June 24, 2008 by jack petrie.

$613 Million Industry Consolidation

With the recent announcement of the merger between Jones Lang LaSalle and The Staubach Company, CresaPartners becomes the largest North American, pure tenant advisory firm in terms of people and locations.

When asked what the impact will be in NYC on the market and the corporate tenant, I have been offering the following points:

• The JLL/Staubach merger is disadvantageous for the corporate real estate consumer because it means one less pure tenant advisory firm in the marketplace;
• The merger makes CresaPartners the tenant rep firm with the largest reach in North America. CresaPartners also has the most employees in the tenant representation model;
• This type of merger is not a surprise as consolidation has been a trend in the real estate industry for several years already;
• CresaPartners steadfastly believes in its partnership model and will remain independent despite industry trends;
• The merger provides CresaPartners with an excellent recruiting opportunity. We will be reaching out to and open to hiring experienced advisors who are committed to the pure tenant representation model.

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June 18, 2008 by jack petrie.

Square 1 Bank, a Durham, N.C.–based financial services firm, has recently signed a seven-year lease for office space at 424 Madison Avenue, NYC, 10017. The Madison Avenue location is Square 1 Bank’s tenth location, joining branches in Austin, TX; Boulder, CO; Durham, NC; East Palo Alto, Los Angeles and San Diego, CA; McLean, VA; Seattle, WA and Waltham, MA. Square 1 Bank was represented in the transaction by Jack Petrie of CresaPartners.

About Square 1 Bank

In 2004, CEO Richard Casey sat down at his kitchen table with a few of his closest associates for a little entrepreneurial discussion. This discussion turned into planning sessions, and those planning sessions set the stage for the Square 1 Bank dream to become reality. On August 8, 2005, with many long hours logged at that same kitchen table, the doors to the first six Square 1 Bank offices opened for business. A little over a year later in October 2006, Square 1 reached profitability and surpassed their client goal by 38%. Today, Square 1 Bank has four additional offices, has reached a billion dollars in assets, and accumulated $352 million in loans and $898 million in deposits.

About 424 Madison Avenue

424 Madison Avenue located between 48th and 49th Streets is a 75,000 square foot office building constructed in 1926. It is currently owned by BLDG Management Company, Inc. and is currently 97.4% leased. Major tenants include North Fork Bank and the World Gold Council.

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June 18, 2008 by jack petrie.

First Quarter 2008 Market Update

Tenant’s Viewpoint

Asking rents are expected to remain flat over the next few quarters. More sublease space will come on the market and landlords will be more reluctant to exercise their recapture rights. Recent economic events have produced sufficient uncertainty to change landlords’ attitudes towards deal making. Incentives to tenants are on the rise and landlords will increasingly be motivated to get a transaction done. This is welcome news for tenants with requirements over the next 2-3 years. There is a window of opportunity that tenants should be looking to take advantage of.

Market Overview

The level of unease in the New York City office market is increasing in light of the layoffs on Wall Street and the recent collapse of Bear Stearns. Further job losses are expected and this will check the demand for space and put more sublease space on the market. Tenants are rethinking their plans and, in some cases, are withdrawing from transactions or major commitments. However, the statistics are slow to react: Class A space vacancy in Midtown increased only slightly whereas Class A space vacancies in Midtown South and Downtown actually decreased in Q1. There were negative absorptions in all submarkets except Midtown South and Downtown.

Trends & Statistics

Midtown
Midtown Class A vacancy rates increased from 4.5% to 4.7% in the last quarter. Asking rents for Class A space continued to increase to $84.46 per rentable square feet (rsf). Vacancy in Class B midtown space increased from 3.9% to 4.3%, with asking rents barely increasing from $53.81/rsf to $53.97/rsf. Q1 2008 net absorption was -355,632 rsf for Class A space, the first negative absorption in quite some time. Class B absorption was -258,529 rsf.

Midtown South (Class A & B)
Q1 vacancy decreased nominally from 4.0 to 3.6% from Q4, with asking rents increasing $0.41/rsf (0.8%) to $54.26/rsf. Net absorption in Midtown South was still low at 9,822 rsf, a reflection on extremely limited availability in the submarket and lower activity in light of current economic conditions.

Downtown
Class A vacancy dropped by 11.3% from 5.3% in Q4 to 4.7% in Q1, with asking rents increasing slightly ($0.48/rsf) to $52.94/rsf. Class B vacancy increased marginally in Q1 2008 to 10.1% from 9.0% in Q4, but asking rents climbed at a slower pace than the prior quarter — only 1.5% to reach $47.41/rsf.

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February 14, 2008 by jack petrie.

Fourth Quarter 2007 Market Overview

Tenant’s Viewpoint

Continuing uncertainty in the financial markets coupled with announcements of job cutbacks have quelled the surge that commercial real estate experienced over the last year. We expect this pause to continue through 2008 as the financial services industry continues to write down losses from the credit crisis. Tenants contemplating renewal or relocation should consider taking advantage of this window of opportunity before the uncertainty stabilizes and landlords and sublandlords regain their market bullishness.

Market Overview

The tide of sentiment about the strength of the New York City Office Market has ebbed even though the statistics remain strong. As more reports of job losses are published, we would expect to see this trend in confidence continue. Class A space in Midtown remains strong with a vacancy rate of 4.5%. Class A space in Midtown South and Downtown are also showing no signs of weakening, due to limited supply. The big winner in 2007 on absorption was Downtown Class A space which reduced its vacancy by almost half, absorbing 3.2 million rentable square feet (”rsf”) in comparison to 2.7 million rsf in midtown Class A space. Overall, there now appears to be less competition for space, and we see the first signs of landlords being more negotiable.

Trends & Statistics

Midtown
Midtown Class A vacancy rates decreased from 5% to 4.5% in the last quarter. Asking rents for Class A space continue to increase, now $83.32 per rsf. Vacancy in Class B midtown space improved to a new low of 3.9% from 4%, with asking rents decreasing slightly from $54.95 to $53.81 per rsf. Since Q4 2006, Class A vacancy rates have decreased 13.46% (from 5.2% to 4.5%) and the average asking rent has increased by $15.87 per rsf or 23.53%. Class B vacancy decreased nominally from 4% in Q4 2006 to 3.9% and asking rents increased $11.04 per rsf (or 25.81%). Q4 2007 Net absorption was 927,873 rsf for Class A space, almost 70% higher than Q3 2007. Class B absorption did an “about face” with positive absorption of 282,572 rsf (compared to the previous quarter which had negative absorption of 211,951 rsf).

Midtown South (Class A & B)
Q4 vacancy increased once again nominally from 3.8 to 4% from Q3, with asking rents increasing by another $4.99 per rsf (or 10.21%) to $53.85 per rsf. A year ago (Q4 2006), vacancy was 20% higher at 5%. Asking rents in the same period increased $13.80 per rsf or by 34.46%. Midtown South has continued to remain tight in light of the premium cost of space in Midtown. Net absorption in Midtown South in Q4 was quite low at 29,585 rsf, a reflection on the very limited availability in the submarket.

Downtown
Class A vacancy reduced by 10.17% from 5.9% in Q3 to 5.3% in Q4, with asking rents increasing only slightly ($o.98 per rsf) to $52.46 per rsf. Class B vacancy increased marginally in Q4 2007 to 9% from 8.3% in Q3, but asking rents continued to climb by 6.45% to $46.71 per rsf. A year ago, Class A Vacancy was 10.3%, and class B was 10%. Asking rents were $45.27 per rsf and $36.38 per rsf, respectively. This shows a massive 48.54% reduction in vacancy for class A (10% for class B) and an increase of 15.88% (Class A) and 28.39% (Class B) in asking rents.

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February 14, 2008 by jack petrie.

3PAR Inc., a Fremont, Calif.–based provider of utility storage, has recently signed a five-year lease for office space at 1 Whitehall Street, NYC, 10004. 3PAR was represented in the transaction by Kristian Hansen and Jack Petrie of CresaPartners.

About 3PAR

3PAR, which raised $105 million in its November, 2007 IPO, is relocating and expanding from its existing location in an executive suite on Wall Street. The company’s IPO sold 7.5 million common shares at $14 per share, for an initial market cap of approximately $840 million. It will trade on the NYSE Arca under ticker symbol PAR.

Previously, 3PAR had raised around $185 million in total VC funding since its 1999 inception, from firms like AllianceBernstein LP (f.k.a. Alliance Capital), Integral Capital Partners, Mayfield, Menlo Ventures, Open Field Capital, Van Wagoner Capital Management and Worldview Technology Partners

About 1 Whitehall Street

1 Whitehall Street located between Bridge and Stone Streets is a 300,000 square foot office building constructed in 1962. It has been continuously owned by Rudin Management Company and is currently 100% leased. Major tenants include the Topps Company, The Enterprise Foundation, St. Paul Travelers and International Shipholding Company.

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February 13, 2008 by jack petrie.

AlwaysOn On Media Conference Overview

I recently attended the AlwaysOn OnMedia conference (see photo) held in NYC at the Mandarin Oriental Hotel in NYC on January 28th-30th. I was impressed by the continuous lineup of panel discussions featuring technology and new media CEO’s and their investors. I also enjoyed the overall quality of the business concepts and content in the presentations as well as the escalating sense of a tech/new media community developing in NYC. Here’s the lowdown on some other upcoming events:

Upcoming iBreakfast Alert

On February 27^th, CresaPartners will cosponsor and host the iBreakfast on “Web Video: Monetizaton Challenges & Opportunities”. The event will feature a panel discussion with Bryan Thatcher of Empressr; Marcien Jenckes, CEO of Voxant; and John Lumpkin of Heavy Media.

Web Video is everywhere - it is one of the fastest growing uses of the Internet and it is spilling over to mobile. But can this visual cornucopia generate profit? Three great companies tell us how they are doing it - or expect to do it.

About Empressr

Empressr is the first Ajax/Flash-based Web-enabled application that allows you to create, manage, publish, and share presentations online. Empressr is developed by Fusebox to answer the limitations of existing presentation applications – namely, if streaming video and Flash are more dynamic ways to present important information, then why shouldn’t businesses and individuals be able to include them in presentations? The result is an application so innovative, it will revolutionize the way presentations are created.

About Voxant/Marcien Jenckes

Voxant is building a network that delivers unparalleled licensed

content, advertising and syndication services to the millions of Web sites and

niche communities that comprise the Web. Voxant’s 20,000+ Web publisher

affiliates have access to the Web’s largest, most diverse selection of free,

high quality, fully licensed news and information for their Web sites and

blogs. Voxant provides full monetization while maintaining control over

content integrity, quality and branding for more than 250 content providers.

Voxant is backed by SoftBank Capital, Longworth Venture Partners and Court

Square Ventures.  For more information, please visit www.voxant.com.

Voxant announced earlier this year that Internet industry veteran Marcien Jenckes has been named Chief Executive Officer.  As CEO, Jenckes will provide

strategic direction as Voxant continues its aggressive growth, solidifying its

position as the world’s largest online syndication network. Before joining Voxant, Jenckes served as Senior Vice President of Messaging Community, Voice at AOL, and was responsible for launching AOL’s free web services and online network, which attracts more than 100 million monthly visitors. Prior to AOL, Jenckes worked at McKinsey and Company in Washington DC, as a member of their Media & Technology practice.  Jenckes holds an MBA from Darden at the University of Virginia, and a BA in Economics and Political Science from New York University.

About Heavy/John Lumpkin

Heavy.com is one of the web’s leading consumer video companies and the leader for 18-34 year old males. Heavy combines its own unique original programming with those of its users to create an environment where you can control and even participate in your own personal video experience. Heavy’s original programming staples include “Superficial Friends,” “Kung Fu Jimmy Chow,” “The Massive Mating Game,” “The Burly Sports Show,” and “Behind the Music that Sucks.” John Lumpkin is a fomer publisher at Stuff.

iBreakfast Update

Other recent iBreakfast events included:

January 31, 2008 - Web 2.0 NY - The Monetizing Conference

This conference focused on the many paths successful Web 2.0 companies have taken to turn relationships into dollars.

December 19, 2007 iBreakfast - New Opportunities with TV and Mobile Ads

After the great Tech Company Land Grab on Madison Ave. the advertising world has become highly digitized. What does this mean for the industry - especially with TV-Web Advertising integration and the emerging world of Mobile Advertising?

November 28, 2007 iBreakfast - Monetizing the the Web 2.0

This event looked at advertising from the perspective of Google, which has been dramatically extending its footprint on Madison Avenue and looking for new ways to reach people through mobile advertising.

Following this breakfast, a full report has been made available, featuring an inside look at Google’s inventions that reveals the depth of their technology and how the company is poised to challenge incumbents in publishing, telecommunications, and other market sectors. The 266-page study Google Version 2.0: The Calculating Predator is now available. For more information visit www.ibreakfast.com.

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February 11, 2008 by jack petrie.

With the recently announced closing of the NYSIA (”New York Software Industry Association”) technology incubator

http://www.crainsnewyork.com/apps/pbcs.dll/article?AID=/20080208/FREE/330958854/1064/newsletter01

and the rumored closing of a similar, university-based incubator; technology firms currently face increasing challenges in solving their office space requirements in New York City.

Firms from those that operate in a “virtual” mode to those in executive suite centers - have always had a need for flexible, shared office environments. With the demise of the larger incubators, this demand has surged while no sign of increased supply exists. We expect that the looming softness in the service economies may create future excess space capacity that may hit the sublease market, but for now supply is short.

Recently, CresaPartners has recently identified two opportunities that may be of interest to potential space sharers:

Downtown - Broadway & Wall Streets

A CresaPartners client in the technology sector, has asked us to market a portion of its space for sublease on a “shared” basis. The available space can range in size from 1 workstation up to 10 workstations, or from approximately 200-2,000 rsf. Furniture is available as are the use of a shared conference room and pantry.

Midtown – Sixth Avenue & 36^th Street (See Photo)

An accounting firm has asked us to market “shared” space within its offices near Penn Station. The available space consists of 1 private, corner office and four (4) workstations, or approximately 1,000 rsf. Furniture and phones are available as is use of a shared conference room, pantry and training room. A private bathroom is available.

If interested in either opportunity, please contact Jack Petrie at 212.389.2361 or jpetrie@cresapartners.com

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October 31, 2007 by jack petrie.

Congressman Weiner Luncheon

On Monday, October 29th, NYSIA and Information Builders hosted a luncheon featuring Congressman Anthony Weiner’s speech on Entrepreneurial Growth in New York City.

Congressman Weiner discussed how New York City’s economic future will impact the technology sector and emphasized three points: 1) Government recognizes a need to help medium-sized businesses offset the high costs of doing business in NYC and the primary vehicle for that assistance is in the form of tax incentives; 2) Net Neutrality is necessary regulation to insure ongoing growth and opportunity; and 3) Immigration is of paramount importance to both the tech sector and the continued thriving of New York City.

New York Software Industry Association Monthly Meeting

Jack Petrie, SVP of CresaPartners will be among the panelists at the New York Software Industry Association’s (”NYSIA” www.nysia.org) November Monthly Meeting featuring a Two Hour Startup Bootcamp: The Faster Fast Track! The bootcamp will be held at JPMorgan Chase’s offices at 277 Park Avenue on the 17th Floor. The other panelists include Paul S. Ellis, Partner at Scarola Ellis LLP; Ed Golud, President of Revenue Accelerators; Erik K. Grimmelmann, Chief Architect of Send Word Now Communications Inc.; Warren Haber, Jr., Managing Partner of Crossbar Capital and Michael Lopez, CPA at Amper Politziner & Mattia.

NYSIA Sales & Marketing SIG

The following morning, CresaPartners will be hosting the November 7th, 2007 New York Software Industry Association’s Sales & Marketing SIG Panel Discussion on Selling to the CIO, featuring Edward I. Golod of Revenue Accelerators and Michael Minelli of Partnering With the CIO.

Revenue Accelerators - Ed Golod

Mr. Golod has 25 years of in-field sales leadership using value to build high-tech consultative sales engines. He has “hunted” over $210M in new business selling to Sr. executives in the Fortune 100. A thought leader and writer in value-based consultative selling for Sr. level relationships, he has studied over 500+ software firms to develop a new style of Business case selling to mentor high tech sales teams. Along with his deep knowledge in Enterprise software, Infrastructure, and Networks, Mr. Golod’s ability to rapidly “understand” complex IT businesses and processes is of high value to his clients.

Partnering with the CIO - Michael Minelli

Michael Minelli is a successful sales professional and client advisor. He manages clients for SAS Institute, the largest privately owned software company in the world. Michael worked with C-level executives and their teams to analyze, diagnose and transform current information and data challenges into value-based solution opportunities for CRM, Financial Management, Performance Management, IT Management and Supply Chain Intelligence. His most recent engagements have been with clients such as Time Inc., Cablevision, Foxwoods, Scholastic, Major League Baseball, S&P and Sony.

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October 26, 2007 by jack petrie.

Israeli Tech Breakfast Series

I recently attended the Israeli Tech Breakfast Series’ October 11th, 2007 Breakfast discussion of Web 2.0 Israeli Innovation & Investment held at The Harvard Club and hosted by Loeb & Loeb LLP.

All-Star Panel

The panel discussion was moderated by Loeb & Loeb LLC’s Lloyd Rothenberg and featured LivePerson’s President & CFO, Tim Bixby; Crossbar Capital Managing Partner Charlie Federman; Pando Networks’ Co-Founder & CFO, Yaron Samid; and Yissum Technology Transfer Company of the Hebrew University of Jerusalem’s CEO, Nava Swersky.

Israel’s Technology Boom

The panel’s consensus was that Israel’s technology companies are rapidly becoming global, and not purely Israeli companies. Additionally, as the rest of the world adopts a global perspective, other countries are taking a page from Israel’s historical playbook by marketing to the globe.

What are some of the reasons for Israel’s booming technology sector?

• Comraderie - the social network in Israel is tighter by virtue of the country’s size, education system and military requirements;
• Technical Expertise - Israel’s top engineering talent provides original and innovative solutions for early-stage development;
• Persistence - Israeli entrepreneurs don’t give up easily.

So, why come to NYC?

What does New York offer to these companies that they can’t find in Israel:

1. Access to media and financial markets and customers,
2. Human factors - desire to pursue the “American dream”,
3. Greater opportunity (for success).

The follow-up event in The Security Breakfast Series NY will be a breakfast on November 1, 2007 discussing Public Transportation Investing in Homeland Security and Innovation at The Harvard Club from 8AM-9:30AM.

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October 25, 2007 by jack petrie.

CresaPartners recently cohosted the October 10th, 2007 iBreakfast’s Venture Capital Outlook featuring Idealab & First Round Capital’s Howard Morgan, New York Angels & Rose Tech Ventures’ David Rose and Newforth Partners’ Robert Hoffer.

Rose Buds

Rose began by observing that there are relative few truly new concepts, but offered some personal platitudes he invokes in making investment decisions:

Invest in the jockey, not the horse - this is commonly heard from venture capitalists and Rose suggests that it is rarely about the business plan. All business plans are bound to change and the successful entrepreneur must be adaptable.

The venture concept must be scalable - monetizing purely content plays is difficult as people want free content. An advertising model must be scalable. The best models are “platforms” which allow the company to scale and offer other services besides content.

Additionally, the venture concept must be monetizable and saleable.

M&A Perspective

Hoffer’s forte is investing in the “Digital Media Value Chain” and he suggested that the mpeg4 will drive all future media. Hoffer emphasized that in the current climate, limited partners returns come from merger & acquisition activities rather than from successful initial public offerings. He suggested that the last money “in” to an investment provides the greatest opportunity for returns and suggested that the valuation process can be a competitive tactic by investors to minimize the position of early investors.

Idealab’s Ideas

Howard Morgan discussed the two stages of venture capital investing: 1) too early and 2) way too early. (In fact, he writes a blog on the topic, titled www.waytooearly.com). Morgan looks for the six “P’s” from a venture investment opportunity: 1) people, 2) product, 3) plan, 4) profits, 5) passion and 6) persistence. Morgan also emphasized the important distinction between product users and product customers.

Future Bets

As far as trends for the future, some of the concepts discussed included:

• The office of the future - technology will take the place of travel;
• The concept of the “living room” - doesn’t exist any longer;
• Second World-type virtual domains and avatars will continue to grow;
• Radio - is on the rebound and growth will be driven by podcasting;
• Movies - can’t compete with video game new releases.

All in all, another great discussion organized and moderated by Alan Brody of iBreakfast. See you next month!

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