TOP COMMERCIAL REAL ESTATE NEWS STORIES

Provided by Commercial Real Estate Direct

Tishman Snares MetLife Building for $1.7B
Tishman Speyer Properties has won the fierce battle for the trophy MetLife building at 200 Park Ave. in Manhattan. The local firm is said to be paying more than $1.7 billion for the 58-story office tower that sits atop Grand Central Terminal. The list of finalists also included Macklowe Properties and Reckson Associates Realty Corp. The impetus for MetLife to sell the trophy asset, in addition to One Madison, is to help the insurance giant fund its $11.5 billion acquisition of Travelers Life & Annuity Co.

CA Hotels Remain Popular Among Investors
California hotels remain a popular real estate investment, according to a survey by Atlas Hospitality Group. Investors spent $2.2 billion on 320 hotels last year, compared to $1.8 billion spent on 267 hotels in 2003. Several factors are driving up prices. The hospitality industry has been improving with the economy. Also, it's getting harder to build in desirable locations because hotel developers often are forced to compete with retail and condominium developers for sites. And construction costs are going up. Consequently, fewer hotels are being built.

Colonial Sells 6 Apartment Complexes
Colonial Properties Trust has sold six multifamily properties totaling 2,074 units for $143.8 million. The properties sold include two Colonial Grand apartment communities totaling 572 units in Macon, GA, and Birmingham, AL, and four Colonial Village apartment communities totaling 1,502 units in Gainesville, FL, Augusta, GA, Bluffton, SC and Sarasota, FL. The six properties are an average of 10 years old and are about 94 percent occupied. In conjunction with the sale, Colonial Properties paid off $69.8 million of mortgage debt.

South Florida Market Tightening
Fort Lauderdale's office market leapfrogged 10 spots to No. 1 in Marcus & Millichap's 2005 National Office Index, displacing Washington, DC. Miami ranked seventh, up seven places, while West Palm Beach moved up two slots to 10th place. The limited amount of new office construction helped propel all three South Florida markets into the top 10. Fort Lauderdale had the second highest forecast revenue growth of all 42 markets considered. Net absorption of office space in 2005 in Fort Lauderdale should hit its highest level since 2000.

SL Green Buys One Madison for $921M
SL Green Realty Trust has won the bidding contest for One Madison Ave., one of two large Manhattan buildings that MetLife, Inc. was marketing for sale. The proposed purchase price for the 1.4 million square foot building was $921 million. It said that Credit Suisse First Boston, which net leases the entire building under an agreement that runs through 2014, would provide financing. SL Green wants to convert the tower part of the 50-story property, which has 270,000 square feet, into residential condominiums. The property's remaining 1.2 million square feet sits in a 10-story base building.

Vornado Sells Chicago Apartments for $126M
A venture led by Vornado Realty Trust has agreed to sell 400 North LaSalle, a recently completed residential building in Chicago, for $126 million. Vornado broached the idea of selling the property because of the solid demand for trophy properties. Its thinking was swayed by the expectation that the property, which generated about $1 million of net operating income, could sell for more than $100 million. Upon stabilization, NOI should climb to roughly $5 million. Vornado's share of the sales price amounts to $107 million, which would provide it with a gain of roughly $30 million.

Duke Acquires Simon's Office Portfolio
Duke Realty Corp. will pay more than $275 million for Simon Property Group, Inc.'s Rosemont, IL, office building portfolio. The portfolio totals 1.4 million square feet and includes Riverway, a three building office property, and O'Hara International Center, a two building complex. In addition, the deal includes ownership interest in the land under a Marriott Suites hotel and the MB Financial headquarters.

New Jersey Market Shows Improvement
New Jersey's office market is showing signs of snapping out of the doldrums. The vacancy rate in the first quarter of this year was 17.3 percent, down from 19.8 percent from the first quarter of 2004, according to Newmark & Co. Real Estate. An estimated 4 million square feet was leased in the first three months of this year, four times more than in all of 2004. The state's midsection – Somerset, Morris, Hunterdon and Middlesex counties – continues to have the greatest glut of office space, where vacancy rates hover near 20 percent.