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NAI Houston among the partners of a new company created to acquire and manage commercial real estate.


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NAI Houston partners with a new company which anticipates spending $25 million to $50 million this year for as much as 1,000 apartment units and 100,000 square feet to 200,000 square feet of commercial properties.

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NAI Houston among the partners of a new company created to acquire and manage commercial real estate.

  1. 1. INSIDE SIPHONING AWAY VALUE: CITYBEAT Shares of local companies associated with the It’s a gas, gas, gas Deepwater Horizon rig disaster have plunged A startling theory from a to new depths/PAGE 2 Houston scientist could dramatically affect the future of the natural gas industry. PAGE 2 Strictly Houston. Strictly Business. Vol. 41 No. 2 Week of May 21–27, 2010 52 Pages, 1 Section $2.95 Here comes the sun Two Houston companies combine efforts to introduce lower priced solar power installations. Key clans back real estate deal Tux slides over to make room for prom dress PAGE 2 Cullen, Brown families Michelle Burk came up with a fashionable Bell tolls for CyrusOne A Houston data center lend nancial muscle business plan to cope with the cost of out t- operator is scooped up by a Cincinnati company in a to commercial venture ting her 17-year-old daughter for competi- $525M deal. tion in pageants. PAGE 6 BY JENNIFER DAWSON Burk opened Only HOUSTON BUSINESS JOURNAL About e Dress, a store with an array of Houston’s prominent Cullen and rental apparel for all Brown families are among the partners sorts of special occa- in a new company created to acquire and sions. manage commercial real estate. Gowns, cocktail e Cullens and Browns are the high- Arcadian Real Estate Arcadian Real Estate dresses, bridesmaid est pro le investors of the bunch, but Services Capital dresses and quincea- they are only two of 16 partners in the (Real estate brokerage services) (Property management (Asset management and ñera dresses are newly established Arcadian Real Estate services) acquisitions) available for rent at a Group LLC. Another key partner is NAI fraction of their retail Houston, a well-established real estate cost. Big week for layoffs brokerage rm. “Men have been Chevron and several other is is the newest investment vehicle renting tuxedos for companies announced a All in the family fortunes: The newly formed Arcadian Real Estate Group backed by Brown and years,” says the new surprising number of job cuts SEE ARCADIAN, PAGE 45 Cullen interests has three offshoots covering three commercial real estate sector components. businesswoman. “So this week, but experts say the why not give women region will experience overall the same opportunity growth in 2010. PAGE 7 Fit food ght sprouts throughout city to save?” Burk who had pre- vious experience as an electrical engineer Building momentum Rival healthy fast-food convenience stores o er everything from organic soup to natural nuts and manager of a Integris Roofing Services came women’s boutique, up with a solid business plan BY ALLISON WOLLAM decided spending a to boost revenue despite the HOUSTON BUSINESS JOURNAL lot on a dress worn shaky economy. only once just wasn’t STRATEGIES/PAGE 17 Smart Meals set up shop on Shepherd practical. Drive this week, just a few doors down She did some re- from a My Fit Foods location. search on her rental INDEX is head-to-head competition be- idea and found a tween healthy fast-food retailers is in- similar company in WEEK IN REVIEW 3 dicative of a niche market that continues California, but noth- FACE TO FACE 13 to grow fatter catering to the health-con- ing in the Houston STRATEGIES 17 21 scious crowd. area. HERITAGE 22 My Fit Foods and Smart Meals share Burk launched the FOCUS 23 28 the so-called healthy convenience store business out of her PEOPLE/MOVE 29 30 sector with others such as Tru Meals and home, with tentative AROUND & ABOUT 31 haute box meals. plans to open a store FOR THE RECORD 32 36 All o er an expansive variety of pre- in September. CLASSIFIED 37 43 pared meals for customers on the go Spiraling demand OPINION 48 who want to keep in shape. accelerated the COMMENTARY 49 MICHAEL STRAVATO/HBJ INDEX 50 My Fit Foods and Smart Meals, both located in the same shopping center, compete for consumers. SEE FOOD, PAGE 44 SEE CITYBEAT, PAGE 4 FOCUS: TALENT THE LISTS MANAGEMENT A ranking of the region’s largest HBJ’s annual report on the key issues Johnson Space Center contractors facing human resources managers in and area auto dealers. the Houston area/PAGE 23 PAGES 20, 28
  2. 2. Week of May 21–27, 2010 Houston Business Journal 45 CONTINUED FROM... ARCADIAN: Wealthy local families gain access to di erent commercial property types FROM PAGE 1 $250 million worth of multifamily properties in acquisitions on a deal-by-deal basis. Addi- Kurtz is primarily responsible for the real es- in Houston through Preferred Communities, tional individual and institutional investors tate services and capital companies. for the old-money families, whose ancestors Kurtz says. Properties include the 596-unit will be brought into some acquisitions. No properties changed ownership as part made their fortunes in energy and construc- Promenade Jersey Village, the 404-unit Prom- Arcadian will acquire assets ranging in of the merger, but new capital was invested to tion and left their marks on Houston through enade Champions Forest and the 263-unit price from $2 million to $50 million, and ob- fund the entity. I a multitude of business and philanthropic en- Arcadian Kirby. tain 50 percent to 70 percent debt on each • 713-395-9631 deavors. e Cullens and Browns have co-invested deal depending on the product type. Arcadian plans to invest as much as $50 quite a bit, he adds. e group anticipates spending $25 million ARCADIAN’S 16 PARTNERS million in commercial assets this year, as well By combining Preferred Communities with to $50 million this year for as much as 1,000 as o er a wide range of real estate services in NAI under the Arcadian umbrella, the fami- apartment units and 100,000 square feet to • All 11 shareholders in NAI Houston, including co-managing connection with those acquired properties. lies will be able to funnel investment dollars 200,000 square feet of commercial properties. Partners Jon Silberman and Randy Wilhelm. e Arcadian umbrella organization con- into additional commercial product types. Most of the value-add acquisitions will be • Three partners of Preferred Communities LP, including Mark Kurtz. sists of three companies: ey will keep a close eye on the manage- in Houston, although some will be located in • Legacy Trust Company NA, a $1.5 billion entity that handles • NAI Houston; ment of those assets through NAI, which has Dallas and Austin. Cullen family business. • Arcadian Real Estate Services LLC, a com- the capability to manage o ce, retail and in- Arcadian Real Estate Group’s operating • Highland Resources Inc., the Brown family’s real estate mercial property management rm; and dustrial assets. partners include Kurtz and NAI Co-Managing holding company. • Arcadian Real Estate Capital LLC, which Each of Arcadian’s partners will participate Partners Jon Silberman and Randy Wilhelm. will acquire properties and provide asset management. e three companies have a total work force of 83 — a number that is expected to climb over the next year as assets are acquired. Arcadian’s 16 partners own an interest in all three companies. DIVERSE INVESTMENTS e unique blend of partners is an o shoot of Preferred Communities LP, which is no lon- ger in operation since its functions have been rolled into the new group. Preferred Commu- nities was formed in 2005 by Mark Kurtz to handle apartment investments for the Cullen and Brown families. Preferred Communities helped the families acquire multifamily complexes and operate them. e families wanted to manage their investment risk by having their own property manager, says Kurtz, a local real estate vet- eran. Since 2005, the families have purchased Arcadian banks on local foreclosure deals One function at Arcadian Real Estate Group LLC addresses the rise in foreclosures that has become part of the current nancial climate. Arcadian will act as a special servicer for regional banks that need to manage and sell commercial properties they have taken ownership of through foreclosure. e company can act as an outsourced real estate owned, or REO, department for lenders too small to manage the slew of commercial properties expected to go into default. Arcadian has secured a deal with an undisclosed regional bank to handle its REO assets. e bank has approximately 40 branches and less than $1 billion in assets. Arcadian is dealing with smaller foreclosures, on properties valued at $1.5 million or less. Randy Wilhelm, co-managing partner at NAI Houston, says banks often need help with distressed properties in the areas of re- pairs, management, leasing and disposition. “We can literally walk in and take over an REO department,” Wilhelm says. “It’s very much a full-service type of deal.” Jon Silberman, co-managing partner at NAI Houston, says the demand for such a service will grow because a lot of o ce buildings need to go through the foreclosure process. While foreclosures are a negative, Silberman says they are necessary for the market to heal. “It’s like a root canal,” he says. “ e sooner they go through it, the better.” I Jennifer Dawson