The recession, a virtual constant since GlobeSt.com launched, continued making its presence felt in the industry and would continue to do so, especially for the office market, through most of the first half. An early January report on sales volume in the hotel sector—-hardest hit by the recession and Sept. 11—-was indicative of our halting, quirky recovery.
The ground-floor opportunity that hotels had become was underscored in April with Marriott's announced plans to acquire $1 billion in CTF Holdings assets. The deal would close in June.
On the retail front, Macerich made its own big-ticket deal, snapping up mall owner Wilmorite Properties for a cool $2 billion. But that was far overshadowed by two $11-billion marriages: Kmart with Sears and Federated with May. But they were all lost in the buzz of the surprise merger of the year in any market category: Catellus and ProLogis.
The first half of the year also delivered plenty of single-asset and portfolio sales as well. In February, MetLife put 200 Park Ave. on the market. The property would close within a month for $1.7 billion. Duke Realty also shelled out major capital--$257 million—for 1.4 million sf of Chicago office space, Riverway and O'Hare International Center. It picked up the asset from retail REIT Simon Property Group, in the process of trimming its portfolio to core assets.
In terms of leasing activity, Lower Manhattan continued to put the pieces back together. This year's first indication of that was the SEC's deal for 235,000 sf at 3 World Financial. It was the commission's return to Downtown after the attacks.
While promise grew around Lower Manhattan, dreams were dashed on the West Side as the Jets stadium was defeated, and with it, the hopes of hosting the 2012 Olympics.
Other developments making more positive news in 2005 include Incheon, Korea's New Songdo City. Developer Gale International unveiled plans in May for the creation of three million sf of spec office there while, on the other side of the world, Lend Lease and retail developer Minerva shook hands on the coming development of 900,000 sf of retail in the UK.
On the terrorist front, industry groups, staring the expiration of TRIA in the face, stepped up their lobbying efforts to maintain the legislation. But it's not looking promising as Treasury Secretary John Snow nay-says the legislation around Capitol Hill.
Stay tuned.
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John Salustri
John Salustri has covered the commercial real estate industry for nearly 25 years. He was the founding editor of GlobeSt.com, and is a four-time recipient of the Excellence in Journalism award from the National Association of Real Estate Editors.
