Sowing Seeds for Growth With Value-Added Acquisitions in St. Louis

Joseph Hill from our Block Hawley office, located in St. Louis, weighs in on the investment outlook for the St. Louis area.

In 2011, private Real Estate Investment Trusts (REITS) and well capitalized private investors began sowing seeds for the future by acquiring investment grade industrial assets at as low as 50% of replacement cost. The wheels were set in motion back in 2009 when the public REITS started offering major rent concessions in order to boost portfolio occupancy for the sake of damage control on Wall Street. It was widely believed that these extremely low rates would be very short-term, but they remained low longer than expected.


Those hardest hit were the private investors whose pre-recession pro formas did not account for a 50% drop in Class A rental rates. Class B and C properties lost their niche as the low cost option, and several of these owners have been forced to sell. Some of the Class B tenants have chosen to upgrade faclities with better functionality and increased efficiencies at minimal additional cost. 

Money In Multifamily: The Final Investment Series Post

As the final blog post in our three-part series focused on CRE investments in Kansas City, we look to the multi-family market sector and also sum up the overall 2012 outlook.

Multifamily
The darling of the commercial real estate investment world continued to be multi-family. With long-term debt at sub-4% interest rates provided by Fannie Mae and Freddie Mac, buyer activity remained “white \ hot.” Multi-family investment sales activity in 2011 outpaced the number and quality of transactions completed in 2010. The 340-unit Barrewoods Apartments sold at a 5.72% cap rate for $100,735 per unit ($34.25 million). The 324-unit Cordillera Ranch was sold by Sentinel Real Estate Corporation to A.G. Spanos Companies for nearly $32.6 million and at a 6.34% cap rate. Sentinel Real Estate Corporation also purchased the Fairways at Corbin Park, a 276-unit complex in Overland Park, Kansas, for $30.5 million at a 6.0% cap rate.

The Block Funds Syndications Breakdown

As an active, growing firm, we are constantly presented with property investments. Investor capital is what allows us to readily act on these opportunities. Thus, Block Funds manages our Syndications with a strategic outlook on maximizing investor outcomes. 

Industrial And Retail Investment: Investors Buy Into KC

Industrial 

Like in years past, the industrial sector is always Kansas City’s most sought-after category for both local and institutional investors. Kansas City’s industrial market is very tightly held by numerous long-time local real estate developers, but there are several institutions that have made inroads into Kansas City over the last five years through acquisitions and development. These institutions include Colony Realty Partners, Welsh Property Trust, Cobalt, INVESCO, Blackstone, USAA, and Sun Life Assurance.

Along with the increased single asset sales that occurred in 2011, a large 24-building, 1,080,380 square foot portfolio owned by RREEF, was brought to market at year-end 2011. But while a buyer was selected, the closing is not expected until early 2012.