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VOL. 123 | NO. 42 | Friday, February 29, 2008

Steady Sales Volume Good News for Commercial Real Estate

By Eric Smith

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A handful of high-dollar deals highlighted Shelby County's commercial real estate sales landscape in January, helping 2008 begin on a positive note with a total sales volume of $137.4 million.

Topping the list of commercial sellers for the month was Fair Oak LLC, which sold two multifamily properties for a combined $17.7 million. It marked the top total dollar amount for any one seller during January, according to the latest data from real estate information company Chandler Reports, www.chandlerreports.com.

In addition to being lucrative, the first month of the new year also proved to be an active one, as 99 companies sold at least one commercial property, though only five of those entities registered more than one sale. Ty Investments LLC had the highest number of sales with three totaling $1.1 million.


'Steady eddy'

As for total dollars, Fair Oak's No. 1 ranking was bolstered by the sale of Poplar Place Townhomes for $13.5 million and Collier Village apartments for $4.2 million, both to the same undisclosed out-of-town investor.

"We are a very steady-eddy, reliable market that institutional-grade investors and even smaller investment groups like to have in their portfolio," Lea Heilig of Woodyard Realty Corp. told The Daily News recently. "We're solid, we're not going to go anywhere and Memphis is a good market to have an asset in."

That portfolio was followed by a shopping center at 890 Poplar Ave., on the corner of Market Boulevard in Collierville. Christian Mission Concerns of Tennessee Inc. sold the property to two couples - Alan L. Kosten and Susan Kosten, and Stanley Rosenblum and Judy Rosenblum - for $16 million, the single largest transaction in the county all month.

Rounding out the top five in terms of total sales dollars, Houston Levee Galleria Joint Venture sold a three-building, 65,000-square-foot retail center to DBSI Houston Levee Galleria LLC for $15.8 million; Weingarten/Investments Inc. sold an acre of land in the Ridgeway Trace Center to Target Corp. for $14.2 million; and Kindred Healthcare Inc., working as Kindred Development 15 LLC, sold the Cordova Rehabilitation and Nursing Center at 955 N. Germantown Parkway to a Chattanooga, Tenn.-based health care company for $10 million.


Same refrain

On the residential side, the theme was similar to one that played out during the latter half of 2007, when the rise of foreclosures prompted banks and trust companies to become the county's top sellers.

Indeed, Deutsche Bank National Trust Co. - a division of Frankfurt, Germany-based Deutsche Bank AG - led Shelby County in residential home sales for January in terms of dollar amount, according to Chandler Reports.

Deutsche Bank sold 62 homes in the month - a 29.2 percent rise from the 48 it sold in January 2007 - for a total of $4.3 million. Its average sales amount was $70,122.

The increase occurred because the organization acted as the trustee for numerous securitization trusts and, in some cases, as custodians for mortgage documents, said Deutsche Bank spokesman John Gallagher.

The company's large number of sales stemmed primarily from Shelby County's rise in foreclosures during the past year. The skyrocketing foreclosure rate occurred because so many adjustable-rate mortgages made in 2004 and 2005 reset to higher interest rates during 2007, causing borrowers to default on their loans.

The upheaval turned homes over to banks and trust companies, who were quick to get them off their books. That resulted in a high number of those organizations registering sales in Shelby County, and the trend continued into January.

During the month, 1,476 residential properties sold for a total price of $201.6 million. That marked an increase from the 1,983 sales totaling $288.2 million in January 2007.

Deutsche Bank was followed in dollar amount by U.S. Bank NA with 50 sales totaling $3.9 million; Housing and Urban Development with 67 sales totaling $3.4 million; Kevin and Sharon Kimery with one sale totaling $2.1 million; and Chamberlain & McCreery Inc. with eight sales totaling $2 million.

HUD's 67 sales led the county for the month, followed by Deutsche Bank's 62, U.S. Bank's 50, Wells Fargo NA with 35 and Bank of New York Trust Co. with 26.

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RECORD TOTALS DAY WEEK YEAR
PROPERTY SALES 87 87 14,804
MORTGAGES 80 80 19,410
FORECLOSURE NOTICES 22 22 3,817
BUILDING PERMITS 142 142 35,472
BANKRUPTCIES 62 62 14,096
BUSINESS LICENSES 62 62 5,053
UTILITY CONNECTIONS 99 99 21,532
MARRIAGE LICENSES 37 37 4,594

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