appraisal institute’s year-in-review symposium daniel j. jessup, ccim president
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Appraisal Institute’s Year-in-Review Symposium Daniel J. Jessup, CCIM President. 2010 Sale Comparables. www.apexcommercial.com. 2010 Sale Comparables. www.apexcommercial.com. 2010 Lease Comparables. www.apexcommercial.com. 2010 Lease Comparables. 2010 Lease Comparables. - PowerPoint PPT PresentationTRANSCRIPT
Appraisal Institute’s Year-in-Review SymposiumDaniel J. Jessup, CCIMPresident
2010 Sale Comparables
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AddressYear Built
Sq. Ft. Sale Price Price/SF Comments
Bluemound Crossing16620 W. Bluemound
1989 48,449 $2,950,000 $60.89Class B, single story, 48% occupied
Exec. Center VI400 N. Executive Dr.
1985 102,105 $8,408,700 $85.003-story, multi-tenant, class B, 40% occupied
Exec. Center IV235 N. Executive Dr.
1980 85,612 $5,800,000 $67.00
Two-story, multi-tenant, distressed sale, M&I lease rate around$6 / sq. ft.
9898 Bluemound Rd. 1965 24,696 $1,550,000 $62.75
Owner/occupant, investing $34 / sq. ft. in common areas and own suite, multi-story, brick construction
2010 Sale Comparables
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AddressYear Built
Sq. Ft. Sale Price Price/SF Comments
100 East Wisconsin 1989 430,000 $80,200,000 $186.51
35 story, Class A, .63 acres, 720 N. Water parking structure,94% occupied
Crossroads V21075 Swenson Drive
1989 20,000 $1,300,000 $65.00
Single story, owner/occupant, invested $35/sq.ft. in their space, 2.49 acres
The Forum Building3333 N. Mayfair Road
1970 81,902 $5,000,000 $61.00Three-story, multi-tenant, distressed sale, significant vacancy
Midwest Express HeadquartersOak Creek
1996 2000
120,883 $9,000,000 $74.45
2 - Three story buildings, owner/occupant, 27+ acres, Class A, brick construction
2010 Lease Comparables
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BuildingTenant Name
Sq. Ft.Lease Rate
NetGross
Op. Exp. / Sq. Ft.
Lease Term
RentConcessions
TIs/SF
Plaza EastAssociated
Bank17,432
$19.502.5%
Gross $10.77132
mos.None $35.00
Plaza EastRobertson
Ryan17,432
$18.503%
Gross $10.7769
mos.None $10.00
400 N. Exec. Dr.
U.S. Bank 20,796$17.00
2.5%Gross $7.74
125 mos.
5 mos. Gross Rent
$25.00
Honey Creek IV
Strayer University
14,922$13.95
3%Net $10.75
60 mos.
5 mos. Gross Rent
$30.00
2010 Lease Comparables
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2010 Lease ComparablesBuilding
Tenant Name
Sq. Ft.Lease Rate
NetGross
Op. Exp. / Sq. Ft.
Lease Term
RentConcessions
TIs/SF
100 EastHinshaw & Culbertson
12,947$15.50
3%Net $11.58
60 mos.
None $5.00
First Financial
Centre
Weiss, Berzowski
& Brady21,403
$13.93 2%
Gross $8.7992
mos.None $12.00
411 EastMarsh &
McLennan22,600
$13.50 2.5%
Net $10.75 120 None $35.00
9809 S. Franklin
TSA 12,000$25.00
3%Gross $5.05 120 None $45.00
Current Lease Concessions
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Rent abatement Above market tenant improvements Moving allowance Blend and extend Motorcycles, automobiles, etc… Nothing is off the table
Tenants in the Market
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Astronautics – 176,000 sq. ft. Focused on The Brewery
Von Briesen & Roper Law Firm – 75,000 sq. ft. Godfrey & Kahn Law Firm – 90,000 sq. ft. Baker Tilly – 70,000 sq. ft. Eaton Corp. – 90,000 sq. ft.
Focused on a build-to-suit opportunities at I-45 and Good Hope Road
Harmony Initiative – 70,000 sq.ft.
Prospective Developments
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Irgens/Lee Office Project Across from the Pfister Hotel 20 – 25 Stories
Ranier Mixed Use Project Park East Corridor 15 stories – 280,000 sq. ft.
Weas Development Office Project Southeast corner of N. Broadway and Michigan
Avenue – Just north of I-794 15 stories - 200,000 sq. ft.
Note: The Manpower Headquarters project and Cathedral Square both received a $25 million subsidy from the City for parking structures.
Deal Obstacles
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Financing – C.R.E. – four letter word Bank underwriting standards Slow to no employment growth Tenants carrying excess space Financially distressed building ownership Financially distressed tenants Analysis paralysis Continued economic uncertainty
What Can We Expect in 2011?
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Slight, very gradual improvement Concessions may lessen in second half of
2011? No increase in lease rates Maybe – just maybe – a downtown office
building will break ground? Financially stable tenants continue to
blend and extend
What Can We Expect in 2011?
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More adaptive reuse of existing commercial properties Low cost of acquisition More urban opportunities versus
vacant land parcels Superior construction Unique character Government incentives available
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THANK YOU
Grubb & Ellis I Apex Commercial, Inc.Daniel J. Jessup, CCIM, Presidentwww.apexcommercial.comPhone: 262-784-7500