Blackstone Group LP Agreed to Buy Centro Properties Group’s

NNN Lease Market News

Blackstone will purchase Centro's U.S. Malls spending 9.4 billion dollars

The largest private-equity firm in the world, Blackstone Group LP, agreed to buy Centro Properties Group’s selection of U. S. shopping centers for an amount of $9.4 billion, two people aware of the matter said.

The purchase of five hundred and eighty eight malls, at the market price they were valued at as of Dec. 31, may enable Centro’s Australian operations to run as an independent company, said one of the people, who declined to be named before an official statement. The deal may get announced as early as today, the person said.

The 5 Secondary Market for Real Estate Investor That Will Thrive in 2012

Dallas and Minneapolis Named Best Secondary Market for Real Estate Investors


Investors have been moving into secondary markets such as Dallas and Minneapolis amid growing confidence in the recovery and soaring prices that drove down yields on office buildings, shopping malls and apartments in prime cities including New York, San Francisco and Washington. Purchases of commercial properties in secondary markets had been increasing this year, extending a rebound that started in the big coastal areas.
Purchases of commercial properties in secondary markets had been increasing this year, extending a rebound that started in the big coastal areas. Building values and rental rates don’t appreciate as fast in secondary markets compared with land-constrained coastal markets because it is easier to construct new buildings.
The Federal Reserve said on Aug. 9 that it will maintain record-low interest rates at least through mid-2013 to boost growth that has been “considerably slower” than it forecast.
If the Fed is successful, prime and secondary commercial real estate markets should benefit.

http://www.blommbeg.com/

As of 2009, it was estimated that there are dozens of dedicated firms and institutional investors that engage in the purchase of private equity interests in the secondary market with upwards of $30 billion of capital available for such transactions.The market for secondary interests is still highly fragmented. Leading secondary investment firms with current dedicated secondary capital in excess of circa $3 billion include: AlpInvest Partners, AXA Private Equity, Coller Capital, HarbourVest Partners, Lexington Partners, Pantheon Ventures, Partners Group, Neuberger Berman, and Paul Capital.

Office Sublease Market Trends

NNN LEASE MARKET NEWS

Affordable Prices Push Active SubLease Market In Manhattan ...


Conventional wisdom holds that subleasing in which tenants vacate their offices before the end of their lease and rent it to another tenant at a discount has a negative impact on the market. The amount of sublease space available has declined, the research shows, as 21 percent of all office space on the market in the first half of 2011 was available for sublease, compared to 30 percent in 2009. The most coveted office space, in city towers above the 25th floor, is on the market for an average of 8.5 months, 3 months less than  space at the 10th floor and below.
Yet despite these positive signs for those seeking sub-tenants, subleases are actually getting snapped up so quickly because of weaker price points compared to the direct-lease market. Many tenants that have recently converted sublease space into direct leases, a trend that is being driven by the tightening commercial real estate market.  The disparity sat at 25 percent for the first half of this year, thanks to the improving commercial office leasing market,
But the industry perspective is now shifting.Tenants are embracing subleases as a means of locking in below-market rents, while landlords, who are facing fewer vacancies, are using it to attract tenants and then converting the leases into direct deals when the subleases expire.
During this downturn, however, sublease space may have proved to be somewhat less of a drag on the market
http://therealdeal.com/

 What is sublease? when a tenant let out the whole or part of the property rented by him a to a third person it is called 'sublease'. Even though it is rented out fully, the first tenant will be responsible for payment of rent and all charges to the landlord and he is also responsible for all loss caused by the sub lessee to the property. There is no agreement with the landlord and the sub-tenant. The landlords generally discourage such sub-leasing by banning it in the lease agreement.

  

Brookfield Asset Management Reports Positive Earnings

Brookfield Asset Management Says Earnings Increased Nine-Fold on Holdings

Brookfield Asset Management Inc. (BAM/A), the Toronto-based investment firm that manages about $150 billion, said second-quarter profit rose nine-fold as the value of its holdings surged.
Net income attributable to shareholders rose to $838 million, or $1.26 a share, from $89 million, or 12 cents, a year earlier. Cash flow from operations increased 29 percent to $829 million, the company said today in statement.
Brookfield, which focuses on property, renewable power and infrastructure assets, booked $1.09 billion in fair value changes as the financial market recovery lifted the value of holding. The company raised $4.7 billion in the second quarter and will seek another $4 billion for seven funds as it expands investments globally.


http://www.bloomberg.com/news

The Market Swings Made it Harder for Wall Street Firms to Sell New Issues

 Tremors in the market for commercial-mortgage-backed securities

Tremors in the market for commercial-mortgage-backed securities are hindering the recovery of the commercial-property sector. But the new-issue market for these securities has hit a speed bump amid turmoil in the capital markets, causing a key set of lenders to back off from making new loans. The result is that deal activity has fallen, putting the brakes on the rise in values.
Earlier this year, some analysts were predicting banks would issue as much as $50 billion in new commercial-mortgage securities this year. Now, they are saying volume may be as low as $30 billion to $35 billion.
A test for the sector is slated for later this week, when Deutsche Bank AG and UBS AG intend to sell a pool of $1.4 billion in commercial mortgages. In response to the skittish market, the deal will offer investors 30% in so-called credit protection, nearly double the levels they offered in their last issuance in June. The market swings made it harder for Wall Street firms to sell new issues. It also posed risks for the underwriters who were having a harder time hedging against price declines as they made and accumulated commercial mortgages to prepare them for securitizations. But the changes in the market have caused some smaller firms to back out of the commercial-mortgage-security sector entirely, including hedge fund Citadel LLC, which is pulling out of issuing loans intended for securitization given the drop in demand, according to people familiar with the matter.

http://online.wsj.com/article

No Downturn in the Rental Market

LIC apartment sales reach 86 percent: report

Long Island City's rental market in the first half of 2011 is flat compared with the end of 2010, with 94 percent of 2,084 rentals leased, according to Modern Spaces' mid-year residential report based on neighborhood-wide data. The for-sale market was up almost 10 percent compared to the end of 2010, with 86 percent of 2,359 units on the market snapped up compared to 77 percent at the end of last year. Monthly rents in the first six months of the year averaged $1,475 to $5,323, depending on whether the buildings had doormen or elevators. Sales prices ranged from $319,725 for studios to $1.27 million for three-bedroom apartments.

Long-Island-City-Orange-Report-2011-Mid-Year-1

New York Commercial Real Estate Market Revenue Up 30%

New York Commercial Property Revenue Climbs Up 30%

The company is seeing “steady demand and controlled supply within our primary markets,” Chief Executive Officer Ric Clark said in the statement. “We remain optimistic about our performance over the balance of the year and the next few years to come.”

Brookfield Office Properties Inc., owner of Manhattan’s World Financial Center, reported funds from operations that beat analyst estimates after increasing revenue and adding income from Australian properties acquired last year.
Revenue Up 30%
FFO, a gauge of a property company’s ability to generate cash, was $152 million, or 30 cents a share, in the second quarter, the New York-based landlord said today in a statement. Analysts expected 26 cents a share, the average of 14 estimates in a Bloomberg survey. FFO was $201 million, or 40 cents, a year earlier, when results included a $53 million gain from the repayment of a loaThe companywide occupancy rate was 93.3 percent, down from 95 percent at the end of last year and 94.8 percent a year earlier, according to the supplemental report.

http://www.bloomberg.com/news