CRE Outlook Forum Voices

EisnerAmper & Bloomberg hosted a business and political perspective breakfast forum this week called "Commercial Real Estate Outlook 2015 & Beyond" in New York, inviting a panel of commercial real estate professionals to discuss the outlook of the economy and its impact on CRE. The panelists included Scott Rechler, CEO of RXR Realty, Joseph Sitt CEO of Thor Equities, Steven Witkoff, CEO of The Witkoff Group, Brian Harris, CEO of Ladder Capital, and Peter Sotoloff, CIO of Mack Real Estate Credit Strategies. GlobeSt.com covered the even in an article titled "The Dealer Has Reshuffled the Deck"; an excerpt follows:

What's driving that economy? asked Scott Rechler, CEO of RXR Realty. In word, "talent." Employers, and therefore office landlords, need workplaces that attract that talent, but that imperative goes beyond the office space and into the surrounding neighborhood. It has changed the dynamic not only of office, Rechler said, "but also how everyone looks at real estate in totality."

Rechler also added on to Sitt's observation about a new hand of cards. The deck is reshuffled at least every year, he said, and everyone needs to be aware of shifts in the market as they occur.

As a case in point, he cited RXR's current strategy compared to the one it pursued a few years earlier. As the downturn evolved into the recovery, the company rode the wave by snapping up attractive properties at attractive prices. More recently, the playing field has become far more competitive and "we're not in an investment market right now."

Asked where development is taking place, Sitt countered that a better question would be where it isn't taking place. Cranes dot the horizons everywhere, even amid rising costs for both construction and acquisition of developable parcels, as CEO Steven Witkoff of the Witkoff Group pointed out. On the other hand, Witkoff added, "I think the market is healthy."

For more news and information visit Blumberg Capital Partners.

Bloomberg Signs Lease for More NYC Space

Bloomberg L.P. announced this week that it has reached an agreement to lease 16 floors, totaling more than 400,000 square feet of office space, at 120 Park Avenue in New York according to a New York Times article. The company said that it expanded its presence in the former Philip Morris building, across from Grand Central Terminal, to accommodate the company’s rapid growth. Bloomberg will continue to maintain its headquarters space of about 900,000 square feet at 731 Lexington Ave.

"This new location is ideal as we build upon our record-setting year in 2010 and position ourselves for future growth," said Peter Grauer, Chairman of Bloomberg L.P. "We continue to hire in New York and we expect that to continue as we expand our businesses and move into new markets worldwide," said Daniel Doctoroff, President of Bloomberg L.P.

The new space at 120 Park Avenue is owned by Eastgate Realty Corporation, with CBRE representing Bloomberg in the transaction. Terms and pricing for the lease were not disclosed, but Bloomberg said it expects to begin occupying the new offices in late 2011 after renovations to the space.

For more news and information visit Blumberg Capital Partners.

NAR Says CRE Market Stabilizing, Vacancies Peaking

According to the National Association of Realtors® the commercial real estate markets are flattening out and appear to be stabilizing. The association expects modestly improving fundamentals in the coming year. "Property fundamentals are improving, investment capital is slowly flowing back into the sector, commercial mortgage originations are increasing, and demand for CMBS issuance is gaining traction," Standard & Poor's said in a Bloomberg report. An excerpt from NAR's office market findings:

Vacancy rates in the office sector, where a large volume of sublease space remains on the market, are forecast to decline from 16.7 percent in the current quarter to 16.4 percent in the fourth quarter of 2011, but with very little change during in the first half of the year.

The markets with the lowest office vacancy rates currently are New York City and Honolulu, with vacancies around 9 percent. All other monitored markets have double-digit vacancy rates.

Annual office rent is expected to decline 1.8 percent this year, and then slip another 1.6 percent in 2011. In 57 markets tracked, net absorption of office space, which includes the leasing of new space coming on the market as well as space in existing properties, should be a negative 3.7 million square feet this year and then a positive 16.4 million in 2011.

For more news and information visit Blumberg Capital Partners.