Real Estate Forum - January 2008

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Forecasts Call for Stability in

Commercial Real Estate Markets

C&W Buys Burnham,
Widens Reach Into CA

With the housing and credit markets in turmoil, 2008 will not be a banner year for commercial real estate, as experts expect vacancy rates in most sectors to rise slightly and rents to post modest increases. The only segment that may escape relatively

tank completely, although it will definitely be less frothy than 2007.

“I wouldn’t say it’ll be a good year. I think the best we can hope for in 2008 is that it will be a stable year,” says Robert Bach, SVP and chief economist at Grubb & Ellis in Chicago. “On the leasing side for office, industrial and

ROBERT BACH, GRUBB & ELLIS

“In most of the country, the

housing downturn will be a

net plus for apartments.”

unscathed is multifamily. That is the consensus of outlook reports from Grubb & Ellis and the National Association of Realtors.

In its “2008 Global Real Estate Forecast,” Grubb & Ellis predicts that even with a sluggish economy, the commercial real estate market won’t

retail, you’ll see an increase in supply coming through the pipeline at the same time as a slowdown in demand as absorption decelerates. The double-digit rent growth that we’ve seen in the past few years, especially in the office market, will be a thing of the past.”

FORECASTS continued on page 14

Harrah’s Extends CEO’s Contract

A year after agreeing to a private buy- 2006, stockholders of the Las Vegas-out by Apollo Management LP and based gaming giant will receive $90 in Texas Pacific Group, Harrah’s cash for each outstanding share. That Entertainment Inc. has extended its represents a 36% premium over the stock employment agreement with chair- price on Sept. 29, 2006, the day before man, CEO and president Gary Apollo and TPG made their initial offer Loveman, who will stay on after the to buy Harrah’s for $81 a share. $27.8-billion deal is completed some- Established nearly 70 years ago, time in the early part of this year. Harrah’s operates casinos around the

Further clearing the way for Harrah’s world primarily under the Harrah’s, privatization was the green light given by Caesars and Horseshoe brand names. It the National Indian Gaming Commission, also owns the London Clubs International which occurred in late December. familyofcasinos.

According to a statement from Harrah’s, In a videotaped statement released in all regulatory approvals are now in place conjunction with the takeover for the transaction. In April 2007, announcement,Lovemanand Jonathan Harrah’s shareholders approved the Halkyard, Harrah’s SVP, CFO and merger, with 66% voting in favor. treasurer, both said the buyout would

Under the terms of the takeover not affect Harrah’s ongoing develop-agreement announced in December ments in Spain and the Bahamas.

Cushman & Wakefield Inc. has reached an agreement to acquire San Diego-based Burnham Real Estate. The deal, scheduled to close this month, is expected to position Cushman & Wakefield as the largest commercial real estate firm in San Diego and to further strengthen its Southern California operations, according to the company. Terms of the transaction were not disclosed.

The firm’s president and chief executive officer, Stath Karras, says that becoming part of the Cushman & Wakefield brand is a tremendous opportunity for Burnham clients and staff. Karras will serve as executive managing director of C&W’s San Diego operations, which includes the three former Burnham Real Estate offices.

“There will be little change to the ‘look’ of our operation in San Diego, with the exception that our team of brokers has grown,” Karras states.

The addition of Burnham closely follows Cushman & Wakefield’s 2006 acquisition of San Diego Corporate Real Estate Advisors. Prior to that, Cushman & Wakefield served clients in the region through an alliance relationship.

When the deal is complete, Cushman & Wakefield will maintain 13 full-service offices throughout California, including 10 in Southern California.—Natalie Dolce, GlobeSt.com

Capital Markets Slump
To Go On, Say Experts

Turmoil in the credit markets and the ensuing deterioration of investor confidence late last year will likely continue to slow down commercial sales volumes in 2008. This was the overall sentiment of both a recent presentation given by Integra Realty Resources and a report issued by Jones Lang LaSalle.