appraisal institutes year-in-review symposium daniel j. jessup, ccim president

Appraisal Institute’s Year-in-Review SymposiumDaniel J. Jessup, CCIMPresident

2010 Sale Comparables

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AddressYear Built

Sq. Ft. Sale Price Price/SF Comments

Bluemound Crossing16620 W. Bluemound

1989 48,449 $2,950,000 $60.89Class B, single story, 48% occupied

Exec. Center VI400 N. Executive Dr.

1985 102,105 $8,408,700 $85.003-story, multi-tenant, class B, 40% occupied

Exec. Center IV235 N. Executive Dr.

1980 85,612 $5,800,000 $67.00

Two-story, multi-tenant, distressed sale, M&I lease rate around$6 / sq. ft.

9898 Bluemound Rd. 1965 24,696 $1,550,000 $62.75

Owner/occupant, investing $34 / sq. ft. in common areas and own suite, multi-story, brick construction

2010 Sale Comparables

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AddressYear Built

Sq. Ft. Sale Price Price/SF Comments

100 East Wisconsin 1989 430,000 $80,200,000 $186.51

35 story, Class A, .63 acres, 720 N. Water parking structure,94% occupied

Crossroads V21075 Swenson Drive

1989 20,000 $1,300,000 $65.00

Single story, owner/occupant, invested $35/sq.ft. in their space, 2.49 acres

The Forum Building3333 N. Mayfair Road

1970 81,902 $5,000,000 $61.00Three-story, multi-tenant, distressed sale, significant vacancy

Midwest Express HeadquartersOak Creek

1996 2000

120,883 $9,000,000 $74.45

2 - Three story buildings, owner/occupant, 27+ acres, Class A, brick construction

2010 Lease Comparables

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BuildingTenant Name

Sq. Ft.Lease Rate

NetGross

Op. Exp. / Sq. Ft.

Lease Term

RentConcessions

TIs/SF

Plaza EastAssociated

Bank17,432

$19.502.5%

Gross $10.77132

mos.None $35.00

Plaza EastRobertson

Ryan17,432

$18.503%

Gross $10.7769

mos.None $10.00

400 N. Exec. Dr.

U.S. Bank 20,796$17.00

2.5%Gross $7.74

125 mos.

5 mos. Gross Rent

$25.00

Honey Creek IV

Strayer University

14,922$13.95

3%Net $10.75

60 mos.

5 mos. Gross Rent

$30.00

2010 Lease Comparables

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2010 Lease ComparablesBuilding

Tenant Name

Sq. Ft.Lease Rate

NetGross

Op. Exp. / Sq. Ft.

Lease Term

RentConcessions

TIs/SF

100 EastHinshaw & Culbertson

12,947$15.50

3%Net $11.58

60 mos.

None $5.00

First Financial

Centre

Weiss, Berzowski

& Brady21,403

$13.93 2%

Gross $8.7992

mos.None $12.00

411 EastMarsh &

McLennan22,600

$13.50 2.5%

Net $10.75 120 None $35.00

9809 S. Franklin

TSA 12,000$25.00

3%Gross $5.05 120 None $45.00

Current Lease Concessions

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Rent abatement Above market tenant improvements Moving allowance Blend and extend Motorcycles, automobiles, etc… Nothing is off the table

Tenants in the Market

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Astronautics – 176,000 sq. ft. Focused on The Brewery

Von Briesen & Roper Law Firm – 75,000 sq. ft. Godfrey & Kahn Law Firm – 90,000 sq. ft. Baker Tilly – 70,000 sq. ft. Eaton Corp. – 90,000 sq. ft.

Focused on a build-to-suit opportunities at I-45 and Good Hope Road

Harmony Initiative – 70,000 sq.ft.

Prospective Developments

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Irgens/Lee Office Project Across from the Pfister Hotel 20 – 25 Stories

Ranier Mixed Use Project Park East Corridor 15 stories – 280,000 sq. ft.

Weas Development Office Project Southeast corner of N. Broadway and Michigan

Avenue – Just north of I-794 15 stories - 200,000 sq. ft.

Note: The Manpower Headquarters project and Cathedral Square both received a $25 million subsidy from the City for parking structures.

Deal Obstacles

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Financing – C.R.E. – four letter word Bank underwriting standards Slow to no employment growth Tenants carrying excess space Financially distressed building ownership Financially distressed tenants Analysis paralysis Continued economic uncertainty

What Can We Expect in 2011?

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Slight, very gradual improvement Concessions may lessen in second half of

2011? No increase in lease rates Maybe – just maybe – a downtown office

building will break ground? Financially stable tenants continue to

blend and extend

What Can We Expect in 2011?

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More adaptive reuse of existing commercial properties Low cost of acquisition More urban opportunities versus

vacant land parcels Superior construction Unique character Government incentives available

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THANK YOU

Grubb & Ellis I Apex Commercial, Inc.Daniel J. Jessup, CCIM, Presidentwww.apexcommercial.comPhone: 262-784-7500