Commercial Real Estate - Getting Interesting Again...

Lots of interesting things going on in Commercial Real Estate (CRE) right now, both nationally and locally.

Nationally: Costar reported on the survey results of the PricewaterhouseCoopers Korpacz Real Estate Survey:

• Cap-Rates: "Survey respondents forecast that overall cap rates will hold steady in 19 of the survey's 30 markets over the next six months. This compares to the fourth-quarter survey, when participants forecast cap rate stabilization in just two markets."
• Available Credit: "Looming debt maturities and delinquencies will continue to pose major hurdles for owners and lenders going forward...However, lenders appear more willing to extend credit to commercial real estate investors, though at more conservative underwriting and equity requirements than in the past."
• Rental Rates: "(E)xpect rental rate declines and vacancies to flatten overall in coming quarters. To offset weak tenant demand, investors reported the continued need to offer potential tenants free rent during lease negotiations..."

Locally: Lots of movement and expansion by some of the regional Commercial Real Estate Brokerages.

• Jones Lange Lasalle: Added Jason Volpe as a Senior VP to their San Francisco office. Volpe was most recently with Studley in Chicago and San Francisco. This is the second "marquee" broker that has joined JLL in the past year (in July of 2009 Kevin Brennan, another top broker, left Studley and joined JLL).
• Cornish & Carey: Recently opened two new North Bay offices, one in Larkspur and one in Santa Rosa.
• Grubb & Ellis: Hired long-time East Bay power broker Ed Del Beccaro away from Colliers International to manage Grubb's Walnut Creek office.

These are not small investments, and indicate to me that these firms are gearing up for a recovery in late 2010.

National Commercial Real Estate Brokerage With East Bay Roots Faces NYSE Delisting

In yet another sign of the current challenging economic environment, Commercial Real Estate brokerage Grubb & Ellis Co. is facing delisting by the NYSE. Grubb & Ellis Co. has deep East Bay roots, but is now based out of Southern California.

Oakland City Center - Legacy of Grubb & Ellis Co-Founder Hal Ellis Jr.

Grubb & Ellis merged with NNN Realty Advisors in December of 2007, and at that time had a reported market capitalization of $725 Million. The reason for the most recent delisting notice is that Grubb's market cap has dropped below $50 Million for 30 consecutive days. This notice follows a similar notice issued in February of 2009, for non-compliance of the NYSE's requirement of a minimum closing price of $1.00 per share (over 30 days). Grubb's share price as of this morning was .62 cents.

The company has until January 23, 2010 to bring their share price into compliance. It should be noted that the company has stated it "intends to cure the deficiencies and to return to compliance with the NYSE continued listing requirements", and that it's its business operations, SEC reporting requirements and credit agreements are unaffected by the notification.