Accelerated Marketing Program Attracts Property Owners, Financial Institutions in 20 States Across the U.S.
Monthly Sales Events Feature Internet Auctions, Sealed Bids to Help Sellers Achieve Optimum Value
More than 50 properties valued in excess of $150 million will be featured in the first round of the Commercial Property PowerSale™, NAI Global’s ongoing series of national, multi-seller auction and sealed-bid sales.
NAI Global, in cooperation with its longtime alliance partner Higgenbotham Auctioneers International, created The Commercial Property PowerSale™ as part of an Accelerated Marketing Program to help property owners optimize the value of their property in today’s extremely difficult selling environment.
“This first event has generated significant interest across the U.S., and is being embraced by motivated sellers who are frustrated by gridlock in the traditional sales channels,” said Jeffrey M. Finn, NAI Global President & CEO. “We’re excited about this program’s potential to bring together buyers and sellers to create a market where one doesn’t currently exist.”
NAI Global expects to move over $1 billion in premier investment properties, financially distressed real estate and real estate loans by the end of the year, through online auctions sealed bids and a unique combination of the two formats, Finn noted.
This unique program gives clients the opportunity to sell their assets quickly, reducing their holding costs and securing true market value for the properties. Sellers in the Commercial Property PowerSale™ benefit from the tremendous marketing leverage created by aggregating properties from multiple sellers into a series of nationally marketed events.
The first Commercial Property PowerSale™ will take place online on May 1, 2009. Interested buyers will have an opportunity to bid on properties in 20 states, including New York, Washington, California, Texas, Florida and Maryland. The properties range from development-ready land tracts to investment-grade office, retail and multi-family properties. The full list of properties and detailed bidder information is available to the public on www.naiglobal.com/powersale. Interested buyers have the option of participating by submitting a sealed-bid or bidding live during the online auction, depending on the specific property.
“This is just the first phase of the Commercial Property PowerSale™,” said Finn. “We expect momentum to grow with each subsequent event.”
The second Commercial Property PowerSale™ is scheduled for June 11, with a property submission deadline of April 13. Future events are expected to be held on a monthly basis and will also feature the sale of performing and non-performing loans, providing another solution for banks and financial institutions.
Prospective buyers and sellers interested in learning more about the Commercial Property PowerSale™ should visit www.naiglobal.com/powersale.
NAI Austin is one of Austin’s most experienced commercial real estate firms and the Austin area representative for NAI GlobalTM, the industry’s largest global network of real estate service-providers, comprising 5,000 brokers in 325 offices serving more than 55 countries worldwide. For more information on NAI Austin, please visit www.naiaustin.com.
Amber Oaks has added two new buildings: an addition of 150,000 square feet to the already existing 10-building office park located at the southwest corner of RR 620 and Parmer Lane in northwest Austin. The new buildings H and I have 100,000 square feet 50,000 square feet respectively, with a parking ratio of 5:1,000. This new addition was completed last September and no leases have been signed for space in the new buildings.
Amber Oaks is conveniently located next to Lifetime Fitness, a 120,000 square feet fitness center with various playing courts, a rock-climbing wall, pool and state-of-the-art equipment. There are 40 restaurants within two miles of Amber Oaks, and developers are adding three retail pad sites.
NAI Austin’s Senior Broker Phillip Bible and Land Specialist Meredith Sloan represented Dr. Greg Biehle in marketing and selling a prime retail site, located at the southeast corner of 35 St. and Glenview, one block west of Dr. Biehle’s popular veterinary clinic in the Brykerwood area.
This 15,512 square foot site includes a commerical building formerly known as the Gorbet Building. The new owners plan to remodel the building to house a new, Austin-original, Argentine-style restaurant.
As more Austin-area developments are looking to become LEED certified to reduce their impact on the environment, they are also moving up in their environmental certification.
Last week, a North Austin office development, which started construction in January, became gold LEED pre-certified as a result of its energy and water efficiency, use of local and recycled materials and the provision of facilities for bicycling commuters. Located at Oak Creek Drive and MoPac Expressway, Oak Creek Plaza is a Class A 50,000 square foot office building on four acres of land near the Capital Metropolitan Transportation Authority’s commuter rail. Real estate developers have figured out that developing LEED certified office buildings will not only be a benefit to the environment but will also make their buildings more attractive to tenants, especially those from the West Coast. Oak Creek Plaza is one of the first gold LEED certified projects in Austin and will be finished in October of this year.
In May, the Ronald McDonald House of Austin and Central Texas became platinum LEED certified as a result of its landscape architecture and rooftop solar panels that power at least half of the rooms and avoid 30,000 pounds of carbon dioxide emissions annually. Located at 1315 Barbara Jordan Boulevard and completed in 2007, this 28,500 square foot facility is the first solar-powered Ronald McDonald House in the world.
NAI Austin Industrial Specialist Mark Milstead negotiated the sublease of 8040 sq. ft. at 110 Market Street to Gypsum Supply, Ltd. Gypsum is a Dallas company that specializes in drywall and acoustical supplies.
Started in 1991, Gypsum Supply, Ltd. helped created Amarok, a co-op that joins the resources of independent gypsum dealers. Amarok now has over 170 members and 300 locations nationwide. Gypsum Supply, Ltd. is looking to expand in Texas and was bought by the Wright Family in 2006.
NAI Austin’s Industrial Specialist David Barber and Land and Commercial Building Specialist Dean Janeff were recently chosen as two of CoStar’s Power Brokers of 2007. Barber, who worked for NAI in Fort Worth for seven years before joining NAI Austin in September 2006, was also added to the NAI Global Elite in February as a Top Producer based on his production last year. Janeff has also worked for NAI Austin over seven years.
CoStar Group and Real Estate Forum’s Power Broker Awards have been around for six years. CoStar chose these awards based on the amount of commercial property leasing and/or sale transactions listed in CoStar’s database each year, and by the broker’s supplied transaction data supplied to CoStar. CoStar Group, Inc., started 20 years ago and headquartered in Bethesda, Maryland, provides information about the commercial real estate industry, with a database that includes over two million properties in the U.S. and Europe.
For the first time ever, monthly commercial real estate publication Real Estate Forum has ranked the top 100 companies in the brokerage, development, finance and ownership areas of the industry. In the inaugural rankings, NAI Global was named the no. 3 company within the brokerage category.
The companies on the list were ranked using four general categories: 2006 revenues, projected revenue for 2007, number of employees and number of offices. This information was provided by the individual firms.
NAI Global has more than 8,000 employees in 375 offices worldwide. Its 2006 gross revenue was $750 million, and its projected revenue for 2007 is around $800 million. NAI Global works primarily with office and industrial transactions, but also deals in retail.
NAI Austin, an NAI Global subsidiary, works not only in the office, industrial and retail sectors, but also has a land department. The Austin office, like all NAI branches, is independently owned and operated.
The South Austin area surrounding South Congress and Ben White is growing substantially as it plays host to development projects which include residential, retail and office space. Also being built is the South Central Transit Center, a new part of the Capital Metropolitan Transportation Authority system, which will serve to improve the city’s public transportation, beginning in early fall.
Some projects coming online soon are 2900 South Congress, a 21-unit office complex and SoCo Lofts, a housing complex with more than 20,000 sf of restaurant, retail and office space. The Abby at Ben White, a 48,938 sf shopping center built in 2007, recently came onto the market. It is currently home to a diverse group of tenants and is selling for $12.5 million.
This area, just minutes from downtown, has become a bustling hub of expansion with a live/work/play design. Its convenient location is not only close to the heart of Austin, but is also near many major roadways, such as U.S. Highways 35, 290 West, 71, and a short distance from both 360 and MoPac. It is also just minutes from Austin-Bergstrom International Airport and rests on the doorstep of St. Edward’s University.
For more information on the South Austin commercial real estate market or properties, contact the professionals at NAI Austin through www.naiaustin.com. For retail information, contact NAI Austin Retail Specialist Sherry Sanchez; for office information, contact NAI Austin Office Specialist Lise Wineland.
The following are highlights of commercial real estate market activities in selected U. S. MSAs during 2007. This information is extracted from NAI Global’s just released 2008 Global Market Report. This 148-page report, compiled by NAI Global members around the world, is a unique review and summary of global commercial real estate activities during the past year, and it provides comprehensive market data as well as geographical area and economic overviews for 213 primary, secondary and tertiary property markets worldwide.
Overview: In 2007, U.S. markets reported generally tightening vacancies and modest increases in rents. With any lingering remnants from the dot-com bust erased in 2006, the supply side is remarkably stable, as evidenced by the modest drop in the vacancy rate for Downtown Class A office space from 9.85% in 2006 to 9.55% in 2007. The 16.4% increase in the national average rental rate for Downtown Class A space translates into sticker shock for tenants with leases expiring in resurgent downtown areas such as New York City, Boston, San Francisco and Los Angeles, where supply is scarce and rents have risen more dramatically.
Suburban markets nationwide mirrored the vacancy trend without the velocity of rental rate growth. The national vacancy rate for Suburban Class A space declined slightly from 13.16% in 2006 to 12.87% in 2007, while rental rates increased 5.6% from $24.49 in 2006 to $25.87 in 2007.
Market conditions in the industrial sector also improved, with the biggest gains recorded in the bulk warehouse sector. Demand for bulk warehouse space has been strong in prior years, but not strong enough to keep pace with new supply. The national average vacancy rate for bulk warehouse space declined to 9.09% in 2007, its lowest level in over five years, after increasing four of the five previous years.
Retail vacancy rates declined modestly in all categories and are at their lowest levels in over five years. The most significant growth in rental rates occurred in regional malls, where the national average rose from $44.97 in 2006 to $46.26 in 2007. The rental rate for downtown retail climbed from $47.70 in 2006 to $48.09 in 2007.
“The outlook for 2008 calls for continued stability with moderate growth in occupancy and rental rates,” stated NAI Global President and CEO Jeffrey M. Finn. “Tenants in the most supply-constrained cities may have to consider other alternatives, such as splitting headquarters and back-office functions or relocating to lower-cost space in the suburbs.”
Atlanta: Office absorption hit the highest level since 2000 in Atlanta, but vacancies remained steady at 18-19% as new construction continues apace. Retailers are driving growth in the industrial market due to the need for distribution centers in close proximity to large retail markets.
Boston: Vacancy rates on Class A and B space in the CBD have tightened dramatically and tenants are facing significantly higher rents. Aggressive new owners are asking $75 to $90 per square foot for Class A space in high-rise buildings in the Financial District and Back Bay. Investment sales produced record-setting volume in almost every property type.
Chicago: On the whole, Chicago remains a tenants’ market with vacancy rates above historic averages. Office vacancy rates downtown have fallen to levels not seen since 2001, but there is ample supply to give tenants leverage. Leasing activity has been concentrated in Class A product with the strongest demand in the West Loop. The housing slump is beginning to impact retail rents, which dropped for the first time in over a year.
Dallas: Large spaces are easy to find in the Dallas industrial sector, but tenants looking for less than 50,000 square feet will find limited choices. Office vacancy rates remain stuck at high levels—21% downtown and 14.1% in the suburbs for Class A space—despite over 1.3 million square feet of absorption and 91,000 new jobs.
Denver: The Denver office market continued to benefit from in-migration and new job growth, which helped to push vacancy rates below 15% market-wide. Downtown vacancies actually are close to single digits with almost 1 million square feet of speculative development under way.
Los Angeles: Los Angeles County’s highly diverse economy, the second-largest in the nation, is driving growth in all sectors of commercial real estate. Large contiguous blocks of space are hard to find in West Los Angeles, Pasadena and Burbank, where buildings that were getting $20 to $24 per square foot a few years ago now command rents above $50 per square foot. The price of office buildings has skyrocketed. Sale prices in excess of $500 per square foot are now commonplace in West L.A. and certain Class A properties will top $700. The industrial market in Los Angeles is the tightest large market in the U.S., with vacancy rates for bulk warehouse a meager 3.4%.
Miami: The convergence of rising occupancy costs, living costs and a collapsing residential condominium market will return Miami’s stellar growth to earthly levels. Opportunistic investors will look to pounce on failed high-rise residential projects as prices of non-waterfront projects are expected to drop 10-40% in 2008.
New York: New York City continued its rampant growth of recent years, punctuated by a late-year pause resulting from turmoil in the capital markets. Office rents are topping $200 per square foot at the top-end, $100+ rents are now commonplace in Class A product and $1 billion+ sales transactions are no longer unusual. Midtown is a landlords’ market with a Class A vacancy rate of 5.2%. Downtown offers some relief in rent but supply is equally scarce with a Class A vacancy rate of 5.8%. It is yet to be seen if the hesitation in the market late in 2007 was merely a breather or the beginning of a broader market adjustment.
Phoenix: While office vacancy rates increased, Phoenix will continue to see growth from expanding and relocating businesses, including companies seeking relief from California’s higher-priced, supply-constrained markets.
San Francisco: The vacancy rate for office space is approaching single-digits market-wide with the vacancy rate for Class A space already at 9.4% and heading down. At $485 per square foot, prime street-front retail space in San Francisco is second only to New York City in price and ranks among the most expensive retail markets worldwide.
Washington, D.C.: Office rents continued to rise in 2007 on the strength of one of the country’s best markets for job growth and a shift in ownership from publicly-traded REITs to private equity funds. Although 10.9 million square feet of retail inventory has been added to the metro area since 2000, the market remains underserved as the growing population increases demand for retail services.
NAI Global has just published its 2008 Commercial Real Estate Global Market Report. This 148-page report, compiled by NAI Global members around the world, is a unique review and summary of global commercial real estate activities during the past year. It provides comprehensive market data, as well as geographical area and economic overviews for 213 primary, secondary and tertiary property markets worldwide.This report provides a wealth of global commercial real estate market intelligence that will be used by corporations, institutions, developers, real estate investors, lenders, property owners and real estate brokers throughout the U. S. the Asia Pacific Region, Canada, Europe, the Middle East, Africa, Latin America and the Caribbean.
Asia-Pacific Region: Manufacturing continues to be focused on China, but as prices for real estate, utilities and labor rise, companies are pursuing a “China plus one” approach, where they locate a facility in China and a second facility in another low cost country in Asia. India has 1.1 billion people and cheaper production costs. China and India are attracting a lot of attention for joint venture development opportunities with local developers. However, investors should tread carefully. Most local developers in these markets do not have the experience in dealing with Western investors. Therefore, the time and effort invested in each project will be significantly greater than what Western investors generally expect.
Canada: Foreign investors are disrupting Canadian owners’ traditional hold on the market. Canada’s real estate ownership remains largely concentrated in the hands of a dozen institutions and trusts. However, Europeans and American investors such as Blackstone Group and ProLogis have made significant investments in the market.
Europe: France and Germany are experiencing economic expansion fed by historic levels of global growth. Property markets across the continent have been strong, although some shifts may occur as a result of overreaction to U.S. sub-prime concerns. The most expensive office space in the world can be found in London’s West End, where peak rents in Mayfair top $225 per square foot. Rental increases also have been particularly strong in Budapest (+17.5%), Madrid (+20%), Moscow (+25%), Oslo (+65%), Paris (+10%) and Warsaw (+30%). Copenhagen, London, Madrid, Moscow, Paris, Düsseldorf, Frankfurt and Stockholm all claim vacancy rates of 5% or less. Retail is particularly strong in Budapest, where rents have increased 25%, and in Moscow, where rents are up 45%.
Latin America & the Caribbean: A long-awaited period of sustained economic growth is finally occurring in much of Latin America. After decades of failed economic policies and dubious politics, much of the region is slowly entering the realm of stable and productive economies. Brazil is now awash with capital for Class A office, industrial and retail developments, as well as speculative acquisitions. Lease rates for all product types have increased 15-20% due to heightened demand and lack of inventory. Colombia may be the region’s best-kept secret. Although growth has slowed from 6.8% in 2006 to a projected 4.9% for 2008, inflation has been tamed to 4%. Real estate development activity is strong, but supply lags demand, particularly for higher-end office, retail and industrial properties. Developers can’t keep pace with demand in Mexico either, where all property types have single-digit vacancy rates. Prices for well-located land parcels are expected to rise as much as 15% in 2008.
About NAI Global:
NAI Global is one of the leading commercial real estate services providers worldwide. Headquartered in Princeton, New Jersey, NAI Global manages a network of 8,000 commercial real estate professionals and 375 offices in over 55 countries, and completes over $45 billion in annual transaction volume. Since 1978, NAI Global clients have built their businesses on the power of NAI’s expanding network. NAI Global’s extensive services include corporate real estate services, brokerage and leasing, property and facilities management, real estate investment and capital market services, due diligence, global supply chain consulting and related advisory services. To learn more, visit www.naiglobal.com.
