Brad Thomas’ Post

No asset documentation… no problem! A family had owned a portfolio of office buildings for many decades and by the time the surviving member passed away, there were no heirs, so the assets were left to the Einstein College of Medicine. We had worked for the college on a few other assignments and knew the members of the Board very well. Several of them were real estate professionals. The college wanted to monetize the real estate and we were hired to sell this portfolio of five Class B office buildings in Manhattan’s booming Midtown South and Grand Central submarkets, totaling approximately 460,685 rentable square feet. The properties had been owned by the same family for several generations, whose arms-length management style meant that building upgrades and leasing strategies that could have been implemented to increase the portfolio’s performance had never been undertaken. Additionally, there was no access to documents such as reimbursement schedules, contracts, or even full leases as record keeping in recent years had been neglected due to the unfortunate passing of the owner. Added to that, an office fire years before destroyed a significant amount of the historical documents. We began with a lengthy and robust due diligence process, in which several associates and analysts poured over each salvageable document and inspected the buildings several times in order to piece together the history and current state of the properties and their operations. After solidifying the underwriting, we integrated a third-party digital platform to organize our data room and assist in running a smooth process. Given the popularity of the submarkets at the time, the response from the investment community was enormous. After just a short time on the market and achieving 42 offers, we realized that the best way to achieve a dual mandate – get the highest price and ensure that all five buildings were sold – was to push potential investors to purchase the entire portfolio. Many investors were enamored with one or two properties, but few with all of them. Acknowledging this, investment groups began to group together to purchase the entire portfolio and split up the properties accordingly. Eventually, we secured the sale of the portfolio for $198.5 million to a group led by a national private equity firm coupled with several local and national partners. Swipe to see what the seller had to say. #TuesdayTestimonial #BKREA #NYCRealEstate

In the News: Presidio Bay Managing Principal K. Cyrus Sanandaji was featured in CoStar News’ recent article ‘Signs of More Office Demand Raise Optimism for Recovery’. Discussing our insights on the demand for office space in San Francisco, he outlined our continued efforts to continue to invest in our city by offering hospitality-driven experiences; “In San Francisco specifically, we’re seeing the entire ecosystem, from investors to entrepreneurs, embrace the return to office and recognize how much you gain" from being back in a physical space, he said. "This is what’s driving so many to start searching for office space and signing new leases. We need a lot more of it, but when it turns back on, it’ll ramp up very quickly and beyond what most people are anticipating.” Read the full article at 🔗: https://lnkd.in/eh8XHyU2 #PresidioBayVentures #SanFrancisco #CommercialRealEstate #OfficeMarket

🌆 Embracing Change in the Indianapolis Office Market 🌆 CARMEN Commercial Real Estate unveils key strategies for thriving amidst the market's recession phase. From analyzing market dynamics to identifying untapped opportunities, this latest blog article offers a roadmap for success in challenging times. Dive into expert insights on leveraging cyclical downturns for strategic advantage. 🚀 #CorporateRealEstate #MarketInsights #InvestmentOpportunities #CARMENCorporate

🔍 Discover how CARMEN Commercial Real Estate is turning challenges into opportunities in the midst of Indianapolis's office market recession! With 63% of markets in recession and a further 18% facing hyper-supply, we delve deep into strategic solutions that promise not just survival, but growth. 💡💼 Click to explore our latest insights and find out how to thrive in a fluctuating economic landscape. #IndianapolisOfficeMarket #MarketResilience #StrategicInvestment #CARMENCRE https://lnkd.in/grCvAGzG

For as long as I can remember, I have been a real estate man by trade, education, and heart. That’s why I always start with location when evaluating real estate. And also why I wouldn’t touch New York City real estate with a ten-foot pole. I have been in the real estate industry for many years and I firmly support each investor’s right to come to their conclusion. But, I also believe in the importance of choosing based on location first and foremost. Now, for me, location encompasses a few factors including: ✅ Safety ✅ Economic Outlook ✅ Distance to jobs, stores, hospitals, schools, etc And if you ask me, NYC falls flat on all three of these. If you put all three of these factors together, then it’s obvious that unfortunately, real estate in the city isn’t where it’s at. And lately, the trends in New York have been disappointing, to say the least. Does this mean NYC real estate is always going to be this way? Definitely not. And NYC isn’t alone in offering too little to investors. Cleveland, Ohio. Los Angeles and San Francisco, California. Chicago, Illinois are a few others. These cities are spending too much on all the wrong things. The results make them places I want to and will stay away from until things change. Do you look at location first when considering real estate investments? #future #investing #business #success #motivation

That’s largely because the Detroit real estate market has proven to be remarkably resilient, even as high interest rates throw challenges its way. Like other CRE markets, the Detroit-area office sector is seeing a flight to quality, with tenants seeking out higher-quality office space with more amenities. Because of hybrid work schedules, these tenants are willing to pay more per square foot for higher-quality office space while renting a smaller amount of square footage. This gives these tenants higher-quality space without boosting their overall rent expenses by a significant amount. https://okt.to/1h6Cuf

While concerns exist, experts still see potential for growth in the office sector. Stay informed and make strategic decisions for your commercial real estate needs. #CRE #officemarket #optimism #commercialrealestate #commercialproperty

CREATE, the commercial real estate magazine of the National Association of REALTORS®, featured The Counselors' Top Ten Issues Affecting Real Estate® in its latest issue. Read the article here: https://lnkd.in/eDvqHyxF #cre #commercialrealestate #commercialproperty

Billionaire Starwood Capital CEO Barry Sternlicht recently shared alarming insights at the Global Alts conference in Miami Beach, revealing that the US office real estate market is grappling with staggering losses, estimated at $1 trillion. In this analysis, we will delve into the nuanced challenges faced by the office property market and the broader implications of this existential crisis. THE BILLIONAIRE’S PERSPECTIVE: Sternlicht emphasized the severity of the situation, characterizing the dilemma as an “existential crisis” for the office segment of the commercial Real Estate. The once robust $3 trillion market has witnessed a significant depreciation, currently valued at around $1.8 trillion.... Read More

Barry Sternlicht just gave a VERY thoughtful interview about the growing troubles in commercial real estate: Here's what he had to say: "We have a problem in real estate. In every sector of real estate, not just office, because of the 500 basis point increase in rates that was vertical. The office market has an existential crisis right now... it's a $3 trillion dollar asset class that's probably worth $1.8 trillion [now]. There's $1.2 trillion of losses spread somewhere, and nobody knows exactly where it all is... There are buildings in New York that were bought for $200 million... the loan was $100 million... and we [personally] thought it was worth $30 million. There's a building for sale right now in San Francisco. It was bought for $850 per sq ft. The loan was $450 per sq ft. They'll [probably] sell it for $250 per sq ft... that's $0.25 on the dollar. That would mean we lost three-quarters of the total asset class... This asset class is not just owned by rich people. It's owned by pension plans and other people... small investors. We're not just talking about towers. We're talking about the buildings that surround towns and municipalities. What happens to those cities? But there is a bright spot - the office situation is a completely US phenomenon. I just was in Munich last week, and rents in Munich are up 15%. The vacancy rate in Munich is 2% for Class A. In Seoul, Korea, it's 1%. In Tokyo, it's 4%. Everyone's back to work except for Americans. We've gone off the deep end. We don't show up for work, we don't apply for jobs, and we don't feel like we have to go back to the office."