Columbus Worthington Mall $19 million Redevelopment

Compliments of Maureen McCabe of WorthingtonOldandNews.com

Morris Capital Partners principals Bill Morris and Walter Floyd – formerly with Trademark Property Co. – and Columbus real estate developer Tom Carter purchased the Worthington Square Mall in Worthington, Ohio, as an investment property. The partnership bought the 168,000-square-foot mall from GE Credit Equities and plans a $19 million redevelopment.

Posted in Columbus Real Estate News, Development | Tagged , , , , | Leave a comment

Columbus retailers make great 2010 stides

 It was good to be invested in local retail stocks in 2010. Same goes for the state’s big regional banks.

While shares of most companies based in Columbus outperformed the main stock-market averages, retail and bank stocks left the shares of many other big companies in the dust.

Shares of retailers Abercrombie & Fitch and Limited Brands, for example, jumped 65 and 60 percent, respectively, last year. Shoe retailer DSW’s stock soared 51 percent.

Meanwhile, Huntington Bancshares’ stock jumped 88 percent, while shares of Cleveland-based KeyCorp and Cincinnati-based Fifth Third rose about 50 percent. Newark-based Park National Bank saw its shares rise 23 percent.

The gains don’t take into account dividends.

That retailers and banks did well for a second straight year is a reflection of an economy that’s improving after the recession, and of better days for consumers who power the economy, analysts say.

There were worries that Huntington and many other major banks would fail as the financial crisis two years ago froze credit markets and more homeowners fell behind on their mortgage payments.

Huntington shares, which fell to $1 in 2009, are back to nearly $7.

Ric Dillon, CEO of Columbus investment-advisory firm Diamond Hill Capital Management, said of Huntington and other banks: “Not only have they survived, but they seemed to gain more solid footing in terms of operations and profits, and some of the credit concerns, while not alleviated, are not as severe.”

Huntington, like many other banks, returned to profitability in the first quarter of 2010. It also announced a plan to add branch offices, remodel existing ones and invest in new programs that, for example, give customers 24 hours to cover an overdraft without a fee. In December, the bank repaid $1.4 billion it had borrowed from the government during the financial crisis.

“We believe our strong stock-price performance reflects increasing confidence in the strength of Huntington’s franchise and financial-performance prospects,” said Jay Gould, Huntington’s director of investor relations.

Retailers, meanwhile, did a good job of cutting costs and controlling inventories during the recession, and that has led to profit margins that are their highest in decades, Diamond Hill’s Dillon said.

“These severe, challenging times focus one’s attention like nothing else,” he said. “It’s easy to be complacent when everything is good.”

At the same time, consumers have come back to the mall quicker than many analysts expected, given the high unemployment rate and continued worries about the housing market.

“I didn’t envision that it would be as good (a) year as it has become,” said James W. Coons, principal of

investment-management firm Coons Advisors.

Not that 2010 didn’t have its scary moments.

Stocks rose at the beginning of the year but then tumbled in the spring and summer amid concerns that the economy was going to fall back into recession.

To make matters worse, the “flash crash” on May 6 sent the Dow Jones industrial average falling off a cliff. The Dow plummeted nearly 700 points in less than a half hour, making the intraday loss nearly 1,000 points, but it then quickly recouped most of the midday plunge.

A government report later blamed the plunge on an unusual order placed by a firm that set off a cascade of selling.

But the result — coupled with a stock market that basically has been flat for a decade — helped keep many individual investors on the sidelines.

That meant that they

missed the gains in the stock market that began in the summer as Federal Reserve Chairman Ben Bernanke started giving hints that the Fed would buy more government bonds to drive down borrowing costs.

Although long-term interest rates actually rose after the Fed put the plan in place later in the year, it seemed to give a psychological lift to investors that the Fed stood ready to do all it could to keep the economy growing, Coons said.

“It raised people’s confidence in the future,” he said.

That was followed by the November elections, in which Republicans regained control of the U.S. House of Representatives and narrowed the Democrats’ majority in the Senate. The elections were viewed as being more favorable for business and stocks.

Stocks have kept climbing since.

The Dow ended the year 11 percent higher, the broader Standard & Poor’s 500 index of large companies rose 13 percent, and the technology-heavy Nasdaq composite index climbed 17 percent, not counting dividends.

The indexes are at their highest levels since before the September 2008 collapse of investment bank Lehman Brothers, which accelerated the downward spiral of stocks and deepened the recession.

The biggest winners of 2010 were the shares of small companies. The Russell 2000 index rose more than 25 percent.

One local member of that index, Glimcher Realty Trust, saw its shares soar more than 200 percent with dividends included. The mall operator was the No. 1 performer among U.S. real-estate investment trusts last year, said Mark Yale, the company’s executive vice president and CFO.

Like banks, Glimcher has benefited from credit markets that have settled down after the financial crisis. Improving retail sales and a rising occupancy rate in malls also have helped.

The company also has been able to raise money through new stock sales, and it has cut debt.

“It’s been pretty incredible,” Yale said.

He said the jump in Glimcher’s shares is an endorsement of the company’s steps to strengthen its balance sheet and recognition of its real-estate portfolio.

Shares of other small companies in central Ohio jumped as well in 2010.

After skyrocketing 544 percent in 2009, shares of Commercial Vehicle Group rose 171 percent in 2010.

Shares of Pinnacle Data rose 166 percent, and shares of Core Molding Technologies and Pacer International more than doubled.

Other prominent companies in the area that topped the major market indexes included M/I Homes, Worthington Industries, Scotts Miracle-Gro and Cardinal Health.

Not every local stock was a winner in 2010. Excluding dividends, State Auto Financial’s shares fell about 6 percent and DCB Financial sank 54 percent.

mawilliams@dispatch.com

Source: Columbus Dispatch

Posted in Columbus Real Estate News | Leave a comment

Interesting strategy by real estate giant M/I homes to boost sales

At a time when Governor-elect Kasich may abandon “evidence-based funding”, the focus of educational improvement in Columbus may shift to more “down-to-earth” planning.

According to The Columbus Dispatch, a group of locals known as the Central College Community Development Authority, that includes M/I Homes executives, hope some affluent, up-and-coming areas in Northeast Columbus will at last opt to build a new Columbus City school in their district.  In fact, title for the future site for the school was transferred from M/I to the Authority this Friday, December 10 (http://bit.ly/gSo7swhttp://bit.ly/e5kxqs).

Presumably, the M/I executives will sell the idea that everybody wins.  The district will get a new school, district kids will get to attend a school closer to home than they do now, and M/I will get to sell homes more easily, if there is a new school to attract future homebuyers to the currently sparsely pupiled community.

M/I Homes will get part of a 4-mill tax collected from each new homeowner.  This goes to pay for the land the Authority bought from M/I for the new school.  To the outsider this looks like a good deal for the real estate tycoons, and an expensive gift property owners will have bought for themselves (http://bit.ly/gSo7sw).

This district, north of State Route 161 and east of Hoover Reservoir, rejected the idea of a new school once before.  If the district refuses to build, a park is planned the area. Whether or not a park or a school ultimately occupies the land may be a function of how well the economy does.  In any case, M/I eventually paid about a half-million dollars for the real estate (http://bit.ly/gSo7sw).

Source: The Examiner

Posted in Columbus Real Estate News | Leave a comment

Wondering How Lease Accounting Changes Will Hit Commercial Real Estate?

NAR Commercial
Lease Accounting – Issue Summary

What is the Fundamental Issue?

The Financial Accounting Standards Board (FASB) and International Accounting Standards Board (IASB) proposed lease accounting changes may be detrimental to our nation’s economy by reducing the overall borrowing capacity of many commercial real estate lessees and lessors. The proposal would bring nearly $1.3 trillion in leased assets back onto companies’ balance sheets, with roughly 70 percent being real estate leases. Under the proposal, companies would be required to use a “right-of-use” accounting model where both lessees (renters) and lessors (property owners) recognize assets and liabilities arising from lease contracts. Currently, accounting rules allow many businesses to classify leases as operating expenses, which do not appear on their balance sheets. Both FASB and IASB believe these changes would improve transparency as well as provide investors with more consistent and concise financial reporting. However, if enacted, this proposal could negatively impact the financial stability of many businesses, which could prolong our nation’s economic recovery.

I’m a Realtor®. What does this mean to my business?
If ratified, this proposal would hurt businesses of all sizes, especially lessees and lessors of commercial real estate. With more bloated balance sheets, some companies may see their debt-to-equity ratios increase and find it more difficult to obtain credit, especially those with heavy debt loads or still recovering from the recession. The proposed accounting changes could also complicate compliance with debt covenants or agreements between the bank and borrower, which usually prohibit companies from borrowing more than they are worth. By capitalizing new and/or existing leases, some businesses could show more debt than allowed in their agreement with the lender, and therefore be in default of their loan. This could force some firms to put up more capital for existing loans or even have their credit lines revoked.
Additionally, the elimination of off-balance-sheet financing would be detrimental to commercial property owners. More frugal lessees will want less space and shorter-term leases without renewal options or contingent rents, which will decrease cash flow for property owners. Shorter-term rents will likely reduce the borrowing capacity of many commercial real estate lessors, who rely on leases and the value of the property as collateral in order to obtain financing. Ultimately, property owners would be forced to increase rent rates due to market uncertainty and reduce tenant improvements due to shorter recovery periods. Conversely, this change could encourage some firms to consider buying instead of leasing commercial real estate.

NAR Policy:
NAR is concerned that the new lease accounting proposal will be detrimental to our nation’s economy by reducing the overall borrowing capacity of many commercial real estate lessees and lessors. Also, NAR is opposed to lease accounting standard changes that would treat the income producing real estate business as a financing business on company balance sheets. Such a step would not accurately depict the unique characteristics of the investment real estate sector and in turn discounts the usefulness of the industry’s financial statements.

Legislative/Regulatory Status/Outlook:
FASB and IASB will accept public comments on their lease accounting proposal until December 15, 2010. Both organizations expect to have their joint proposal finalized by mid-2011. The effective date of this proposal will likely be in 2012 or 2013, where virtually all new and outstanding leases would be subject to the new accounting standard. NAR is currently writing comments to submit to FASB/IASB and will continue to work with other stakeholders to develop and implement a strategy to address this issue.

Check out this video explaining it as well!!

Source: NAR Commercial

Posted in Basic Economy News, Columbus Real Estate News, Real Estate Trends | Tagged , , , , | Leave a comment

Good News for Investment Real Estate in Columbus

2010 saw positive trends in the real estate market and the transaction volumes have significantly increased. The availability of real estate capital is expected to increase in 2011, which will result in attractive loan terms for the borrowers. Columbus, Ohio (December 06, 2010): In 2011, it is expected that there will be an increase in commercial real estate capital. There have been positive trends in the market as transaction volumes increased significantly this year. The mortgage market too have found their footing and the resurgence is expected to continue next year as well. The availability of commercial real estate capital in 2010 made great strides, despite the unstable political climate of United States and the 9.6% of national unemployment rate. The CMBS (Commercial Mortgage-Backed Securities) market specifically, has shown a good deal of growth. The Wall Street Journal stated that CMBS volume is likely to be as much as $15 billion this year. In 2007, the figure was $230 billion. A number of lenders have reentered the real estate market, which is one of the primary reasons for this increase. This growth has nurtured competition among the lenders and the result was more aggressive mortgage loan terms for buyers. Debt yields too have dropped into the high single digits; this, along with the low Treasury yields has resulted in attractive loan terms. The Federal Government has also announced that FDIC is about to launch its very first CMBS deal. The life insurance companies too are competing on low-leverage assets as well as for terms that are more than ten years. Other financial organizations like Freddie Mac, Fannie Mae, and HUD/FHA are also providing aggressive capital for real estate market. Banks are likely to follow the example, though they can hardly be called a noteworthy source of getting real estate capital at present. Real estate experts of Revealty.com, a leading and reliable Central Ohio real estate company, opine that the availability of commercial real estate capital, which turned the corner this year, is likely to grow further in 2011. This Ohio based company that offers exclusive buyer/ seller’s agents, also provide assistance in finding lenders providing low cost loans. About Revealty Revealty.com is a reliable Central Ohio real estate company that has been in business since the early 90s. Business First recognized the company as one of the top 25 residential real estate agencies in Columbus multiple times. Revealty offers exclusive buyer representation, assuring the buyers that the agent will always be on their side, working exclusively for them. With its range of services, Revealty helps the sellers to save their money otherwise wasted on the high commissions charged by traditional listing agents. Whether helping clients sell or find home, this Ohio real estate company protects their client’s interests throughout the entire home selling or buying process.

Source: pr-usa

Posted in Basic Economy News, Columbus Real Estate News, Development, Real Estate Trends | Tagged , , , , | Leave a comment

More signs of economy growth in Columbus – Job growth!!

This gallery contains 1 photo.

Central Ohio employers’ hiring plans appear poised for an about-face in the right direction next year, according to a new survey. Milwaukee-based Manpower Inc. (NYSE:MAN) in its quarterly employment outlook survey found that 14 percent of employers in the area surveyed … Continue reading

Gallery | Tagged , , | Leave a comment

Another example of buying loans – Could this be the way to go in the new economy?

Columbus deal maker Michael Schiff has a “heads-I-win, tails-I-win” real estate play in the works for the former Yankee Trader by the North Market.

He may be close to winning, in fact.

The Schiff Capital Group principal has purchased the Fifth Third Bank mortgage ($350,000 as of November 2006) on the two buildings at 457 and 461-465 N. High St., under the YT Acquisition LLC affiliate. Schiff confirmed the transaction but declined to reveal details on how much he paid.

“We bought the loan at a discount,” he said, “and we’re hoping what we paid for it versus the value we receive will make it a good transaction for us.”

The former Schottenstein Management Co. executive declined to reveal the status of the loan, but did say the play will work out for him whether YT Acquisition ends up with the property or, in the event the property sells, gets the balance of the loan paid in full.

“I’m OK either way,” he said, calling the current investment market as “the day and age when people buy loans.”

“If you like the underlying asset a lot, it’s not as risky,” he said, “because if you end up with the property, you’re still happy.”

Yankee Trader closed its store in early November after 40 years in the buildings, citing a desire to relocate.

Agents Wayne Harer and Clayton David of the Continental Realty Ltd. brokerage have marketed the buildings for sale since early August at $2.75 million. The site a few years ago had been eyed as the site for a boutique hotel. Harer said the two properties have contracts to two separate buyers. He declined to name those potential buyers, but said closing should occur in the first quarter of 2011.

Read more: Schiff buys loan on former Yankee Trader site | Business First

Posted in Uncategorized | Leave a comment

Great Proposal Video for Property Adjacent to Casino play..

“This is a supplemental video I used to show the Franklin County Commissioners my project for the fall 2010 quarter, which proposed a sustainable development to replace 99 acres of highly vacant, distraught apartment complexes that are across from the site of the new casino to be built in the next year.”  – Dominic Marchionda
Source: http://dmarchionda.tumblr.com/

Posted in Uncategorized | Leave a comment

Hotel Deal in downtown Columbus finally proceeding.

The planned Hotel Indigo on Capitol Square downtown has taken a small but significant step forward.

A year after the 117-room project landed an Ohio Historic Preservation Tax Credit, St. Louis-based Midas HospitalityLLC http://www.midashospitality.com has a contract to buy the commercial properties at 16 and 20 E. Broad St. from real estate partnerships affiliated with Columbus real estate mogul Jay Schottenstein.

Schottenstein had planned to become a joint venture partner in the $26 million-plus renovation project through a contribution of the properties to the deal. Midas Hospitality has worked on the deal with the Schottenstein Property Group for more than three years.

“The main thing is, we can move forward on the project now that we have an executed purchase contract,” said Rob Willard, Midas Hospitality’s senior vice president of operations.

Terms of the deal, including the purchase price, were not disclosed. The contract gives Midas Hospitality 120 days from Dec. 1 to complete its due diligence on the project.

“That mostly has to do with securing financing,” Willard said. “… We have work to do in the next 120 days.”

The project, designed by Lusk Architecture of Columbus, could get under way in May after Midas Hospitality closes on the property acquisition, Willard said. The hotel could open by early summer 2012.

The 13-story structure (with penthouse) at 16 E. Broad St. dates back to 1901, according to documents filed in the application for the Ohio tax credit. That 25 percent credit is worth an estimated $4.6 million. The five-story office property (again, with penthouse) at 20 E. Broad St. was built in 1869.

Combined, the buildings will give the hotel about 112,000 square feet after construction of a 11,000-square-foot addition to the back of 16 E. Broad.

Read more: Schottenstein’s Hotel Indigo project downtown changing hands to Midas Hospitality | Business First

Posted in Columbus Real Estate News, Development, Real Estate Trends | Tagged , , , , | Leave a comment

National Retailers seeing dramatic gains!

Central Ohio’s largest retailers game out of the gate into the Christmas shopping season on improving footing.

Limited Brands Inc. (NYSE:LTD), the parent of the Victoria’s Secret and Bath & Body Works chains, told investors Thursday that sales at its stores open at least a year rose 10 percent in November. The gain came on a 14 percent increase in total sales to $893 million for the month at the Columbus-based merchant, which operates 2,666 domestic stores.

New Albany-based apparel retailer Abercrombie & Fitch Co. (NYSE:ANF), meanwhile, reported a 22 percent jump in same-store sales for November. Total sales for the 1,112-shop chain soared 32 percent to hit $318.9 million last month.

Receipts weren’t as robust last month for another major Ohio-based retailer: Cincinnati-based Macy’s Inc. (NYSE:M) reported a 6 percent gain in same-store sales and an increase in total sales of 8 percent to $2.34 billion in November. Macy’s runs seven stores in Central Ohio.

With two months remaining in the retailers’ fiscal year:

• Abercrombie’s same-store sales were up 7 percent through November, as total sales jumped 18 percent to $2.64 billion;

• Limited Brands’ same-store sales grew 9 percent on an 11 percent gain in total sales to $7.05 billion for the first 10 months; and

• Macy’s reported a 5 percent gain in same-store sales year-to-date, with total sales up 7 percent at $19 billion.

Read more: Limited Brands, A&F enjoy Nov. sales jump | Business First

Posted in Basic Economy News | Tagged , | Leave a comment