Falcon Real Estate works with a number of clients around the world, both individuals and institutions, that have well-established investment objectives for the United States real estate market. Different clients, of course, have different investment objectives, and therefore the Falcon acquisition staff is constantly looking for many types of properties, in differing size ranges and with differing risk parameters. With the rise in capitalization rates that has occurred during the current recession, we are seeing an increasing number of investors from overseas that are interested in the US commercial real estate market. Because of the conditions in the credit markets today, our clients will purchase on an all-cash basis or will assume existing debt.
Our current requirements are listed below:
1. Multi-Tenant Office Buildings: $50 to $500 million range. We are actively seeking Class A office buildings for several of our clients. Major locations – primarily New York, Boston, Washington DC, Los Angeles and San Francisco – are preferred but attractive investment opportunities in other major markets will also be considered. We require newer office buildings with occupancy levels of 85% or higher. Credit or quality tenants are favored as well as properties that are leased to a handful of tenants.
2. Single-Tenant Office Buildings: $25 to $100 million price range. Long-term leases with ten years or more remaining, leased to investment grade tenants. Internationally recognized companies are preferred and leases must have attractive rental rate increases during the term.
3. Joint Venture Opportunities: $20 to $150 million equity investment. We are actively reviewing opportunities to recapitalize existing office properties. An equity position of 40% to 90% will be considered and preferred returns are desired. Top locations and experienced operators are required.
4. Distressed Debt: A number of our clients are seeking to purchase non-performing commercial mortgage notes. The debt should be tied to quality commercial or residential projects in prime locations. In addition to distressed debt tied to office properties, we will consider debt on completed condominium projects that could be converted to rental units.
5. Retail: We have received several requests for boutique retail assets on prime retail streets. Madison Avenue and Fifth Avenue in New York City, Michigan Avenue in Chicago and Rodeo Drive in Beverly Hills are examples of quality locations that will be considered. We are also looking for neighborhood and community centers with recession-resistant anchor tenants and minimal in-line shop space.
August 2009
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