Monday, September 28, 2009

Investors lining up for Stoneleigh Residences

Auction for bankrupt project set for Oct. 13; minimum bid is $4M

More than 30 prospective investors have expressed interest in bidding on the high-profile, half-built and abandoned Stoneleigh Residences condominium tower in Uptown, according to bankruptcy court documents.

Bids are due into AP-Prescott Stoneleigh Residences LP by Oct. 9, and the auction is scheduled for Oct. 13, the documents said.

Dallas-based Hayman Woods Maple Avenue LP has set the minimum bid at $4 million. The firm is led by partners Kyle Bass and Jonas Woods, who, until he left in April 2007, was president of Hillwood Capital and the driving force behind Victory Park.

“Honestly, we think the property is valued much higher than that,” said Clay Likover, managing director of the private real estate investment fund. “If someone outbids us, we can raise our bid, and we will.”
Court documents outlining the list of prospective bidders include such companies as Harwood International, Fairfield Residential, Lincoln Property Co., Fulton Anderson Realty Advisors, Gables Residential and Matthews Southwest.

“It’s about opportunity,” said Kristian Teleki, a senior vice president with Matthews Southwest. “It’s a very, very good location.”

On May 4, AP-Prescott Stoneleigh Residences LP was forced into Chapter 11 reorganization by five creditors, the largest of which was the general contractor, Turner Construction Co. It claimed the owner of the Stoneleigh, Prescott Realty Group, had not paid for about $4.7 million of work.

Turner Construction had filed a lien valued at more than $4.7 million against Stoneleigh Residences. Various North Texas subcontractors had filed at least $3.5 million in liens against Turner Construction for work completed at the Stoneleigh.

According to court documents, there is an estimated $24 million in secured debt against the property.

The Stoneleigh Residences at 2919 Maple Ave. is part of a renovation of the historic Stoneleigh Hotel, which has an estimated project cost of more than $70 million. The hotel and residences were supposed to be built concurrently, but the hotel opened last year before work really got under way on the 21-story condo tower. A 400-space parking garage on the site was finished first, followed by work on the tower.

But in the midst of a global financial crisis that appears to have peaked last fall, the developer’s credit sources dried up and, in April, Prescott stopped work after contractors reached the 10th floor of the building, Prescott representatives told the Dallas Business Journal in May.

The 1.56-acre site is valued at $5.2 million, according to the Dallas Central Appraisal District.

“When it’s finally time to build apartments again, this will be the first site to be developed,” Likover said, estimating that Prescott spent about $30 million on the half-built condo building. The 400-space parking garage alone cost an estimated $10 million, he said. “When the world comes back, which it eventually will, Uptown Dallas is the best apartment location in the city. And you’ve got a huge head start in the development time frame and in terms of costs.”

Likover said the work that Turner Construction already has completed could mean the difference between taking two years to purchase a site and build new, versus 14 months to finish the existing structure.

The value of the Stoneleigh depends on what individual developers want to do with the site, Teleki said.

“The existing construction, that can either be a liability or an asset,” he said. “If you’re going to do exactly what was planned, then you’re a little bit closer.”

Teleki wouldn’t comment on the coming auction or whether Matthews Southwest would bid on the site. But he did say the Stoneleigh is “one of many” distressed properties in which the developer has expressed an interest.

“As an asset, it, like others, is attractive,” he said.

Katherine Cromer Brock

Dallas CBD office vacancy nears 30%

Tenant demand for office and industrial space in North Texas will remain sluggish and rents will remain flat for the rest of this year and into 2010, according to preliminary third-quarter research by Cushman & Wakefield of Texas Inc.

Demand for office space dropped 43 percent through September when compared to 2008 levels. The market recorded 7.16 million square feet leased year-to-date, compared to 12.6 million square feet leased at this time last year.

The overall office vacancy rate stands at 21.9 percent, up from 20.7 percent in September 2008. The vacancy rate for the Dallas Central Business District is approaching 30%, jumping from 26.5 percent a year ago to its current 29.1 percent.

The downtown vacancy rate hasn't been this high since the third-quarter of 2005, when it hit 29.8 percent, Cushman's research shows.

Job creation is the key to turning around the high vacancy rate downtown and marketwide, said Matt Heidelbaugh, senior director in the Dallas office of Cushman & Wakefield.

"We need to start hiring again," Heidelbaugh said. "We need job growth, and we need a more stable economy. There are too many unknowns out there. We need stability so decisions will be made rather than delayed."

Complicating the situation is available sublease space, which now stands at 4.5 million square feet -- an increase of 9.5 percent since the third quarter of 2008.

Asking rental rates across classes reached $20.77 per square foot, up 2.2 percent over third-quarter 2008 levels. Rates saw a jump in the last quarter of 2008, with the delivery of new class A construction completions in the Preston Center, Turtle Creek/Uptown and Legacy/Frisco areas.

According to the Cushman & Wakefield report, landlords of class A product are quoting average rents of $26.29 per square foot, an increase of 3.9% over the same period last year.

Even though quoted rates are up, effective rates are actually falling when concessions such as free rent are factored in, Heidelbaugh said. He estimated that effective rents have fallen anywhere from $1 to $5 per square foot, depending on the submarket and quality of the building.

"The reality is, they have begun to decrease," Heidelbaugh said. "Rental rates are a lagging indicator. Landlords are being very aggressive."

Office projects under construction totaled 1.4 million square feet, with about a quarter of the total being speculative. Developers are building office projects in the Turtle Creek/Uptown, Far North Central Expressway and Legacy/Frisco submarkets.

On the industrial side, overall vacancy increased to 12.4 percent from 10.1 percent a year ago. The rise was attributed to construction completions, which totaled 7.6 million square feet through September 2009, a decrease of 47.5 percent over 2008.

Speculative projects accounted for 95.2 percent of the industrial total, adding 6.1 million square feet to the market. The glut of vacant industrial space has developers holding back: Just 1 million square feet remains under construction, compared to 10.6 million square feet under construction one year ago.

Bill Hethcock

Wednesday, September 23, 2009

The Commercial Real Estate World Is Definitely Going Green!!!

If the following projects can manage to go green. There has to be a way for the rest of us to do the same.

When it opened in 1931, the 102-story Empire State Building capped a decades-long race to build ever taller skyscrapers. Now, its owners hope to position it at the vanguard of a new trend: retrofitting old commercial buildings to lower their energy use.

The new lights, refurbished windows and other upgrades being installed in the building will save an estimated $4.4 million a year on utility bills and pay for themselves in three years. What's more, over the next 15 years, the changes will likely keep 105,000 metric tons of carbon dioxide out of the air, the same as the emissions from roughly 1,300 cars during the same time period.

The Empire State Building is one of the most prominent projects by commercial-building owners who are putting their capital toward green retrofits. In doing so, they're betting that such investments will keep their properties desirable in a tough market, help them attract the best tenants, and give them a competitive advantage should the government pass tougher building energy standards.

Commercial real estate accounts for nearly 20% of U.S. energy use, making the sector one of the biggest opportunities for curbing greenhouse-gas emissions. Even as new buildings are built green, the bigger potential lies in the tens of billions of square feet already built, environmentalists say.

But financing these retrofits has been a challenge. Multi-tenant buildings, where the benefits of energy savings would be split between landlords and tenants, are especially tough. Lack of capital due to the sour economy and falling real-estate values has compounded the problem.

The Empire State Building and a handful of other projects suggest some possible approaches companies can consider as cash becomes more available and new financing models emerge. "There's money to be made here that's being left on the table," says Anthony E. Malkin, president of Malkin Holdings, which supervises the Empire State Building on behalf of a syndicate of owners.

Other building owners both in the U.S. and abroad are taking on projects of their own. In June, the partnership that owns the Willis Tower (formerly the Sears Tower) announced that they would undertake a $350 million retrofit of Chicago's tallest building to reduce energy use by 80%.

In Frankfurt, Germany, Deutsche Bank AG is spending €200 million ($290 million) to update its headquarters, a twin-tower complex originally opened in 1984, with lighting improvements, triple-pane windows and several other energy- and water-saving measures. When the retrofit is complete in 2010, the complex is expected to cut its energy use and greenhouse-gas emissions by 50% or more.

Thomas Properties Group Inc. is in the process of certifying its entire 16 million-square-foot portfolio in the existing-building portion of the U.S. Green Building Council's Leadership in Energy and Environmental Design program, better known as LEED. To certify their existing properties with this standard, owners must operate and manage their buildings in a way that saves energy and water and lessens the impact on the environment.

In 1931, the Empire State Building crowned a decades-long race to build the world's tallest skyscraper. Now its owners are at the forefront of a different type of race -- a race towards energy efficiency. WSJ's Christina Jeng reports.

Among other projects, Thomas Properties has spent $46 million over the past four years to retrofit City National Plaza, a 2.5 million-square-foot twin-tower office built in 1972 in Los Angeles. The retrofits have reduced energy use per occupied square foot by 35%. Buildings rated by the LEED program have consistently had higher rents and occupancy rates, according to research by CoStar Group Inc., which tracks data on the commercial real-estate industry.

Still, the companies that have the capital to do such retrofits are the exception right now, says Roger Platt, senior vice president and counsel for the Real Estate Roundtable, a Washington, D.C., trade group for the commercial real-estate industry. "The hurdle rate is substantially higher than it was even a year ago, because of the fact that real-estate owners and investors need to preserve cash to deal with the recapitalization of real estate," he says.

At the Empire State Building, the owners paired the retrofit with a planned $500 million remodeling effort. Taking the whole building into account allowed project consultants to look for synergies among all the different building systems that contribute to energy use.

Modeling Change
Johnson Controls Inc., a Milwaukee-based company that won the contract to oversee energy improvements to the building, developed a computer model along with teams from the Rocky Mountain Institute, a Colorado-based think tank, and Quest Energy of Arizona to see how different combinations of more than 60 suggested improvements would reduce carbon emissions—and at what cost. In the end they recommended eight.

All told, only about $20 million was added to the budget for the energy-saving improvements, such as 6,500 gas-filled windows that let in the same amount of light as double-pane windows but retain heat better during the winter.

The proposed changes had another upside: They eliminated the need for $7 million of planned upgrades. For instance, the owners had originally planned to replace the building's chiller plant, the massive machines that air-condition the skyscraper. But the energy improvements reduced the amount of cooling the building needs enough that a much cheaper retrofit of the existing equipment proved sufficient.

So, the incremental cost of the green retrofit was only $13 million, an amount that could be paid back in three years once the building achieves its expected annual energy savings

Monday, September 21, 2009

CIC Looks to Pile Cash Into U.S. Real Estate


China's $300 billion sovereign-wealth fund is eyeing big investments in distressed U.S. real estate, according to people familiar with the matter. To finance some of the deals, China may rely on an old trading partner: the U.S. government.

In recent weeks, officials from China Investment Corp. have held talks with U.S. private-equity fund managers, including BlackRock Inc., Invesco Ltd. and Lone Star Funds, about potential investments in beaten-down property assets, namely mortgage securities backed by office buildings, hotels, strip malls and other commercial property. CIC also is considering buying ownership interests in buildings, according to the people with knowledge of the matter.

In addition, CIC is weighing investing through one of the U.S. government's bailout programs, the Treasury's Public-Private Investment Program, known as PPIP. The program is designed to rid banks of toxic mortgage securities by enticing investors to buy these assets with financing from the U.S. government.

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.Representatives for CIC, BlackRock, Invesco and Lone Star declined to comment.

The discussions come at a time when CIC, which had nearly $300 billion in assets at the end of last year, is moving to deploy its capital after a relatively idle 2008. Property markets world-wide have plunged since the credit-market crisis that started in mid-2007, creating opportunities for cash-rich buyers. In the U.S., commercial property values already have dropped 35% from the peak.

Last year, CIC deployed just $4.8 billion in global financial markets. This year it invested that much in a single month, CIC Chairman Lou Jiwei said last month. He said that if CIC's future returns are good enough, it might ask the government to let it invest more of China's foreign-exchange reserves, which now total $2.132 trillion.

Imaginechina/Associated Press

CIC Chairman Lou Jiwei is sitting on a $300 billion investment chest.
.It is unclear how much CIC intends to allocate to U.S. real estate. But in order to achieve any meaningful diversification in its portfolio, the fund would need to set aside between $4 billion and $10 billion to global property investments in the next year and a half, estimates Michael McCormack, an executive director at Z-Ben Advisors, a consulting firm in Shanghai. By 2014, he projects that CIC's U.S. property investments alone could amount to more than $20 billion.

The U.S. property market is appealing to the Chinese partly because of the financing being offered through the PPIP program.

Under the program, the Treasury will co-invest with funds that buy toxic mortgages that have been clogging banks' balance sheets. The U.S. government, through the Treasury and the Federal Reserve, also will make financing available to the ventures. In other words, CIC and the Treasury would be partners in borrowing money from the U.S. government to buy troubled mortgages.

.The Treasury, which plans to allocate as much as $30 billion to PPIP, has designated nine fund managers, including BlackRock and Invesco, to raise at least $500 million of private capital each by the end of September. The Treasury then will provide equity capital up to 100% of the private capital raised by the fund managers. The fund-raising efforts are off to a relatively slow start, as many investors remain wary of the red tape associated with investing in a government-sponsored program.

The possibility of a sovereign-wealth fund investing through PPIP was envisioned in the program's design. It limits investments by any single investor to no more than 9.9% of each PPIP fund. The cap was intended to assuage any concerns that any one investor, like China, could control too much, according to government officials. A Treasury spokeswoman declined to comment.

To be sure, CIC and other sovereign-wealth funds face some obstacles to investing in U.S. real estate. Economic distress has raised the ire on Capitol Hill, with some lawmakers pointing the finger at China. They claim that heavy purchases of U.S. government bonds by the Chinese helped inflate the credit bubble by keeping interest rates low.

Elected officials have for decades been concerned about foreign investment in U.S. real estate. In the early 1980s, Congress approved a tax on capital gains from foreign sales of U.S. property. That tax, however, didn't stop Japanese investors in the 1980s from investing about $77 billion in the U.S. property markets, buying such assets as Rockefeller Center in New York and the Pebble Beach golf course in California.

CIC is unlikely to replicate those investments. It has consistently taken minority stakes, often below 10%, in part to defuse political risk. CIC's "debut in the U.S. property market likely will be double arm's-length investments," meaning through U.S. fund managers, with a minority stake in the fund, as opposed to direct stakes in actual properties, Mr. McCormack said.

And the woes in the U.S. marketplace might work in the favor of foreign investors like CIC. U.S. real-estate executives are lobbying to amend tax law to encourage overseas capital to flow into U.S. real estate, thus helping prevent a further decline in commercial-property values.

"Simple reforms could be made that would help address the equity shortfall our markets need to recover," said Jeffrey Deboer, president of Real Estate Roundtable, a trade group that is spearheading the lobbying efforts.

CIC's foray into international markets, including its stakes in Blackstone Group LP and Morgan Stanley, has been marked with big losses, at least on paper. But it recently has signaled a willingness to reopen the purse, selecting both firms to help oversee new investments in hedge funds. Also this year, it bought stakes in China-focused alternative asset-management firm Citic Capital Holdings Ltd. and U.S. asset manager BlackRock and has been in discussions about allocating billions more to hedge funds.

It recently made an investment in Goodman Group, a real-estate trust in Australia, and bought a stake in Songbird Estates PLC, the majority shareholder of Canary Wharf Group, an owner and developer of office towers and retail stores in London.

In addition, CIC has committed about $800 million to a Morgan Stanley global property fund, which intends to raise more than $5 billion and invests in real estate world-wide, according to a person familiar with the matter. A Morgan Stanley spokeswoman declined to comment.

—Deborah Solomon contributed to this article.

Friday, September 18, 2009

Real estate experts: Tenants in charge

Office and industrial tenants are clearly in the driver's seat across North Texas and will continue to be throughout 2010, a panel of commercial real estate experts said Thursday at an event hosted by Jones Lang LaSalle.

Effective office rental rates are down 12 percent in the past year and industrial lease rates have dropped 25 percent as a large supply of both product types and the economic turmoil take a toll on Dallas-Fort Worth, the commercial real estate firm's top executives said.

"What that means for landlords is, don't miss a deal," said Jim Yoder, managing director of office leasing for JLL. "If you're an owner of a building, you need to make your deal today."

Yoder expects office vacancy rates across Dallas-Fort Worth, now at about 17 percent, to peak in mid 2010.

Steve Thelen, managing director of tenant representation, said more office tenants are renewing their leases instead of relocating their offices, and concessions by landlords have increased. It will be at least three years before new office development begins again, he said.

"We might not see office cranes until 2012 or 2013," he said.

Jack Crews, JLL's managing director of investment sales, projected it will be five to seven years before development starts again in North Texas. However, the now-stalled market for buying and selling office buildings will improve slightly next year, and trade velocity will continue to speed up in 2011 and beyond as the credit market improves, more foreclosures hit the market and buyers and sellers are able to agree on values, he said.

The impact of the $787 billion federal stimulus package is just starting to filter through the economy, said Roger Staubach, JLL's executive chairman Americas.

The effect of the federal money will help the overall economy for the next 12 to 18 months, but then the economy will have to deal with the huge deficit the stimulus will create, Staubach said in an interview after the panel discussion.

"I worry about whether we'll really be out of it in two years," he said.

The D-FW area's commercial real estate industry will fare better than it did during the collapse in the late 1980s because development has slowed to reasonable levels, reducing the severity of any oversupply, said Paul Whitman, president of JLL's Dallas office.

North Texas has been grazed by the current national recession, but hasn't felt its full force, and will bounce back more quickly than other areas, he said.

"We were hurt less than other parts of the United States, and we will come out quicker than other areas because of (corporate) relocations and other factors," Whitman said.

Staubach urged the gathering of several hundred brokers and top commercial real estate executives to persevere.

"I've always believed that adversity reveals genius and prosperity conceals it," the former Dallas Cowboys quarterback said. "We are in difficult times, but the challenges bring out the best in all of us."

Bill Hethcock

Wednesday, September 16, 2009

Convention Center Hotel breaks ground

The Omni Dallas Convention Center Hotel has come a long way since voters approved construction of the hotel in May.

Dallas City Mayor Tom Leppert was joined by community leaders Wednesday when the city officially broke ground on the property, which is expected to open in early 2012.

The project, which will be backed by the sale last month of $500 million in revenue bonds, has drawn praise from those wanting to anchor downtown Dallas with a hotel dedicated to conventions and business travelers and consternation from taxpayers who don’t trust or want a publicly funded hotel.

When complete, the 1,000-room, 23-story hotel will be spread across 8 acres in the heart of downtown Dallas. Included in the 6-acre design will be a signature restaurant, lounges, retail, a high-end Mokara Spa, pool deck and other features. The remaining 2 acres are slated for dining, retail and other venues that will enhance entertainment opportunities.

“This has never been about a building,” said Mayor Tom Leppert. “It has always been about positioning Dallas for success and about keeping Dallas competitive. This hotel is a symbol of our city’s confidence and willingness to invest in its future.”

Dallas-based Matthews Southwest is serving as the hotel’s developer.

“We see the hotel as being a great economic engine for additional development around the convention center,” said the firm’s President Jack Matthews. “It is our goal to continue to build a strong connection between downtown and South Dallas, and the hotel will be a true catalyst for helping achieve that vision.”

For Dallas' Deep Ellum, hopes ride on DART

Almost two-thirds of a new shopping strip that opened last year in Dallas' Deep Ellum district is still vacant. But leasing agents aren't sweating the project's performance. Starting next week, hundreds of commuters a day will be streaming through the new DART light-rail station right next door.

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"This is what we have been waiting for," said Heather Winn of United Commercial Realty, which leases the ground-floor retail space in the Ambrose apartments on Malcolm X Boulevard at Indiana Boulevard. "We already have two retail tenants, and they are ready for the rail line to open, too."

The rail station near Baylor Medical Center is one of two DART stops opening next week in Deep Ellum – a welcome stimulus for an urban district that has seen its share of booms and busts.

Lately, most of the real estate news in Deep Ellum has been dour. A high vacancy rate for commercial buildings and failed development plans have been the norm for several years.

Leasing agents and building owners say they now have reasons to be optimistic.

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The Deep Ellum stations opening Monday are among the first of 20 stops planned on DART's $1.8 billion Green Line, which will eventually run from Carrollton to Dallas' Pleasant Grove neighborhood. The rest of the stations will be finished late next year.

The transit agency estimates that in the coming years, more than 2,000 riders a day will use the Deep Ellum station at Baylor. That flood of commuters can bring new business.

Quinton Mathews of John Bowles Co. is trying to line up tenants for a vacant commercial property at Gaston Avenue and Good-Latimer Expressway. The 5,200-square-foot building, built in 1946, previously housed an architectural firm but has been vacant for some time.

Leasing the building, which is across from the new rail stop, was tough while the street and rail line route were torn up for construction.

"We are working on a deal there right now," Mathews said. "Now that Good-Latimer is back open, we have good visibility.

"We are talking with a creative firm that wants to lease the whole building."

How far?

Despite the boost that DART will bring to Deep Ellum, Mathews still questions whether the impact will be felt blocks away from the station.

The window of an empty storefront reflects a DART train passing through Deep Ellum. Heather Winn, who is leasing out space in the Ambrose apartment building, has lined up two retailers expecting business from a new rail station.
"We are trying to do some stuff in the heart of Deep Ellum, too," he said, "but that doesn't have the momentum."

Deep Ellum also needs further public-sector investments in streets, sidewalks and utilities that serve the aging commercial buildings, said longtime district property agent Barry Annino.

"DART will not be the panacea unless the city becomes our partner," Annino said. "DART may, in fact, be the catalyst that gets the politicos to pay attention and see the opportunity."

Recent large-scale plans to redevelop parts of Deep Ellum failed when the economy tanked and real estate lending stopped.

Without new investment, Annino doesn't anticipate a quick rebound.

"Otherwise, you will see a slow grinding improvement based on market conditions, such as low rent strategic to downtown, an improving economy and developments at Baylor," he said.

Broker Jeff Swaney is trying to lease a vacant building on Swiss Avenue just yards from the new rail station.

"We'd love to put in a little sandwich shop or coffee shop – it's an incredible opportunity for someone," he said.

But he worries that the recession will make it tough to find a tenant.

"The expansion of retail has just died because of the economy," Swaney said. "The owners of that building have bent over backwards trying to make a deal, but we haven't been able to."

Parking not a worry

A couple of blocks away, at Elm and Good-Latimer, three of the four corners are vacant.

Tom Heraty is trying to find someone to lease a former furniture store that's been empty for about five years. "Everybody hopes that with this transportation hub, it will change Deep Ellum," he said.

"The biggest problem in Deep Ellum is no parking. So the train could definitely be a boost to the whole neighborhood."


Construction to begin next month for Woodall Rodgers deck park in Dallas

Construction is expected to begin next month on a 5.2-acre park that will span the Woodall Rodgers Freeway and provide a pedestrian link between downtown Dallas and Uptown.

Dignitaries, students mark Woodall Rogers deck park grounbreaking (DMN)

The Woodall Rodgers Park Foundation celebrated Monday the deck park that will stretch three blocks between Pearl and St. Paul streets.

"This is so much more than a park," Mayor Tom Leppert during the celebration at the Parkside Condos located near the freeway. "It’s a place for all of us, a place where the people of the city of Dallas all come together."

The landscape near the freeway is dominated by skyscrapers towering above and traffic zipping below. The park would provide greenery in the middle of a concrete jungle.
With an estimated price tag of about $105 million, the park will include features such as a restaurant, performance pavilion and a dog park. Millions of dollars in federal, state, city and private funds have been committed.

"Many people felt this couldn’t be done – it’s too complicated, too expensive and too much of a challenge for the city of Dallas. Today, we proved them wrong," said Jody Grant, park foundation chairman.

Sheila Grant, who serves on the park foundation's board and is Jody's wife, said she hopes the park will host a Christmas tree lighting, similar to the one held at Rockefeller Center in New York, as well as Easter sunrise services and other events.

"This will host traditions that will be there for generations to come," she said.
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Grant said construction most likely will begin in October. The $44.5 million building contract was awarded to Atlanta-based Archer Western.

Officials on Monday also worked to allay fears of road delays caused by construction.
Bill Hale, a Texas Department of Transportation engineer, said he hopes to restrict construction to the late evening and early morning hours, when traffic is light. He said crews will work around downtown entertainment events to ensure traffic headaches are kept to a minimum.

CHRIS DELL / The Dallas Morning News

Friday, September 11, 2009

Westmount Realty Capital Announces

Sale of Five Downtown Dallas Buildings

Buyers own The Joule Hotel and Charlie Palmer Restaurant which are surrounded by the recently-acquired buildings.

DALLAS – September 9, 2009 –Dallas-based Westmount Realty Capital javascript:void(0)announced today the sale of five buildings in downtown Dallas to 1600 Main Street Holdings , L.P., an affiliate of the Joule Hotel. On the same block as the flagship Neiman-Marcus, the five buildings surrounding The Joule Hotel and Charlie Palmer Restaurant represent all the buildings on Commerce Street between Neiman Marcus and the Magnolia Hotel, as well as an 8-story building at 1604 Main Street, situated between the Joule Hotel and Neiman Marcus.

The properties sold by Westmount are: • 1417-19 Commerce Street, a 11,450 square foot former restaurant built in 1932 and purchased by Westmount in 1997; • 1503 Commerce Street, an 8,400 square foot former restaurant acquired by Westmount in 1997; • 1505 Commerce Street, an office building built in 1900 and purchased by Westmount in 2005;• 1511 Commerce Street, a 15,000 square foot former retail/office built in 1928, now carrying a historical designation and acquired by Westmount in 1995; and • 1604 Main Street, a 47,724 square foot former retail/office built in 1914 and purchased by Westmount in 1996 from Neiman-Marcus.

Until selling to the Joule Hotel in 2003 and 2006, Westmount also owned 1530 Main Street and 1524 Main Street buildings which now, respectively, house the Joule Hotel and Charlie Palmer Restaurant.“As a big believer that well chosen, downtown Dallas properties held great investment prospects, Westmount diligently worked from 1995 until 2005 assembling this portfolio,” said Cliff Booth, chief executive officer of Westmount. “Westmount had contemplated doing a large scale redevelopment ourselves on this block. Considering the strong interest expressed by the buyer, the extension of the likely development time frame caused by current market conditions and the price we were able to negotiate with the purchaser, we are very pleased with this transaction,” Booth added. “Given that world famous Neiman Marcus’ flagship store is the anchor of the neighborhood, we believed that this block had potential to be the very center of a downtown Dallas renaissance,” Booth added. “With the recently relocated AT&T headquarters nearby, as well as new and redeveloping hospitality, entertainment, retail and residential interests, the prospects for this block are as promising as ever.”

First Distressed Assets Conference on Tap

DALLAS-With the growing number of distressed assets hitting the marketplace, advice, counsel and wisdom needs to enter into how to take advantage of the opportunities. This is the main purpose of the first annual RealShare Distressed Assets, which will take place on Sept. 14: to provide attendees with information to help them make their way through the distressed asset market.

The conference will take place from 7 a.m. to 5:30 p.m. at the Adolphus Hotel in downtown Dallas, and is presented by RealShare, in conjunction with Real Estate Forum and According to RealShare Conference producer Jason Young, the physical conference, which is national in breadth, was an outgrowth of a RealShare/GlobeSt-produced webinar that aired earlier this year.

With 300 people having attended that webinar, "we realized our readership appreciates hearing about those topics, and thought it would be a good idea to translate this to a full-day conference," Young tells

Furthermore, Dallas was selected as a location because of its convenience to East and West Coast speakers and attendees. Young says the initial thought was to put the conference in an area with the highest rate of distressed assets hitting the market. But those were areas, he explained, that were already the site of tons of conferences about the topic.

"People are so exasperated with the distressed asset movement and so buffeted by conferences about distressed assets, it made more sense to put it in Dallas, which hasn't really experienced that yet," Young explains.

The speakers will present expertise on topics ranging from opportunities in distressed assets and restructured finance, to how to find debt and equity in the current environment, to working with special servicers, to appraising distressed asset value. Also on the agenda is expert advice from lenders as to what types of assets might be making a comeback.

Young anticipates more than 200 people will show to hear the national take on distressed assets, to get some useful advice and, of course, to network. "This is a fine network opportunity for any real estate executive involved with distressed assets to meet and network with attendees and speakers," he adds. For more information about Real Share Distressed Assets, or to register

by Amy Wolff Sorter