Commercial Real Estate Market Holds Steady, Improves: Fed

In its most current analysis, the Federal Reserve Board said commercial real estate market conditions have held steady or improved in nearly all 12 of its districts in recent weeks.

According to the Fed’s Beige Book released Wednesday, on the residential side, all of the districts cited increases in home sales, home prices or housing construction. Reports on commercial real estate markets were also generally positive, the report showed.

Atlanta, Boston, Chicago, Cleveland, Dallas, Kansas City, Minneapolis, New York, Philadelphia, Richmond, Va., San Francisco and St. Louis make up the Fed’s12 districts.

New York, Philadelphia, Minneapolis and Kansas City all reported that commercial leasing increased and vacancy rates fell.

Chicago's report was mixed: office vacancy rates remained high, restraining demand for new office construction, but office leasing demand improved modestly and industrial construction picked up.

Atlanta reported rising apartment rents and small gains in office leasing with weakness in the retail and industrial sectors.

Boston reported that office fundamentals were flat on average, with rising rents in portions of Boston proper and muted but steady activity elsewhere in the district. Both Cleveland and Boston said nonresidential construction had picked up while office and industrial real estate markets remained healthy in Dallas.

The St. Louis report noted an increase in commercial construction across much of the district and varied reports on leasing across areas within the district.

In San Francisco, demand for commercial property was stable while commercial construction was limited.

Richmond reported a decline in office leasing volume in Washington, D.C., but some portions of the district recorded increasing sales and construction.

Meanwhile, based on data collected on or before Aug. 20, the Beige Book noted that overall, banks in the districts said credit conditions had improved with credit spreads decreasing and competition for high-quality borrowers among lending institutions on the rise.

The New York district noted that shrinking spreads were observed particularly in commercial and industrial loans as well as in commercial mortgages. Some bankers in the Cleveland district mentioned a moderate loosening of lending guidelines. The New York, St. Louis, and Kansas City districts reported unchanged credit standards while New York and Cleveland cited declining delinquency rates.

The Richmond and Atlanta districts reported generally low demand for loans, but some pockets of growth. The Chicago district noted that growth in business loan demand was generated mostly from small and mid-size firms and for the purpose of refinancing rather than financing capital expenditures.

Cleveland, St. Louis and San Francisco mentioned small positive or negative changes in business credit demand, and relatively strong demand for consumer credit. The Kansas City district reported stable demand for commercial and industrial loans and commercial real estate loans. Dallas noted softer demand for loans overall.

Source: http://www.cutimes.com/2012/08/30/commercial-real-estate-market-holds-steady-improve

Boston firm expands real estate holdings in Shelton

Boston-based Marcus Partners has added another Shelton building to its growing portfolio, announcing the acquisition of 6 Armstrong Road.

"It is part of Armstrong Park and is one of the best properties in eastern Fairfield County," said David Fiore, a Westport resident and a principal of the real estate investment firm. "It was always a very good competitor in the area."

Marcus already has two other Shelton properties in its portfolio, 1000 Bridgeport Ave., and Reservoir Corporate Center.

Fiore said 6 Armstrong was about 50 percent leased and is a reason the firm was able to get it at a good price. Marcus Partners bought the 175,000-square-foot office building for $8.15 million and plans to invest about $4.5 million in upgrades.

The building's last listed owner was Armstrong Park Associates.

Fiore said the Class A office building was built in the 1980s. Marcus Partners is renovating lobbies, bathrooms and common areas and updating mechanical systems. Work has already begun on those projects.

He didn't disclose the rental rates, saying it will be competitive.

"We certainly welcome their investment in our community," said Bill Purcell, president of the Greater Valley Chamber of Commerce. "It's a handsome development with some exciting companies within the building."

United Illuminating and GTI are among the tenants.

Purcell said Marcus Partners' investment is further evidence the area's real estate market is on solid footing.

"I think the fundamentals are strong here in Shelton and the Valley," he said.

Marcus Partners has been growing through acquisitions along the East Coast in the past 18 months with 10 transactions involving 34 buildings in the Miami, Atlanta, Washington, D.C., and suburban New York City markets totalling more than 2.9 million square feet of office, bio-medical, medical office, research and development and industrial space.

This transaction brings Marcus Partners portfolio of properties owned and managed by its affiliates to 6.7 million square feet.

Source: http://www.ctpost.com/news/article/Boston-firm-expands-real-estate-holdings-in-3593885.php

Recent real estate sales in town

To search for homes in the area, go to www.boston.com/realestate

Copyrighted material previously published in Banker & Tradesman, a weekly trade newspaper. It is reprinted with permission from the publisher, The Warren Group, www.thewarrengroup.com/bg.

243 Mystic Ave. — Burton Weiner to Joseph Cummings, $599,000

2 Monument Ter — Anthony J. Barretto and Donna M. Barretto to Alexander Kuritnik and Boris Kuritnik, $585,000

114 S Border Rd. — Barbara J. Dwyer 1995 RET and Thomas E. Dwyer to Cheryl C. Mcgillivray, $575,000

173 High St. — Kathleen Oloughlin and Stephen F. Oloughlin to Dana Macnamee and Mary Macnamee, $540,000

119 Saunders St. #B+C — Eastern Mass Props LLC to Michael J. Boire and Brianna M. Cosgrove, $497,500

69 South St. — Robert Perreault and Claudine Perreault to Alex Schrebler, $450,000

120 Monument St. — Dana R. Macnamee and Mary H. Macnamee to Andrew G. Clark and Amy P. Clark, $439,500

7 Warren St. — James H. Snow and Angeline Alexakos-Snow to Jason Streciwilk and Angela Dambrowski, $414,700

137 Washington St. — Derek R. Stephens to Yi Gu, $410,000

18 1st St. — Osborne FT and Ellen Attenazio to Jennifer Chan and Xu J. Chen, $390,000

65 Almont St. — Robert S. Davis and Ciriaco S. Peppe to Eileen F. Powers and William E. Powers, $370,000

16 Clewley Rd. — First Priority CU to Jonathan Christensen and Jacqueline Christensen, $363,000

131 Middlesex Ave. — Brijesh P. Chandwani and Monica S. Chainani to Keith Dlugolenski, $347,000

170 Sheridan Ave. — Jose Chalita and Roselia Souza to Wellington Santana, $340,000

7 Leyden St. — James M. Taranti to Michael Kopson and Kelly M. Garvin, $319,000

179 Park St. #402 — Crecco Family LLC to David W. Brown and Vanina R. Brown, $290,000

8 9th St. #208 — Resnick Marcia Est and Karen Resnick to Joshua J. Herting, $264,000

62 Clark St. — Margaret M. Carreiro and Elaine M. Carreiro to Elaine M. Carreiro and Philip J. Morano, $250,000

43 Belle Ave. — John M. Burnett and Stacy M. Burnett to Bethany A. Morneault, $244,000

84 Spring St. #4 — John P. Mancini and Newton Loans LLC to Mohan Saini, $240,000

87 Bowdoin St. — Carl S. Geder to Christian Jones and Marni S. Jones, $215,500

87 Bowdoin St. — Geder Stephen J. Est and Carl S. Geder to Christian Jones and Marni S. Jones, $215,500

64 Forest St. #232 — Helen S. Hayman to Michael Trainor, $184,500

Source: http://www.boston.com/yourtown/news/medford/2012/05/recent_real_estate_sales_in_to_115.html

Boston swaps real estate in North End to expand Eliot school

The City of Boston agreed today to a real estate swap in the North End that will allow a popular public grammar school to potentially double in size.

The $11.35 million deal will give the Eliot K-8 School a second campus with four buildings on North Bennet and Tileston streets. While it will take a few years to renovate the buildings, the extra space will be a boon to the Eliot, a school with an enrollment of 322 students that has a wait list of 295.

The partner in the land deal is the North Bennet Street School, a private vocational institution where students learn to make fine furniture and musical instruments. The North Bennet Street School has acquired the city’s defunct printing plant at the corner of North and Richmond streets. The North Bennet Street School will pay $4.6 million in cash and give the city its four buildings, which have been appraised at $6.71 million.

In a statement outlining the deal, Mayor Thomas M. Menino described the Eliot as a “true gem.”

“Parents have urged us to expand this small, successful school,” Menino said in the statement. “Expanding the program helps us deliver on our promise to provide quality educational choices in every part of Boston and connect schools with the communities they support.”

The four buildings -- 37-39 North Bennet St. and 48-52 Tileston St. in the North End -- are a short distance from the Eliot K-8 School.

One North End parent, Jennifer McGivern, greeted the news with enthusiasm. McGivern’s 5-year-old is in kindergarten at the Eliot, and she hopes her 3-year-old sibling will be able to join her.

“It shows that the city of Boston is a place where families can stay and can raise their children,” said McGivern, 37. “It gives hope that it is a priority.”

Andrew Ryan can be reached at acryan@globe.com Follow him on Twitter @globeandrewryan.

Source: http://www.boston.com/metrodesk/2012/05/14/boston-swaps-real-estate-north-end-expand-eliot-school/O4oZ0yBHUJJ41yfstKd7YO/story.html

Real estate leader

New York - The United States will remain the top choice of most global commercial real estate investors in 2012, but the country has lost ground to Brazil which ranked No 2 this year, according to a survey released Sunday.

While the United States offers the most stable and secure option in commercial real estate, investors said improvement in rent and occupancy growth and the repeal of a 1980 foreign investment tax would have the strongest impact on their investment decisions, according to the 20th annual survey of Association of Foreign Investors in Real Estate (AFIRE) members.

For about the past year or so, investors in US commercial real estate have focused on gateway cities such as New York, Washington, Boston, San Francisco and Los Angeles, driving prices up and yields down.

Meanwhile commercial property in Brazil, with its bubbling economy and safer investment environment, has become a hot spot for global investors. Sao Paulo, Brazil's largest city, jumped to the fourth best city for real estate investment dollars in 2012, up from 26th place last year.

The United States is still very desirable and was second behind the UK in attracting cross-border investment in 2011, according to Real Capital Analytics preliminary figures.

"The negative is it doesn't promise a whole lot of capital appreciation because the prime markets are already fully priced," AFIRE CEO James Fetgatter said.

"By no means will Brazil replace the US, at least not in the forseeable future. Brazil is considered now a much safer place to invest and a place where you can get capital appreciation and good yield."

AFIRE'S survey respondents hold more than $874bn of real estate globally, including $338bn in the United States.

Sixty percent of respondents said they plan to increase their investment in US real estate in 2012, down from a record 72% last year, according to the 20th annual survey.

Some 42.2% said they believed the United States in 2012 would offer the best opportunity for the price of their commercial real estate investments to increase, down from 64.7% last year's survey.

The United States lost ground to Brazil, with 18.6% saying Brazil's property market offered the best growth opportunity for their investment dollars. That's up 14.2 percentage points, moving Brazil up to second place from fourth, and pushing China down to No 3, according to the AFIRE survey.

Seventy percent of respondents picked one of the three countries as their favourite, while the remaining 30% had top choices from 13 other countries on five continents.

Respondents said they would invest more in US commercial property if the fundamentals of rent and occupancy growth were stronger.

Another US barrier respondents cited was the Foreign Investment in Real Property Tax Act (FIRPTA). The 1980 act, originally designed to protect farm property from foreign ownership, subjects foreign buyers to both their domestic and US taxes when they sell their investment, unless their home country has a taxation treaty with the United States.

FIRPTA opponents have argued that the act unfairly penalises foreign investors of real estate. Such double taxation does not apply if they buy US stocks or bonds.

As for the top cities for foreign investment in 2012, New York remained No 1. London moved up to No 2 from No 3, swapping ranks with Washington. Sao Paulo was fourth, and San Francisco moved up to No 5 from No 10 last year.

Europe's sovereign debt problems and looming recession pushed most of the countries there - except for a few such as Switzerland and Poland - off the map for real estate investors. Germany lost about half its support among respondents in terms of stability and price appreciation, according to the survey.

Emerging markets also seem to be getting more popular among potential investors. Respondents identified 25 countries they would consider for investment, up from 18 last year.

Brazil topped the list, with China in second place, as each did last year. Turkey moved up to No 3 from No 7 last year. India and Vietnam each dropped down one spot, to No 3 and No 4 respectively. Appearing for the first time were Colombia, at No 10, Hungary at No 12, and Qatar at No 17.

As for US commercial real estate, respondents said that this year they would most likely invest in apartment buildings, the fourth consecutive year multifamily topped the list. Of all the types of US commercial real estate, the multifamily sector has not only recovered from the post-2007 real estate slump but rents and occupancy are even stronger than before.

Warehouse and distribution centres ranked second, up from No 5 last year. Office properties were third, up a notch from No 4. Retail properties - shopping centres and malls - slipped to No 4 from No 2. Hotels ranked No 5, down from No 3 last year.

The survey was conducted in the fourth quarter by the James A Graaskamp Center for Real Estate, Wisconsin School of Business.

Source: http://www.fin24.com/Companies/Property/Real-estate-leader-20120103