says Ludeman. “If there is forward momentum, it’s in favor of tenants in most markets.
Concessions are more generous today.”
On the development side, Troy L. Jones,
a principal in the transaction advisory services group at Ernst & Young in Los
Angeles, relates that experienced firms that
have existing relationships with capital
sources and a history of solid projects are
enjoying the most success.
Lenders are looking for development
pros that can deliver quality assets, and that
often means projects with built-in demand.
“The only buildings that are being financed
today are those that are significantly leased,”
observes Chapman. “And if it’s a to-be-built
project, it must be substantially preleased.”
Consequently, most experienced developers are altering their strategies to adapt
to market changes. Take the Opus Corp.,
for instance. The Minneapolis-based firm
has pulled back on its speculative office
and retail projects, opting for more build-to-suits and apartment properties, according to SVP and chief investment officer
Andrew Deckas.
NOW IN ITS
3rd YEAR
R SaenalSFh raanrecisco/Bay Area
OCTOBER 15, 2008 • Hyatt Regency San Francisco
Originally slated as a condominium, Opus’ Ladd in
Portland, OR has been reconfigured as a 332-unit
luxury apartment building. The 23-story tower is
scheduled for delivery in August 2009.
Make plans now to attend this high-level information
and networking conference which will offer thought-provoking analysis and in-depth discussions on the
Bay Area’s most important market trends.
AGENDA TOPICS:
• Town Hall Meeting: State of the San Francisco Bay Area Market—Has Investment Sales Pricing Remained Resilient? What Has Been the Impact
of Economic Change on Overall Deal Flow, Including Leasing?
• Debt & Equity Capital Markets Update: Who is Filling the “Credit Void”,
and What Are the Latest Innovations in Capital Structures?
• Technology Sector Leasing, Acquisition & New Development: Is Bay
Area Real Estate & Infrastructure Adequately Supportive of the Demands
of a Growth Sector?
• Inside the Real Estate Mind
• Investment Sales Update: Have New Buyers Emerged in 2008, and What
Has Been the Impact of Foreign Capital, Including Sovereign Wealth
Funds?
• San Francisco Bay Area Green Update: Are Local and State Mandates
Accelerating the Green Effort? Are Green Building Retrofits Creating New
Opportunities?
Sponsors
• Arden
• Buchanan Street Partners
• GE Real Estate
• Holland & Knight
• Marcus & Millichap
• Shorenstein Realty
Services, L.P.
Hospitality Sponsors
• Jenner & Block
CONTACT US
Sponsorship Information
Terry Bisogno
(212) 645-3825
Terry.Bisogno@incisivemedia.com
Andrew Orth
(213) 430-0310
Andrew.Orth@incisivemedia.com
General Information
Brian Klebash
(917) 464-0363
Brian.Klebash@incisivemedia.com
“Clearly, in this environment, speculative development has slowed,” he says.
“Two years ago, you could make more
money from spec buildings because they
performed, but those projects are more
challenging to get financed and are a bigger risk today.” While build-to-suits may
be harder to find, “there’s less risk, they’re
easier to finance and produce pretty good
margins.”
Opus is more actively pursuing multifamily developments in response to increased
demand in a number of markets as well as
the availability of financing. “Capital seems
to be a little bit easier to secure for rental
apartments than for other assets,” he relates.
Opus currently has 1,000 apartment
units under construction. One such development, Ladd in Portland, OR, was originally slated as a condominium tower, but,
like a number of such projects, has shifted
to a rental property following the for-sale
housing slump. The 332-unit luxury
building is scheduled for delivery in
August 2009.
Opus has also been bulking up its fee
development business. It has been particularly active in developing facilities such as
dormitories, research labs and high-tech
classrooms for educational institutions. In
July, Opus Northwest LLC completed work
on Creighton University’s Harper Center, a
220,000-sf property on the Omaha campus.
“Fee business like this keeps your people
busy in a more challenging development
environment,” says Deckas.
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