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June 30, 2011 


Yet another Walmart Express site was confirmed yesterday, just a mile from a proposed Walmart Neighborhood Market site in Lakeview. (They actually purchased the second Walmart at the first one.) The 14k SF mini-mart would be within a few blocks of a Jewel-Osco and Treasure Island grocery store.
3636 N Broadway
The building was constructed in the early 1900s and isn't historically preserved but has been on the endangered buildings list since 2007. (The darn thing just refuses to multiply.) “We want each of our Chicago stores to be a reflection of the surrounding neighborhood and think a Walmart Express can offer Wrigleyville a convenient and affordable option for their grocery needs,” Walmart spokesman Steve Restivo tells us. “Just as we’ve done in other parts of the city, we look forward to engaging with the alderman and community to listen to concerns, answer questions, and share information about Walmart and our newest format.” On Monday, Walmart chief administrative officer Tom Mars told members of the Metropolitan Planning Council that Chicago would be the launching pad for a new minority supplier program.

Jerrold Peven and Mike Kurtzon
Last time we talked to Dykema's Mike Kurtzon (right) in April 2010, he was mired in a flood of workouts. This year, he and Dykema's Jerry Peven tell us banks are finally trying to get bad debt off of their books (bad debt always crinkles the pages) through short sales, note sales, auctions, and foreclosure. Mike, Jerry, and a team of more than 20 other Dykema attorneys recently represented a private investment fund that participated in an auction sale of 42 nonperforming securitized loans secured by multiple real estate types located in the greater Las Vegas area for a special servicer. Cities like Vegas, Phoenix, and Miami that were hit particularly hard by condo overbuilding are now getting back on track as lenders seek to dispose of these assets and want to lend again, Mike says.
Jerrold Peven and Mike Kurtzon
Jerry, who works mostly with special servicers, says that with multifamily housing as a hot commodity right now, many life companies, banks, and equity funds want to get their money into a performing asset. Consequently, they are willing to sell notes or properties at a discount. There are also lenders and buyers with an appetite for discounted notes (as a means to eventually acquiring a property) and discounted properties themselves. Jerry and Mike believe there is plenty of money sitting on the sidelines but say it's too soon to tell how long or stable the recovery will be.

Michael DelBovo and Rich Thompson
Gas prices are rising and warehouse technologies are changing, so where are the best places to locate a large corporate distribution network? Saddle Creek's Michael DelBovo told attendees at yesterday's Inland Ports Conference that real estate costs average just 4.3% of a company's overall output. This means selection needs to be based less on the real estate mantra of “location, location, location” and more on transportation, inventory, and incentives. Jones Lang LaSalle's Rich Thompson agreed, saying there needs to be a comprehensive approach. He advises industrial users and brokers to interact with municipal economic development partners to encourage incentives for industrial jobs, which are often higher than minimum wage.
Bill Frain and Time Feester

CBRE's Bill Frain says a lot of his clients are looking at smaller warehouses, each closer to the customer, to reduce the cost of the last mile of the trip. Grubb & Ellis's Tim Feemster told the audience one of his clients was trying to go from two to 11 or more distribution centers across the country to reduce shipping costs, although such a move would mean a huge increase in inventory. He said because of leases already in place, 1M SF warehouses won't become obsolete any time soon, especially in major markets like Chicago, Atlanta and LA. (Plus we'd argue giant warehouses are always necessary for movie chase scenes and episodes of Scooby Doo.)

Where do you want the next Walmart? Tell Maureen Wilkey, maureen@bisnow.com.
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