DISPATCH :: Moving downtown

ST. LOUIS | Centene Corp., a health insurance management company based in Clayton, Missouri, has announced plans to relocate its corporate headquarters to a $250 million office development in the city’s Ballpark Village.



Dubbed Centene Centre, the project will be the first new Class A office constructed in St. Louis proper in 20 years. Two skyscrapers will add as much as 1.2 million square feet to the CBD's portfolio, and the project's importance has everyone energized, to say the least.



“It’s thrilling to me, because it’s such a high-visibility urban project that’s happening in a fabulous location,” says Cassandra Francis, a senior vice president with Chicago-based US Equities. “It’s actually the kind of project that we at US Equities love to get involved in.”



Francis’ firm is partnering with Overland, Missouri-based Clayco and Centene to form BW Development. The multifaceted venture will construct and lease the office and retail space. Both Clayco and US Equities responded to an initial request-for-proposal from Centene, and they ended up joining forces for the historic project.



“We were able to build a very strong partnership with Clayco quickly because our firms are very similar in our outlook and philosophy,” she explains.



The project will occupy two blocks in the Cordish Co.’s Ballpark Village development and generate about 1,200 jobs for St. Louis. BW Development will purchase the plot outright from Cordish prior to construction.



As expected, tax abatements played heavily into Centene’s decision to relocate downtown. According to the St. Louis Post-Dispatch, the city assembled a $78 million incentives package; more is promised from state and federal agencies.



“Centene will be the largest employer to move its headquarters into the city in decades—maybe as long as 50 years,” said St. Louis Mayor Francis Slay in a media release. “We will look back on this move as a tipping point for downtown.”



The first phase of Centene Centre will be a 27-story tower totaling about 700,000 square feet and anchored by Centene’s 400,000 square foot lease. A second tower, planned at 500,000 square feet, will be developed subsequently.



Downtown St. Louis most recently recorded 151,000 square feet of negative absorption in the second quarter of 2007, according to a market report by Colliers Turley Martin Tucker. It remains to be seen how the market will embrace this new project. Rents in the CBD are among the metro’s lowest, averaging just $19 per square foot.



Francis says BW Development hopes to break ground by early 2008 and allow for tenant occupancy by 2010.



“That’s a very tight schedule, but we really want to get Centene into their space as quickly as possible,” she says.

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source: mwrenonline.com

DISPATCH :: Downtown acquisition

KANSAS CITY, Missouri | For its fourth acquisition since forming a joint venture, investors Orix Real Estate Capital Inc. and Boulder Net Lease Funds LLC have acquired a 146,591 square foot, single-tenant office building occupied by Sprint Nextel Corp. The seller was Irvine, California-based Gateway.



The 2-story building at 1414 Genessee Street adjacent to the CBD was built in 1996 and rehabbed in 2006. Sprint Nextel has 1,000 employees in the facility for a call center operation.



Eric Wollan, a senior vice president with Orix, says the property was attractive because it features a combination of an investment-grade credited tenant on a long-term lease in a building that is very well suited for its needs.



In addition, Wollan says that the Kansas City renaissance, with billions of dollars poured into new projects in the CBD, is bringing in a lot of corporate interest to the market raising its profile.



The Orix-Boulder JV is seeking office and industrial net lease properties nationwide that are between $7 million and $20 million. Earlier this year, the partnership acquired an industrial building in Lincoln, Nebraska's airport submarket.



Wollan says the JV is a higher-yield investor willing to take on more risk. Also, they operate as an all-cash buyer, he says.



“We have been able to take advantage of situations that leveraged buyers cannot,” Wollan says. “We provide an institutional investor process in markets that haven’t always had that and we provide an all-cash close. It means we can look at assets with shorter lease terms and credit that is less-than-desirable making the assets challenging and difficult to finance frankly. We don’t have those restrictions.”

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Greening the supply chain

Global logistics, the worldwide transportation network that powers our consumer-based culture, is about as un-green it gets. Industrial warehousing depends on this industry, which uses conventional petrol-burning transport vessels to move bulk goods from factories to storefronts worldwide.



But sustainability has an open-door policy to new industries, and global logistics is no different. Forward-thinking consulting firms like Sunnyvale, California-based Ariba Inc. are offering answers to clients’ green questions—often before they even ask them.



“We have been struck by the extent to which this is not hype,” says Kris Colby, senior manager in Ariba’s spend management services group. “People are putting money behind it; they’re putting effort behind it; they’re putting their goals and objectives behind it.”



Industrial real estate stands as one of the largest cost buckets in the global supply chain, and it represents a single sub-industry that can benefit from a determined greening effort. Colby’s firm recently published a list of 10 tips to green the supply chain, and he says the research has takeaways that are 100 percent relevant to the real estate industry.



“If you’re looking at warehousing and logistics, the primary focus so far has been on the fleet, and what we can do to increase the fuel efficiency of the fleet,” he explains.



But there’s more beyond that. Bulk warehousers can go green under the US Green Building Council’s LEED rating system. Locations can be chosen that are closer to major metro areas to encourage shorter travel times. Products can be sourced from companies and suppliers that use more carbon-friendly production methods. Above all, says Colby, decision makers should realize that it’s no longer about green for the sake of green. There is a growing global industry built around sustainability, and it needs savvy businesspeople almost as much as it needs committed worldchangers.



“If you’re trying to do something altruistic, chances are you might get some press out of it, but it’s not going to stick,” Colby says.



1. Know where you stand

Understanding your organization consumption patterns is the first step because you can't affect what you can't see. A simple assessment of your organization’s green status (and then a more detailed carbon footprint study) will provide you with the information you need to determine how well your supply chain is positioned for the changes on the horizon.



2. Have a plan
Once you know where you stand, create a set of goals and (even more important) metrics that can be used to track progress against these goals.

3. Have a single point of accountability

Many organizations have appointed chief sustainability officers to oversee their green efforts. The appropriateness of this specific position will depend on your organization and industry, but the key is to have a single point of accountability empowered to effect change.



4. Market your progress internally and externally

Half the battle is getting the word out and bringing people on board. Be sure to communicate to all levels why green efforts are being undertaken, what will be measured and how the company is going to get there.



5. Incorporate green into your existing sourcing and procurement processes

Sourcing and procurement have always been about more than just price. Be sure to include green criteria in your requests for proposals and create clear metrics for measuring them as part of supplier performance management.



6. Communicate your goals and standards to your supplier community

By setting clear expectations of your supply base during the sourcing process and proactively monitoring compliance/progress, you can quickly improve your sustainability performance. Outline what suppliers will be expected to provide and how they will be measured to ensure that they are delivering and putting in place the processes and procedures to drive compliance.



7. Stay up-to-date with global regulations

Environmental regulations such as the Restriction of Hazardous Substances directive in the European Union will increasingly affect how your supply chain functions regardless of your location. You need a method for keeping up with changes in this rapidly evolving area to avoid costly mistakes in your supply chain.



8. Keep up with new materials, technologies and processes

Significant work is being done to develop new approaches that can effectively address the challenges and opportunities that green initiatives present. Stay up-to-date in your industry, participate in trade groups and do whatever it takes to maintain your competitive advantage and not be left behind.



9. Do the easy stuff first

You don't need to overhaul your supply chain to see gains from sustainability efforts. Instead, identify quick wins such as simple improvements in energy efficiency that can both deliver bottom-line results and kickstart your green initiative.



10. Get everyone involved
As with any broad initiative, it is nearly impossible for just one functional area to have an impact on the entire organization through its efforts alone. To be effective, get engineering, design, sales, finance, operations and everyone else involved.

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Steve & Barry's set for Omaha

OMAHA | Steve & Barry’s, a big box apparel retailer based in New York, has finalized lease negotiations with the Seldin Co. to open a 70,000 square foot outlet in the Benson Park Plaza. Construction began at the end of October with an opening planned for summer 2008.



In 2005, Steve & Barry’s was one of five retailers chosen by the International Council of Shopping Centers to receive the group's “Hot Retailer” award, which is given annually to storefront operators who generate significant buzz and draw in new shoppers. The company originally began as an athletic-wear outfitter and now operates 211 stores nationwide, including outlets in Lincoln and La Vista, Nebraska.



The Seldin Co. launched Benson Park Plaza nine years ago at the behest of the mayor, who was attempting to stifle urban blight and create new opportunities for the community. The project began with the demolition of the existing K-Mart and the redesign of the nearby intersection at 72nd Street and Ames Avenue.



About $5.8 million in TIF funding was authorized for the 250,000 square foot redevelopment, but Seldin reinvested $3.5 million to improve the intersection.



Current retailers at Benson Park Plaza include Bakers Supermarket, Home Depot, Hancock Fabrics and Famous Dave’s Barbecue, among others.



“In 2000, at the start of the redevelopment, the assessed value of the 40 acres now comprising Benson Park Plaza was only $2.5 million, generating only $53,000 per year in real estate taxes,” said Randy Lenhoff, president and COO of the Seldin Co., in a media release.

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source: mwrenonline.com

DISPATCH :: Detroit's Vinton Building

DETROIT | The headlines out of the Motor City have mostly been focused on the large projects and major redevelopments from out-of-state players. Less attention is paid to the investment from local citizens, who are in a unique position to leverage change in the recovering market.



One example is the Vinton Building, a 14-story skyscraper in the CBD designed in 1916 by renowned architect Albert Kahn. The steel and terra cotta building was added to the National Register of Historic Places in 1983, but that couldn’t protect it from the economic downturn that wracked the city during that same era.



Recently the city of Detroit acquired the building, located at the corner of Woodward Avenue and Congress Street downtown, and began soliciting proposals for a redevelopment project. The group that materialized during the bidding process, however, was a collection of local business professionals committed to redeveloping the building into a collection of loft residences—for their own occupancy. So instead of a master developer, the Vinton Building now has a group of 10 owner/occupiers who not only believe in Detroit’s revitalization, but are prepared to live right in the midst of the CBD.



John Lowry, a project manager for Acquest Realty Advisors, helped guide the redevelopment process and worked closely with the 10 stakeholders. His firm was brought in at the beginning to assemble the financing package and the construction loan.



“It’s different in that it’s not a typical development project [where] somebody puts up some money and tries to get all the tax credits they can,” Lowry explains. “They want to be part of what’s happening in downtown Detroit.”



The Vinton Building’s for-sale residences are all spoken for, leaving just one floor of office space and one floor of retail space available on the lower levels. Both commercial components (about 3,000 square feet per level) are being developed and leased by a pair of owner-occupiers.



The tall, narrow design of the Vinton Building means the floorplates are bereft of the typical support beams found in modern skyscrapers. Each floor will be transformed into a single “white box” loft, which will then be built out as per the individual owner’ designs.



The entire process has been quite interesting, says Lowry, because there were no intermediaries in the development. The same group of people who intend to live in the Vinton Building after the construction were intimately involved in the entire project.

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source: mwrenonline.com