WHOEVER COINED THE TERM "SUMMER slowdown" certainly hasn't seen a summer like this one. The past few months have been eventful, to say the least, between billion-dollar property acquisitions, game-changing mergers and significant executive appointments.
Recently, for instance, Realty Income Corp. revealed its intentions to buy American Realty Capital Trust Inc. in a deal valued at $2.95 billion; Health Care REIT Inc. agreed to buy Sunrise Senior Living Inc. in a $1.9-billion acquisition; Walker & Dunlop plans to pay $220 million for CWCapital; and M&T Bank Corp. became one of the larger community banking franchises in the eastern US when it acquired Hudson City Bancorp and its 97 New Jersey branches in a $3.7-billion merger.
On the single-property side, just a sampling of the deals that took place this summer tops the $1-billion mark. Union Investment Realty of Germany bought San Francisco's 555 Mission St. for $446.5 million from Tishman Speyer; Strategic Hotels & Resorts paid $362 million for Jumeirah Essex House in New York City; and the Rockefeller Group and Mitsubishi Estate New York reportedly paid $300 million for 50 Beale St., also in San Francisco. And portfolio deals brought in millions—just look at the Canada Pension Plan Investment Board's $355-million investment in seven US properties and American Campus Communities' $627-million acquisition of 15 properties from Campus Acquisitions. What's more, lenders are more than willing to provide considerable amounts of capital, albeit to the right deals that cross their desks.
The wave of senior-level executive moves hasn't abated. The past couple of weeks alone saw Related Cos. tap president Jeff Blau to succeed Stephen Ross as CEO, CBRE promote Mike Lafitte to global president, Jeff Heller leave CBRE for Avison Young and Brian Murdy exit Cornerstone Real Estate Advisers to join Institutional Property Advisors.
All of this is great news for the market and the business as a whole. What's even better news is that unlike the prior couple of years—which saw a slowdown come midyear—it's likely these trends will continue into 2013.
Just take a look at the following pages of this issue. Reporter Matt Hudgins explains why some experts believe some office markets might see a slight uptick next year and the industrial market will likely continue on its upswing. Developers, meanwhile, continue to start, deliver and plan new projects, both individually and in partnerships, as you'll see in Amy Sorter's examination of the sector. Despite the slow-growth economy, asset managers are doing their best to squeeze returns from properties, and the strong performance of apartments this year will spill over into 2013, according to the observers John Jordan spoke with for our Multifamily Quarterly.
No doubt there are headwinds, such as the aforementioned slow economy, as well as domestic and global social and political uncertainty. But for the most part, commercial real estate professionals seem to have come to terms with this "new normal," and are indubitably making the best of it.
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