A Hungover Friday Morning Link Rundown

Fortress Acquiring Flagler Development for $3.5 Billion (CoStar)
Apparently bought all-cash, which is somewhat surpring. I would say that is may be due to the fact that development firms which aim for quick development and exits tend to be low on operating cash flow, especially in today's environment where less buyers are buying on in-place income and rather focusing on future stabilized cash flows and/or values... but Flagler has a sizable portfolio of owned assets. In any event, it's definitely the news of the day [yesterday].

Mathias named SL Green President (Forbes)
Notorious BSD Andrew Mathias has been promoted to president of SL Green and will keep the CIO title as well (of both SLG and Gramercy Capital). Previously, CEO Marc Holliday was President of the company as well. Said Holliday, "Andrew could make eight kajillion bazillion dollars if he were to start something up himself, so I'm perplexed that he accepted my offer of a title upgrade and some extra pocket change." ...Or maybe that's just what I said ... to myself.

NAR: Commercial Real Estate Investment Expected to Remain Strong (EARTHtimes.org)
Don't ask how I happened upon an EARTHtimes link, but its really just a press release from the National Association of Realtors which cites the fact that more dumb money is being thrown at commercial real estate deals in 2007. "Investment in commercial real estate rose 11 percent to a record $306.8 billion in investment-grade transactions in 2006, with office buildings leading the way."

Broadway Closes on 237 Park, 100 Wall (NY Observer)
The Real Estate pokes a little fun for their "announcement" when everyone already knew about the transaction via the same blog two months ago.

If a high-rise is developed in downtown LA, does it make a sound? (CPN)
I don't know many people who care much about Los Angeles real estate, save for Maguire Properties, I'm sure... but according to CPN, "Plans have been announced for Park Fifth, a high-rise residential and hotel complex in Downtown Los Angeles. Africa Israel and Namco Capital Group are serving as the capital partners for the $1 billion project, which is being developed by Houk Development Co." It will be the tallest residential property west of Chicago at 76 stories on Fifth and Olive (and another 43-story tower). It will include 732 condos, a 220-room five-star hotel and a 15-story bridge linking the two towers. Groundbreaking will take place in Q1 2008.

Everyone drink lots of water and be liberal with the Aleve!

Could a Downtown Migration Signal the End of the Midtown Office Craze?

An article in CPN this morning on JP Morgan Chase negotiating with the Port Authority to building a 50-story office adjacent to the World Trade Center site implies that a number of blue chip Midtown tenants are exploring possibles moves to downtown.

"Overall there is significant sticker shock from some big midtown tenants that are looking downtown. Even the best inventory downtown is trading at approximately half of that ($100 per square foot) at $60 plus or minus a square foot." [So says Brian Given, vice chairman at GVA Williams in Manhattan.]

Following up on this story a few days ago, could we be staring at the beginning of the end of the Midtown office craze?

It is well known that very little available office space exists city-wide, let alone in the core Midtown office market from 6th Avenue to Lexington, 42nd Street to Central Park. If the big banks are going to aggressively pursue the types of spaces the recent rumors suggest, one has to believe that new downtown developments will be their only possible solution.

Let's not kid ourselves - when comparing a new Class A+ office at $60 per square foot versus a 30-year old Class A office at $100 per square foot, ahead of what many believe to be a rebirth of Lower Manhattan, the cheaper, value-added play will win out every time.

The flip side of the coin is that Midtown landlords are forced to drop their rents significantly - perhaps by as much as 25% - to keep these core tenants.

In either case, its hard to see the Midtown valuation trend continuing very much longer; it's certainly much easier to see the nearing peak of the price curve.

Green Condo to Rise in the ATL

GlobeSt.com reports that Lily Development will break ground this summer on Aquarius Tower, a 122-unit, 38-story condo tower at Ivan Illen and Luckie. They have reached approximately 45% presales, which is around a common threshold for lenders to fund vertical construction of condo buildings these days.

Prices will range from $300,000 to $900,000 for most of the units ($350 to $430 per square foot).

Designed by PFVS Architects, Inc., the 240,000-sf tower will be the first condominium project in Georgia to incorporate solar and wind energy into its design. The rooftop solar panels will harness the power of the sun and the wind turbines will channel high winds into usable energy. The tower will have other sustainable features, such as the use of recycled building materials and thermally efficient products. Escandari says he decided to incorporate green features mainly for philosophical reasons. “It’s costly, but we’re finding ways to do it,” [ Lily Development president Antonio Escandari] says.

$1B Theme Park Coming to Dubai

According to this morning's GlobeSt.com email alert, NY-based Marvel Entertainment will JV with Al Ahli Group to develop a "Super Hero" theme park in Dubai. It is anticipated to open in 2011, and it may be the first of several similar developments in the region.

“We are launching a long-term relationship with the Al Ahli Group to bring the Marvel Universe to Dubai with this exciting new theme park development,” says David Maisel, chairman of Marvel Studios and a member of the Office of the Chief Executive of Marvel Entertainment, in a statement. “Al Ahli Group has both an impressive team of theme park, entertainment and hospitality executives and the financial strength to leverage that expertise into a world-class destination resort experience unparalleled in the region.”

"Family destinations have not evolved in Pan Arabia and thus it’s time that we cater to that demand and make the investment required for global tourism,” says CEO Mohamed Khammas of AAG."