As 2010 moved into its final days, the real estate industry was watching to see how a certain deal would play out. No, it wasn’t the $930-million sale of the iconic John Hancock Tower to Boston Properties. For starters, that trade was originally reported in October, but even if it had been completely new—well, anything in Boston, New York City or Washington, DC has become something of a yawn.
At least, that’s how Steven Pumper, executive managing director of Transwestern’s Investment Services and Asset Services Groups, sees it. “Sure these deals are welcome, and if they fall through, it sends a shiver up everyone’s spine as they flash back to 2009. But, in truth, successful and high per-square-foot deals in gateway cities like Boston are now expected.”
So what deal—at least at this writing—was the real estate community tracking so avidly? Parkway Properties’ new contract to purchase a mixed-use building for $167.3 million in the heart of the Atlanta submarket of Buckhead. Buckhead, says Pumper in tones approaching awe, is still looking at 26% vacancy rates. That a deal went under contract there, with funding in place, was a near holiday miracle.
The real estate capital markets went into seizure rather quickly. It started quietly, with smaller CMBS asset classes, such as self-storage, then spread quickly to the main asset classes.
The reverse—a fast recovery to match the rapid decline—is not going to happen even as the markets recover. Instead, the shape of the recovery has been seeded by deals and developments that began in 2010, and will slowly expand in scope and asset class as the year moves forward...
To read more, visit the January 2011 issue of Real Estate Forum online.
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