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VOL. 122 | NO. 23 | Thursday, February 8, 2007

Daily Digest

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USAA Buys Summit II Building

     An affiliate of USAA Real Estate Co. has bought Summit II, a 790,000-square-foot industrial building at 5215 U.S. 78, from Principal Global Investors for an undisclosed sum.
     The building, which is completely leased to Hewlett-Packard Co. (HP), was completed in 2005 and sits on about 40 acres on U.S. 78 north of Holmes Road.
     The sale price was not disclosed, but in conjunction with the sale, the USAA affiliate, US Industrial REIT II, filed a $19.8 million loan through The Northwestern Mutual Life Insurance Co.
     The property is part of a payment-in-lieu-of-taxes (PILOT) agreement with the city-county Industrial Development Board (IDB). The PILOT went into effect in January 2006 and runs through December 2017. Under a PILOT, the property is transferred to IDB and leased back to the original owner; however, the owner retains the right to sell the property.
     As part of the PILOT, HP committed to create 601 jobs with a median annual wage of $22,000, said John Zeanah, senior planner with the city-county Office of Economic Development. The project includes combined capital investments of $45 million in real estate, tenant improvements and personal property such as equipment.
     Colliers Management Services (CMS) will continue to lease and manage the Summit properties, said CMS president Brad Kornegay.
     "We have been associated with Summit since the first building, while our group was with Trammell Crow. ... USAA has now closed, and we will continue to manage and lease the property," he said.
     Summit Distribution Center, developed by Principal Development Investors LLC, has three buildings, Kornegay said. The first two are leased to HP. The third is a 490,000-square-foot building completed last August, Kornegay said, adding it was a spec, or speculative, build that has not yet been leased out.
     USAA recently sold a 10.6 million-square-foot industrial portfolio to London-based StratREAL for an undisclosed sum. That portfolio included 4.2 million square feet of buildings in Memphis, with those 89 percent leased. For details, see The Daily News' Jan. 17 news digest at www.memphisdailynews.com.

Wal-Mart Sex Bias Lawsuit Can Move Forward

     On Tuesday, the United States Court of Appeals for the Ninth Circuit in San Francisco ruled that the sex bias lawsuit against Bentonville, Ark.-based Wal-Mart Stores Inc. can move forward as a class-action lawsuit.
     In the suit, Dukes v. Wal-Mart, more than 1.5 million female Wal-Mart employees could join alleging discrimination in pay and promotional opportunities.
     The suit, which originally was filed in 2001 by six female employees, alleges Wal-Mart paid women with similar qualifications less than their male co-workers and frequently overlooked women for promotions.
     News reports filed following the ruling made it clear that Wal-Mart officials intend to file an appeal of the decision.
     Memphis attorney Alan Crone, a partner at Crone & Mason PLC, said these cases are very difficult to prove.
     "And they're very expensive to prove on an individual basis for plaintiffs," he said.
     "For example, if you read the opinion, there are three or four experts that the plaintiffs have engaged to help them prove this pattern of practice on behalf of Wal-Mart, so having said that, it's really too expensive for an individual plaintiff to do all of that for one case."
     He added that if this case isn't filed as a class-action suit, most of those affected won't be able to bring the claim.
     "I'm assuming Wal-Mart doesn't want to have to deal with 1.5 million claims. They'd rather deal with a much smaller percentage of women who bring the claim on their own and be able to fight each one individually," Crone said.
     In its 40-page opinion, the panel's majority wrote, "It would be better to handle this case as a class action instead of clogging the federal courts with innumerable individual suits litigating the same issues repeatedly. ... Wal-Mart failed to point to any specific management problems that would render a class action impracticable in this case."

Community Panel To Discuss Living Green

     A panel of environmental experts will hold a community discussion about green living options and opportunities at the Memphis Brooks Museum of Art Feb. 25 at 2 p.m. The event, called "Living Green: A Community Panel," is free with museum admission.
     Discussion topics include sustainable design, alternative energy sources, clean fuels, urban planning and green spaces. Panel members include Jim Lutz, architecture professor at the University of Memphis; Bill Bullock with Memphis Light, Gas & Water; Andrew Couch, director of the West Tennessee Clean Cities Coalition; and Laura Adams with the Shelby Farms Park Alliance. The film, "Kilowatt Ours," will be shown at 3:30 p.m., following the panel discussion.

2006 Banner Year For Downtown; More to Come in 2007

     With $133 million in new development and more than $1.7 billion in projects under construction, 2006 appears to have been a good year for Downtown Memphis and 2007 looks to be just as strong.
     The Center City Commission's 2006 year-end review gives a peek at what projects are still to come, including more than $1 billion in new medical and bioscience facilities, 556 condo units, 318 apartment units, 200 single-family homes and 429 hotel rooms. Fifty-eight percent of the investment in Downtown last year was pumped into residential projects, including the $12 million, 36-condo City House project; the $12 million, 42-condo and townhome unit City Commons Phase 1; and the $5.5 million conversion of the Shrine Building into 75 condo units.
     Also on the way in 2007 is the Downtown Works initiative, a collaborative campaign with private and public partners to bring more office users to Downtown.
PROPERTY SALES 57 57 1,266
MORTGAGES 48 48 964