Real Estate Alert 10.28.09 (downloadable)

OCTOBER 28, 2009 9 PLACEMENT AGENTS 3 Equity Sought for FDIC-Asset Fund 3 Distressed Calif. Condo Project Sold 3 Industrial Fund Shifts to Debt Plays 4 Developer Seeks Equity for 2 Funds 4 Cornerstone Hotel Fund Posts Loss 5 Distressed Retail Plays Emerge in Ga. 6 Lender Shops Seized Hotel in NJ 7 Trident Pursues Troubled Portfolio 7 Distressed Student Housing on Block 8 Capmark Lists Foreclosed Va. Offices 11 Cigna Complex on Block Near Dallas

THE GRAPEVINE Managing director David Lucey is leaving Fidelity Investments at yearend. Lucey is legal counsel and head of the asset-management team for the Bostonbased real estate group. He joined Fidelity five years ago. Managing director Jeff Tapley, a 15-year Fidelity veteran who has primarily worked on acquisitions, will assume Lucey’s duties. Barry Berkowitz has joined Newmark Knight Frank Capital as a managing

director in New York. He will assist buyers and sellers of loans and properties, including distressed real estate. Berkowitz previously worked at New York advisory firm Carlton Group and brokerage Eastern Consolidated. He has also invested via his own company, Beta 2.

CB Richard Ellis is looking for a broker

to head up its multi-family investment

See GRAPEVINE on Back Page

Placement Agents Shift to Advisory Focus With few funds in a capital-raising mode, placement agents have shifted their focus to advising fund operators and their limited partners on how to navigate the troubled real estate market. Industry pros said 2009 will be remembered as the toughest year in recent memory for placement agents, with the bear market forcing the downsizing of operations. The survivors are being asked to defend their industry’s past practices to the SEC, even as they struggle to keep their businesses afloat. “The people who remain are the ones who have been able to transition the business to advisory services in a much tougher environment,” said one market veteran (see list of placement agents on Pages 9-10). With their main line of business — soliciting capital for new funds — largely dead for now, placement agents are assisting fund operators on interactions with See PLACEMENT on Page 8

CenterPoint Targets Industrial Plays in Calif. A year after opening its first West Coast office, industrial investor CenterPoint

Properties is looking to make a big splash in the region.

The Oak Brook, Ill., firm is viewed as a leading contender to buy a 2.5 millionsquare-foot portfolio of California distribution properties being offered by Panattoni Development — among the largest industrial offerings this year. CB Richard Ellis, which is advising Sacramento-based Panattoni, is expected to pick a winner this week. The fully occupied properties, in Ontario and Rancho Cucamonga, could trade for as much as $135 million. That would translate into an initial capitalization rate between 8% and 8.5%. Regardless of the auction’s outcome, CenterPoint is poised to be a dominant buyer of similar properties in Southern California. It could acquire $1 billion of properties within 3-5 years. The 25-year-old company was acquired in 2006 by CalEast Global Logistics, a See CENTERPOINT on Page 7

Chadwick Takes Reins of Calif. Brokerage William Chadwick, a founder of real estate investment bank Chadwick Saylor, has been named chief executive of Multi-Housing Capital Advisors, a Beverly Hills apartment brokerage operation that broke away from Transwestern in January. The surprise move lifts the profile of the operation and marks Chadwick’s return to commercial real estate after his quiet departure from Chadwick Saylor late last year. Until January, the multi-family brokerage operation was affiliated with Houston-based Transwestern and operated under the name Transwestern MultiHousing Capital Advisors, focusing on California. But the two parties agreed to part ways, leading to the formation of a new, independent company under mostly the same management team. The company was founded by principals Curtis Palmer, Herb Chase and Andy Sands. Palmer and Chase are Transwestern alumni. Sands was formerly a senior partner of ING Realty Partners. Several other Transwestern executives stayed on at See CHADWICK on Page 6

October 28, 2009

Real Estate

6

ALERT

Merritt Capital, an investment firm in New Canaan, Conn., acquired the property for $35 million in 2004, when it was called the Merrill Lynch Hotel and Conference Center. Merritt A lender is asking $29.5 million for an underperforming spent some $6 million on a renovation and put the property hotel near Princeton, N.J. under the Wyndham flag. The 364-room Wyndham Princeton Forrestal Hotel and Merritt refinanced the hotel a few years ago, taking out a Conference Center, in Plainsboro, is being pitched to oppor$51 million mortgage. In December 2007, the property was tunistic investors interested in changing the flag, installing new appraised at $77 million. But Merritt subsequently surrenmanagement and improving operating performance. The hotel dered the hotel to its lender. In the past few years, performance is currently running an annual deficit of about $2.6 million. dropped off dramatically as business travel and conferences The unidentified lender is willing to provide a long-term declined. The hotel’s current 29% average occupancy rate and mortgage for up to 75% of the asking price. The rate would be $144 average room rate are insufficient to cover expenses. about 7.25%. Wyndham’s contract has expired, so a buyer could change to another flag, such as Hilton or Crowne Plaza. Federal Realty Investment Trust has The hotel, which includes 64 conference rooms encompassing 47,000 square feet, is at 900 Scudders Mill Road, just off of Route 1. It’s near Princeton available to owners of high-quality retail centers. University and several large corporate campuses. Hotel A.G. has the listing. For With more than 40 years of experience in more information, call Keith owning, operating and redeveloping highFEDERAL REALTY HAS CAPITAL TO: Thompson at 770-692-1605. ❖

Lender Shops Seized Hotel in NJ

over $1 billion of capital quality shopping centers, Federal Realty understands the financial requirements and strategic goals of retail real estate owners.

We can create custom, flexible deal structures to meet your particular needs. Contact us today to discover how your retail real estate can benefit from our foundations of opportunity.

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Chadwick ... From Page 1

• BUY OUT PARTNERS

the independent operation as well. The company handles investment sales and brokers both debt and equity. In its biggest assignment so far, it advised a subsidiary of San Diego-based Fairfield Residential on the $96 million sale of Gallery at NoHo Commons, a 438-unit apartment complex in Los Angeles, to high-yield player Behringer Harvard. The transaction closed last month. Chadwick began his career as an attorney and served in several advisory posts for the federal government. He moved into commercial real estate in 1989 when he and real estate veteran Paul Saylor opened Chadwick Saylor in Los Angeles and turned it into a multi-service investment bank. Early this year, Chadwick was named chairman and chief executive of PriceDoc.com, an Internet startup in Solana Beach, Calif., that compares the prices of medical services. It’s unclear whether he will give up those duties. ❖

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