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C&W is anticipating healthy market throughout 1999.

According to the New York tri-state area's Financial Services Group (FSG) of Cushman & Wakefield, Inc., which is based in the firm's East Rutherford, NJ office, the turmoil felt in the capital markets last fall slowed transaction closings during the fourth quarter, but activity has again reached record levels.

"The market's rebound has prompted a level of activity that should result in our closing more transactions during the first half of 1999 than in any other six-month period in our history," said Andrew J. Merin, executive director of FSG.

With 25 offices and 100 brokers across the United States, FSG represents a distinct area of service from commercial brokerage at Cushman & Wakefield, providing counsel on acquisitions, dispositions and financing, working on behalf of owners, developers, corporations, financial institutions, pension funds and real estate advisors. Founded in 1987 by Merin, FSG's tri-state area team also includes David Bernhaut, Susan Nissim and Gary Gabriel.

FSG's success reflects the strength of the real estate investment market in northern and central New Jersey, which has maintained positive momentum for the past several years. Since 1994, nearly 53 million square feet of office space alone has changed hands in the region. "With a total inventory of 142 million square feet, this represents nearly one-third of the entire market," Merin noted. "The total value of this activity exceeds $5.8 billion."

"The capital markets were so strong that they became overheated," Merin explained. "Since the correction last fall, REITs have become almost non-players in the investment arena."

Although Wall Street has retreated, to a large degree, as a capital source, ample financing and property still exists for real estate purchases, according to Merin. "We anticipate that the key investors in the coming year will include pension funds, foreign entities and entrepreneurs," he said. "Although these buyers have always had a significant presence in the marketplace, they will increase their involvement by purchasing properties from insurance companies that are selling off their remaining real estate assets, as well as opportunistic investors who have seen their investments mature and are ready to sell."

In addition, large corporations - due to outsourcing, right sizing and downsizing - will continue to sell off their corporate real estate investments and excess land. "Value-added investors are now flocking to these opportunities with plans to redevelop older buildings and develop raw land," Merin said. "And within this context, the New York metropolitan market is well-positioned to thrive, supported by a strong economy, rising rental rates and a fight Class A inventory."

During 1998, Cushman & Wakefield's FSG completed 25 major transactions with an aggregate value of $550 million. This included 6,594,248 million square feet in sales of office, industrial, retail and residential properties.

Among its most notable 1998 activities, FSG negotiated Prudential Insurance Company's $113.7 million sale and leaseback of 757,408 square feet in Woodbridge, NJ to TA Associates Realty. The team also orchestrated the sale of the 192,000 square-foot Mountainview Executive Park in Upper Saddle River, NJ, representing the seller, a pension fund client of KB Realty Advisors. Mack-Cali Realty purchased the property for $24.5 million.

In addition, Merin, Bernhaut, Nissim and Gabriel were involved in several diverse transactions, including the sale of the vacant 602,000 square-foot Kraft Foods former corporate headquarters in White Plains, NY to Cohen Brothers Realty Corporation, and the sale of Miami Center, a 9.02-acre development parcel in downtown Miami for $35 million. The team also represented KB Realty Advisors in the sale of a three-building, NY tri-state portfolio.
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Title Annotation:Cushman and Wakefield Inc.; real estate industry; First Quarter Review
Publication:Real Estate Weekly
Date:Apr 7, 1999
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