Archive for February, 2012

Stage Center Takes Center Stage

Tuesday, February 28th, 2012
A new story in national architecture magazine Architectural Record focuses much-needed attention on the Stage Center in downtown Oklahoma City.
Here is a snippet from the story:
In Oklahoma City, John Johansen’s 1970 Mummers Theater has long been one of those love-it-or-hate-it buildings. Now called the Stage Center, the structure is a whimsical assemblage of brutalist concrete forms and brightly colored steel ramps. Hovering above it all are three corrugated metal boxes containing the building’s mechanical systems. A member of the Harvard Five, Johansen, now 95, called the theater “not a building as we have known it, but a fragment,” and claimed it was inspired by the complex beauty of electronic circuit boards. In 1971, Time magazine critic Robert Hughes praised it as “an exquisitely human building in its scale, organization, and intriguing unpredictabilities.”
But the future of Johansen’s controversial masterpiece is uncertain.
Click here to see the rest of the story.

Walmart Stars in Downtown L.A.

Saturday, February 25th, 2012
Hollywood may be the home of the esteemed Oscars, but downtown Los Angeles is where the real drama reigns these days, thanks to – wait for it – Walmart.
The world’s largest retailer has signed a lease to open its first store of any kind in downtown Los Angeles, and its first grocery in all of Los Angeles County. Walmart will roll out the red carpet for its Neighborhood Market concept in the 33,000-square-foot ground floor space of a 320-unit senior housing complex, located just north of the Santa Ana Freeway on the edge of Chinatown.
Walmart is penetrating more urban markets through its smaller, grocery concept. It is also taking space in already entitled retail spaces, thereby avoiding much of the neighborhood opposition that has marked its entry into other large markets, including Chicago.
And Walmart is not the only leading light in its quest to take on downtown L.A.  Target is opening a new City Target, the suburban retailer’s own urban concept, in the heart of downtown L.A. in October.
An opening date for the new Neighborhood Market has not been set, according to spokesman Steve Restivo. Walmart operates 167 Neighborhood Markets across the United States, and opened its first Neighborhood Market in Chicago just last year.
Last week, Walmart reported consolidated net sales for the fourth quarter of 2011 of $122.3 billion, an increase of 5.8% from last year.  For all of 2011, Walmart’s net sales increased 5.9% to $443.9 billion.

In the News (Feb. 20-24)

Saturday, February 25th, 2012
Our new feature gives you links to some of the biggest, more interesting and sometimes offbeat stories that are trending in the world of commercial real estate over the past week:

Grubb & Ellis Files Chapter 11, Sells to BGC

Monday, February 20th, 2012
One of the largest brokerage firms in the U.S. has finally found its future footing, selling itself to the same firm that owns global brokerage Newmark Knight Frank.
To accomplish this feat, however, Grubb & Ellis has filed for Chapter 11 bankruptcy and will be provided with debtor-in-possession financing by BGC Partners until emerging after a “363” sale process.
Here is the official press release from the company:
Grubb & Ellis Enters Into Strategic Transaction With BGC Partners
SANTA ANA, Calif., Feb. 20, 2012 /PRNewswire/ — Grubb & Ellis Company (OTC: GRBE) today announced that it has signed an agreement to sell substantially all its assets to BGC Partners, Inc. (NASDAQ: BGCP) ("BGC"), a leading global intermediary to the wholesale financial markets. BGC owns Newmark Knight Frank, one of the largest commercial real estate service firms in the U.S.
Upon completion, Grubb & Ellis believes the acquisition by BGC will bring the much-needed scale and resources the company had been seeking through its strategic process. The partnership with BGC, a financially strong and respected organization with a deep commitment to the commercial real estate markets, will position Grubb & Ellis to become part of a well-capitalized global platform.
"Following a thorough and rigorous process and the evaluation of all available options, we determined that a partnership with BGC provides the best platform for our brokerage professionals, employees and clients," said Thomas P. D’Arcy, president and chief executive officer of Grubb & Ellis. "We believe the transaction will be seamless for our clients and we expect no disruption to the company’s operations. Furthermore, we believe our professionals and clients will benefit greatly by being part of the BGC organization, which, with its recent acquisition of Newmark Knight Frank, will bring together two strong brands to create a powerhouse in the commercial real estate space. BGC’s purchase of the company’s senior debt and its willingness to provide incremental financing to ensure the smooth execution of the sale process demonstrate its commitment to the success of the Grubb & Ellis business."
Grubb & Ellis intends to implement the transaction as an asset sale under Section 363 of the U.S. Bankruptcy Code. To that end, the company has commenced Chapter 11 proceedings in the U.S. Bankruptcy Court for the Southern District of New York. Grubb & Ellis expects business to continue without disruption as it completes the "363" sale process as expeditiously as possible. The company has simultaneously filed motions requesting that the Court, among other things, approve sale procedures and fix a hearing date and time to approve a sale. Additionally, the company has filed a series of motions to facilitate ongoing operations.
D’Arcy continued, "We thank our outstanding team of professionals and our clients for the faith and loyalty they have shown in Grubb & Ellis through this process, and we are pleased to have found such a strong partner who can provide our company with financial stability and deeply enhanced opportunities. Our track record for exceptional client service will continue, and we look forward to future growth and success under new ownership."
BGC has committed to provide Grubb & Ellis with "debtor-in-possession" ("DIP") financing to support the company’s operations throughout the "363" sale process. Following Court approval, the DIP financing, combined with funds generated by the company’s ongoing operations, will be used to support the business through the consummation of the sale.
Information can be found on the Investor Relations pages of the company’s website,, or for court documents and related updates, at
About Grubb & Ellis
Grubb & Ellis Company is one of the nation’s largest commercial real estate services firms, providing transaction services, property management, facilities management and valuation services through more than 100 company-owned and affiliate offices. Our more than 3,000 professionals draw from a unique platform of services and practice groups to deliver integrated solutions to real estate owners, tenants and investors, and each business is supported by highly regarded proprietary market research, best-in-class processes and extensive local expertise. In 2011, Grubb & Ellis completed approximately 12,000 sale and lease transactions and the company and its affiliates currently manage more than 250 million square feet of property. For more information, visit

Economic Update: 3 Themes, 3 Worries

Monday, February 20th, 2012
If you believe Richard Hoey, Chief Economist at BNY Mellon and The Dreyfus Corporation, then we are in for a “global growth recession” in 2012.
According to Hoey, a closely watched economist in the U.S., the global economy will be marked by three major themes and three risk concerns.
The three main themes are (1) global growth recession, (2) lower inflation for now and (3) monetary ease.
The three main risk concerns are (1) the European financial stresses, (2) the Chinese property market and (3) the Middle East risks, with oil supply vulnerabilities as the main concern.
“We expect a global growth recession in 2012, rather than either a strong global expansion or a full-scale global recession,” says Hoey. “We expect global real GDP growth of about 3% in 2012, down from about 3.7% in 2011 and about 5% in 2010.”
Hoey also notes that a severe recession is likely throughout 2012 in the Southern Eurozone, a moderate recession in early 2012 in the Northern Eurozone and the U.K., a somewhat slower pace of expansion in most emerging countries, and U.S. economic growth near its long-term trend of about 2.5%.
BNY Mellon is a New-York-based investment management and investment services company, with $25.8 trillion in assets under custody or administration and $1.26 trillion under management.
See more of what Hoey thinks here.

In the News (Feb. 13-18)

Sunday, February 19th, 2012
Our new feature gives you links to some of the biggest, more interesting and sometimes offbeat stories that are trending in the world of commercial real estate over the past week:

Valentine’s Day Spending Reaching $17.6 Billion

Sunday, February 12th, 2012
Consumers seem willing to go against the age-old adage that “money can’t buy you love” this Valentine’s Day season.
According to the National Retail Federation’s new 2012 Valentine’s Day Consumer Intentions and Actions survey, the average person celebrating the holiday will spend $126.03, up 8.5% over last year’s $116.21 and the highest in the survey’s 10-year history. Total spending is expected to reach $17.6 billion.
And more consumers will be happily tapping their electronic tablets to make their purchases online.
“As one of the biggest gift-giving holidays of the year, it’s encouraging that consumers are still exhibiting the desire to spend on discretionary gift items, a strong indication our economy continues to move in the right direction,” said NRF President and CEO Matthew Shay.
The NRF 2012 Valentine’s Day survey was conducted by BIGinsight, and polled 9,317 consumers from January 4-11, 2012. The consumer poll has a margin of error of plus or minus 1.0%.
Couples, Men to Spend the Most; Jewelry, Gift Cards Top Gift Ideas
Consumers’ “better halves” will shell out the most on their partners, with the average person planning to spend $74.12 on their spouse or significant other, up from $68.98 last year. Additionally, consumers will spend and average of $25.25 on their children, parents or other family members and $6.92 on friends. Valentine’s Day is a great day for pet owners to show their furry friends just how much they mean: the average person will spend about $4.52 on their pets.
The survey also found the average male is expected to spend $168.74 on clothing, jewelry, greeting cards and more this year – nearly twice as much as women who are expected to spend an average of $85.76.
In addition to traditional gift ideas, those celebrating the holiday will also put some serious thought into the perfect gift. Nearly 19% of celebrants will buy jewelry, up from 17.3% last year and the highest percent in the survey’s history. Some will give the gift of choice: 13.3% will buy gift cards, up from 12.6% last year. Additionally, half of all celebrants (50.5%) will buy candy, 36.0 will buy flowers and 35.6% will treat someone to a nice evening out.
Total spending on jewelry is expected to reach $4.1 billion, up from $3.5 billion last year. Second to jewelry, those with a case of the love bug will spend more than $3.5 billion on a special evening out. Consumers will also spend $1.8 billion on flowers, $1.5 billion on candy, $1.4 billion on clothing and $1.1 billion on gift cards.
“Celebrated by children who give Valentines to their teachers and classmates, family members who make sure to send greeting cards across the miles and couples who wish to show their appreciation for each other, Valentine’s Day means more than what’s simply on the surface,” said Pam Goodfellow, Consumer Insights Director at BIGinsight. “This year we could very well see some consumers searching high and low and stopping at nothing to make sure their loved ones receive the perfect gift.” 
Though discount stores are expected to see the most traffic (37.0%), one-third of shoppers (33.6%) will head to department stores, up from 30.5% last year. Online retailers will also see a nice boost from the business of love – nearly one out of five (19.3%) will shop online for gifts this Valentine’s Day, up from 18.1% last year. Others will shop at specialty stores (20.2%), floral shop (17.8%), jewelry stores (10.6%) and specialty clothing stores (6.6%).
More than Half of Tablet Owners to Use Device to Buy Valentine’s Day Gifts
After honing their mobile and tablet shopping skills this past holiday season, Valentine’s Day celebrants are looking to hit their smartphones and tablets once again to research and purchase gifts. According to the survey, more than half of all tablet owners (53.8%) will use their device to research products, compare prices, redeem coupons, look up retailer information or purchase products. Four in 10 (40.4%) smartphone owners will use their mobile device to do the same.

In the News (Feb. 6-10)

Saturday, February 11th, 2012
Our new feature gives you links to some of the biggest, more interesting and sometimes offbeat stories that are trending in the world of commercial real estate over the past week:

Real Estate Returns 2% for Institutions

Sunday, February 5th, 2012
U.S. institutional plan sponsors eked out small gains in Q4 2011, according to a new study by Northern Trust.
Among asset classes, real estate gained 2%, while private equity was down 1.6% and hedge funds were down 0.4% for the three months ending December 31.
Overall, institutional investment plan sponsors saw a median gain of 4.5%, led by a surge in U.S equities creating a positive ending to a mixed year for most plans. U.S equities were the primary driver of performance, with the median U.S. equity program in the Northern Trust Universe gaining almost 12% in the fourth quarter. International equity programs gained almost 4% in the fourth quarter, while fixed income programs were up 2%.
The Northern Trust Universe represents the performance of about 300 large institutional investment plans, with a combined asset value of approximately $689 billion, which subscribe to Northern Trust performance measurement services.
Corporate pensions led in the fourth quarter with median returns of 5.6%, as public funds gained 5.4% and foundations & endowments advanced 4.2% at the median.
For the entire year of 2011, institutional investors eked out a gain overall, with a median return of 0.8% for all plans in the Northern Trust Universe. The results differed by segment, however. Corporate ERISA pension plans gained 2.3% at the median while the other two segments were practically flat, with the median public fund up by 0.9% and the median plan in the foundations & endowments segment down by 0.6% for the 12 months ending December 31, 2011.
“Global market volatility contributed to an up-and-down year for institutional plan sponsors in 2011, with two quarters of moderate gains followed by a nearly 10% drop in the third quarter and a sharp recovery at year-end,” said William Frieske, senior performance consultant, Northern Trust Investment Risk & Analytical Services. “Last quarter’s positive results were in line with historical trends in the Northern Trust Universe, with fourth quarter median returns typically being the highest in the calendar year.”
Asset allocation again played a key role in relatively wide range of one-year performance figures. Corporate pension plans had the largest allocation (nearly 35% at the median) to fixed income in the third quarter, buffering losses, and also the largest allocation to U.S. equity (nearly 37% at the median), which contributed to gains in the fourth quarter. Public Funds performance suffered from a larger allocation to International Equities (16%) while Foundations & Endowments’ larger allocation to hedge funds (7%) was a drag on performance.
Northern Trust Corp. (Nasdaq: NTRS) is a leading provider of investment management, asset and fund administration, banking solutions and fiduciary services for corporations, institutions and affluent individuals worldwide. Northern Trust, a financial holding company based in Chicago, has offices in 18 U.S. states and 16 international locations in North America, Europe, the Middle East and the Asia-Pacific region. As of December 31, 2011, Northern Trust had assets under custody of US$4.3 trillion, and assets under investment management of $662.9 billion.