CADENCE MCSHANE TO BUILD OUT NEW LSCS CAMPUS

Lone Star College System (LSCS) has selected the Houston office of Cadence McShane Construction Co. to complete the build-out of its new campus. LSCS recently acquired the former Hewlett Packard office campus, a five-building, 1.2 million-square-foot property that is located at 20515 State Highway 249 in Houston, and plans to use it as a new campus. The school plans to use it as its new consolidate Houston campus. Construction will include extensive renovations to the building interiors, envelopes, core and shell, parking deck and immediate grounds. Once the project is complete, which is expected in June 2010, LSCS will relocate several departments from its existing administrative offices in The Woodlands, Texas, as well as its Williow Chase Center operations in Houston. The project architects are Kirksey Architecture and VLK Architects. For more information on Houston office space, Houston retail space or Houston warehouse space and Houston industrial space, please call 713 782-0260 or see my web site at : www.houstonrealtyadvisors.com Offer opportunities for Houston office space. Thank you for your interest.
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53,232 Sq Ft Downtown Office Lease Houston, Tx.

HOUSTON — Grubb & Ellis has arranged a sublease for 53,232 square feet at Wedge Tower, an office building located at 1415 Louisiana St. in downtown Houston. The subtenant, Eagle Rock Energy Partners, will be relocating from its Houston location at 16701 Greenspoint Dr. The sublessor is Dominion Exploration & Production. Jim Arket and Mona Williams of Grubb & Ellis represented Dominion in negotiations. Joe Peddie, David Guion and Hugh Hermann of Cushman & Wakefield represented Eagle Rock. Terms of the lease were not disclosedFor more information on Houston office space, Houston retail space or Houston warehouse space and Houston industrial space, please call 713 782-0260 or see my web site at : www.houstonrealtyadvisors.com Offer opportunities for Houston office space. Thank you for your interest.
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Are things getting better in USA? COSTAR REPORTS

While there has been a noteworthy decrease in the amount of cross-border real estate investment in the Americas since the beginning of the economic crisis, new activity is springing optimism that foreign investors are increasing their interest and preparing to re-enter the Americas next year, according to Jones Lang LaSalle's International Capital Group at a presentation this past at the Expo Real show in Munich, Germany. For the first half of 2009, global investment transaction volumes netted just $76 billion, according to JLL. The United States experienced the largest decline-falling by 77% year-over-year. Japan surpassed the United States and United Kingdom as the most active investor region with $15 billion in transactions in the first half of 2009. The United States was a close second at $14 billion, followed by the United Kingdom with $11 billion. But the U.S. situation may be improving based on recent news and deals. China Investment Corp., a $200 billion sovereign fund based in Beijing, last month agreed to invest up to $1 billion with Los Angeles-based private equity fund Oaktree Capital to buy distressed U.S. assets ranging from real estate to infrastructure. China Investment Corp. is also reportedly weighing putting equal amounts into two other U.S. funds for the same purpose. Action is coming from other countries as well. "In the last two months, we've seen German and Asian investors increase their interest in U.S. investment," said Steve Collins, managing director of Jones Lang LaSalle's International Capital Group. "Several stateside closings also are providing some early encouragement that foreign investors are slowing rising off the sidelines for the right opportunities in the best markets." "Right now, the coastal markets such as New York, [Washington, DC], and San Francisco are drawing interest from a select few foreign investors bidding and winning on off-market investments today," Collins added. "It seems the German open- and close-end funds and the Asian development companies are getting ready for an investment push in first quarter 2010." Also just this week one of Israel's largest holding company, The IDB Group, agreed to purchase the 452 Fifth Avenue Tower, HSBC's U.S. headquarters, for $330 million in an all-cash deal. IDB signed on a New York-based partner Joe Cayre, chairman of Midtown Equities, in the deal that is expected to close early next year. Under the terms of the agreement, HSBC will lease back floors one to 11 for a 10-year term, as well as other parts of the building over a one-year term. The 29-story 452 5th Ave Tower is comprised of approximately 865,000 square feet. Stateside investment activity started increasing in late summer, according to Jones Lang LaSalle. Notable transactions included the largest U.S. transaction to date in the sale of Worldwide Plaza at 825 Eighth Ave. in Manhattan. Local owner/operator George Comfort & Sons bought the former Macklowe property for $605 million in a joint venture with RCG Longview. Macklowe paid $1.7 for the previously fully leased building in 2007. The purchase reflects a net initial yield of 6.3% on what is now a 40% vacant building. If and when the building becomes fully stabilized in three or four years, the yield will likely be closer to 12%. It is widely believed in the market that the purchaser has new tenants lined up already. The other significant deal was also in Manhattan: SL Green's sale of its 49.5% interest in 485 Lexington to a joint venture between Gilmore USA and Optibase Ltd (an Israeli technology company). The joint venture paid a little less than $21 million and assumed the $450 million of existing debt on the building. This is Optibase's first real estate purchase in North America as it attempts to diversify its portfolio by investing in commercial real estate. Once the transaction closes, the joint venture reportedly plans to provide SL Green with a $20 million loan secured by an SL Green pledge to sell an additional 49.5% stake. A little farther down the East Coast in Washington, DC, the large public REIT Vornado sold 1999 K St. NW to Deka's Open Ended Fund for $208 million in the largest DC property transaction this year. The property, designed by Helmut Jahn, was completed just last month and is leased to the law firm Mayer Brown for 15 years. The purchase price equates to $830 per square foot. The last building to trade at such a high level was 2099 Pennsylvania Ave. NW, a Jones Lang LaSalle brokered and closed in April of 2008 that set a high watermark for DC office transactions at $867/square foot. Another trophy DC market transaction was Credit Suisse's purchase of 1099 New York Ave. NW from Tishman Speyer. It reportedly traded at a 7.4% for $90.5 million ($517/square foot). The building is 61% leased with a major law firm as the anchor tenant. Invesco was also active in D.C. and purchased the newly redeveloped headquarters for the Immigration and Customs Enforcement agency from Prudential Real Estate Investors for $153.6 million. The nearly 500,000-square-foot deal was all cash; however its non-core location yielded only $310/square foot. For more information on Houston office space, Houston retail space or Houston warehouse space and Houston industrial space, please call 713 782-0260 or see my web site at : www.houstonrealtyadvisors.com Offer opportunities for Houston office space. Thank you for your interest.
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Biggest Office Space owners in USA

1. RREEFTotal Office Portfolio: 93.6 million sq. ft.280 Park Ave., Ste. 22WNew York, NY 10017Phone: (212) 454-3900Web site: http://www.rreef.com/Officers: Charles B. Leitner, Global Head; Michael Luciano, Global COO2. Brookfield Properties Corp.Total Office Portfolio: 59.5 million sq. ft.Three World Financial Center200 Vesey St., Ste. 1100New York, NY 10281Phone: (212) 417-7000Web site: http://www.brookfieldproperties.com/Officers: Ric Clark, President/CEO; Dennis Friedrich, President/COO, U.S. Commercial Operations; Tom Farley, President/COO3. The Blackstone GroupTotal Office Portfolio: 57.9 million sq. ft.345 Park Ave.New York, NY 10154Phone: (212) 583-5000Web site: http://www.blackstone.com/Officers: Peter Peterson, senior chairman; Stephen Schwarzman, chairman/CEO; Hamilton James, president/COO4. HinesTotal Office Portfolio: 55.4 million sq. ft.2800 Post Oak Blvd.Houston, TX 77056Phone: (713) 621-8000Web site: http://www.hines.com/Officers: Gerald D. Hines, Chairman; Jeffrey C. Hines, President; C. Hastings Johnson, EVP/CFO5. CB Richard Ellis InvestorsTotal Office Portfolio: 49.8 million sq. ft.515 S. Flower St., 31st FloorLos Angeles, CA 90071Phone: (213) 683-4300Web site: http://www.cbreinvestors.com/Officers: Vance Maddocks, CEO; William Harris, President/COO; Robert Zerbst, Chairman6. TIAA-CREFTotal Office Portfolio: 47 million sq. ft.730 Third Ave.New York, NY 11762-3206Phone: (800) 842-2733Web site: http://www.tiaa-cref.org/Officers: Scott Evans, EVP, Asset Management; Edward Grzybowski, CIO; Thomas Garbutt, head, global real estate7. ING Clarion PartnersTotal Office Portfolio: 46.8 million sq. ft.230 Park AveNew York, NY 10169Phone: (212) 883-2500Web site: http://www.ingclarion.com/Officers: Stephen Furnary, CEO/Managing Director; Bill Kracuh, Global Marketing Head; Frank Sullivan, Managing Director8. Vornado Realty TrustTotal Office Portfolio: 44.2 million sq. ft.888 Seventh Ave.New York, NY 10019Phone: (212)894-7000Web site: http://www.vno.com/Officers: Steven Roth, Chairman/CEO; Michael D. Fascitelli, President; Joseph Macnow, EVP/CFO9. Boston PropertiesTotal Office Portfolio: 43.8 million sq. ft.800 Boylston St., Ste. 1900Boston, MA 02199Phone: (617) 236-3300Web site: http://www.bostonproperties.com/Officers: Mortimer B. Zuckerman, Chairman; Edward H. Linde, CEO; Douglas T. Linde, President10. LaSalle Investment ManagementTotal Office Portfolio: 39 million sq. ft.200 East Randolph Dr.Chicago, IL 60601Phone: (312) 782-5800Web site: http://www.lasalle.com/Officers: Jeff Jacobson, CEO; Jaques Gordon, International Director, Research & Strategy; Matthew Reed, International Co-Head, Acquisitions11. Duke Realty Corp.Total Office Portfolio: 36.3 million sq. ft.600 E. 96th St., Ste. 100Indianapolis, IN 46240Phone: (317) 808-6000Web site: http://www.dukerealty.com/Officers: Dennis D. Oklak, Chairman/CEO; Robert M. Chapman, COO12. HRPT Properties TrustTotal Office Portfolio: 35.3 million sq. ft.400 Centre St.Newton, MA 02458Phone: (617) 332-3990Web site: http://www.hrpreit.com/Officers: John A. Mannix, President/COO; John C. Popeo, Treasurer/CFO; Jennifer B. Clark, SVP13. Mack-Cali Realty Corp.Total Office Portfolio: 33.3 million sq. ft.343 Thornall St.Edison, NJ 08837Phone: (732) 590-1000Web site: http://www.mack-cali.com/Officers: Mitchell E. Hersh, President/CEO; Barry Lefkowitz, EVP/CFO; Michael Grossman, EVP14. SL Green Realty Corp.Total Office Portfolio: 32.2 million sq. ft.420 Lexington Ave.New York, NY 10170Phone: 212-356-4109Officers: Marc Holliday, CEO; Andrew Mathias, President/CIO; Greg Hughes, CFO & COO15. Brandywine Realty TrustTotal Office Portfolio: 31.9 million sq. ft.555 E. Lancaster Ave., Ste. 100Radnor, PA 19087Phone: (610) 325-5600Web site: http://www.brandywinerealty.com/Officers: Gerard H. Sweeney, President/CEO; Howard Sipzner, EVP/CFO; George Johnstone, SVP, Operations16. Behringer HarvardTotal Office Portfolio: 30.4 million sq. ft.15601 Dallas Pkwy., Ste. 600Addison, TX 75001Phone: (214) 655-1600Officers: Robert Behringer, CEO; Bob Aisner, President/COO; Bob Chapman, EVP/Co-COO17. J.E. Robert Cos.Total Office Portfolio: 27.7 million sq. ft.1650 Tysons Blvd, Ste. 1600McLean, VA 22102Phone: (703) 714-8000Web site: http://www.jer.com/Officers: Joseph E. Robert Jr., Founder/CEO; Michael E. Pralle, President/COO; Malcolm LeMay, President, Europe18. Highwoods PropertiesTotal Office Portfolio: 25.7 million sq. ft.3100 Smoketree Court, Ste. 600Raleigh, NC 27604Phone: (919) 431-1521Web site: http://www.highwoods.com/Officers: Ed Fritsch, President/CEO; Mike Harris, EVP/COO; Terry Stevens, SVP/CFO18. Liberty Property TrustTotal Office Portfolio: 25.7 million sq. ft.500 Chesterfield Pkwy.Malvern, PA 19355Phone: (610) 648-1700Web site: http://www.libertyproperty.com/Officers: William P. Hankowsky, Chairman/CEO; Robert E. Fenza, EVP/COO; George J. Alburger Jr., EVP/CFO19. Shorenstein PropertiesTotal Office Portfolio: 21.3 million sq. ft.235 Montgomery St., 16th FloorSan Francisco, CA 94104Phone: (415) 772-7000Web site: http://www.shorenstein.com/Officers: Douglas W. Shorenstein, Chairman/CEO; Glenn A. Shannon, President; Richard A. Chicotel, Managing Director/CFO20. Wells Real Estate FundsTotal Office Portfolio: 20.5 million sq. ft.6200 The Corners Pkwy.Norcross, GA 30092Phone: (770) 449-7800Web site: http://www.wellsref.com/Officers: Leo Wells, President; Don Henry, Chief Real Estate Officer; Kevin Race, CFO21. KBS Realty AdvisorsTotal Office Portfolio: 18.7 million sq. ft. 620 Newport Center Dr., Ste 1300Newport Beach, CA 92660Phone: (949) 417-6500Web site: http://www.kbsrealty.com/Officers: Charles J. Schreiber Jr., CEO; Peter M. Bren, Chairman/President; James C. Chiboucas, Vice Chairman22. The Inland Real Estate Group of Cos.Total Office Portfolio: 18 million sq. ft.2901 ButterfieldOak Brook, IL 60523Phone: (630) 218-8000Web site: http://www.inlandgroup.com/Officers: Daniel L. Goodwin, Chairman23. AEW Capital ManagementTotal Office Portfolio: 15.3 million sq. ft.World Trade Center East, Two Seaport LaneBoston, MA 02210Phone: (617) 261-9000Web site: http://www.aew.com/Officers: Jeffrey D. Furber, CEO; Steven D. Corkin, Managing Director, Marketing and Client Service; Pamela J. Herbst, Managing Director, AEW Direct Investments24. Lincoln Property Co.Total Office Portfolio: 14.6 million sq. ft.500 N. Akard, Ste. 3300Dallas, Texas 75201Phone: (214) 740-3300Web site: http://www.lincolnproperty.com/Officers: Mack Pogue, Chairman; Tim Byrne, President/CEO, Residential Divison; Bill Duvall, President/CEO, Commercial Division25. Forest City EnterprisesTotal Office Portfolio: 13.4 million sq. ft.Terminal Tower, 50 Public Square, Ste. 1100Cleveland, Ohio 44113Phone: (216) 621-6060Web site: http://www.forestcity.net/Officers: Samuel H. Miller, Co-Chairman; Albert B. Ratner, Co-Chairman; Charles A. Ratner, President/CEOFor more information see: www.houstonrealtyadvisors.com or www.houstonrealtyadvisors.net

GOOD NEW YORK POST ARTICLE

THE next wave of the credit crisis is about to hit -- a collapse in com mercial real estate and potential explosion of bank failures. With its resources tapped out by the first wave, what should Washington do?
Over the last year, the Federal Reserve doubled the size of its balance sheet, and took unprecedented action in monetizing government debt and extending credit to financial institutions. Now it must head off inflation and extricate itself from $5 trillion-plus in credit exposure from various bailouts. The Treasury, meanwhile, is issuing debt at the fastest pace in peacetime history.
Now comes the next crisis. The same factors that caused the residential bubble -- easy credit, lax lending standards and booming mortgage-backed-securities underwriting -- also drove commercial real-estate overvaluation. But the commercial market lags the residential one by about a year, so this bubble is still popping.
Already, commercial-real-estate prices nationwide are 39 percent off their peak of two years ago, reports the MIT Center for Real Estate. The 18 percent price decline in this year's second quarter was the largest quarterly drop in 25 years.
Prices fell just 27 percent during the late-'80s/early-'90s savings-and-loan crisis -- a collapse that prompted the then-largest federal intervention ever -- $125 billion in the form of Resolution Trust Corp. seizures and auctions. Last year's crisis saw Congress providing nearly six times more to bail out the US financial sector. And that was only the start.
Most commercial properties bought or refinanced in the last five years are now upside-down on their loans -- that is, the property can't be sold for its finance value or purchase price. Real Capital Analytics reports that owners have lost their entire down payments on about $1.3 trillion worth of property.
Nearly half of all US commercial-real-estate-mortgage loans come due within the next five years. Deutsche Bank believes that 65 percent or more will fail to qualify for refinancing.
Absent new job creation -- and whatever nascent recovery is underway seems unlikely to produce net new jobs for several years -- vacancy rates will remain high. The action in commercial real estate will be largely subleasing -- at rents of 50 percent to 85 percent of scheduled lease rates. These lower sublease rates will eventually become the real market rates, putting further downward pressure on property values.
As things stand, this next wave of the crisis will sabotage the recovery -- driving up bank failures, FDIC bailouts and problems for some large insurance companies. Indeed, Congress will surely wind up having to bail out the FDIC itself.
What to do? For once, act before the bottom falls out.
1) Stop forcing banks to reclassify loans that have had minor modifications to assist borrowers. Such rules contribute to failure rather than averting it.
In some cases, it would be appropriate for regulators to permit the renewal of current loans at higher loan-to-value ratios, thus reducing unnecessary foreclosures. So long as loans are performing, and no actual losses have been incurred, banks shouldn't have to take charges against earnings and capital. We need to stop forcing the seizure of banks that aren't in genuine danger of failing.
2) Reject any new taxes on real estate -- such as capital-gains-tax hikes; changes to IRS Section 1031, which allows tax deferral; and efforts to change the tax status of "carried interest." Plus, modernize the Foreign Investment in Real Property Tax Act of 1980 to encourage foreign investment in US real estate.
3) Amend the IRS Tax Reform Act of 1986 to allow modification of loans within Real Estate Mortgage Investment Conduits (REMICSs). Some 25 percent of US commercial real estate is financed with these securities.
The tax code permits REMICs to pool commercial-mortgage loans into trust-like instruments commonly known as CMBS, which issue interest-bearing securities based on their value. Tens of thousands of commercial mortgages are now locked into structured CMBS, just as with residential mortgages.
The Treasury recently announced an easing of rules on restructuring CMBS loans -- but it's only a start on what's needed. The changes have to go beyond protecting Wall Street interests, and defend the property owner's right to make improvements and changes in building space without triggering a default or foreclosure on the loan backing the corresponding property.
Amending REMIC laws to allow property modification and expansion would preserve jobs for businesses that need to make better use of space -- and create construction jobs to make those modifications. It also supports states with much needed sales and business tax revenue.
Make no mistake -- the bust of commercial real estate will bring dozens more bank failures and a huge loss of wealth. More bailouts of financial institutions are inevitable -- but immediate government leadership in key areas can greatly reduce the cost to taxpayers, and help dodge a killer bullet to our economy.
BY: Scott S. Powell is the founder of AlphaQuest, a hedge-fund consulting firm and a Hoover Institution visiting fellow. David Lowry is an owner/developer of Southern California commercial real estate.
For more information on Houston office space, Houston retail space or Houston warehouse space and Houston industrial space, please call 713 782-0260 or see my web site at : www.houstonrealtyadvisors.com Offer opportunities for Houston office space. Thank you for your interest.
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CBRE ARRANGES LEASE RENEWAL FOR MARSHALLS

HOUSTON — CB Richard Ellis (CBRE) has arranged a lease renewal on behalf of apparel retailer Marshalls in Houston. The company renewed its lease for 27,000 square feet at The Commons at Willowbrook, a shopping center located at 7700 FM 1960 West in Houston. Matt Keener and Alex Makris of CBRE represented the landlord, The Commons at Willowbrook, Inc. Terms of the lease were not disclosed.

For more information on Houston office space, Houston retail space or Houston warehouse space and Houston industrial space, please call 713 782-0260 or see my web site at : www.houstonrealtyadvisors.com Offer opportunities for Houston office space. Thank you for your interest.
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Wells Fargo Top Servicer of Commercial Mortgages

Wells Fargo Bank is by far the most active servicer of commercial mortgages, according to a survey by the Mortgage Bankers Association. The bank serviced, as primary and master servicer, a total of 42,829 loans with a balance of $476.2 billion at mid-year. Its portfolio is some 54 percent greater than that of PNC Real Estate, which has the second largest servicing portfolio, at $308.5 billion of mortgages. Capmark Finance Inc., meanwhile, has the third-largest servicing portfolio, with $248.7 billion. At the end of last year, Wells' portfolio placed it in a distant fourth place in a similar MBA ranking. But its acquisition of Wachovia Bank catapulted it to the top of the ranks. A direct comparison to previous periods cannot be made because of reporting nuances by servicers. But the MBA servicer ranking, which is based on a survey, is the best available gauge of servicer activity. The bulk of Wells' servicing portfolio is comprised of loans it handles on behalf of securitized trusts. In fact, nearly 84 percent of the loans it services are owned by CMBS, collateralized debt obligations or other asset-backed issues. That's a far greater proportion than most of its competitors, such as Midland (46.4 percent) and Capmark (52.7 percent), which also are very active servicers of agency loans, by virtue of their affiliation with agency lenders, banks or insurance companies. Midland, meanwhile, led all servicers of loans provided on behalf of Fannie Mae and Freddie Mac. That's no surprise, given that it is affiliated with Red Mortgage Capital, the most active lender under Fannie's Delegated Underwriting and Servicing program, as well as PNC ARCS, which had perennially ranked among the most active DUS lenders. Indeed, last year, PNC Real Estate was the top Fannie lender, with $5.6 billion of volume, up from $1.7 billion a year earlier. Gemsa Loan Services led a ranking of servicers for life insurance company-held loans. It services 2,458 loans totaling $40.3 billion. Behind it was Prudential Asset Resources, with 2,302 loans totaling $26.85 billion, and PNC Real Estate, with 1,621 loans totaling $26.28 billion. LNR Partners Inc. remained atop a ranking of named special servicers of securitized mortgages. But what previously had been a virtually insurmountable lead has been whittled away. It is named special servicer for 15,223 loans with a balance of $195.1 billion. CWCapital, meanwhile, was second with 13,387 loans totaling $170.1 billion and Centerline Servicing Inc. was third with 12,270 loans totaling $112.9 billion. CRE NEWS
For more information on Houston office space, Houston retail space or Houston warehouse space and Houston industrial space, please call 713 782-0260 or see my web site at : www.houstonrealtyadvisors.com Offer opportunities for Houston office space. Thank you for your interest.
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