Apparently another 96 lawyers are being let go at Cadwalader today, meaning the total loss count this year is, if I can count, in excess of 130 people.CWT is well known as one the major, major players in the CMBS market. I've worked with all three of their US offices (NY, DC and Charlotte), usually on the same deal. For whatever reason, CWT had this thing about running deals from multiple offices when I was borrower's counsel.While I found the CWT people professional and thorough almost to a fault, my clients were sometimes unhappy, especially when the lender's counsel's bill (which the borrower...
Finding money in vacant space
When times are tougher it pays to be a little creative. And since I've been working on some sign leasing lately I found this story interesting.In short? Outdoor ad companies are paying retail landlords money to use the vacant storefronts for advertising. From what I gather it is sort of like the ads you see wrapping buses. The ads can look pretty creative. Some even include motion sensors that trigger the projection of images as you walk by.If you are a landlord you still have to be careful about these types of deals. The tenant has to get all the necessary permits, perhaps within a given...
Bye-bye, Bennigans
No more Monte Cristo sandwiches for me, I guess. Here's another retailer biting the dust, this time in the food category. According to this report, Bennigan's, once a favorite chain of mine, has closed all its corporate-owned outlets, and along with the Steak & Ale brand, is looking to Chapter 7 to liquidate. The franchised outlets are still in business.In Chicago, this means two prominent sites on Michigan Avenue are dark today, at 150 S. and 225 N. I've been to both, and IIRC, the South Michigan facility was the busiest in the whole chain (AND...it's supposedly where Michael Jordan...
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retail
Best Buy - my new source for drum equipment?
You probably don't know this about me, but I also dabble as a percussionist, my primary instrument being the timpani (yes, the big kettle shaped drums in the back). And my father was a professional musician, so I've been playing music since I was, oh, three or four?Anyway, the announcement that Best Buy would start devoting a 2500 sf portion of its stores to selling music equipment caught my eye, mainly because they are selling real product. Yeah, you can get a few things at Wal-Mart, but not Fenders, Gibsons and Rolands.I like this idea. First of all, Best Buy can become my source for equipment...
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retail
Let the bad times roll?
This is the title of an emailed article I received from Private Equity Real Estate magazine. Sorry, no link to the actual piece.The gist of the story? We've been talking about distressed property and reading about distressed property and theorizing about distressed property, but there's been no chance to actually do anything about distressed property.The PERE folks think that's about to change, as companies with assets are in trouble and soon will really need to sell. And the people who've had cash on the sidelines for what seems to be forever appear to be saying, "It's about time."A telling...
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private equity
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trends
Dealing with the media
Larry Bodine is absolutely right: blogging can bring media attention. According to the Meyers-Briggs type people, I have a personality that is almost completely opposite of that of most lawyers. Yes, I like my books and my work and sometimes even being in the office on an obvious golf day, but I also really like interacting with people. So when the media calls I try to be helpful with ideas, theories, concepts and even non-confidential examples of my work.What I CAN'T do is break client confidences, disclose certain information regarding deals or dig dirt. It isn't ethical. So I tend not...
Mid-Week Tidbits
Things have been crazy, so I've been remiss in not posting daily. I'll try to improve that. A few items from other blogs caught my eye this morning.One is the passage of a green building code in California, voluntary until 2010 and mandatory thereafter. My take? The private sector is usually, in my opinion, the better way to go about making changes in how things are done. But then, California was the leader in the anti-smoking movement and I'm not sure those bans would ever have come into place without government intervention. We'll see whether this is a folly or a harbinger of things to...
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California
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green buildings
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leases
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retail
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trends
Real Estate Rudy?
Previously I lambasted Eliot Spitzer for wanting to start a vulture fund. Now, it's Rudy Giuliani's turn.Am I going to bash Rudy? No. why not? Well, he's not a disgraced ex-governor, he's not Client #9, he's a decent guy from what I can tell, he was brilliant after 9/11 and, last but not least, he appears to be doing this right.This is party of his diversification plan. And that's smart. He also has a VERY experienced partner in Berman Partners. Finally, by setting a high initial investment but a low threshold for his first fund, he's going to invest in smart plays and also have a limited...
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new york
What is $190 million among friends? A LOT of money!
That is how much Crain's estimates that Teng & Associates has plunked into the Waterview Tower/Shangi-La Hotel development on Wacker Drive. Other than a $20 million bridge loan from LaSalle Bank, that's apparently all cash we're talking here.Neither I nor Crain's has seen any much activity there in weeks, and the trade reports that there are at least nine mechanic's liens that have been filed. (That is an UGLY statute in Illinois to deal with, by the way.) Often that's a sign of major league trouble. But the lender insists that the loan will be done and construction will then proceed....
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Chicago
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development
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lenders
The audacity of excellence?
I got a kick out of this story on lawyer frustration and how to strive to be "above average." Apparently, lawyers are part of an "unintended byproduct of a profession that confines its lawyers to prisons of bureaucracy, internal politics, dysfunctional interpersonal relationships, inefficient systems and ineffective leadership. It is heartbreaking to see people who expect so much from themselves and others toiling in environments that perpetuate underachievement."I'm lucky. Even when I was in a big firm I didn't have too much of that, and now I am free to be as good as I want to be. David...
What a difference 37 years makes...Bolingbrook, Illinois
I moved to Bolingbrook, Illinois in April, 1971. I was 5. I consider it my hometown, and we still own property in town, right down the street from my old neighbor, Mayor Roger Claar.When I was a kid, we didn't really want to admit we lived in Bolingbrook. It had a cheap tract home reputation and everyone thought it was in the middle of nowhere. And I suppose it was. And it was also known for the world's first indoor amusement park and shopping mall, Old Chicago. The concept in its execution was ill-conceived, but in theory it was a great idea, and you now see larger, grander versions of...
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bolingbrook
One last thought for the day - specialty lenders
I ave not seen many stories about non-traditional lending sources. No, I'm not talking about Guido the Killer Pimp. Specialty lenders have their legitimate place in the market, either as lenders, mezz lenders, equity participants or combinations of the above. And guess what -- they are thriving in this credit market. I know -- you're shocked at this revelation.But like Guido, be prepared to pay for the money and the speed in which a deal can get done. Everything comes at a price, and it isn't cheap. But if it beats the alternative....Courtesy of Deal Junki...
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lenders
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loans
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mezzanine loans
Wal-Mart Bombs? No, not really.
Thanks to Counter Culture for pointing out this cool video on Wal-Mart's expansion. It reminds me of the movie War Games. Global thermonuclear war, anyone? Or how about a nice game of ches...
And here go retail vacancy rates
This is before Steve & Barry's, but Crain's reports a hefty jump in vacancy rates in the second quarter. This is not developers bringing space on line, either. Some of the projects I wrote about last year are delayed or dead. Rather some retailers are retrenching and others, as we know, are liquidating.Is it all bad news? No. Some of it was expected. Kane County and many of the suburban submarkets were expected to rise, because retail is perhaps ahead of the rooftops. And some "bad" news is just a sensible slowdown. Walgreens, for instance, is "only" planning to open 365 stores next...
Things are tough all over, eh...so what do you do?
I know and hear that people with money are buying where prudent. This is notwithstanding more recession fears, Fannie and Freddie, huge numbers of retail store closings (including a Steve & Barry's BK and probable liquidation), record gas prices, war...good grief, is anything going well? And Anheuser Busch is going to be owned by WHO???(Speaking of ICSC and retail BKs, here's a nifty little summary of the BK process after reform, which some say is just in time for landlords and other say leads to liquidations because of a lack of time to decide which leases to reject and keep.)As we have...
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trends
It's been a long and busy week
But I could not let Saturday morning go by without giving props to Jeff Brown, the Bawld Guy. Yes, we've been reading about banks being taken over and Fannie and Freddie in trouble. It's enough to scare you and me and many people, eh?Jeff will help bring you back to earth with two posts here and here. The moral of the story? We're in the last act of a movie we've seen before, one where the country is going to hell in a handbasket. But guess what? The crisis ends and we start casting for the next gloom and doom movie. It's just been a while between showings.In short, what is going on is...
But then again...
Reports are that REIT prices are declining again:According to the Wall Street Journal, real-estate investment trusts (REITs) saw a Q2 2008 that was basically opposite the first. The WSJ says the Dow Jones Equity All REIT Total Return index was down 4.9% in the second quarter. In Q1 of ‘08, it was up 1.4%.I guess I am not surprised. The market on the whole has tanked lately. And also remember that REITs can be more volatile than stocks, especially the Dow or the S&P. They go diddley up-up, they go down diddley down-down. And let's not forget that the Dow in this case actually declined...
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REIT
All in all, it's still about the dirt
Here's a story about pension and endowment and other institutional investors looking toward so-called "next generation" investments. In short, Investors already experienced with the traditional alternatives — private equity, real estate and hedge funds — are now open to newer alternatives such as real assets, infrastructure and 130/30 strategies, said John Garibaldi, managing director, heading the alternative strategies group at JPMorgan Asset Management, New York.Yeah, let's take advantage of market disconnects and make lots of money. Sound like something you've heard before?In short, what...
Is Orland Park blowing its new downtown? The Main Street Triangle may just be a sliver
I think they might be. Reports are that the village has decided to put off any bids for a new developer to take on the $100 million project until the fall. Why, why, why?Related Midwest, based in Chicago, had been chosen approximately three years ago by the village to develop the triangle, but pulled out of the project in April, [village development services director Karie Friling] says. The village had a request for proposals, which was initially due in May and then pushed back until last month. “We had suspended it before we received any bids,” she says. The village halted the request because...
Not just law firms are consolidating. Will the average guy be squeezed out of the market again?
First we had Staubach and JLL. Now the rumors are GVA and Colliers joining forces. I understand the whole concept of one stop shopping, but I think this can go too far. Are real estate pros going to end up like accounting firms, where you have a couple of large firms and a bunch of small ones? It sure seems that way. What worries me is the little guy being squeezed out of effective representation in the marketplace. It is already happening in the legal profession and it could happen in others as well.It may even happen in the medical profession, so be afraid. For instance:The Associated...
Another retail chain in trouble? A line on Steve & Barry's and some thoughts on defensive leasing
Boy, they weren't kidding about retail woes. Now I am reading that Steve & Barry's, a cheap chic chain, is talking to Weil Gotschal and thinking about closing 1/3 of its stores as it decides on its future. I found the comment about defensive leasing from a Greenberg Traurig lawyer interesting. From a landlord's perspective I guess that means (for instance) watching out in a down market for big TI allowances and shelling out major money on a lease that could go south. Boy, have I seen that. Defensive leasing also exists for tenants in an up market; this is a term I am more familiar with....
I've heard about real estate developments being a bomb, but this is ridiculous
CNN is reporting about a subdivision in Orlando that apparently contains, oh, live bombs.Yes, you read that right.I don't know what the law is in Florida, but I can't see anything that would actually cover this on a disclosure report in Illinois. Maybe that's because no one in their right mind ever thought someone would build on a, um...bomb range. I've heard about unexploded ordinance in the UK many times, but here? Not so much.Interestingly,Nearly two decades ago, the 1989 development order, in which the county granted the permission to develop the land, shows that builders and developers...
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law
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title insurance
Meanwhile, back in retail...and law law land....
I was sad to see that Whitehall Jewelers is calling it a day. But I guess it might have been inevitable. The family of a college classmate used to own Whitehall so I always cheered it on. On another front, you can see the latest Marcus & Millichap report on the retail market here thanks to the Sibdu Blog. Ready for it? Holding your breath? "The retail commercial real estate market is softening … amid a slumping economy, the prolonged housing downturn … and, you guessed it … the credit crunch."Sorry, no big surprise like the Chicago office numbers yesterday. Asset sales, like most other...
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retail
1031s -- down but not out and possibly set for a boom
If the capital gains tax goes up -- a possibility under McCain and a virtual certainly under Obama -- the 1031 market is going to go through the roof as people will try to defer their capital gains.While in some sectors 1031s are still very popular, I don't see many of them in my practice -- maybe two a year these days. I expect that number to rise, and I am starting to bone up on current events in the field and various rulings and nuances of the law to make sure I am ready for that boom.If you too are interested in thinking about 1031s, one website I stumbled across was this blog from the 1031...