U.S. Commercial Property Prices Increased 6.3% in May, Moody’s Says

By Brian Louis - Jul 20, 2011

Bloomberg

U.S. commercial property prices increased in May for the first time in six months as a rebound in distressed real estate helped boost values, according to Moody’s Investors Service.

The Moody’s/REAL Commercial Property Price Index rose 6.3 percent from April, the largest gain since the measure began in 2000. It’s down 11 percent from a year earlier and 46 percent below the peak of October 2007, the company said today.

The index, which measures broad price trends, had fallen to a record low in April as sales of distressed properties undermined real estate values. Distressed deals in May began contributing to rather than delaying a price recovery, according to the Moody’s report.

“A number of transactions that were recorded in May had their most recent prior sales in 2009 as the market was beginning to bottom and subsequently traded for substantial returns,” Tad Philipp, director of commercial real estate research at Moody’s, said in a separate statement. “We are likely to see a pickup in post-peak repeat sales and expect such transactions to play an important role in helping drive the CPPI higher.”

The index tracks repeat sales, which totaled 174 in May. About 27 percent of deals involved distressed properties, which Moody’s defines as assets in which a default, foreclosure proceeding or bankruptcy of the owner has occurred. The share was down from 30 percent in April. The dollar volume of repeat sales of all properties jumped 33 percent, Moody’s said.

CoStar Report

CoStar Group Inc. (CSGP) also reported rising prices in May. Values of investment-grade commercial properties in the U.S. rose 4.4 percent from the previous month and 5 percent from a year earlier, the Washington-based data company said July 13. Prices were down 35 percent from the peak of August 2007.

CoStar, unlike Moody’s, tracks transactions of less than $2.5 million. The company’s measure of values for all commercial properties rose 1.6 percent from April. It is down 6.8 percent from a year earlier and 34 percent from its highest point.

The dollar volume of sales increased along with the average transaction size, CoStar said in its report. Investment-grade deals averaged $33.2 million in May, almost double April’s $16.9 million.

Green Street Advisors Inc., a real estate research company in Newport Beach, California, reported commercial property values were ...

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NAI Rio Grande Valley is a focused commercial real estate brokerage, consulting, development and syndication firm serving the Rio Grande Valley and based in McAllen, Texas. Our mission is to transform real estate opportunities into profits for owners, users and investors.

NAI Global Joins Forces with Intelligent Edge

NAI Global, the world’s premier managed network of commercial real estate firms and one of the largest real estate services providers worldwide, and Intelligent Edge Advisors, an investment banking firm specializing in asset monetization, today announced the creation of NAI Intelligent Edge, a platform offered exclusively to wealth managers and financial advisors to serve the diverse needs of their clients who own commercial real estate.

Intelligent Edge was created to collaborate with wealth managers and financial advisors to execute liquidity events on behalf of their clients who own businesses, real estate and large positions in publicly-traded stock.

NAI Intelligent Edge combines NAI Global’s vast spectrum of commercial real estate services with Intelligent Edge’s specialization in the tax-efficient monetization of concentrated wealth.

By collaborating with NAI Intelligent Edge, wealth managers and financial advisors have access to services that will allow them to grow and protect the value of their clients’ commercial real estate holdings, as well manage these assets to align with the short-term and long-term financial planning goals of their clients.

“Clients of advisors own vast amounts of real estate which often comprises a significant portion of their worth. Over the next decade baby boomers will sell or monetize trillions of dollars of real estate to fund retirement. Working with NAI Intelligent Edge empowers advisors to expand their asset oversight capabilities into commercial real estate,” said Peter L. Ruggiero, Managing Director of NAI Global Capital Markets.

“The wealth management business is very competitive and is becoming more holistic as advisors differentiate themselves. Increasingly, advisors are taking on the role of the family CFO and are viewed as the trusted advisor clients turn to for advice on an increasing array of wealth planning issues. NAI Intelligent Edge positions advisors to proactively assist real estate owners to maximize the utility of their real estate holdings in the context of their overall wealth planning goals,” commented Ruggiero.

“Over the past few years owners of sub-investment grade commercial real estate have seen the value of their properties plummet, and in many instances the prospects for a robust recovery in prices are not particularly compelling. NAI Intelligent Edge works with advisors to help owners compare the risk / reward of continued ownership of their real estate assets versus cashing out and deploying the proceeds into other asset classes,” said Thomas J. Boczar, CEO of Intelligent Edge Advisors.

Services available through NAI Global include sales and monetization strategies, valuations, corporate solutions, property management, project management, leasing/tenant representation and workout/restructuring services. For more information, visit www.naiglobal.com.

NAI Intelligent Edge is based in Intelligent Edge’s New York City office at 420 Lexington Avenue, Suite 400, New York, NY 10170. For more information, visit www.intelligent-edge.com.

Retail | CCIM Institute

Retail | CCIM Institute

Maximus to establish 400-employee call center in Rio Grande Valley

San Antonio Business Journal

Date: Tuesday, July 5, 2011, 1:35pm CDT

Maximus Inc. plans to open a new customer contact center in Edinburg in August to support the Texas Health and Human Services Commission.

The company will employ up to 400 people in the Renaissance Industrial Park in Edinburg by the end of 2012. Employees will help eligible Texans enroll in Medicaid, SNAP food benefits and Temporary Assistance for Needy Families. This location will be the fourth site the company operates as part of its contract with the state.

Maximus currently operates customer contact centers in Austin, Midland and Athens, Texas, and employs more than 2,200 people statewide. Edinburg is located in the Rio Grande Valley in South Texas.

Maximus (NYSE: MMS) provides health and human services program management and consulting services to clients in the United States, Canada, Australia and ...

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Stakeholders meet to discuss 400-acre research and education park

McAllen Economic Development Corporation 

McALLEN, June 27 – Stakeholders involved in the planning of a 400-acre research and education park were invited to a reception at the McAllen Chamber of Commerce last week.

Stephen Coulston, of Broaddus Planning, provided a power point presentation of what the park might look like. The park, to be located adjacent to the McAllen Foreign Trade Zone, would be a mixed use development, with retail, commercial, education, industry, research, and housing among its components.

“This is about a shared vision and a collaborative process of bringing together a group of people with great ideas to identify opportunities for growth that will create jobs through synergies in education, research and industry. It is about collaboration and partnerships, essentially,” Coulston told the Guardian, at the end of his presentation.

Coulston said his company has been involved in something broadly similar – the Research Valley Bio Corridor currently being developed in College Station-Bryan. However, that park is focusing on the bio tech industry, whereas the McAllen park will focus on advanced manufacturing.

Coulston said his company, which is based in Austin, Texas, provides a research park market assessment and conducts physical master planning. “The science and the art we do is to capture the vision and strategies of clients like this group here and cast those into a physical planning environment and strategy for moving forward,” he said.

The McAllen park will be unlike anything else seen in the Valley, Coulston said, because ...

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Nanotech Manufacturer Incubated at University of Texas Pan American to Create 220 Jobs in Nearby McAllen | Area Development Online

Nanotech Manufacturer Incubated at University of Texas Pan American to Create 220 Jobs in Nearby McAllen | Area Development Online

It takes a research village to raise a brainchild | research, takes, village - TheMonitor.com

It takes a research village to raise a brainchild | research, takes, village - TheMonitor.com

Global Economic Outlook with Dr. Peter Linneman: What's Next for the Global Economic Recovery and Commercial Real Estate?

Click here to Register for the Global Economic Outlook Web Conference

Steel Fabrication & Machining Supplier Opens Facility in McAllen, Texas MSA

McAllen Economic Development Corporation

The Butler Weldments Corporation, a nationwide & international supplier of custom steel fabrications and machining is pleased to announce the signing of a lease to open a new facility in the McAllen MSA area.

The Butler Weldments Corporation is a versatile steel fabrication and machining business with a 30 year tradition of quality and integrity. They manufacture fabrications in the U.S. and Mexico for a variety of industries including power generation, national defense, construction, petrochemical, mining and various original equipment manufacturers (OEM’s). This new facility, located in the Pharr industrial park, will be its third location and will be a combination warehouse, office space and manufacturing facility dedicated initially to servicing their plant in Rio Bravo, Mexico – across the border from McAllen MSA. The planned processes to be offered at this location include blasting, painting, saw cutting, plasma cutting, beveling and small machining. These services will be provided to the sister plant in Mexico, the corporate headquarters in Cameron, Texas and other potential clients.

“We chose this facility for its strategic location and proximity to the Mexico facility,” said Steven Dobos, President of The Butler Weldments Corporation. “This facility will allow us to take the products we currently manufacture to the next level and provide our existing and potential customers with assembly-ready products and just-in-time delivery.”

Over the past three decades, The Butler Weldments Corporation has expanded and adapted to best serve the changing needs of the manufacturing industry. Their facilities, capable of producing a wide range of products, are centrally located in the United States as well as globally competitive Mexico.

Butler Weldments plans to hire 10 people within the first year of operations and will occupy 15,000 square feet, expecting to expand the facility as more business is added or transferred to this location. McAllen EDC has been working closely with The Butler Weldments Corporation for a number of years in both their existing U.S. and Mexico plants, supporting them in site selection for this new building, lease negotiations, and connecting them to potential customers. Their new Pharr location will be fully operational by the 4th quarter of 2011.

For more information about Butler Weldments Corporation and their products and services, please contact Steven Dobos (254) 697-6416. www.butler-weldments.com

WHAT DOES THE FUTURE HOLD FOR ARBY’S, WENDY’S?

JUN 15, 2011 12:31 PM, BY MARK BRANDAU, NATION'S RESTAURANT NEWS ASSOCIATE EDITOR

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The $430 million sale of Arby’s Restaurant Group Inc. to Roark Capital could be qualified as addition by subtraction for both the 3,600-unit Arby’s and its former sister chain, the 6,600-unit Wendy’s.

Restaurant securities analysts noted that the terms of the brands’ separation — with Arby’s leaving parent company Wendy’s/Arby’s Group Inc., and Wendy’s remaining — represented a fair value for Arby’s and will allow both chains to go their own ways with fresh infusions of cash.

Atlanta-based Wendy’s/Arby’s Group now can focus solely on Wendy’s growth initiatives, a goal that company executives said motivated the January announcement that Wendy’s/Arby’s Group would seek strategic alternatives for Arby’s. Areas of focus for Wendy’s will include its test of a new breakfast platform, currently in six markets, with a goal of being in 1,000 stores by year-end; expanding internationally to as many as 8,000 locations; and adding as many as 1,000 domestic stores over the next few years, while remodeling many units along the way.

As part of the deal announced Monday, Roark Capital will pay Wendy’s/Arby’s Group $130 million in cash and assume $190 million in Arby’s-related debt. Wendy’s/Arby’s Group also will receive an $80 million tax benefit. The company also retains an 18.5-percent stake in Arby’s, valued at $30 million, letting it still reap any of the upside should Roark successfully turn around the sandwich chain’s business.

As for Arby’s, Roark has announced that it would spend $180 million at the start of the deal, with $130 million going to Wendy’s/Arby’s Group to pay the cash portion of the purchase price and the remaining $50 million earmarked for liquidity and growth capital for the sandwich chain. Roark officials said the private-equity firm would invest an additional $50 million through 2013 to fund more growth opportunities.

Wendy’s gets a cleaner balance sheet

As Wendy’s attempts to grow a significant presence internationally and realize its remaining potential in the United States, the brand should have a healthier balance sheet to do so. The sale’s $130 million cash proceeds and the assumption of $190 million in debt by Roark Capital represents a $320 million swing in Wendy’s net debt-to-earnings ratio.

Though the company would have to forgo Arby’s trailing-12-month earnings before interest, taxes, depreciation and amortization, or EBITDA, of $53 million, Wendy’s/Arby’s Group’s debt would fall to 2.2 times EBITDA. The presale ratio is 2.7 debt-to-EBITDA. Following the close of the sale, Wendy’s/Arby’s Group would have $630 million on hand.

Continue reading at NRN.com.