The WSJ: Plots & Ploys: Hole-Sale Real Estate

By Maura Webber Sadovi on April 09,2013.

Breaking News
Developments Blog
Hole-Sale Real Estate

Up for grabs: a 76-foot deep cylindrical hole in the heart of Chicago.

First-round bids are due April 23 on a soured loan backed by the site of what was once to be the country's tallest skyscraper. About five years after construction stopped on the planned 150-story Chicago Spire luxury residential tower, an Irish government agency has put the note formerly held by the defunct Anglo Irish Bank Corp. on the block.

Jones Lang LaSalle is marketing the 2.2-acre site—including a large circular foundation near Lake Michigan—for Ireland's National Asset Management Agency. The agency wants to recoup $93 million from the sale, say people familiar with the matter. Any note buyer will need to consider the added cost of gaining title to the site. The property is still owned by developer Garrett Kelleher's firm. A foreclosure proceeding has been tied up in court for years.

"There's clearly been a rapid appreciation in residential land values, but at the same time you've got to keep reminding yourself that you're buying a nonperforming loan," says Curt Bailey, president of Related Midwest, a unit of Stephen Ross's Related Cos. that has expressed interest in the site.

By Craig Karmin

It's a Mall World
KKR & Co. likes something about Albany, N.Y.: It isn't Manhattan.

On Friday, the private-equity giant on Friday acquired Colonie Center, an Albany shopping mall with about 113 stores and 1.3 million square feet of space.

KKR acquired the mall with two partners after the previous owners defaulted on a loan, the firm said. The new owners plan to upgrade the tenants, add kiosks and reduce operating costs on the 90%-occupied mall. KKR declined to disclose financial terms.

Ralph Rosenberg, head of the real-estate group, has a preference for shopping beyond major metro areas where prices have been getting quite high. "There is value in the market for very well-located retail assets in secondary markets, where there are high barriers to entry and good demographic fundamentals," he says.

Three of KKR's nine real-estate deals have been for retail, and the firm is in negotiations to acquire at least three malls from real-estate investor Macerich.

By Peter Grant

Comps for Sale
A start-up firm that sells extensive deal-by-deal data on commercial-property leases has raised another $4.45 million in funding and plans to expand to about 10 U.S. cities by the end of 2013.

CompStak Inc., which raised $1.24 million in its first funding round, got the new money from a group including Canaan Partners, 500 Startups, Founder Collective and Expansion VC. CompStak launched in Manhattan in early January and recently expanded to the San Francisco area.

CompStak charges landlords, asset managers and others more than $20,000 a year for access to its database on "comps," deal-specific data on rents, escalation clauses, landlord concessions and other lease provisions. While some of this information is confidential, brokers have informally traded it for years to make sure they are on top of market trends.

CompStak gathers this deal data from brokers and others by offering them, in exchange, access to comps on other deals. "We've been surprised how quickly brokers, researchers and appraisers have embraced what we do," says Michael Mandel, CompStak's chief executive.

Regina Glick

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