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Sunday, December 23, 2007
American Financial Realty, Gramercy Shareholders to Meet on $3.4B Merger
Feb. 13, 2008, has just been chosen for a special meeting for American Financial Realty Trust and Gramercy Capital Corp. shareholders regarding Gramercy's plan to acquire American Financial for $3.4 billion.
Both companies will court shareholders at the respective meetings for approval of the merger which, if all goes as anticipated, could close in March of next year. As per terms of the proposal, announced on Nov. 5, Gramercy would purchase American Financial for $5.50 per share of American Financial common stock, in addition to the assumption of existing debt.
For Gramercy, completion of the transaction will transform the company from a pure specialty finance company to a diversified entity with business lines involving commercial real estate finance and property investments. The deal would add an aggregate 27 million square feet of commercial real estate in 37 states to Gramercy's list of holdings.
It's been a busy year for Gramercy. In August the company closed a $1.1 billion commercial real estate collateralized debt obligation despite turmoil in the financial market.
Based in New York City, Gramercy is a commercial real estate specialty finance company. American Financial is a REIT that acquires properties from and leases properties to, regulated financial institutions.
Gramercy stock opened at $26.25 today, while American Financial stock opened at $8.18.
source: commercialpropertynews.com
Both companies will court shareholders at the respective meetings for approval of the merger which, if all goes as anticipated, could close in March of next year. As per terms of the proposal, announced on Nov. 5, Gramercy would purchase American Financial for $5.50 per share of American Financial common stock, in addition to the assumption of existing debt.
For Gramercy, completion of the transaction will transform the company from a pure specialty finance company to a diversified entity with business lines involving commercial real estate finance and property investments. The deal would add an aggregate 27 million square feet of commercial real estate in 37 states to Gramercy's list of holdings.
It's been a busy year for Gramercy. In August the company closed a $1.1 billion commercial real estate collateralized debt obligation despite turmoil in the financial market.
Based in New York City, Gramercy is a commercial real estate specialty finance company. American Financial is a REIT that acquires properties from and leases properties to, regulated financial institutions.
Gramercy stock opened at $26.25 today, while American Financial stock opened at $8.18.
source: commercialpropertynews.com
Whitehall Funds Adds to German Holdings with $2.4B Office Buy
Whitehall Street Real Estate Funds is the latest U.S. investor to see opportunity in the Germany’s improving, if challenging, commercial real estate climate.
Allianz disclosed today that Whitehall Funds, an affiliate of The Goldman Sachs Group Inc., has acquired a portfolio of 190 office buildings for 1.7 billion Euros, or about $2.4 billion. Whitehall Funds’ move follows an even larger buy from Allianz this year. In May, three Whitehall Funds affiliates paid an Allianz affiliate about $3.3 billion for a 27-property German portfolio.
Other U.S. players are spending big in Germany. Earlier this year, an entity co-owned by Morgan Stanley paid $3.5 billion for 53 office portfolios. In September, GE Real Estate brought the value of its German holdings to $1.7 billion when it bought a $503 million mixed-use portfolio in Dusseldorf and a 118,000-square-foot office building in Hamburg for $34 million.
Representatives of Whitehall Funds could not immediately be reached for comment, but the investors see significant growth potential in the portfolio, suggested Marcus Lemli, an international director for Jones Lang LaSalle Inc. who advised Allianz in the deal.
The properties have a vacancy rate of approximately 25 percent, and Whitehall Funds expects to add value by increasing occupancy and raising rents as leases roll during the next few years, Lemli explained.
In this way, Whitehall Funds’ strategy amounts to a departure from the recent strategies of many German institutional investors, which is to buy and hold properties rather than improving performance through asset management.
Although the former Allianz portfolio and many other assets offer growth potential, investing in Germany has recently become more challenging, Lemli contended. “Really the trick is to find properties that have good ... cap rates and present growth opportunities,” he said. Since this summer, cap rates for office properties have risen about 25 to 50 basis points, even as Germany’s economy is exhibiting healthy growth that is nudging rents upward, he noted. The German parliament’s authorization of REIT structures prompted several major transactions earlier this year. But since then, Lemli said, “”REITs have not taken off.”
source: commercialpropertynews.com
Allianz disclosed today that Whitehall Funds, an affiliate of The Goldman Sachs Group Inc., has acquired a portfolio of 190 office buildings for 1.7 billion Euros, or about $2.4 billion. Whitehall Funds’ move follows an even larger buy from Allianz this year. In May, three Whitehall Funds affiliates paid an Allianz affiliate about $3.3 billion for a 27-property German portfolio.
Other U.S. players are spending big in Germany. Earlier this year, an entity co-owned by Morgan Stanley paid $3.5 billion for 53 office portfolios. In September, GE Real Estate brought the value of its German holdings to $1.7 billion when it bought a $503 million mixed-use portfolio in Dusseldorf and a 118,000-square-foot office building in Hamburg for $34 million.
Representatives of Whitehall Funds could not immediately be reached for comment, but the investors see significant growth potential in the portfolio, suggested Marcus Lemli, an international director for Jones Lang LaSalle Inc. who advised Allianz in the deal.
The properties have a vacancy rate of approximately 25 percent, and Whitehall Funds expects to add value by increasing occupancy and raising rents as leases roll during the next few years, Lemli explained.
In this way, Whitehall Funds’ strategy amounts to a departure from the recent strategies of many German institutional investors, which is to buy and hold properties rather than improving performance through asset management.
Although the former Allianz portfolio and many other assets offer growth potential, investing in Germany has recently become more challenging, Lemli contended. “Really the trick is to find properties that have good ... cap rates and present growth opportunities,” he said. Since this summer, cap rates for office properties have risen about 25 to 50 basis points, even as Germany’s economy is exhibiting healthy growth that is nudging rents upward, he noted. The German parliament’s authorization of REIT structures prompted several major transactions earlier this year. But since then, Lemli said, “”REITs have not taken off.”
source: commercialpropertynews.com
HFF Arranges $114M Construction Loan for $300M Project
As Phase II of The Tower Residences at the Ritz Carlton gets under construction, the Dallas office of Holliday Fenoglio Fowler L.P. arranged a $114.4 million, non-recourse construction loan for the project.
The Residences at The Ritz-Carlton, Dallas was designed by Robert A.M. Stern and Hayslip Interior Design Co. The 4.9-acre development is located at 2121 McKinney Avenue, close to the Central Business District, the Arts District, Victory Park and the Uptown area of Dallas.
Valued at $130 million, Phase I of The Residences in Dallas sold out in October after opening in August. Phase I encompasses 70 private condominiums located on floors nine through 21 above the 218 rooms and suites of The Ritz-Carlton Hotel.
With a projected value of $175 million in sales, Phase II includes The Tower Residences and Regency Row homes, scheduled for completion in 2009. Four freestanding manors will comprise the Regency Row homes. The second phase includes a 23-floor tower with 96 units and four townhomes set apart from the tower by a central courtyard. The tower will be connected to The Residences at the Ritz-Carlton via a climate-controlled skybridge and will have its own underground parking garage and amenity package, including a pool, wine storage and tasting room, fitness center, meeting space and hotel service amenities. As of October, the second phase was 65 percent pre-sold.
“The tremendous success we’ve had with Phase I further underscores the demand for a second phase,” Bill Mabus, vice president of development for Crescent, said in October. “By bringing together the best of the best, we have realized our vision of creating a new sophisticated urban lifestyle in Dallas.”
Phase II broke ground on July 26. Prices for the Regency Row homes range from $700,000 to $8 million. Upon final completion, The Residences at the Ritz-Carlton, Dallas will be valued at $300 million.
HFF associate director John Ahmed worked exclusively on behalf of Crescent Real Estate Equities to secure the 36-month, adjustable-rate loan through Societe Generale.
Crescent Real Estate Equities L.L.C. is headquartered in Fort Worth, Texas. Through its subsidiaries and joint ventures, Crescent owns and manages a portfolio of 54 premier office buildings totaling 23 million square feet located in select markets across the United States with major concentrations in Dallas, Houston, Denver, Miami and Las Vegas. Crescent also holds investments in resort residential developments in locations such as Scottsdale, Arizona; Vail Valley, Colorado; and Lake Tahoe, California.
source: commercialpropertynews.com
The Residences at The Ritz-Carlton, Dallas was designed by Robert A.M. Stern and Hayslip Interior Design Co. The 4.9-acre development is located at 2121 McKinney Avenue, close to the Central Business District, the Arts District, Victory Park and the Uptown area of Dallas.
Valued at $130 million, Phase I of The Residences in Dallas sold out in October after opening in August. Phase I encompasses 70 private condominiums located on floors nine through 21 above the 218 rooms and suites of The Ritz-Carlton Hotel.
With a projected value of $175 million in sales, Phase II includes The Tower Residences and Regency Row homes, scheduled for completion in 2009. Four freestanding manors will comprise the Regency Row homes. The second phase includes a 23-floor tower with 96 units and four townhomes set apart from the tower by a central courtyard. The tower will be connected to The Residences at the Ritz-Carlton via a climate-controlled skybridge and will have its own underground parking garage and amenity package, including a pool, wine storage and tasting room, fitness center, meeting space and hotel service amenities. As of October, the second phase was 65 percent pre-sold.
“The tremendous success we’ve had with Phase I further underscores the demand for a second phase,” Bill Mabus, vice president of development for Crescent, said in October. “By bringing together the best of the best, we have realized our vision of creating a new sophisticated urban lifestyle in Dallas.”
Phase II broke ground on July 26. Prices for the Regency Row homes range from $700,000 to $8 million. Upon final completion, The Residences at the Ritz-Carlton, Dallas will be valued at $300 million.
HFF associate director John Ahmed worked exclusively on behalf of Crescent Real Estate Equities to secure the 36-month, adjustable-rate loan through Societe Generale.
Crescent Real Estate Equities L.L.C. is headquartered in Fort Worth, Texas. Through its subsidiaries and joint ventures, Crescent owns and manages a portfolio of 54 premier office buildings totaling 23 million square feet located in select markets across the United States with major concentrations in Dallas, Houston, Denver, Miami and Las Vegas. Crescent also holds investments in resort residential developments in locations such as Scottsdale, Arizona; Vail Valley, Colorado; and Lake Tahoe, California.
source: commercialpropertynews.com
JV Closes on 30 Net-Leased Assets for $408M
Lexington Realty Trust and Inland American Real Estate Trust Inc. have closed on the sale of 30 primarily single-tenant, net-leased assets in their co-investment program for $408.5 million.
The aggregate purchase price includes the assumption of non-recourse mortgage financing secured by some of the assets. The REITs did not release details about the assets in this group other than to say they are located in 23 states and contain more than 3.5 million net rentable square feet. A press release from New York City-based Lexington stated more information would be contained in an 8K expected to be filed Dec. 28 with the U.S. Securities and Exchange Commission.
As reported Aug. 17 by CPN, the two REITS created a joint venture to acquire and manage net lease properties. Net Lease Strategic Assets Fund L.P., was to be initially seeded with 53 net leased properties contributed by Lexington Realty Trust from its existing portfolio, which at the time comprised 8.4 million square feet and was valued at $940 million. The properties to go into the joint venture are widely diversified by tenant, property type and geography. The co-investment program is contracted to acquire up to 23 more properties from Lexington and its subsidiaries. The Lexington release noted closings on the majority of the remaining properties should take place during the first quarter of 2008.
In a supplement filed Nov. 13 with the SEC, Inland American, which is based in Oak Brook, Ill., stated that the two parties had agreed to an amendment of their initial JV contract. Under the amended terms of the venture, Inland American will initially contribute approximately $250 million and Lexington Master L.P. will contribute about $3 million for capital expenditures, the SEC document stated. The document noted that if the venture does not complete at least 35 of the initial purchases by March 1, 2008, the joint venture will be dissolved.
When the REITs formed the JV in August, George Pandaleon, president of Inland Institutional Capital Partners Corp., which negotiated the deal, told CPN that no single lease was more than 5 percent of the entire portfolio. He said that strategy was expected to continue and added that the co-investment program expected to spend another $500 million in acquisitions over the next two years.
Lexington president & CEO T. Wilson Eglin previously told CPN the co-investment deal was part of the company’s new strategy. The REIT will hold a minority interest in specific use properties within the joint venture, in this case, 15 percent, while also focusing on wholly owned general office and industrial properties.
Lexington owns, invests in and manages net-leased office, industrial and retail real estate across the United States. Inland American also owns a diverse portfolio of wholly owned or joint ventures. Through a subsidiary it also owns 50 hotels.
source: commercialpropertynews.com
The aggregate purchase price includes the assumption of non-recourse mortgage financing secured by some of the assets. The REITs did not release details about the assets in this group other than to say they are located in 23 states and contain more than 3.5 million net rentable square feet. A press release from New York City-based Lexington stated more information would be contained in an 8K expected to be filed Dec. 28 with the U.S. Securities and Exchange Commission.
As reported Aug. 17 by CPN, the two REITS created a joint venture to acquire and manage net lease properties. Net Lease Strategic Assets Fund L.P., was to be initially seeded with 53 net leased properties contributed by Lexington Realty Trust from its existing portfolio, which at the time comprised 8.4 million square feet and was valued at $940 million. The properties to go into the joint venture are widely diversified by tenant, property type and geography. The co-investment program is contracted to acquire up to 23 more properties from Lexington and its subsidiaries. The Lexington release noted closings on the majority of the remaining properties should take place during the first quarter of 2008.
In a supplement filed Nov. 13 with the SEC, Inland American, which is based in Oak Brook, Ill., stated that the two parties had agreed to an amendment of their initial JV contract. Under the amended terms of the venture, Inland American will initially contribute approximately $250 million and Lexington Master L.P. will contribute about $3 million for capital expenditures, the SEC document stated. The document noted that if the venture does not complete at least 35 of the initial purchases by March 1, 2008, the joint venture will be dissolved.
When the REITs formed the JV in August, George Pandaleon, president of Inland Institutional Capital Partners Corp., which negotiated the deal, told CPN that no single lease was more than 5 percent of the entire portfolio. He said that strategy was expected to continue and added that the co-investment program expected to spend another $500 million in acquisitions over the next two years.
Lexington president & CEO T. Wilson Eglin previously told CPN the co-investment deal was part of the company’s new strategy. The REIT will hold a minority interest in specific use properties within the joint venture, in this case, 15 percent, while also focusing on wholly owned general office and industrial properties.
Lexington owns, invests in and manages net-leased office, industrial and retail real estate across the United States. Inland American also owns a diverse portfolio of wholly owned or joint ventures. Through a subsidiary it also owns 50 hotels.
source: commercialpropertynews.com
Management Matters with Mike Myatt: Does Your Bonus Say Naughty or Nice?
This is the time of year where expectations are high and so is the volume of chatter around the water cooler in anticipation of that great corporate tradition--The Christmas bonus. So what's it going to be this year? A turkey, an extra paid day off, a cash bonus, something creative or nothing at all? In this week's column I'll take a look at the well intentioned but often misguided practice of year-end bonuses.
I can’t even begin to communicate the number of times I’ve heard employees complain about the size of their Christmas bonus. It was if they felt entitled to significant rewards solely based upon the fact that they happen to be employed. Is a year-end bonus a right of entitlement or a privilege to be earned? I believe that it can actually be both, but that decision lies solely with the employer and is not really up to the employee no matter how much they might feel it is.
Some employers believe in providing a little something extra to all employees during the Holiday Season as an expression of gratitude for their loyalty and contributions during the year without regard to performance. It is in this type of culture where I believe the employees expectations can easily confuse the difference between a gift and a reward. Let’s say that in the previous year the company provided what was considered by most to be a fairly generous bonus, but in this annum the company struggled while also needing to make heavy expenditures in Q1 of the upcoming year so it opted to distribute no year-end bonus. How do the employees feel about this?
One would hope that the employees would understand and put the needs of the enterprise ahead of their expectation that this year’s bonus should eclipse that of the previous year, but would they? I’m certain not distributing a bonus would only spawn a sense of resentment among many and the gossip at the water cooler would shift to criticizing the CEOs car or how much vacation time he/she took that year.
As contrasted with the environment discussed above, some cultures distribute annual bonuses based on a formulaic approach calculated on metrics designed to reward individual, team or company performance according to the goals of the specific entity. While many tend to favor this structure it is far from perfect as well. It is very typical that in this type of environment that the controversy shifts from company vs. employees to employee vs. employee. As an example the marketing assistant who receives a comparatively small bonus when contrasted to that of a sales person feels that his/her contribution is minimized and feels that they were treated unfairly. Imagine working at Goldman Sachs where bonuses in any given year are expected to range from secretaries receiving $10,000, analysts garnering close to $100,000, junior executives seeing as much as $2-4 million and top income producers receiving upwards of $40 million dollars in bonus money. You don’t think there’s a bit of green-eyed bonus envy at Goldman Sachs each year?
At the end of the day, employers should hire well, bonus generously and provide public thanks where merited. Employees on the other hand should be thankful for the privilege of having gainful employment and be grateful for any bonus compensation received. I hope you enjoy your bonuses and will perhaps consider giving some of your bonus to those less fortunate this season.
source: commercialpropertynews.com
I can’t even begin to communicate the number of times I’ve heard employees complain about the size of their Christmas bonus. It was if they felt entitled to significant rewards solely based upon the fact that they happen to be employed. Is a year-end bonus a right of entitlement or a privilege to be earned? I believe that it can actually be both, but that decision lies solely with the employer and is not really up to the employee no matter how much they might feel it is.
Some employers believe in providing a little something extra to all employees during the Holiday Season as an expression of gratitude for their loyalty and contributions during the year without regard to performance. It is in this type of culture where I believe the employees expectations can easily confuse the difference between a gift and a reward. Let’s say that in the previous year the company provided what was considered by most to be a fairly generous bonus, but in this annum the company struggled while also needing to make heavy expenditures in Q1 of the upcoming year so it opted to distribute no year-end bonus. How do the employees feel about this?
One would hope that the employees would understand and put the needs of the enterprise ahead of their expectation that this year’s bonus should eclipse that of the previous year, but would they? I’m certain not distributing a bonus would only spawn a sense of resentment among many and the gossip at the water cooler would shift to criticizing the CEOs car or how much vacation time he/she took that year.
As contrasted with the environment discussed above, some cultures distribute annual bonuses based on a formulaic approach calculated on metrics designed to reward individual, team or company performance according to the goals of the specific entity. While many tend to favor this structure it is far from perfect as well. It is very typical that in this type of environment that the controversy shifts from company vs. employees to employee vs. employee. As an example the marketing assistant who receives a comparatively small bonus when contrasted to that of a sales person feels that his/her contribution is minimized and feels that they were treated unfairly. Imagine working at Goldman Sachs where bonuses in any given year are expected to range from secretaries receiving $10,000, analysts garnering close to $100,000, junior executives seeing as much as $2-4 million and top income producers receiving upwards of $40 million dollars in bonus money. You don’t think there’s a bit of green-eyed bonus envy at Goldman Sachs each year?
At the end of the day, employers should hire well, bonus generously and provide public thanks where merited. Employees on the other hand should be thankful for the privilege of having gainful employment and be grateful for any bonus compensation received. I hope you enjoy your bonuses and will perhaps consider giving some of your bonus to those less fortunate this season.
source: commercialpropertynews.com
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