Knoxville News Sentinel, June 29, 2012 – It looks like Fred Langley got a deal when he bought the Kimberly-Clark building on Thursday.
According to a deed filed today, an LLC with ties to Langley paid $3,550,000 for the 12-story office building at the corner of Summit Hill Drive and Locust Street.
According to KGIS, Kimberly-Clark paid $6 million when it acquired the property in 1997.
The NAI Knoxville Multifamily Team of Steve Goldman, John Dempster and Roger Denny represented the seller in the listing and sale of the Evergreen Apartments, a thirty-unit, all-brick complex in Fountain City. The transaction closed on November 30, 2011, just 62 days from listing to closing. Several challenges were overcome in the process, including getting a new roof paid by the insurance company for the benefit of both buyer and seller. This took a true team effort by the buyer, seller and the agents involved. This brings to 357 the total number of units sold this year by the NAI Knoxville Multifamily Team.
Contributed by: Steve Goldman, CCIM & John Dempster, Brokers, NAI Knoxville
We thought you might be interested that on June 16, we closed on the sale of the Ashlandwood Apartments. This is a 79-unit complex very close to West Town Mall in west Knoxville. The buyer was the owner of the adjacent Briarcliff At West Hills Apartments. The sale included a short sale with a local bank and we acted as “facilitator agents” in the transaction.
This was a really tough deal to get done. And frankly, we are proud of getting through it successfully in 115 days from start to close. Here is a short case study on the transaction.
We learned Feb. 22 that the apartments were in foreclosure with an auction in three weeks. A commission agreement was worked out, which included permission to contact the lender regarding a possible short sale. We delivered a written offer on Feb. 25. It was a complicated deal due to the short sale negotiation, dealing with other secured property etc., but it ultimately led to a fully executed contract at $1,850,000 on 4/1/2011, including the necessary agreements with the lender. More >
By Roger Denny, NAI Knoxville
Recently in an interview, Robert White CEO of Real Capital Analytics stated investors are looking for higher yield on their investments. Presently money market funds and stock market returns are low, and since real estate offers a “hard asset” as a hedge against inflation investors are looking at core properties as a solution and low risk.
Core properties are defined as stabilized (high occupancy) Class A properties located in top tier markets with high intrinsic value. According to White investors see these assets as low risk and are paying top dollar for them with cap rates in the range of 5 1/2. Historic low interest rates on Treasuries allow investors to still have positive leverage says White. In 2010 75% of the deals tracked by Real Market Analytics were Core properties.
Here is the good news. White feels that investors have a threshold of pain for those prime assets and will look for the same type of assets in the smaller markets as prices push upward in the top tier markets. For right now those cap rates and investor demands are being seen mostly in the office sector but low cap rates are nudging investors toward high quality larger retail centers with a grocery or big box anchors trading in the mid 6 caps.
Mr. White also stated that “the loosening of the credit crunch and the revival of the CMBS market should also support investment in smaller cities.”
Washington Ridge, a 248-unit apartment complex on Washington Pike, has sold to C. J. Lombardo Company of New Jersey. The buyer was represented in the transaction by Steve Goldman, CCIM and John Dempster, apartment specialists with NAI Knoxville. The undisclosed seller was represented by Larry Ochab of Pinnacle Realty Management Company of Maitland, FL. The new owners will rename the property Spring Meadow.
Goldman says the twenty-year-old apartments are close to the Knoxville Center Mall and are consideredvery nice class B apartments. The units are spacious and many even have fireplaces. The complex is on a well-landscaped, 19 acre property. Lombardo also owns and manages over 3,000 apartment units and in 2008 acquired the 186-unit Deane Hill Apartments adjacent to Knoxville’s West Town Mall.
This is the second significant multifamily property sold by the NAI Knoxville team recently, having represented the seller of the 100-unit McKenzie Acres Apartments in Oak Ridge which sold in November.
NAI Knoxville brokers Brian Tapp and Trey Miller, along with David Devaney, of NAI Charter, have confirmed that “bank owned” Belle Island is under contract. A local Knoxville developer has big plans for the pedestrian friendly development. Belle Island was originally designed to be a one-of-a-kind “entertainment village” in Pigeon Forge, TN combining traditional Southern charm and hospitality with unique shopping, dining and entertainment experiences. [read more]
NAI Knoxville is pleased to announce that we have completed the sale of the Hotel St. Oliver (Kern Building) on Market Square which also houses Market Square Kitchen & Shono In City. The property was co-listed by Steve Goldman, CCIM of NAI Knoxville and Tim Duff of Coldwell Banker Commercial, and the project was financed through an SBA 504 loan through Skip Murry at ORNL Federal Credit Union. Some additional information about the sale is available on Josh Flory’s [blog].
If you are an occupier of commercial real estate it is a great time to lease space. We’re still getting calls from occupiers that only want to buy and won’t consider leasing. If that’s you’re attitude, good luck. Getting all of the stars to align for that perfect building at $0.25 on the dollar, in the perfect location, size and meets your functional requirements is extremely tough to near impossible.
Advantages of Leasing: Availability of Cash; Location; and last but not least Focus. Leasing allows the user to concentrate on his primary business without the distraction of managing real estate.
Also, if you own your real estate and need an infusion of cash, consider a sale-leaseback [read more].
CoStar reports that the first half of 2010 is looking increasingly attractive yet competitive for mulitfamily investors. [read article]
After notching gains totaling 19.4% in the 4th quarter 2009, and 1st quarter 2010, REITS faded by 3% during the 2nd quarter but still did better than equities as the DJIA slipped by 8% over the same period.
One bright spot, however, was apartment REITs which were up 7%, driven by homeowners who have lost homes to foreclosure turning to rentals and lack of financing for new product over the last two years limiting competition.
Source: The Property Report, by Nick Timiraos and A. D. Pruitt, Wall Street Journal., June 30, 2010.