Corporate Real Estate
The following post is an excerpt from the Summer 2012 issue of The Linneman Letter.
Every executive with whom we speak expresses utter confusion about the state of the global and U.S. economy and capital markets. As a result, they are in a muddle about their investment strategies. They closely monitor economic and capital market data for signs that “everything is all right,” yet even as the U.S. economy grows at a seemingly healthy rate, they remain extraordinarily ill at ease. Why?
Simply stated, this discomfort reflects the fact that even though U.S. real GDP and employment are growing at moderately healthy paces, we remain in totally uncharted waters in terms of both the economy and our capital markets. And when private decision makers are in unfamiliar (and unrecognizable) landscapes, they act very cautiously.
For example, we have not seen in our lifetime federal budget deficits as large as those which currently exist. Not only is U.S. federal spending as a percent of GDP at a peace-time high, but federal revenues as a percent of GDP are well below their historic norm, resulting in unprecedented budget deficits. Compounding the problem of unprecedented U.S. budget deficits is the fact that there is neither political leadership nor a political consensus on how to bring the federal budget back in balance. This is creating a situation in which the only clarity is that the current situation is not sustainable.
NAI Global, the world’s premier managed network of commercial real estate firms and one of the largest real estate services worldwide, announced today that it is expanding its coverage into Colorado’s Resort Market with the addition of Vail Commercial Advisors. The firm will now operate as NAI Mountain Commercial.
Founded in 2006 to fulfill the unmet need of providing dedicated commercial property solutions in the region, NAI Mountain Commercial is the only full-service commercial real estate firm from Summit to Pitkin County. The firm is the leading regional provider of acquisition, disposition, leasing, tenant representation, property management and asset management services. NAI Mountain Commercial provides services for all types of commercial real estate assets including office, retail, industrial, hospitality, multi-family and mixed-use properties and works with many of the region’s largest owners and investors of commercial real estate.
In his latest white paper, “Global Economic Round-Up”, NAI Global Chief Economist, Dr. Peter Linneman, evaluates the state of the global economy in Europe, Asia and the United States including the impact of the continuing European debt crisis, the rise of China and India and the current state of the U.S. economic recovery.
“The global economic recovery has been hindered by a massive game of Old Maid. Who will be forced to bear the losses generated during the downturn? Only when the losses are put behind us will the world be able to focus on creating new wealth,” said Dr. Linneman. “There is simply not enough European bank capital to cover the losses associated with Greece and any defaults by Spain, Portugal or Italy.”
C-III Capital Partners LLC (C-III) announced today that it has completed its previously announced acquisition of NAI Global, the largest and premier network of independent commercial real estate firms worldwide.
C-III is led by CEO Andrew L. Farkas, who founded and was Chairman and CEO of Insignia Financial Group, Inc. (NYSE:IFS).
“The completion of this transaction represents a significant step forward in our strategy to build a fully diversified commercial real estate services company,” said Mr. Farkas. “With the NAI Global acquisition, we are gaining the world’s leading commercial real estate network and a tremendous foundation for future growth. As we begin a new year, we look forward to partnering with the NAI team to provide enhanced services to the commercial and institutional real estate markets they serve as well as continuing to take advantage of other opportunities to grow and expand our platform.”
“We are thrilled to be joining forces with C-III and excited about the opportunity to deliver an even broader range of services to our members and add greater value to our collective corporate and investment clients. We look forward to tapping into their great resources and expertise to help C-III clients strategically optimize their commercial real estate assets,” said Jeffrey M. Finn, President and CEO of NAI Global.
NAI Global will continue to operate as a separate company under its current management. NAI manages a network of commercial real estate firms comprising 5,000 professionals and 350 offices in the US and 55 countries throughout the world. NAI’s network members provide a full spectrum of corporate, financial, technology and project management services.
C-III commenced operations with the purchase of Centerline Capital Group’s institutional real estate debt fund management and commercial mortgage loan servicing businesses in March 2010. Since that time, C-III has successfully launched mortgage origination, investment sales and title insurance businesses, and expanded its principal investment, loan origination, fund management and primary and special loan servicing businesses, including acquiring the special servicing and CDO management businesses of JER Partners in August 2011. In November 2011, C-III acquired two affiliated multifamily property management businesses – U.S. Residential Group and Pacific West Management – which now operate on a combined basis under the U.S. Residential Group name.
Financial terms of the NAI Global acquisition were not disclosed.
About C-III Capital Partners
C-III Capital Partners LLC is a leading commercial real estate services company engaged in a broad range of activities, including primary and special loan servicing, loan origination, fund management, CDO management, principal investment, title services and multifamily property management. Our principal place of business is located in Irving, TX, and we have additional offices in New York, NY, Greenville, SC, McLean, VA, Chicago, IL, Dallas, TX and Nashville, TN.
About NAI Global
NAI Global (www.naiglobal.com) is the largest network of independent commercial real estate firms worldwide, comprised of over 5,000 professionals in 55 countries in more than 350 offices. NAI advisors work in tandem with our global management team to ensure our clients strategically optimize their real estate assets. NAI offices complete over $45 billion in combined transactions annually and manage 300+ million square feet of commercial space.
The number of occupants and the space required per occupant are the key determinates to total cost of occupancy. Consider that the occupancy costs are the multiplication of the rental rate per square foot plus the operating costs per square foot times the number of people and the space that each person occupies. There are factors that add to the total space consumption including lost space from hallways, bathrooms, elevator cores, storage areas, atriums and reception areas. This is often called the building loss factor and is an efficiency measure of the building. To these losses also add the space required for cafeterias, special computer and server rooms and conference, training areas and other special spaces. More >