Shopping Centers Today is the news magazine of the International Council of Shopping Centers (ICSC)
Issue link: https://sct.epubxp.com/i/58695
THE BOTTOM LINE A derivatives deal BGC Partners' acquisition of Grubb & Ellis is the latest step in a plan to create a derivatives market for commercial real estate. BGC, which specializes in trading derivatives, also bought Newmark Knight Frank last April. BGC Chairman and CEO Howard Lutnick wants to develop a market in property derivatives pegged to rents as a means for landlords and tenants to hedge against market volatility. "Property derivatives are a 'when,' not an 'if,' market," Lutnick said on a conference call following the Newmark deal. "We are going to build a better type of property- derivatives business that is more custom-fit to the client." One-year total returns 10 15 20% -5 0 5 -10 -15 Feb '11 Apr Jun Aug Oct Same-store NOI 4% -1 0 1 2 3 -2 -3 -4 4Q '08 2Q '09 4Q '09 2Q '10 4Q '10 2Q '11 4Q '11 Retail All REITs Dec Feb '12 Retail All REITs Retail mortgages on the rise U.S. commercial-mortgage originations are projected to hit $230 billion this year, up 17 percent from last year, and they will probably reach $290 billion by 2015, ac- cording to The Mortgage Bankers Association. Commer- cial-mortgage debt outstanding is expected to grow this year too, to upwards of $2.4 trillion, 2 percent more than last year. By the end of 2015, mortgage debt out- standing will probably exceed $2.5 trillion, the trade group says. Life insurance companies and government- sponsored entities will be the most active lenders, the group predicts. Deal Barometer WHO IS PAYING HOW MUCH FOR WHAT SOURCE: SNL FINANCIAL $5.25 million The Atlanta-based Shopping Center Group sold the 29,800-square-foot shop portion of Loggins Corners, a 108,630-square- foot shopping center in Jefferson, Ga., to a private investor $11.6 million Phillips Edison– ARC Shopping Center REIT bought two centers in North Carolina: the 66,890-square-foot Westin Centre, in Fayetteville, and the 62,380-square- foot Tramway Crossing, in Sanford 62 SCT / APRIL 2012 $15.4 million Katz Properties, of New York City, bought the 80,000-square- foot Super Stop & Shop Plaza, in Stoughton, Mass., from an undis- closed seller $29.4 million Kite Realty Group Trust sold the 106,063-square- foot Gateway Shopping Center, in Marysville, Wash., to Capital Pacific $66 million Rouse Properties bought the 589,000-square- foot Grand Traverse (Mich.) Mall out of receivership $73.4 million Inland Real Estate Corp. bought the 474,000-square- foot Westgate Shopping Center, in Fairview Park, Ohio, from an undis- closed seller Unfortunately for retail borrowers, the trend seems to be driven by lending to multifamily and industrial proper- ties. The association reports that in the fourth quarter of last year, when commercial-mortgage originations grew 13 percent from the year-ago quarter, loans on the industrial side grew by 43 percent, and those in the mul- tifamily sector increased by 31 percent. By comparison, on the retail side, loan originations in the fourth quarter fell 8 percent year on year, while originations for health care properties dropped 24 percent, office properties de- creased 29 percent, and hotels sank 44 percent. DEAL OF THE MONTH $113.25 million TIAA-CREF bought The Shops at Wisconsin Place, a 118,000-square- foot shopping center in Chevy Chase, Md., from New England Development