Here we go again..RLJ LODGING TRUST ACQUIRES HUMBLE OIL

A new group called RLJ Lodging Trust has acquired the historic Humble Oil Building, a three-tower complex that occupies an entire city block in downtown Houston, for $79.5 million. This building has been in and out of play for 15 years....at one time it was to be a downtown new Ritz Carlton..The purchase price equates to approximately $151,000 per key, based on a combined forward room count of 528 keys. The Humble Oil Building consists of an 82-room apartment tower that will be converted to a 166-room SpringHill Suites, as well as two existing hotels. The hotels include the 191-room Courtyard Houston Downtown Convention Center and the 171-room Residence Inn Houston Downtown Convention Center. RLJ Lodging purchased the buildings with its revolving credit facility. The new SpringHill Suites is scheduled to open in mid-2015. 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  Thank you for your interest.   Regards,     Ed A. Ayres Houston Realty Advisors, Inc. Mitaquye Oyasin

767,632 SQ FT RENEWAL LEASE IN HOUSTON BY DHL

EXEL RENEWS LEASES TOTALING 767,632 SF IN

HOUSTON — Exel, part of the supply chain division of Deutsche Post DHL, renewed leases at 8607, 8609, 8711 and 8833 City Park Loop in the City Park East Business Park in Houston. The lease renewals total 767,632 square feet of rail-served industrial space. Sam Brown with Sam H. Brown Interests represented the tenant in the lease transaction. John Kruse and Jason Dillee of Holt Lunsford Commercial represented the landlord, The Realty Associates Fund VIII L.P. 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  Thank you for your interest.   Regards,     Ed A. Ayres Houston Realty Advisors, Inc.

Post Oak Central three buildings sells for $232.6 Million

Cousins Properties, Inc., an Atlanta, Ga.-based real estate company, acquired Post Oak Central, a Class A office complex in the Galleria submarket of Houston, Texas, for $232.6 million from institutional investors advised by J.P. Morgan Asset Management.

Post Oak Central consists of three 24-story properties located at 1980, 1990 and 2000 Post Oak Blvd. The acquisition also included a two-acre parcel adjacent to the property that may be used for future development.

The towers were built between 1975 and 1981 and offer 1.3 million square feet, currently 92 percent leased by tenants such as Apache Corp., Stewart Information Services and GDF Suez.
According to Gellerstedt, Post Oak Central provides the company with an attractive entry into Houston’s Galleria submarket, a location it had been targeting for a while due to its solid in-place yield and significant development opportunity.

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 Thank you for your interest.

 

Regards,

Ed A. Ayres

Houston Realty Advisors, Inc.

Mitaquye oyasin                                           

 

BUY CRE NOW in Houston!!!

COSTAR SAYS: Sensing that commercial real estate markets are near a point that properties are not going to get any less expensive, there is a strong temptation to jump in and grab deals while the getting is good and real estate is still affordable.

However, CRE brokers and advisors who have been refined by five years of recession are cautioning their clients against over-exuberance. Instead, they are encouraging clients to measure their risk tolerance and move forward at an unrushed pace.

"There are a tremendous amount of deals available, some riskier than others; some short term and some long-term turnarounds,” said Gregory P. Schenk, president of The Schenk Co. in Columbus, OH. “The first thing we do is judge our clients risk tolerance and how much capital they have on hand. We need to find out if the client is looking for immediate monthly income, or seeking longer term appreciation on a sale.”

“Once we know those items, we can find what properties suit them best and align them with like-minded individuals,” Schenk said.

“We are seeing a faster pace of activity combined with an urgency,” said Adelaide Polsinelli, senior director of Eastern Consolidated in New York. “The momentum is continuing due to 1031 exchange buyers who have dollars to place as a result of last quarter dispositions. Clients are approaching the market with fervor! There is no time to waste. However, every deal must be properly vetted and pricing razor sharp."

Benjamin Phillips, director of operations at Phillips Commercial Real Estate Services Inc. in Dallas, said multifamily is seeing strong demand from buyers in DFW. "Investors have voiced concerns regarding the overbuilding of new units but I don’t think it’s there yet, athough developers always seem to know how to rain on our parade when demand climbs," said Phillips. "Generally speaking, my most common advice is get good management, get long-term fixed interest, non-recourse, fully assumable financing (another reason I like multifamily), and be realistic with what the numbers are going to take to do what you want to do."

Brokers are also sharpening their skills in anticipation of increased deal volume, and telling their clients to sharpen their pencils so that they don’t overpay.

“To prepare for the eventual market turnaround, I have attended educational courses, expanded my referral network, re-established connections with local lenders, purchased a new laptop and become proficient with CoStarGo on my iPad,” said Bob Zavakos, principal of NAI Dayton in Dayton, OH.

Steve Collins, executive vice president of Environmental Liability Transfer in St. Louis, MO, said there are clear signs that more people are trying to clear out distressed assets.

“We are seeing more deal opportunities,” Collins said. “We are traveling more to tour sites, meet brokers and sellers, and attend networking conferences. Although the information available online is helpful, we believe it is still important to meet brokers and owners face-to-face to build the strong relationships that help close deals.”

More Distressed Properties Coming To Market

“In Dallas, our group is keeping an eye on troubled assets, which we believe the lenders are now prepared to take control of and bring to market,” said Robert Deptula, principal, Tenant Advisory at Transwestern in Dallas. “But we are focused on getting assets with significant vacancy, and positioning tenants who can purchase the building and occupy that vacant space.”

“The institutional community is not looking kindly on these buildings when valuing for purchase. That provides our owner occupants a chance to buy the building at below market prices and underwrite the vacancy favorably with their tenancy,” Deptula said. “We believe that 2013 will provide our clients with other opportunities to acquire equity ownership in properties in return for bringing their lease to the table either as the purchaser or part of a partnership. Low financing rates coupled with a low purchase price makes for an excellent economic opportunity for our corporate users who have the ability to purchase or be part of a partnership.”

Meanwhile, the availability of distressed assets is expected to had a direct impact on deal volume.

"Banks have finally decided that 'commercial short-sale' is not a dirty word and won’t get you fired,” said David S. Miller, vice president/National Accounts at Chicago Title Insurance Co. in Scottsdale, AZ. “That will shrink the pool of buyers as the risk-reward buyer will not be wanting to pay non-distressed prices. "

As the values rise, fewer properties will be subject to material defaults and replacement financing will be more available, further shrinking the amount of product coming to market, added Miller.

“With the re-entry of financing by the commercial banks, more buyers will want leverage to increase their yields as cap rates continue to be compressed," Miller said. “This will slow down transaction volume as sellers and buyers will start to reach an impasse on price and terms. If buyers can’t get a lower price for cash, they’ll be turning to the capital markets for leverage.”

Nudging Values A Little Higher

“On the assumption there is a recovery underway, with the inevitable rise in long-term rates from their historic lows, we plan to 'reach' on acquisition values in 2013, and anticipate an inflationary rise in rents, particularly because of the supply-constrained character of the market in eastern New England,” said Leonard Bierbrier, president of Bierbrier Development in Lexington, MA. “We believe the competitive position of a cost basis built on low cost debt, versus players who delay entering the market, will be well rewarded.”

Neal Jernigan, partner in Crossley, Jernigan & Ellison Inc. in Alpharetta, GA, is advising clients that the industrial market is in the beginning stages of recovery and that the office, while slightly behind in the recovery process, is also likely on th emend as well.

"With the anticipated general lower risk profile in both investment products, we are encouraging them to be a bit more aggressive in their underwriting while tempering their yield requirements for selected investment opportunities, be it core, value add, or opportunistic plays, in well located, dynamic markets,” said Jernigan.

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

 

 Thank you for your interest.

Thanks,

Ed A. Ayres

Houston Realty Advisors, Inc.

Mitaquye oyasin                                           

Please follow me on Twitter at http://twitter.com/edayres, my blog at http://houstonrealtyadvisors.blogspot.com,

BakerHostetler Signs a 75,000-SF Lease

BG Group Place is downtown Houston’s newest office tower. Completed in 2011, the iconic, one million-square-foot, 46-story building is certified LEED Platinum.Their new space on floors 11 through 13 includes a unique 10,000-square-foot, green rooftop deck for client events and firm functions. The law firm will relocate from another downtown building when the lease commences in the third quarter of this year. With the signing of this lease, BG Group Place is 92 percent committed.

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  Thank you for your interest.

 

Thanks,

Ed A. Ayres

Houston Realty Advisors, Inc.

Mitaquye oyasin                                           

North Houston Industrial Space Heating UP!!!

North Houston has 5% overall industrial vacancy, and Northwest is a stunning 3.8%. Even flex space (a hard property type to lease) has 10% vacancy across the city. Rents are increasing; Some Brokers have seen recently saw $0.40 net for a distribution lease, a new benchmark high for Houston, and we think it’ll go higher. Brokers see construction costs increased $3/SF in the last six months to about $28/SF. They’re still rising dramatically, but probably won’t take the overwhelming leap that many predict (We've heard as high as 25%). Labor is the biggest issue; most quality contractors are too busy, and some subs are hopping around projects. HRA, Inc. recommends putting incentives into your contract to make subs focus on your deal to meet an aggressive timeline. Other factors contributing to the rise in construction costs include major competition driving up land prices. And don’t be excited if you get a great deal—Brokers say most sites left in the uber desirable North and Northwest submarkets have hair on them, which can cost big to resolve. We recommends doing your due diligence but building now before prices get any higher.

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

 

Thank you for your interest.

Ed A. Ayres

Houston Realty Advisors, Inc.

J.C Penny has cheap occupancy costs, can they step up?

 J.C. Penney's strength is its low cost of retail space. The company owns 49% of the 111.1 million square feet and leases the remaining against an average of $4 a square foot. This is a competitive advantage with the average specialty retail space being around $40 per square foot. In essence, Ron Johnson and team are making a bet they can expand their existing model with the Sephora store-within-a-store concept to other national brands. How that plays out remains to be seen.

K-Mart moved in and out of bankruptcy years ago, based on low real estate values on their books, making them an attractive take over target and now a come-back kid. Is J.C.Pennys next?

 

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  Thank you for your interest.

 

Thanks,

Ed A. Ayres

Houston Realty Advisors, Inc.

Mitaquye oyasin                                           

 

Please follow me on Twitter at http://twitter.com/edayres, my blog at http://houstonrealtyadvisors.blogspot.com,