Friday, December 31, 2010
Thursday, December 30, 2010
Takeover War Gets Bigger—Blackstone Is In .
By KRIS HUDSON
DECEMBER 29, 2010
Original post: http://online.wsj.com/article/SB10001424052970203513204576048240134649426.html?mod=WSJ_RealEstate_MIDDLETopNews
Blackstone Group LP has jumped into the bidding war for Australian shopping-center owner Centro Properties Group, intensifying what is likely to be one of the largest property takeover battles of 2011.
Blackstone, among the world's largest buyout firms with $100 billion under management, made a preliminary offer known as an "indicative bid" by the Dec. 17 deadline set by Centro, according to people familiar with the matter.
The size of Blackstone's bid couldn't be determined Tuesday. The buyout giant primarily is interested in Centro's 600 U.S. properties, the people said.
The properties, located throughout the country, consist of strip malls and other nondescript neighborhood shopping centers anchored by grocers or discount retailers, like TJX Cos.' TJ Maxx and Marshalls and Kroger Co. Centro valued its U.S. portfolio at $9.5 billion at the end of its fiscal year on June 30.
Centro also owns 112 malls in Australia and New Zealand.
Brooksville Square Shopping Center, in Brooksville, Fla., is among Centro's U.S. properties up for sale.
Values for U.S. strip centers have rebounded from the lows of the recession but have yet to fully recover. Green Street Advisors estimated the average U.S. strip center suffered a 40% decline in value from the middle of 2007 to the middle of 2009. Since then, it has recovered roughly half of the lost value, according to Green Street.
Melbourne's Centro was one of the first big real-estate companies to get into trouble in the downturn, failing to refinance $3.4 billion in debt that matured in early 2008. Since then, it has been kept on life support by its creditors.
Lately, 25-year-old Centro has become the symbol of another trend: the return of deal making in commercial real estate. Although rents and vacancy trends remain weak in many markets, investors have been bidding up values of many properties in anticipation of a recovery. Real-estate returns are also looking more attractive in a low-interest-rate environment.
Centro is one of the biggest assets on the block, making it especially attractive to companies like Blackstone that have a lot of money to put to work.
A joint bid for the entirety of Centro also has come from a consortium led by U.S. real-estate investor NRDC Equity Partners LLC and Australian investor Lend Lease Corp., people familiar with those talks said. That bid is in excess of $16 billion, these people said.
Rival Bid Emerges
In addition, entities affiliated with shopping-center mogul Chaim Katzman's Gazit-Globe Ltd. have made separate bids for Centro's U.S. and Australian properties, people familiar with the talks said. Gazit teamed with Colonial First State Global Asset Management to offer $7.3 billion for Centro's Australian and New Zealand properties, the people said.
And Gazit's U.S. affiliate, Equity One Inc., paired with Apollo Global Management LLC to make a joint bid for Centro's U.S. operations, though the amount of that bid couldn't be determined.
Centro is being advised by UBS AG, Moelis & Co. and J.P. Morgan Chase & Co. Several smaller suitors, such as Australia's Charter Hall Retail REIT, have made offers for pieces of Centro's Australian and U.S. empires rather than the whole, the people said.
Centro's fate is complicated by its intricate capital structure, which includes dozens of lenders, cross collateralization and properties owned by syndicates of thousands of Australian mom-and-pop investors.
Bankruptcy a Possibility
There remains a chance that Centro could end up in Australian bankruptcy if it can't find a buyout or recapitalization deal that pleases its lenders. Australian bankruptcy, called administration, mandates liquidation rather than reorganization.
Blackstone has emerged as a major player in many of the biggest deals this year. In the hotel business, the firm participated in a $3.9 billion buyout of bankrupt hotel chain Extended Stay America Inc.
In retail, Blackstone was part of the group that took General Growth Properties Inc. out of bankruptcy protection and also partnered with mall Glimcher Realty Trust this year to buy malls.
The pursuit of Centro's U.S. properties is a logical one for Blackstone. The buyout firm was among those that took an initial look at Centro in early 2008, when Centro first opened its books to would-be acquirers.
Centro's occupancy slipped to 88.3% in the year ended June 30 from 88.7% in the previous year. Its U.S. net operating income declined by 4.2% in the year ended June 30.
Mr. Scott's Buying Spree
Since late 2007, Centro has struggled to refinance and pare its $18.4 billion debt load. The debt was amassed during the boom years as former Chief Executive Andrew Scott went on a buying spree that made company one of the world's largest retail landlords. Centro's U.S. portfolio carries debt of $8.1 billion.
Mr. Scott, who was ousted in early 2008, amassed the company's U.S. portfolio by purchasing real-estate investment trusts New Plan Excel Realty Trust, Kramont Real Estate Trust and Heritage Property Investment Trust Inc.
Write to Kris Hudson at kris.hudson@wsj.com
Original post: http://online.wsj.com/article/SB10001424052970203513204576048240134649426.html?mod=WSJ_RealEstate_MIDDLETopNews
Blackstone Group LP has jumped into the bidding war for Australian shopping-center owner Centro Properties Group, intensifying what is likely to be one of the largest property takeover battles of 2011.
Blackstone, among the world's largest buyout firms with $100 billion under management, made a preliminary offer known as an "indicative bid" by the Dec. 17 deadline set by Centro, according to people familiar with the matter.
The size of Blackstone's bid couldn't be determined Tuesday. The buyout giant primarily is interested in Centro's 600 U.S. properties, the people said.
The properties, located throughout the country, consist of strip malls and other nondescript neighborhood shopping centers anchored by grocers or discount retailers, like TJX Cos.' TJ Maxx and Marshalls and Kroger Co. Centro valued its U.S. portfolio at $9.5 billion at the end of its fiscal year on June 30.
Centro also owns 112 malls in Australia and New Zealand.
Centro Properties Group
Brooksville Square Shopping Center, in Brooksville, Fla., is among Centro's U.S. properties up for sale.
Values for U.S. strip centers have rebounded from the lows of the recession but have yet to fully recover. Green Street Advisors estimated the average U.S. strip center suffered a 40% decline in value from the middle of 2007 to the middle of 2009. Since then, it has recovered roughly half of the lost value, according to Green Street.
Melbourne's Centro was one of the first big real-estate companies to get into trouble in the downturn, failing to refinance $3.4 billion in debt that matured in early 2008. Since then, it has been kept on life support by its creditors.
Lately, 25-year-old Centro has become the symbol of another trend: the return of deal making in commercial real estate. Although rents and vacancy trends remain weak in many markets, investors have been bidding up values of many properties in anticipation of a recovery. Real-estate returns are also looking more attractive in a low-interest-rate environment.
Centro is one of the biggest assets on the block, making it especially attractive to companies like Blackstone that have a lot of money to put to work.
A joint bid for the entirety of Centro also has come from a consortium led by U.S. real-estate investor NRDC Equity Partners LLC and Australian investor Lend Lease Corp., people familiar with those talks said. That bid is in excess of $16 billion, these people said.
Rival Bid Emerges
In addition, entities affiliated with shopping-center mogul Chaim Katzman's Gazit-Globe Ltd. have made separate bids for Centro's U.S. and Australian properties, people familiar with the talks said. Gazit teamed with Colonial First State Global Asset Management to offer $7.3 billion for Centro's Australian and New Zealand properties, the people said.
And Gazit's U.S. affiliate, Equity One Inc., paired with Apollo Global Management LLC to make a joint bid for Centro's U.S. operations, though the amount of that bid couldn't be determined.
Centro is being advised by UBS AG, Moelis & Co. and J.P. Morgan Chase & Co. Several smaller suitors, such as Australia's Charter Hall Retail REIT, have made offers for pieces of Centro's Australian and U.S. empires rather than the whole, the people said.
Centro's fate is complicated by its intricate capital structure, which includes dozens of lenders, cross collateralization and properties owned by syndicates of thousands of Australian mom-and-pop investors.
Bankruptcy a Possibility
There remains a chance that Centro could end up in Australian bankruptcy if it can't find a buyout or recapitalization deal that pleases its lenders. Australian bankruptcy, called administration, mandates liquidation rather than reorganization.
Blackstone has emerged as a major player in many of the biggest deals this year. In the hotel business, the firm participated in a $3.9 billion buyout of bankrupt hotel chain Extended Stay America Inc.
In retail, Blackstone was part of the group that took General Growth Properties Inc. out of bankruptcy protection and also partnered with mall Glimcher Realty Trust this year to buy malls.
The pursuit of Centro's U.S. properties is a logical one for Blackstone. The buyout firm was among those that took an initial look at Centro in early 2008, when Centro first opened its books to would-be acquirers.
Centro's occupancy slipped to 88.3% in the year ended June 30 from 88.7% in the previous year. Its U.S. net operating income declined by 4.2% in the year ended June 30.
Mr. Scott's Buying Spree
Since late 2007, Centro has struggled to refinance and pare its $18.4 billion debt load. The debt was amassed during the boom years as former Chief Executive Andrew Scott went on a buying spree that made company one of the world's largest retail landlords. Centro's U.S. portfolio carries debt of $8.1 billion.
Mr. Scott, who was ousted in early 2008, amassed the company's U.S. portfolio by purchasing real-estate investment trusts New Plan Excel Realty Trust, Kramont Real Estate Trust and Heritage Property Investment Trust Inc.
Write to Kris Hudson at kris.hudson@wsj.com
For Sale or Rent: The Governor's Mansion
Forty-three states have an official governor's mansion, and most state chief executives still call them home. But living rent-free is falling out of favor with some governors -- and with voters
Monday, December 27, 2010
Monday, December 13, 2010
US Shoppers Can't Say No to Deals: Survey
Getty Images
The number of U.S. shoppers unable to resist buying "impulse" gifts for themselves or others is on the rise this season, due to the plethora of discounts and deals in stores.
Some 46 percent of U.S. consumers have already purchased an "impulse item" this season, according to an exclusive survey for Reuters by consumer research firm America's Research Group.
That number increased from 28 percent and 38 percent in two similar surveys conducted earlier in November.
The impulse buying is due to the attractive price tags offered by retailers, who are having to discount merchandise to lure shoppers.
About 55 percent of consumers said they found the deals better this year than last year, with only 26 percent saying they appeared to be comparable.
"What this says is, a lot of people have seen something they've bought they weren't planning on," said Britt Beemer, president of America's Research Group. "You have 55 percent of people saying the deals are better this year, which is why the 46 percent made an impulse purchase."
Retailers from Macy's to Wal-Mart Stores started promoting merchandise earlier this year, even in advance of Black Friday, the historical kick-off to the holiday shopping season, which attracts droves of shoppers for "door buster" deals.
Amid high unemployment and a slow recovery for the U.S. economy, shoppers are still tentative about opening their wallets, but recent sales data from the Thanksgiving weekend point to pent-up demand that has boosted revenue.
Last week, retailers posted their best sales gains in four years in November, although analysts cited the danger of narrowing profit margins from the surge of discounts.
The National Retail Federation still expects that retail sales will rise by a mere 2.3 percent this November and December, compared with a 1.1 percent rise in 2009 and a 3.4 percent decline in 2008.
The survey found that 72 percent of consumers planned to shop in the first two weeks of December, up from about 62 percent last year.
And more people may find a present under the tree for themselves this year, according to the survey.
Respondents said they were twice as likely to buy gifts for more people this year, than less people.
That could add up to a lot more cash for retailers, given that the average spent for a gift is $45, said Beemer.
This year's hot gift is a smart phone and some 16 percent of respondents said they either had already purchased one, or planned to buy one soon.
The telephone survey of 1,000 U.S. households was conducted on Dec 4 and Dec 5.
Wednesday, December 8, 2010
Tuesday, December 7, 2010
Sharing the Dakota With John Lennon
Original Post: http://www.nytimes.com/2010/12/07/nyregion/07appraisal.html
By CHRISTINE HAUGHNEY New York Times Published: December 6, 2010
Before he was gunned down in front of the building 30 years ago Wednesday, he was the seventh-floor resident who brought sushi to the building’s October potluck. He was known as a protective father and an enterprising real estate collector, irking a few neighbors by buying up five apartments in the building.
One of the many quirks and privileges of living in Manhattan is finding neighbors who are famous poets, celebrated scientists and aging jazz musicians. It was no different for residents at the Dakota, who grew used to seeing the former Beatle pass through the building’s entrance in his fur coat. What made the Dakota different from other buildings, besides its distinctive gothic design, was that so many residents were also celebrities that it afforded Mr. Lennon a certain degree of privacy.
“This building is chockablock full of famous people,” said Roberta Flack, who lives in the Dakota next door to Yoko Ono. “Most artists like myself tend to keep to themselves.”
Mr. Lennon’s and Ms. Ono’s life in the Dakota began in 1973, when they were looking to move from their loft on Bank Street. Bob Gruen, who photographed Mr. Lennon when he lived in New York City, said the couple wanted a home with better security.
He said they looked at homes in Greenwich, Conn., and on Long Island before buying the apartment at the Dakota from the actor Robert Ryan, making it past the building’s notoriously picky board.
While their early days in the Dakota were rocky and Mr. Lennon briefly left his wife for May Pang, Mr. Gruen said that Mr. Lennon returned by late 1974 and the couple settled into the throes of nesting. Ms. Flack recalled hearing them rehearsing music. Their son, Sean, arrived in 1975.
Like many new homeowners, Mr. Lennon and Ms. Ono renovated their kitchen. Mr. Lennon wanted it to resemble the open spaces many artists had in their lofts downtown. Their home “wasn’t particularly stylish,” recalled Stephen Birmingham, author of “Life at the Dakota: New York’s Most Unusual Address,” which was first published in 1979. But Ms. Flack, who agreed to be interviewed with Ms. Ono’s consent, said the apartment was always uncluttered and tasteful.
The Lennons socialized with neighbors who also had children. Sean was friends with the children of Warner LeRoy, who owned Tavern on the Green. Paul Goldberger, the architecture critic at The New Yorker, who lived in the Dakota, was invited to a Christmas dinner at the LeRoys’ apartment in the late 1970s and recalled the Lennons being there. He said that the dinner was “warm and very low key,” and that Mr. Lennon chatted with Mr. Goldberger’s future mother-in-law about the music industry.
Most neighbors remember him being preoccupied with raising his son. Mr. Birmingham said that when he visited, Mr. Lennon had wrapped packing twine around the staircase to protect Sean. Ms. Flack recalls Mr. Lennon taking Sean out for walks in the park with his bicycle.
“Sean loved his dad,” said Ms. Flack, pouring every inflection into the word “loved.” “There was a lot of holding hands and looking up, and a lot of holding hands and looking down.”
The Lennons generated the most criticism from neighbors over their real estate purchases. Mr. Gruen said that in addition to two seventh-floor apartments, they bought three other apartments, to use for storage, a work studio for Ms. Ono and an apartment for guests.
Ms. Ono, accustomed to being a scapegoat for the breakup of the Beatles, absorbed more than her share of disdain inside the building, too.
“There was a little bit of resentment built up against Yoko, more because she kept trying to buy more apartments,” said Mr. Goldberger, who briefly served on the Dakota’s board. “I think people didn’t dare get mad at John Lennon, so she bore the brunt of any resentment.”
“When you’re John Lennon and Yoko and you have all of the money in the world,” Ms. Flack said, “how come he can’t buy all that he wants?”
The Lennons’ real estate purchases did not color the opinions of one Dakota resident. Leonard Bernstein’s daughter Nina Bernstein Simmons, whose family moved into the Dakota in 1975 when she was 13, said her “great brush with John Lennon” took place at the building potluck when the Lennons brought a platter of sushi. When Ms. Bernstein Simmons stood next to Mr. Lennon at the dessert table, he stared at the sweets and said, “I want something mushy and disgusting,” she said, still remembering his Liverpool accent.
“I think I muttered something about the pecan pie looking good,” she added.
Leonard Bernstein enjoyed Mr. Lennon’s poetry so much that at the annual potluck, he made his wife, two daughters and son approach Mr. Lennon and then sing an improvised round he had taught them of Mr. Lennon’s poem “The Moldy Moldy Man.”
It was one celebrated musician testing his work out on another musician.
Ms. Bernstein Simmons said, “I think John was amused by it.”
A version of this article appeared in print on December 7, 2010, on page A29 of the New York edition.
By CHRISTINE HAUGHNEY New York Times Published: December 6, 2010
Keith Bedford/Reuters
The Dakota, on Central Park West and 72nd Street, where John Lennon lived from 1973 and where he was killed 30 years ago.
Long before its history was marked by the sound of bullets, thousands of fragrant flowers and crowds grievously singing “Imagine,” the Dakota was just another historic Manhattan co-op where among its famous inhabitants lived a musician named John Lennon.
MacMillan
John Lennon, Yoko Ono and their son Sean in 1975.
Before he was gunned down in front of the building 30 years ago Wednesday, he was the seventh-floor resident who brought sushi to the building’s October potluck. He was known as a protective father and an enterprising real estate collector, irking a few neighbors by buying up five apartments in the building.
One of the many quirks and privileges of living in Manhattan is finding neighbors who are famous poets, celebrated scientists and aging jazz musicians. It was no different for residents at the Dakota, who grew used to seeing the former Beatle pass through the building’s entrance in his fur coat. What made the Dakota different from other buildings, besides its distinctive gothic design, was that so many residents were also celebrities that it afforded Mr. Lennon a certain degree of privacy.
“This building is chockablock full of famous people,” said Roberta Flack, who lives in the Dakota next door to Yoko Ono. “Most artists like myself tend to keep to themselves.”
Mr. Lennon’s and Ms. Ono’s life in the Dakota began in 1973, when they were looking to move from their loft on Bank Street. Bob Gruen, who photographed Mr. Lennon when he lived in New York City, said the couple wanted a home with better security.
Mario Cabrera/Associated Press
In 1980, after Lennon was killed, the police erected barricades as crowds formed outside the building.
He said they looked at homes in Greenwich, Conn., and on Long Island before buying the apartment at the Dakota from the actor Robert Ryan, making it past the building’s notoriously picky board.
While their early days in the Dakota were rocky and Mr. Lennon briefly left his wife for May Pang, Mr. Gruen said that Mr. Lennon returned by late 1974 and the couple settled into the throes of nesting. Ms. Flack recalled hearing them rehearsing music. Their son, Sean, arrived in 1975.
Like many new homeowners, Mr. Lennon and Ms. Ono renovated their kitchen. Mr. Lennon wanted it to resemble the open spaces many artists had in their lofts downtown. Their home “wasn’t particularly stylish,” recalled Stephen Birmingham, author of “Life at the Dakota: New York’s Most Unusual Address,” which was first published in 1979. But Ms. Flack, who agreed to be interviewed with Ms. Ono’s consent, said the apartment was always uncluttered and tasteful.
The Lennons socialized with neighbors who also had children. Sean was friends with the children of Warner LeRoy, who owned Tavern on the Green. Paul Goldberger, the architecture critic at The New Yorker, who lived in the Dakota, was invited to a Christmas dinner at the LeRoys’ apartment in the late 1970s and recalled the Lennons being there. He said that the dinner was “warm and very low key,” and that Mr. Lennon chatted with Mr. Goldberger’s future mother-in-law about the music industry.
Most neighbors remember him being preoccupied with raising his son. Mr. Birmingham said that when he visited, Mr. Lennon had wrapped packing twine around the staircase to protect Sean. Ms. Flack recalls Mr. Lennon taking Sean out for walks in the park with his bicycle.
“Sean loved his dad,” said Ms. Flack, pouring every inflection into the word “loved.” “There was a lot of holding hands and looking up, and a lot of holding hands and looking down.”
The Lennons generated the most criticism from neighbors over their real estate purchases. Mr. Gruen said that in addition to two seventh-floor apartments, they bought three other apartments, to use for storage, a work studio for Ms. Ono and an apartment for guests.
Ms. Ono, accustomed to being a scapegoat for the breakup of the Beatles, absorbed more than her share of disdain inside the building, too.
“There was a little bit of resentment built up against Yoko, more because she kept trying to buy more apartments,” said Mr. Goldberger, who briefly served on the Dakota’s board. “I think people didn’t dare get mad at John Lennon, so she bore the brunt of any resentment.”
But Ms. Flack defended their apartment shopping and said she wished she had bought more apartments back then, when they were less expensive. A storage unit once owned by the Lennons sold in 2008 for $801,000.
The Lennons’ real estate purchases did not color the opinions of one Dakota resident. Leonard Bernstein’s daughter Nina Bernstein Simmons, whose family moved into the Dakota in 1975 when she was 13, said her “great brush with John Lennon” took place at the building potluck when the Lennons brought a platter of sushi. When Ms. Bernstein Simmons stood next to Mr. Lennon at the dessert table, he stared at the sweets and said, “I want something mushy and disgusting,” she said, still remembering his Liverpool accent.
“I think I muttered something about the pecan pie looking good,” she added.
Leonard Bernstein enjoyed Mr. Lennon’s poetry so much that at the annual potluck, he made his wife, two daughters and son approach Mr. Lennon and then sing an improvised round he had taught them of Mr. Lennon’s poem “The Moldy Moldy Man.”
It was one celebrated musician testing his work out on another musician.
Ms. Bernstein Simmons said, “I think John was amused by it.”
A version of this article appeared in print on December 7, 2010, on page A29 of the New York edition.
Monday, December 6, 2010
Thursday, December 2, 2010
Wednesday, December 1, 2010
Groupon Cofounders About To Become Billionaires?
Original Post: http://blogs.forbes.com/luisakroll/2010/11/30/groupon-cofounders-about-to-become-billionaires/?boxes=Homepagelighttop
by Luisa Kroll Bounty HunterNov. 30 2010 - 1:57 pm
Now he could be the first one to officially cross into the billionaire ranks. The New York Times DealBook reported today that Google (nasdaq: GOOG) might strike a deal by end of week to buy Groupon for $5 billion to $6 billion. Based on the lower estimate, Lefkofsky’s 30% stake would be worth $1.5 billion. That valuation might also land his cofounder and the group’s chief executive, Andrew Mason, among the world’s wealthiest. His estimated stake of 20% would be worth $1 billion. (That does not factor in taxes if it turns out to be a cash deal).
It’s been a crazy couple of years for Groupon, which presents online customers with deep discounts on products or services. (The name blends “group” and “coupon.” ) Groupon raised $135 million in April, the biggest chunk of it from Digital Sky Technologies, the Moscow investment fund behind Facebook and Zynga. Based on that transaction, the 17-month-old company was already valued at $1.35 billion. The only company to reach a $1 billion valuation faster, according to Forbes writer Christopher Steiner, was YouTube (now part of Google), founded in 2005. We featured Groupon on our August cover, calling it the fastest-growing company ever.
Lefkofsky and Mason met at InnerWorkings, a Chicago firm where Mason worked after college. Lefkofsky was a founder of the outfit, which farms out companies’ printing jobs. Lefkofsky later gave Mason $1 million in angel capital for another startup idea he had. While Mason runs Groupon, Lefkofsky is busy looking for other investments. Earlier this year, he cofounded a venture fund LightBank, which has stakes in nearly a dozen companies. He is also the author of Accelerated Disruption and an adjunct professor at the University of Chicago Booth School of Business.
As for whether the deal will get done, Google said it does not comment on “rumor or speculation.” Calls and/or emails to Groupon and Lefkofsky have not yet been returned.
by Luisa Kroll Bounty HunterNov. 30 2010 - 1:57 pm
In September, we named Eric Lefkofsky, the biggest individual investor in Groupon, as a ”billionaire in the making.” He was one of 15 people we cited as likely to become billionaires by 2015. Fifth on the list, behind folks like Zynga’s Mark Pincus and Facebook’s first president Sean Parker, he was estimated to be worth $750 million.
It’s been a crazy couple of years for Groupon, which presents online customers with deep discounts on products or services. (The name blends “group” and “coupon.” ) Groupon raised $135 million in April, the biggest chunk of it from Digital Sky Technologies, the Moscow investment fund behind Facebook and Zynga. Based on that transaction, the 17-month-old company was already valued at $1.35 billion. The only company to reach a $1 billion valuation faster, according to Forbes writer Christopher Steiner, was YouTube (now part of Google), founded in 2005. We featured Groupon on our August cover, calling it the fastest-growing company ever.
Lefkofsky and Mason met at InnerWorkings, a Chicago firm where Mason worked after college. Lefkofsky was a founder of the outfit, which farms out companies’ printing jobs. Lefkofsky later gave Mason $1 million in angel capital for another startup idea he had. While Mason runs Groupon, Lefkofsky is busy looking for other investments. Earlier this year, he cofounded a venture fund LightBank, which has stakes in nearly a dozen companies. He is also the author of Accelerated Disruption and an adjunct professor at the University of Chicago Booth School of Business.
As for whether the deal will get done, Google said it does not comment on “rumor or speculation.” Calls and/or emails to Groupon and Lefkofsky have not yet been returned.
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