August 27, 2009
A reader sent me a Globe St. article on a deal in Las Vegas. Panattoni has acquired a 40% finished project at a low price, and has now turned around and began marketing (and selling) buildings which were previously listed for $205 psf for $100.
I am posting this because it goes back to what I’ve mentioned numerous times on this site about how new owners will effectively cause additional distress in the market, simply because they will and can do the deals that other landlords with a higher basis cannot do, leading the other owners and developers into distress as well.
Locally, so much real estate has been sold over the past 3-4 years, that this cycle will take some time to work its way out. Developers such as Jay Paul, Legacy Partners, Menlo Equities, Tishman Speyer, Sand Hill Property Co. and RREEF (there are many more as well) are all sitting on projects which all fall into this camp. Once one goes to a new owner, they’ll likely cut the asking rent in half and make it pretty difficult – if not impossible – for the others to do a competitive deal.
And that’s the new stuff. There is still millions of square feet of existing product that traded hands which will face the same dilemma.
- Moffett Towers Might Finally Be Getting a Tenant
- Hammer Dropping on Sunnyvale Town Center
- Weakness in Rents Beginning to Show
- RREEF Portfolio Under Distress
- Sunnyvale City Center In Trouble – Developer Wants To Convert to Public-Private Partnership!