Knollwood Mall is in the midst of renovation, which may have been just what the shopping center needed to attract a new suitor.
Heitman, a real estate investment management firm in Chicago, is purchasing the 60-year-old shopping center, according to St. Louis Park city officials. The chief executive of New York-based Rouse Properties revealed the sale's pricetag of $106.7 million during its third-quarter earnings report in November, but didn't reveal the buyer's name.
Knollwood was Rouse's only Minnesota real estate investment.
The mall, which sits near the northeast corner of Highways 7 and 169, is in the final stages of its $32-million makeover that is transforming it from an indoor to outdoor shopping center.
"We have executed a contract to sell Knollwood Mall upon completion of our redevelopment, demonstrating the value we are creating throughout our portfolio while recycling capital to reinvest in higher yielding growth opportunities," said Andrew Silberfein, Rouse's president and chief executive officer, in its third-quarter earnings statement.
Built in 1955, the shopping hub has survived multiple owners and disruptive trends in the Twin Cities retail market. The viability of the location is bolstered by its busy commercial neighborhood where the average household income is $93,000.
The property sale is expected to close this month, and possibly as early as this week, said St. Louis Park officials. Rouse and Heitman did not return phone calls.
Construction at the Knollwood shopping center has gutted the interior of the building. Knollwood Mall is undergoing a much-need facelift that involves converting the mall into a power-center, with stores accessible form the parking lot. Photographed on 6/20/14 by Bruce Bisping/Star Tribune.
Little by little it's becoming a better time to be a home buyer, and 2015 will be no exception.
Today, U.S. Housing and Urban Development Secretary said the Federal Housing Administration (FHA) will reduce the annual premiums new borrowers will pay by half of a percent. Doesn't sound like a big deal, right? The reduction is expected to "save more than two million FHA homeowners an average of $900 annually and spur 250,000 new homebuyers to purchase their first home over the next three years," according to an official press release.
In addition, mortgage interest rates have been slipping in recent weeks, and though they're likely to rise by the end of the year, most experts say the average 30-year fixed-rate mortgage won't breach 5 percent this year. And with house prices on the rise, there's a greater incentive to sell, and that means buyers will have even more choices this year. And, finaally, with the market fundamentals continuing to improve, financing a house has gotten slightly easier and slightly cheaper. An economist with CoreLogic recently predicted that with loans originated since 2009 performing extremely well, underwriting standards could be loosened without undermining the health of the recovery.
U.S. businesses expanded into more office space in 2014 than in the eight years prior, according to a new report by DTZ.
Many experts, including DTZ's chief economist for the Americas, Kevin Thorpe, saw the office sector as one of the slowest real estate sectors to recover. Thorpe says job growth is now fueling stronger occupancy gains.
The report also found that rent rates increased in 70 percent of U.S. cities. In 2014, U.S. markets absorbed a total of 70.2 mllion square feet of office space, marking the highest demand since 2006.
The national vacancy rates dropped as well. About 61 percent of the 80 metro areas tracked by DTZ reported fourth-quarter gains in filling office space.
“If one annualizes the second half of 2014, the office sector has been absorbing space at nearly twice its historical average,” Thorpe said, in a statement. “For most of this recovery, shifts towards space efficiency – lower square feet per worker – dampened aggregate demand, but robust job creation has taken over as the dominant force. Fundamentals still vary greatly by location, but the latest demand metrics can no longer be characterized as subpar. This is robust.”
He adds, “Economic fundamentals are increasingly compelling for developers to move forward with new projects. With real GDP growth nearly touching 5%, job creation at a 15-year high, lower gas prices, low interest rates, and rising business and consumer confidence, there is little to suggest that leasing fundamentals will not continue to tighten in most markets in 2015.”
The West saw the highest increase in net absorption, up 89 percent from 2013, while the Midwest -- which is composed of Nebraska, Kansas, Missouri, Iowa, Illinois, Indiana, Michigan, Ohio, Minnesota and the Dakotas -- only saw an average net absorption gain of 1.2 percent in 2014.
Housing predictions for 2015 are rolling in, and here's the latest: Mortgage interest rates will rise this year, but the 30-year fixed-rate mortgage is expected to remain below 5 percent this year. That's according to Greg McBride, chief financial analyst for Bankrate.com.
"We'll see rates near 4 percent on the low side if there's an economic stumble or geopolitical crisis, and rates as high as 4.8 or 4.9 percent if the Fed missteps or misspeaks," McBride says.
McBride considers a "misstep" or "misspeak" a situation in which the Fed might raise its rates too much or too quickly, or accidentally signal an intention to do so. In its annual forecast, Bankrate said the Mortgage Bankers Association expects the Fed to hold off on its first increase in the federal funds rate until mid-2015.
Should prospective buyers fret? No. "We're talking about very measured increases and an environment of strong lender competition," noted McBride. "That works in favor of home equity borrowers."
Cassidy Turley, a well-known commercial real estate firm with a presence in the Twin Cities, has a new name and a new owner.
The U.S.-based firm has completed its merger with DTZ, a global real estate company. The newly combined entity's new owner is a private equity investment consortium, composed of TPG Capital, PAG Asia Capital and Ontario Teachers' Pension Plan.
Internet searches for CassidyTurley.com now redirect web visitors to a merger splashpage explaining the new brand and its expanded geographic reach. The new DTZ now has more than 28,000 employees across 265 offices in 50 countries, and managed 3.3 billion square feet of real estate globally.
Pre-merger, Cassidy Turley was the fifth-largest commercial property management firm in the Twin Cities Metro Area.
The combination makes DTZ a top-three commercial real estate services company in the world.
DTZ is ranked No. 1 in China for investment sales transactions, with over 50 percent of the market share, and is ranked No. 3 in London and the United Kingdom, according to a news release.
The private equity consortium acquired DTZ in November. Tod Lickerman of legacy DTZ will be the Global CEO of the integrated company while Cassidy Turley's CEO, Joseph Stettinius Jr., will serve as Chief Executive of the Americas. Brett White, former CEO of Los Angeles-based CBRE Group, who also invested in the acquisition, will become full-time Executive Chairman in March.
“This combination is an excellent cultural fit and mutually beneficial for both companies, given our strong position in the U.S. market and DTZ’s global footprint,” said Joseph Stettinius, Jr., in a prepared statement.
We noWe now have more than 28,000 employees operating across 265 offices in 50 50 countries and $63 billi50on in transaction volume. And, we manage 3.3 billion square feet globally on behalf of institutional, government, corporate and private clients.w have more than 28,000 employees operating across 265 offices in 50 countries and $63 billion in transaction volume. And, we manage 3.3 billion square feet globally on behalf of institutional, government, corporate and private clients.
We now have more than 28,000 employees operating across 265 offices in 50 countries and $63 billion in transaction volume. And, we manage 3.3 billion square feet globally on behalf of institutional, government, corporate and private clients.
House prices across the country keep rising, but at a much more moderate pace than they have in the past. An index that measures prices in the 20 biggest metros nationwide shows that home prices during October were just 4.5 percent higher than last year but were basically flat compared with the previous month, according to the latest S&P/Case-Shiller Home Price Indices. In the Twin Cities metro, prices were up just 2.3 percent year-over-year, but had fallen 0.3 percent.
The October increase was the 10th consecutive month of decelerating increases, though eight cities saw prices rise faster. The biggest annual gains were in Miami and San Francisco; prices in Cleveland were didn't increase at all.
The Case-Shiller report is closely watched because it uses repeat sales of the same property to track home prices rather than all sales that have occurred within a particular month.