Nike Buys More Office Space for $84.5M

In a deal that expands Nike's global headquarters footprint by nearly 600,000 square feet, the footwear and apparel giant has purchased more buildings around its current headquarters for $84.5 million. Each of the properties was formerly owned by Triple Net Properties LLC, a subsidiary of Grubb & Ellis, according to a Portland Business Journal article. In April 2012, Nike acquired four other office buildings adjacent to its campus in a $44 million deal.

The two new properties, called Woodside I and Woodside II, are located within Beaverton, Oregon city limits southeast of the Southwest Walker Road and Southwest 158th Avenue intersection. "These real estate investments are designed to help support Nike's growth," Nike spokeswoman Mary Remuzzi, in an email to the Journal.

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Hangover Opportunity Fund Buys Tarrant Co. Office Building

The Hangover Opportunity Fund LLC, formed in 2010 by SkyWalker Property Partners, has added another property to its portfolio with the addition of 3301 W. Airport Freeway in Bedford, Texas. The 70,938-square-foot office building was acquired for an undisclosed sum, with Grubb & Ellis representing the seller, a California-based family trust.

According to a Dallas Business Journal article, SkyWalker plans to invest $100,000 to $200,000 to restore the 3.07-acre property's curbside appeal along the expanding Texas 183-121 junction, as well as common-area improvements. The building was 57% leased at the time of sale to five major tenants, with Renee Efimoff and Justin McCarthy of SCM Real Estate Services in Arlington under contract to oversee the property's leasing efforts. Shane Benner, a research analyst for SkyWalker, said that "this is a highly visible property in a submarket where we are currently invested. We firmly believe this is a good turn-around opportunity with renovation and the repositioning plan that we're putting in place."

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BGC Finalizes Grubb & Ellis Purchase, Forms Newmark Grubb Knight Frank

BGC Partners, Inc. announced on Friday that it had closed the acquisition of Grubb & Ellis assets after receiving approval from the U.S. Bankruptcy Court for the Southern District of New York. At the same time, BGC is rapidly integrating Newmark Knight Frank, which it acquired in October 2011, with Grubb & Ellis, forming Newmark Grubb Knight Frank, its new full-service commercial real estate platform.

Michael Lehrman, Global Head of Real Estate at BGC, said, "With more than 100 offices in North America, 250 million square feet in Property and Facilities Management, and an outstanding national Appraisal business, the creation of Newmark Grubb Knight Frank is a game-changing moment in the real estate industry. Newmark Knight Frank and Grubb & Ellis each have consistently ranked among the leading companies in the real estate industry, and now these two great brands have come together as an even more impressive competitive presence in the real estate marketplace."

Barry Gosin, CEO of the combined Newmark Grubb Knight Frank, added, "Our value proposition embraces a portfolio of management services, capital markets, corporate services, investment sales, leasing, tenant and landlord representation, property and facilities management, industrial engineering, appraisal and valuation services. In short, it's a fresh and comprehensive way of identifying creative, fully integrated solutions to meet clients' complex real estate objectives by applying BGC's capital, management, and technology as we enlarge the scale of our real estate services platform and expand into new markets."

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Grubb & Ellis Economist is "Pretty Optimistic" on CRE

Robert Bach, senior vice president and chief economist at Grubb & Ellis in Indianapolis, addressed the Wichita Independent Business Association's annual meeting at the DoubleTree by Hilton Wichita Airport this week to discuss the current state and outlook of commercial real estate. "Overall, I'm pretty optimistic about commercial real estate markets," he told roughly 200 people gathered for the meeting.

The Wichita Business Journal reports that according to Bach, commercial real estate struggled during the recession, with average prices falling by 44 percent between October 2007 and October 2009. However, the market has significantly improved since then, he said, and returns for commercial real estate investors are fairly attractive in the current low-interest-rate environment.

Bach predicted that cap rates will drop this year which, along with slowly increasing rents across sectors, would have properties throwing off more income. He noted that lower prices have enticed tenants to take advantage of the opportunity to upgrade at lower prices, and that industrial space has performed well in the face of manufacturing growth and years of improved efficiencies.

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Grubb & Ellis Cancels Asset Auction

Grubb & Ellis canceled the auction for its assets this week with an announcement that none of the bids topped BGC Partners' offer, which would forgive the $30 million already owed to BGC in exchange for the assets, while also providing bankruptcy financing. Grubb & Ellis claimed $150 million in assets and $167 million in liabilities in its Feb. 20 bankruptcy filing. According to a Wall Street Journal article, a hearing to approve the sale to BGC Partners is scheduled for Thursday.

Grubb & Ellis had said that the offer from BGC Partners is the "sole reason why a going-concern sales process is possible," and came after nearly a year of soliciting 50 companies and one failed exclusivity agreement.

"Simply put, absent BGC's efforts and capital, the debtors would likely have already been forced to liquidate, resulting in the loss of over 3,000 jobs and placing its valued management clients' properties in jeopardy," Grubb & Ellis said in court papers.

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BGC Partners Picks Up Grubb & Ellis Assets

Grubb & Ellis Co. announced this week that it had filed for bankruptcy protection and agreed to sell the majority of its assets to BGC Partners. The proposed sale to BGC Partners Inc. will require court approval as part of Grubb & Ellis’ Chapter 11 bankruptcy process reported The Washington Post. The filing listed $150 million in assets and $167 million in debt as of the end of last year. BGC will provide financing of up to $4.8 million to keep Grubb & Ellis operating while the acquisition closes, according to the filing.

Howard W. Lutnick, Chairman and Chief Executive Officer of BGC, said that "this transaction reflects the deep and unwavering commitment of BGC -- the fastest growing, and one of the world's largest, global brokerage companies serving the financial markets -- to build a premier position in real estate services. We agreed to acquire Grubb & Ellis because we believe Newmark Knight Frank's and Grubb & Ellis' broad knowledge and extensive brokerage expertise, combined with BGC's powerful proprietary technology and our strong financial backing, will enable Grubb & Ellis to thrive and grow as part of the BGC family of companies."

Thomas P. D'Arcy, President and Chief Executive Officer of Grubb & Ellis, added, "We believe this transaction enhances our value proposition to our clients and strengthens our position in the commercial real estate marketplace. BGC's strong capital base, robust technology and deep commitment to its brokers provides Grubb & Ellis with scale along with the resources needed by our professionals to deliver exceptional service to our clients. We are confident this will be a seamless transition for our clients and that becoming part of BGC is an extremely attractive opportunity for our brokerage professionals and employees."

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Flatiron Park Complex Sold for $60.8M

Goff Capital Partners completed the purchase of a 19 building office complex in Boulder, Colorado from the Flatiron Park Co. for $60.75 million, or $99 per square foot, according to a CoStar report. Flatiron Park Co. built, owned and managed the park, a complex built in stages between the 1970s and the late 1990s.

"It was never on the market. It was a situation where we knew some of the folks, and they had expressed some interest," Flatiron Park Co. Vice President and General Manager Dick Hedges said in a Boulder County Business Report article. "We're very happy these are the guys that bought the property," Hedges said. "They've indicated they're going to run the park as we have in the past, and they've taken on a number of our employees, which we're very happy about. There will be continuity."

NewOptions Partners represented Flatiron Park Co. in the transaction. Goff Capital is expected to redevelop and reinvest in some of the properties, according to information provided by Hedges and Scott Garel, a senior vice president with Grubb & Ellis Co., which oversees leasing of the properties.

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Moody's CPPI Up 2.4% in August

The latest Moody's/REAL Commercial Property Price Indices report for October 2011 was released this week recording a 2.4% increase in August for the National — All Property Type Aggregate Index (CPPI), bringing it to 15.3% above the post-peak low recorded in April 2011. An excerpt from the report:

The share of distressed transactions included within this month's CPPI was 21.7%, down 5.9% from last month and the lowest level since January 2010. Prices for distressed transactions were down by 3.5% from the last month and are 6.9% above their post peak low set in August 2010. The reduced share of distressed transactions helped drive this month's overall price increase.

Looking forward, we do not envision significant price increases over the next year. While distressed transactions should be at or near their high water mark for this cycle, there is less CMBS loan origination to help support acquisition pricing, especially beyond the portfolio lender sweet spot of trophy properties and top tier markets.

"There's more caution," Robert Bach, chief economist for Grubb & Ellis Co., a Santa Ana, California-based brokerage, said in a telephone interview with Businessweek before the Moody's report was released. "Investors in general are a little more cautious, and that includes investors in commercial real estate."

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Grubb & Ellis Receives $18M Financing Commitment from Colony

Grubb & Ellis Company announced that it had received an $18 million financing commitment from Colony Capital, LLC according to a CoStar report. As part of the commitment, Colony was granted the right to an exclusive 60-day negotiating period during which it can evaluate a potential larger strategic investment with Grubb & Ellis. Grubb & Ellis announced last month that it had been considering a possible sale or merger. If Grubb & Ellis and Colony enter into a definitive agreement for a strategic transaction, Grubb & Ellis retains the right to solicit competing strategic transactions for a period of 25 business days. JMP Securities served as financial advisor to Grubb & Ellis in connection with this financing.

"Colony Capital is a premier real estate investment and advisory firm with a strong track record of identifying undervalued real estate and corporate investment opportunities, and we welcome their support and the confidence they have shown in Grubb & Ellis," said Thomas P. D'Arcy, President and CEO at Grubb & Ellis. "We will work with Colony over the next 60 days as they focus on a possible larger strategic transaction. With this show of support by Colony, our clients and partners should feel confident that our experienced team of professionals will continue to provide the same outstanding service that they have come to expect from us."

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Colliers Acquires Winbury Group

A controlling interest of commercial real estate agents with Grubb & Ellis/The Winbury Group has been acquired by Colliers International according to a Lawrence Journal-World article. The Winbury Group, a full-service commercial real estate firm founded in 1989, will immediately assume identity under the new Colliers umbrella and signage is expected to change within 30 days. The terms and price of the deal were not disclosed.

"With today's news, we are continuing our systematic strategy to seize additional market share in the U.S.," said Dylan Taylor, chief executive officer of Colliers International in the U.S. "Our U.S. continued expansion further solidifies our ability to provide the best service to our clients and the best career opportunities for our professionals. The Winbury Group is the clear market leader in greater Kansas City and we see very high alignment between the two firm's cultures."

Ted Murray, who serves as the CEO of The Winbury Group, adds: "After serving our clients for more than two decades throughout the Kansas City region and the country, we are thrilled to join Colliers International, a global industry leader. Our ongoing commitment to deliver the highest-quality commercial real estate services in the region will be significantly enhanced by this merger. Our clients will continue to rely on our local market knowledge and connections, but going forward they also will benefit from the national and international growth opportunities and resources of Colliers."

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