VOL. 123 | NO. 26 | Thursday, February 7, 2008
Developer Closes Deal On Cotton Row Bldgs.
Joe Sinkovich, the developer planning to turn three Cotton Row buildings into a boutique hotel, has closed the deal on the purchase. The Bull, Bear & Banker LLC - for which Sinkovich signed loan documents as president - bought 56, 60 and 62 S. Front St. for $950,000 in two transactions.
The properties, better known as the former Prince Mongo's Planet night club, have been vacant for a number of years. All are on the National Register of Historic Places.
A.H. of Tennessee Inc. sold the buildings at 56 and 62 S. Front St. for $650,000; M. Hodgeco Inc. sold 60 S. Front St. for $300,000. The deal closed Friday.
56 S. Front St. is a .08-acre lot on the east side of Front Street at the corner of an alley. 62 S. Front St., of which Bull, Bear & Banker purchased only a portion, according to the sale deed, is a 7,350-square-foot lot on the east side of Front Street north of Union Avenue.
The building is an 18,750-square-foot, three-story brick
veneer office building constructed in 1880. 60 S. Front St. is a .09-acre lot that also sits on the east side of Front Street north of Union Avenue.
Sinkovich plans to convert the buildings into The Grade Hotel, so named for the former "grading" of cotton that took place there years ago, according to the Center City Commission Web site.
The project, which will cost nearly $5 million in restoration and renovations, will convert the buildings into a boutique hotel with 30 rooms plus 8,000 square feet of ground floor space to house a coffee shop, a book store and a restaurant.
The Grade Hotel is slated for completion in spring 2009, according to the CCC site. The project received a payment-in-lieu-of-taxes (PILOT) agreement from the Center City Revenue Finance Corp., and the Center City Development Corp. helped fund the venture with a $270,000 development loan.
Joey Hagan of Architecture Inc. is the project's architect, and Gilluly & Associates is the contractor, according to the CCC.
Cobbins Tapped To Fill Spot on MLGW Board
Darrell T. Cobbins, co-founder of the local political group New Path, is Memphis Mayor Willie Herenton's choice to replace Dr. Phillip Bowden on the Memphis Light, Gas and Water Division board. Bowden resigned abruptly from the utility board last year.
Cobbins, who founded Universal Commercial Real Estate LLC last year, made a brief appearance before a Memphis City Council committee Tuesday. The full council is scheduled to vote on the nomination Feb. 19.
At the committee meeting, Cobbins was questioned by council member Barbara Swearengen Ware about his activities with New Path. The group has drawn the ire of some elected leaders for its backing of challengers to several incumbents in the 2006 county elections and the 2007 city elections. It was enough of an issue for Ware to vote against the nomination in committee.
The other four council members voted for his nomination. But council member Wanda Halbert acknowledged the controversy as she told Cobbins to "Clean it up. Clean it up quick."
If approved by the full council, Cobbins will serve through October 2010. The council committee unanimously recommended the reappointments of MLGW board chairman Lynn Evans to another term through October 2010 and Rick Masson through June 2010. Utility board member Bill Taylor's term runs out at the end of July.
Herenton still has not tapped a replacement for businessman Nick Clark, whose term recently ran out.
Regions Shares Fall On Analyst Cut
Shares of Regions Financial Corp. traded lower Wednesday morning after Citi Investment Research analyst Greg Ketron cut his rating on the bank to "Sell" from "Hold."
In a note to clients, Ketron wrote Regions Financial "faces mounting credit costs with little ability to offset this with organic revenue growth or higher than expected cost saves."
Shares of Regions Financial fell 10 cents to $24.14 in morning trading.
The Federal Reserve Board's recent reduction of the fed funds rate by 1.25 percentage points is unlikely to provide any benefit to Regions Financial, Ketron said, adding that the bank's interest margin is likely to continue to contract through the first half of 2008 as credit costs remain high.
Banks across the country have been forced to reserve more cash to cover rising delinquencies and defaults among loans, especially mortgages.
Ketron added that recently acquired investment bank Morgan Keegan could struggle in the currently volatile market. Cost savings from the acquisition are likely to be fully realized by the middle of 2008, further minimizing potential revenue growth from the acquisition.
Ketron's price target for Regions Financial is $21. He expects the bank to earn 48 cents per share during the first quarter and $2.05 per share for the full year.
Affordable-Housing Sale Includes Memphis Property
Knoxville-based Lawler Wood Housing LLC has signed a contract for sale of interest in 20 affordable-housing properties with Eagle Point Enterprises LLC. The properties are in Tennessee, South Carolina, Ohio, Louisiana, Illinois and Alabama.
The 13 Tennessee-based properties include one in Memphis: the Memphis Towers at 1081 Court Ave.
Because of a confidentiality provision in the contract, financial details for the transaction were not disclosed.
The transfer will involve 3,911 apartment units, which is approximately 60 percent of the units currently owned by Lawler Wood Housing.
The sale is expected to close this summer, following financial and legal due diligence as well as approval by lenders and investors.
CB Richard Ellis Earnings Slip in Q4
Commercial real estate firm CB Richard Ellis Group Inc. said Tuesday its fourth-quarter earnings slipped on acquisition costs and credit worries.
Net income for the period ended Dec. 31 was $122.4 million, or 54 cents per share, in the quarter compared to $125.1 million, or 53 cents per share, in the prior year period. The company said the number of shares outstanding fell to 222.8 million from 228.4 million in the year-earlier quarter.
The company said profits were hurt by $118 million in expenses from the acquisition of Trammell Crow Co. Excluding this and other one-time events, CBRE said it would have earned $144.3 million, or 63 cents per share.
Analysts polled by Thomson Financial expected 71 cents per share.
Adjusted earnings for full-year 2007 were $496.8 million, or $2.11 per share, compared to income of $318.6 million, or $1.35 per diluted share, last year. Analysts expected earnings of $2.19.
Memphis Library Receives National Medal
The Memphis Public Library & Information Center recently received the 2007 National Medal for Museum and Library Service from the federal Institute for Museum and Library Services (IMLS).
This award is the highest honor that can be bestowed on a library in the country. The award includes $10,000 and a presentation in Washington.
The Memphis Public Library & Information Center was chosen because of its participation in the civic, educational, economic, environmental and social aspects of the community.
The library offers seminars on a variety of subjects, from Web-based and software usage courses to author readings and panel discussions on a variety of subjects. It hosts a book club as well as seminars and events aimed at helping the public with tasks such as filing taxes, home-buying education and other topics.
GMAC LLC Reports $700 Million-Plus Q4 Loss
GMAC LLC has reported a $724 million loss in the fourth quarter, battered by the housing slump and widespread credit crunch and sparking fears in some circles that auto-lending may be next on the list of tightening sectors of the marketplace.
The company's mortgage business - Residential Capital, referred to as ResCap for short - lost $921 million in the fourth quarter, much of it from write-downs related to credit and mortgage-related costs. Carmaker General Motors Corp. owns 49 percent of Detroit-based GMAC after selling part of the business to an investment group for $14 billion.