America Center Up for Sale

Legacy Partners, a vertically integrated real estate investment firm, announced this week that it had retained HFF and Cornish & Carey Commercial Newmark Knight Frank to spearhead the sale of the entire America Center project in Santa Clara, California. The offer for sale includes the two 213,000-square-foot, six-story buildings and roughly 13 acres of adjacent land that is envisioned for two additional 213,000-square-foot buildings. According to a Silicon Valley Business Journal article, several real estate sources indicated the property could trade for significantly north of $400 per square foot, based on the built space; a range of $400 to $500 a foot would pencil to $170 million to $213 million.

"America Center was conceived and constructed as an environmentally advanced office campus that reflects a growing demand for a sustainable land use policy and modern workplace environments in Northern California, Silicon Valley and indeed the nation," said Derrick How, Vice President of Acquisitions and Development for Legacy Partners Commercial, in a 2010 article shortly after Legacy Partners updated the property. "This project required us to work with the most current techniques in design, construction and remediation, an investment we hope serves as a ready inspiration for our corporate tenants seeking to further elevate the Bay Area’s commitment to long-term sustainability and continued progress in the adoption of clean technologies and green infrastructure."

Construction of the America Center began in June 2000 after Legacy Partners acquired more than 60 acres at Highway 237 and Great America Parkway from Cargill Salt. In 2007, HKS Architects were commissioned by Legacy Partners to expand and update the property with an advanced and modern mindset. America Center was shell complete in July 2009 and soon became San Jose's first LEED Gold-certified speculative office development built on a fully restored brownfield.

For more news and information visit Blumberg Capital Partners.

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."

For more news and information visit Blumberg Capital Partners.

Qwest Plaza Building in Seattle Sold for $137M

Clarion Partners acquired the Qwest Plaza building at 1600 Seventh Avenue in downtown Seattle, Washington for $137 million from CenturyLink, formerly known as Qwest Communications. The purchase was made on behalf of a separate account client of the firm in an offmarket transaction. CenturyLink was represented by Newmark Knight Frank Frederick Ross in the transaction and a new lease negotiation which has the company still occupying 260,000 square feet of the tower.

Additionally, Nordstrom is leasing more than 300,000 square feet in the building for a term of 20 years, with an option to take more space, said Nordstrom spokesman Colin Johnson. Nordstrom has been on the hunt for more downtown Seattle office space, and the Qwest Plaza building is near the Seattle retailer's headquarters and flagship building, according to a Puget Sound Business Journal article. "This new location is to accommodate our continuing growth," Nordstrom spokesman Colin Johnson said. "It's a long-term solution." Nordstrom recently said it planned to hire 400 tech workers to round out the retail company's fast-growing ecommerce division.

"We are thrilled to have been able to secure such high quality companies as Nordstrom and CenturyLink as tenants," said Stephen P. Latimer, Managing Director at Clarion Partners. "We look forward to rejuvenating the building with New York, April 3, 2012 the renovation and bringing in additional retail uses in this key location in the city."

Designed by John Graham & Company and completed in 1976, the building was originally known as the Pacific Northwest Bell Building, and has also been called 1600 Bell Plaza, and US West Communications. The 598,000-square-foot tower was reportedly 88% leased at the time of sale.

For more news and information visit Blumberg Capital Partners.

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."

For more news and information visit Blumberg Capital Partners.

The Move for Bike Rooms in NYC Office Buildings

An article from the New York Times, A Room of Their Own for 2-Wheeled Commuters, examines the recent move by some building landlords to establish bicycle rooms for their tenants, and the related benefits and limits of offering the ammenity. The article used 345 Hudson Street in New York as an example, where the property manager says that the bike room they built in its storage space in 2008 is "always packed". "We have 35, 40 bicycles there a day," said Alfonse Amore, vice president for property management for the building's landlord, Trinity Real Estate.

Regulations established by the New York City Department of Transportation on December 11, 2009 requires commercial office buildings with at least one freight elevator to implement and post a Bicycle Access Plan that allows the tenant's employees to bring bikes into the tenant's office space. "The law doesn't require bike rooms," explained Noah Budnick, the deputy director of the nonprofit Transportation Alternatives. "The law just requires that the buildings let the people get their bikes from the street to their office. We're hearing more and more that this is a selling point for the real estate industry. You're seeing office spaces marketed with bike rooms, which is pretty awesome."

But, notes the article, one thing may be preventing landlords from building even more bike rooms: showers. An excerpt:

In new office buildings, the U.S. Green Building Council, which certifies buildings as LEED-compliant, awards points only for bike rooms with showers and changing rooms. And in existing buildings, bike rooms also do not automatically earn LEED points because they are based on behavioral changes in tenants — for instance, if a tenant allows employees to telecommute or if a landlord puts in a bike room that gets heavy use. LEED certification, shorthand for Leadership in Energy and Environmental Design, is important to landlords because it tells the public, and investors, that their buildings save energy.

The building council's requirement that new buildings have showers, which can be costly to install and take up more space, is a sticking point for some New York landlords. While a rinse may be necessary for riders pedaling 10 miles to a suburban office park, landlords say, Manhattan employees coming from, say, Park Slope in Brooklyn, usually won't work up much of a sweat.

"You have a lot of buildings here which would like to get LEED points," said Eric Gural, an executive managing director of Newmark Knight Frank who oversees the 1,000-square-foot bike room at 520 Eighth Avenue. "If we didn't have to put a shower in, I think you'd see a lot more bike rooms that would be provided by landlords."

For more news and information visit Blumberg Capital Partners.

NYT Takes a Look at Office Sublets

The New York Times published a new article titled "Manhattan Office Sublets Show Benefit as Markets Tighten" examining the current trend in NYC. Data from Newmark Knight Frank shows that, as of April, Downtown reflected a 40% drop in sublease space with Midtown down 35%. An excerpt from the article:

Conventional wisdom holds that subleasing — in which tenants vacate their offices before the end of their lease and rent it to another tenant at a discount — has a negative impact on the market. Landlords must compete against the lower rents, while tenants bristle at the restrictive terms that often are a part of a sublease.

But the industry perspective is now shifting. Tenants are embracing subleases as a means of locking in below-market rents, while landlords, who are facing fewer vacancies, are using it to attract tenants and then converting the leases into direct deals when the subleases expire.

"Landlords don’t usually like the fact that sublease space rents for less, and tenants don’t like that the leases offer little flexibility," said Moshe Sukenik, an executive vice president and principal at Newmark Knight Frank. "But there is a silver lining that can result in a win-win for everyone involved."

For more news and information visit Blumberg Capital Partners.

Microsoft Moving to Moffett Towers

Microsoft Corporation announced this week that it has entered into a long-term lease agreement to take up 237,000 square feet at Moffett Towers in Sunnyvale, California according to a GlobeSt.com article. The company will be making the move from its current spaces in Palo Alto and Mountain View, a total of roughly 160,000 square feet of space, and expects to begin occupying 1020 Enterprise Way in January 2012. While the terms of the deal were undisclosed, it's been reported that asking rates for Moffett Towers are $2.95 per square foot per month.

Moffett Towers is a 1.8 million square foot office/R&D campus in the heart of Silicon Valley developed by San Francisco-based Jay Paul Company. Other tenants include HP, which leased 393,776 square feet in April, and Motorola Mobility, which leased 236,444 square feet in March.

"Microsoft's lease is another significant endorsement from a market leader of the unparalleled Moffett Towers office park experience," said Cornish & Carey Commercial Newmark Knight Frank Executive Vice President Phil Mahoney, which represents Jay Paul Company's Moffett Towers property in all leasing engagements. "Recent leasing activity at Moffett Towers alone has dropped the city of Sunnyvale's office vacancy rate nearly 10 percentage points. This state-of-the-art campus is changing the landscape of this real estate market."

For more news and information visit Blumberg Capital Partners.

Sandler O'Neill Makes Longterm Play for 1251 Avenue of the Americas

Mitsui Fudosan America gained another long-term tenant this month as Sandler O'Neill & Partners inked a lease for 74,164 square feet in the 1251 Avenue of the Americas skyscraper in New York. While terms of the lease were not disclosed, CoStar reports that O'Neill's occupancy is scheduled for 2012. Sandler O'Neill & Partners was represented by Cushman & Wakefield while the owners were represented by Newmark Knight Frank.

1251 Avenue of the Americas, also known as the Exxon Building, was part of the later Rockefeller Center expansion (1960s-1970s) dubbed the "XYZ Buildings" on Sixth Avenue, (also known as Avenue of the Americas). In 1989 Exxon announced that it was moving its headquarters and around 300 employees from New York City to the Las Colinas area of Irving, Texas. Exxon sold the Exxon Building, its former headquarters, to a unit of Mitsui Real Estate Development Co. Ltd. in 1986 for $610 million. Tenants of the property include DLA Piper, Rothschild, Mizuho, The Bank of Tokyo-Mitsubishi, and Natixis, which recently leased a large block of space in the building.

For more news and information visit Blumberg Capital Partners.