Dominick's - your new lifestyle grocer

I've never been a big user of Dominick's Finer Foods. Why? Location. Growing up, I had a Jewel right down the street. The same is the case were I live now, but Kroger has gotten most of my business because I don't like the new Jewel and the new Kroger is just awesome. A brand new Super Wal-Mart is also getting some of our business because of price, and I am hearing the local stores' sales are down because of it (surprise, surprise). Safeway bought Dominick's ten years ago, and its market share went down almost 50% in the first five years. Jewel outmarketed them, and Wal-Mart and Home Foods...

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Chicago = Dubai West?

Here's two reasons why:1. The only skyline in the world that rivals Chicago's, in my humble opinion, is Dubai's. What they have done there is amazing. And even though I am not a big modern architecture guy, you have to admire what they are doing. Some of those buildings just drop my jaw.2. It looks like an arm of the government is looking to acquire a 51% stake in the John Buck Co. Buck is, of course, a major player here in town, and it looks like the game plan is having their talented team help with development in Dubai and later regionally; presumably they'll retain a major presence here...

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Random (and live) CMBS thoughts

I'm listening from Bourbonnais to a live ALI-ABA program on CMBS. Here's some thoughts, which I will update during the day:Increased leverage is a big concern; commercial and multifamily mortgages are currently 23% of GDP, an all-time high. Credit, liquidity and information risk has all been mispriced. Has the mark been overshot? Pulling back to 2005 levels to a level when mortgage capital was in line means a 10-15% correction in prices using technical analysis. The market is not going to hell in a handbasket. Delinquencies should increase (they've been SO low), but this is NOT the makings...

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Where is the office leasing market going?

That's a good question. Some people are advising big tenants to lock in now while the going is good and the economy supposedly soft. Others are saying, especially here in Chicago, that a big glut will hit the market in 2009 and beyond that will rival that in the 1990s.Both may actually be right. A downturn is a good time to lock in megaleases for office space because landlords want the certainty of a major tenant while the tenant might get a better deal. But if you were a smaller tenant or not dying to get space now, when absorption decreases and/or more lease and sublease space comes on to...

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Guest Blogging...

I don't do guest blog much. Heck, I hardly have time to keep my own blogging efforts up.But I did tonight, at the one website I check every single day without fail: Jeff Brown's BawldGuy Talking. I'm seriously not saying this because I am the guest blogger. Jeff truly amazes me and excites me with his knowledge of real estate. And I do not say that often. He's certainly taught me a thing or two about investing, and I can guarantee you that if you read what Jeff has to say, you will learn -- and a lot, not a little.In any event, my topic du jour was a quick little foray into entity forming...

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Scary times for retail landlords?

That's what this USA Today story (via AOL) implies. The list of retailers on credit watch is a veritable Who's Who of the industry, including "Eddie Bauer, Sbarro, Guitar Center, Blockbuster, Six Flags and Linens 'n Things." I saw a number of other big names there too.That's the bad news. Let's not forget that some people have been predicting the demise of some of these companies forever, and it hasn't happened yet. This does not mean there will be more trimming, bankruptcies and store closings like we've seen with Wickes, Sharper Image and Bombay Company, but let's not assume every company...

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Going green -- remember, it's good for business and bottom line

Let's forget all the politics here. As I have said before, green practices can have a positive impact on your bottom line. Ask Lee Scott, who says Wal-Mart isn't green but undertakes green practices to make more money.Case in point: TIAA-CREF wants to reduce energy consumption by 10%. Is that green? Yup. But it can also improve the bottom line, which makes your properties more valuable. Now, as Ellen Sinreich (one of the go-to people in the biz) says acceptance is not universal, but everyone knows it is the way the industry is going.So what would make the industry go green faster? Incentives....

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More JPM & Bear -- working too fast can hurt you

I pride myself in working efficiently so as not to run up client bills and to keep a deal moving. But I've had to teach myself over the years to slow down sometimes to try to avoid mistakes. We are all human, and now I often finish a task, let it sit overnight and then look at it again before sending something to the client just to be safe.Of course, when you are under the gun you cannot always do that. That came up for me Friday when a client leaving town for the holiday needed a full set of documents for a deal in pronto. I got it done and correctly, too.Now we're hearing there may have...

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So now Bear is at least almost worth its HQ building...

Dimon upped the bid on Bear Stearns to a billion dollars -- still a little less than the estimated value of its headquarters but a lot more than $250MM. Will it go higher? Maybe. The market thinks so right now since BSC is trading above $12.00. It probably won't go to book value but almost anything's better than $2 a shar...

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In this market. money talks and you know what walks....

Up until this credit crunch hit there were a lot of highly-levered deals going on out there, some better than others. Harry Macklowe can tell you all about them. And sellers were willing to tolerate them because the returns were so high.Now, of course, the cash buyers have the upper hand. Here's a great example. Unexciting office building, almost 30 years old, but in a great mid-Loop location (heard that before?) and with 94% occupancy, sells for $152/sf. Try to build that now. Even with any refurbishing you'll never get close to replacement value. And why did the deal happen? Cash, cash,...

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Why is an alternative work schedule all about minorities and women?

This piece in the LA Times is, in my opinion, so right and so wrong at the same time. We've been talking about the concerned law students group for a long time now, and the problems have been going on as long as I can remember.I agree that there are problems with minority and female associate retention and partnership promotion. But that is a systemic issue at all levels, not just those groups. It is not just female hamsters that are flung against the cage. People of all genders and colors go to BigLaw after leaving law school and most leave within a few years. That is the nature of the system...

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Bear's Manhattan space? Well, since you asked....

Jeff Brown wondered what would happen to Bear's dirt ion the wake of its collapse. Looks like we know what happens in Manhattan, and it's not a shocker. The Deal Junkie, citing Bloomberg, says that Bear's "best in the world" space will be occupied by JPMorgan Chase's investment bank. So, the IB guys win again. Go figure. And if tis deal goes down, what a great space for the mone...

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Everyone's selling REITs short

It looks like there is not much confidence in CRE, at least at the REIT level. David Bodamer (citing thestreet.com) tells us that investors are shorting REITs at near record numbers. So, even though REITs are way off their highs, the expectation is that the prices (both of property and stock) are going down even more.This could be a time to pick up the stocks (on which we made a nice profit) or it could be a sign of more decline to come. There's no guarantees in this market. It all depends on your take of the fundamentals. Sometimes there's too much emphasis on the fall and prices overcorrect....

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Yes, we have no associates...

This Canadian law firm has just shareholders and consultants. Like real estate agents, the consultants rent desk space and negotiate a percentage split of their fees with the firm.I actually love this concept and want to find out more. There are plenty of young and older practitioners who want a stable environment without the pressure of having to bill 2,000+ hours. Now partners will lose some of the leverage-making profits, but that does not bother me. It also eliminates much of the BS that you see with some firms. But this is pure eat what you kill -- almost Glengarry Glen Ross so -- and...

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Negative $1 billion?

That's what Kevin Kingston is telling us that Bear Stearns is actually worth when you take into account that its Manhattan HQ is probably worth about $1.2-1.3 billion alone. (But will it be still without an anchor tenant?)As I write, it looks like the Fed's intervention over the weekend has helped, what with the market down only ~30 points as I type. (That can of course change in a flash.)What does this mean for dirt? Well, the loss of thousands of jobs will mean more open space on the market, just what I feared previously, as JPMorgan Chase will just absorb the accounts. But it does not...

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This can't be right -- law school teaching you how to be a lawyer?

There's an old saying about law school that goes something like this: the first year they scare you to death, the second year they work you to death, and the third year they bore you to death.With all due respect to my professors, I found the third year utterly useless. I had classmates that did not attend one class the entire 3L year, and they did just fine. We were all worried about getting jobs in an awful economy.Now the Law Blog tells us that Washington & Lee Law School is replacing its entire 3L curriculum with practical things such as time-tracking, client interaction...things you...

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Wall Street woes and dirt

A few months ago I suggested that law firms lock in leases in busy markets such as New York because, even with the credit crunch, rents were still going up. I had one exception to that advice: big layoffs on Wall Street.And now that is being predicted by today's Journal. And the numbers are not the prettiest.It may be that the big boys hold on to some empty space if there is a bloodbath, under the expectation that they will need it again soon. But another likely scenario is that the firms, wanting to eat as little real estate cost as possible, might flood the market with cheap(er) sublease...

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Chicago says - stop, soak the sellers too!

It looks like the Chicago City Council may have the sellers pick up the burden of the big transfer tax increase that will take effect April 1. Much as I don't like to see the tax increase, sellers are often the ones paying the tax (or, as some called it, stripping the equity).What isn't 100% clear from the Tribune's story is whether the seller is only the $3.00/thousand increase or whether the parties will share the cost of the tax equally. The Sun-Times, however, did make it clear: it will be an unequal distribution. "Ald. Pat O’Connor (40th), sponsor of the ordinance, said he wanted to evenly...

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