston Convention & Exhibition Center is always great. Clean, great location and workable (just a bit too big for our little regional show), it is one of the best convention centers in the US. It was also great to have the tall ships in view from the Harbor. The Seaport District, even with the economic downturn, is quite a bright spot for the city.