Have you ever wondered, "What ever became of XYZ project?"
As a commercial real estate broker who either participates in or observes others participating in the hunt for real estate deals, I often wonder. Over time, every deal reaches its conclusion. Project A is sold to Investor B for $C. Asset D is withdrawn from the market because Lender E overpriced it and needed time to come to grips with reality. Project F dragged Developer G into bankruptcy, resulting in the unfinished project being sold to Investor H who plans to reposition it. Portfolio I sold quickly for a record high of $J. There is an ending to every story.
As an intellectual exercise and to have some fun, I have decided to select a current deal or project to follow. I will gather the facts and figures, offer my up-front analysis of the project and make predictions as to how it will conclude. I will rely on public records as much as possible. Where I cannot, I will make educated guesses based upon then current market conditions. Time will be the arbiter of my predictions.
Stay tuned while I cast around for an eligible deal for what will hopefully be an ongoing feature of my blog. Of course, I am always open to reasonable suggestions.
Showing posts with label commercial real estate. Show all posts
Showing posts with label commercial real estate. Show all posts
Tuesday, June 1, 2010
Friday, May 28, 2010
Move Over BRAC
At a luncheon for commercial real estate brokers hosted on May 25, by Corporate Office Properties Trust (COPT) at its newly acquired Canton Crossing Tower, COPT CEO Randall Griffin observed that while BRAC (the Base Realignment and Closure Act of 2005) may be heavily promoted as a big economic engine in the Baltimore-Washington, D.C. region, work being done by Federal government agencies and their contractors in cyber security may prove to be a far greater economic engine and anchor for our region. He further opined that with the construction pipeline for Class A office buildings near empty, 2011-2012 could see a spike in office occupancy levels along with a corresponding spike in Class A office rents. His friendly advice to the commercial brokers in attendance was to begin focusing more on office users who are involved in cyber security.
That is news we can use!
COPT's commercial real estate broker luncheon at Canton Crossing Tower was set in a former penthouse residence on the top floor of this 17-story, 474,000 square foot office building. The luncheon provided a unique opportunity for my fellow brokers and me to enjoy the exquisite culinary offerings of the Blue Hill Tavern. We dined while peering through the floor-to-ceiling windows at Baltimore's Inner Harbor, Fort McHenry, Harbor East and the working waterfront.
Landlords use broker events as marketing vehicles to let brokers experience a property that is being offered for lease. Landlords capitalize on the fact that brokers, being brokers, can seldom turn down free food, chances to win door prizes and the convenient opportunity to talk deals and market scoop with colleagues.
Rand Griffin wisely seized the opportunity to offer his thoughts on the big picture. He guessed correctly that his audience would be more interested in learning his perspective on the economy, financial markets and office markets than hearing a recitation of project details. After all, we had been mixing and mingling with the listing brokers and COPT's in-house leasing team throughout the luncheon.
Rand's expertise in the Class A office market is derived from his experiences developing and operating a large, high quality portfolio. COPT is one of Maryland's largest private office landlord, owning and operating 197 building with 13.6 million square feet. COPT owns 268 properties in six states (AL, CO, MD, NJ, PA and VA) containing over 20 million square feet. COPT's business model is to offer Class A office space to Federal government agencies having an alphabet-soup of names such as NRO, NSA, NGA, DoD, GSA, DISA and CIA. COPT derives 56% of its revenue from government agencies, 30% from government contractors and the balance from first class businesses such as CareFirst BlueCross BlueShield.
Thanks Rand Griffin for your insight. Your optimism is encouraging during these challenging, uncertain times.
That is news we can use!
COPT's commercial real estate broker luncheon at Canton Crossing Tower was set in a former penthouse residence on the top floor of this 17-story, 474,000 square foot office building. The luncheon provided a unique opportunity for my fellow brokers and me to enjoy the exquisite culinary offerings of the Blue Hill Tavern. We dined while peering through the floor-to-ceiling windows at Baltimore's Inner Harbor, Fort McHenry, Harbor East and the working waterfront.
Landlords use broker events as marketing vehicles to let brokers experience a property that is being offered for lease. Landlords capitalize on the fact that brokers, being brokers, can seldom turn down free food, chances to win door prizes and the convenient opportunity to talk deals and market scoop with colleagues.
Rand Griffin wisely seized the opportunity to offer his thoughts on the big picture. He guessed correctly that his audience would be more interested in learning his perspective on the economy, financial markets and office markets than hearing a recitation of project details. After all, we had been mixing and mingling with the listing brokers and COPT's in-house leasing team throughout the luncheon.
Rand's expertise in the Class A office market is derived from his experiences developing and operating a large, high quality portfolio. COPT is one of Maryland's largest private office landlord, owning and operating 197 building with 13.6 million square feet. COPT owns 268 properties in six states (AL, CO, MD, NJ, PA and VA) containing over 20 million square feet. COPT's business model is to offer Class A office space to Federal government agencies having an alphabet-soup of names such as NRO, NSA, NGA, DoD, GSA, DISA and CIA. COPT derives 56% of its revenue from government agencies, 30% from government contractors and the balance from first class businesses such as CareFirst BlueCross BlueShield.
Thanks Rand Griffin for your insight. Your optimism is encouraging during these challenging, uncertain times.
Thursday, April 29, 2010
Is Microsoft Becoming Irrelevent?
Say it isn't so!
Microsoft (MS) is becoming irrelevant - calcified to accelerating change in the tech market, reacting to yesterday's news, not actively participating in defining or divining markets for tomorrow's services and products. I have even read reports of the best and brightest college graduates spurning MS for Google and facebook.
How did that happen? Perhaps I am over reacting to just a slight lull in the marketing prowess of a tech giant. Or maybe not. In this era of the 24 hour news cycle, a BlackBerry tethered United States President, on-air correspondents Tweeting while cameras roll, and facebook eclipsing Google as the most popular web site, something is different.
I just read an interesting article on CNNMoney.com (a co-sponsored feature with Fortune) describing the state of the mobile computing world. (See the link.)
MS, while tarnishing the upgrade of Windows XP with the ill-fated Vista, ceded market leadership in search to Google, and then began ceding market leadership in mobile computing to Apple. Windows 7 has rescued the MS brand in desktop computing. Bing is making inroads in search. Will Windows Phone 7 be the next Vista or Windows 7? Windows Phone 7 is scheduled to be released, according to PC Magazine, during the 2010 holiday season. MS is promising a new experience, Hubs and Apps. Apple, meanwhile, is 75 million iPhones and 4 billion apps down the road. Android is gaining share. Palm had to seek shelter in the arms of HP. And Nokia's Symbian, what is the new release date, again? As of today, the stock market capitalization of Apple is $241 Billion, versus Microsoft's $270 billion and ExxonMobil's $325 billion. Something has changed.
What does this have to do with commercial real estate?
Has the cataclysmic shock experienced by commercial real estate in the Great Recession changed the course of business as usual? If so, how? Many suspect things have changed. We hear the terms "deleveraged," "falling valuations," "distressed assets," "workouts," "record high vacancies," and "bank failures." How has your commercial real estate business adapted to this new reality? What is the new reality? Who will be the next generation of winners, loosers, or has-beens? Has your service delivery platform migrated from desktop to mobile and then into the cloud?
Stay tuned.
Microsoft (MS) is becoming irrelevant - calcified to accelerating change in the tech market, reacting to yesterday's news, not actively participating in defining or divining markets for tomorrow's services and products. I have even read reports of the best and brightest college graduates spurning MS for Google and facebook.
How did that happen? Perhaps I am over reacting to just a slight lull in the marketing prowess of a tech giant. Or maybe not. In this era of the 24 hour news cycle, a BlackBerry tethered United States President, on-air correspondents Tweeting while cameras roll, and facebook eclipsing Google as the most popular web site, something is different.
I just read an interesting article on CNNMoney.com (a co-sponsored feature with Fortune) describing the state of the mobile computing world. (See the link.)
MS, while tarnishing the upgrade of Windows XP with the ill-fated Vista, ceded market leadership in search to Google, and then began ceding market leadership in mobile computing to Apple. Windows 7 has rescued the MS brand in desktop computing. Bing is making inroads in search. Will Windows Phone 7 be the next Vista or Windows 7? Windows Phone 7 is scheduled to be released, according to PC Magazine, during the 2010 holiday season. MS is promising a new experience, Hubs and Apps. Apple, meanwhile, is 75 million iPhones and 4 billion apps down the road. Android is gaining share. Palm had to seek shelter in the arms of HP. And Nokia's Symbian, what is the new release date, again? As of today, the stock market capitalization of Apple is $241 Billion, versus Microsoft's $270 billion and ExxonMobil's $325 billion. Something has changed.
What does this have to do with commercial real estate?
Has the cataclysmic shock experienced by commercial real estate in the Great Recession changed the course of business as usual? If so, how? Many suspect things have changed. We hear the terms "deleveraged," "falling valuations," "distressed assets," "workouts," "record high vacancies," and "bank failures." How has your commercial real estate business adapted to this new reality? What is the new reality? Who will be the next generation of winners, loosers, or has-beens? Has your service delivery platform migrated from desktop to mobile and then into the cloud?
Stay tuned.
Sunday, April 5, 2009
Hello Blogosphere!
Hello blogosphere! This is my very first post to my very first blog. While late to the party, I hope that I can contribute to the dialog about commercial real estate during these most distressing times.
I am a commercial real estate broker who has been in the commercial real estate industry since 1986. But really, my experience is much longer. That's if I receive credit for performing maintenance and property management services in my mother's portfolio of five multi-family buildings in Baltimore City beginning in 1967. Over 42 years! And I have loved every minute of those years, though some of the experiences were not so pleasant in hindsight.
So that readers can understand my perspective, I would like to share a little about my path to this blog. I grew up in the Windsor Hills neighborhood of northwest Baltimore City, one of five children. I attended public schools, ultimately earning a high school diploma from Baltimore Polytechnic Institute, A-Course, Engineering Option. Back then, I was convinced that my future lay in designing and racing automobiles. Upon entering the University of Pennsylvania, I majored in Bioengineering with a Mechanical Engineering concentration, receiving a BSE in 1981. By the time I graduated, the country was racked by runaway inflation, US hostages in Iran and 18% interest rates for car and home loans. I secured a job at Westinghouse Defense near BWI Airport as Reagan's defense buildup had resulted in great salaries for new engineers.
As the years clicked past, I became very interested in business, but couldn't satisfy this need at Westinghouse while working on classified projects. From my low level, I seldom knew the ultimate end-user, or received feedback on cost, performance, and quality. Those were critical components that every businessman ought to know. In reality, Westinghouse managers knew those facts but my clearance was not high enough and I didn't have a "need to know."
Oh, well.
I left Westinghouse after five years to earn an MBA in Finance with a concentration in Real Estate from The Wharton School at the University of Pennsylvania. My experiences at Wharton opened my eyes to a whole new world. The flow of international capital, risk adjusted returns, arbitrage! Amazing!
Next stop, USF&G Insurance where I worked my way up to running the corporate real estate department after five years. Again, my experiences were eye opening. This time in understanding national real estate submarkets, construction costs, commercial property management, asset management, and the direct impact of real estate - both used and held for investment - on the bottom line of a corporation. I also learned a thing or two about downsizing a large corporation during a recession and while in a dire financial crisis.
Next stop was a small regional brokerage shop in Baltimore for two years and then on to Cushman & Wakefield, on of the world's largest international commercial real estate brokerages. During my seven years in the Tysons Corner (McLean) Virginia office of Cushman & Wakefield, I learned every aspect of large, complex, commercial transactions. You could say I learned how to be a broker and a businessman.
Finally, in 2003 while in the middle of the dot com recession, I founded Kington Commercial to focus on commercial real estate within the region. My goal was to offer to a select group of clients - both large and small - the same quality of commercial real estate counsel demanded and enjoyed by Fortune 500 firms. That has proven to be a winning strategy.
My goal with this blog is offer thoughtful commentary to the blog's followers on current issues in Commercial Real Estate. I hope that you find this blog both interesting and informative.
I am a commercial real estate broker who has been in the commercial real estate industry since 1986. But really, my experience is much longer. That's if I receive credit for performing maintenance and property management services in my mother's portfolio of five multi-family buildings in Baltimore City beginning in 1967. Over 42 years! And I have loved every minute of those years, though some of the experiences were not so pleasant in hindsight.
So that readers can understand my perspective, I would like to share a little about my path to this blog. I grew up in the Windsor Hills neighborhood of northwest Baltimore City, one of five children. I attended public schools, ultimately earning a high school diploma from Baltimore Polytechnic Institute, A-Course, Engineering Option. Back then, I was convinced that my future lay in designing and racing automobiles. Upon entering the University of Pennsylvania, I majored in Bioengineering with a Mechanical Engineering concentration, receiving a BSE in 1981. By the time I graduated, the country was racked by runaway inflation, US hostages in Iran and 18% interest rates for car and home loans. I secured a job at Westinghouse Defense near BWI Airport as Reagan's defense buildup had resulted in great salaries for new engineers.
As the years clicked past, I became very interested in business, but couldn't satisfy this need at Westinghouse while working on classified projects. From my low level, I seldom knew the ultimate end-user, or received feedback on cost, performance, and quality. Those were critical components that every businessman ought to know. In reality, Westinghouse managers knew those facts but my clearance was not high enough and I didn't have a "need to know."
Oh, well.
I left Westinghouse after five years to earn an MBA in Finance with a concentration in Real Estate from The Wharton School at the University of Pennsylvania. My experiences at Wharton opened my eyes to a whole new world. The flow of international capital, risk adjusted returns, arbitrage! Amazing!
Next stop, USF&G Insurance where I worked my way up to running the corporate real estate department after five years. Again, my experiences were eye opening. This time in understanding national real estate submarkets, construction costs, commercial property management, asset management, and the direct impact of real estate - both used and held for investment - on the bottom line of a corporation. I also learned a thing or two about downsizing a large corporation during a recession and while in a dire financial crisis.
Next stop was a small regional brokerage shop in Baltimore for two years and then on to Cushman & Wakefield, on of the world's largest international commercial real estate brokerages. During my seven years in the Tysons Corner (McLean) Virginia office of Cushman & Wakefield, I learned every aspect of large, complex, commercial transactions. You could say I learned how to be a broker and a businessman.
Finally, in 2003 while in the middle of the dot com recession, I founded Kington Commercial to focus on commercial real estate within the region. My goal was to offer to a select group of clients - both large and small - the same quality of commercial real estate counsel demanded and enjoyed by Fortune 500 firms. That has proven to be a winning strategy.
My goal with this blog is offer thoughtful commentary to the blog's followers on current issues in Commercial Real Estate. I hope that you find this blog both interesting and informative.
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