Investor returns to market

Real Estate Weekly, Feb 9, 1994

Encouraged by the more realistic property values that exist today along the U.S. Eastern Seaboard, the Cityscapes Development Corporation has returned to the real estate investment market as a buyer and expects to invest up to $50 million in 1994, it was announced by Albert I. Berger, President.

Cityscapes, headquartered in Rutherford, N.J., and funded primarily by foreign investors, has been emphasizing industrial property acquisitions. However, it also is considering a range of investments, including retirement, congregant care and nursing home facilities; suburban, well located office buildings; and anchored shopping centers. It expects to buy three to four major properties this year.

"There is a growing sense of optimism," Berger said, "that investment properties are now being priced realistically, creating stronger opportunities which still have room for growth."

Berger noted that, increasingly as the economy strengthens, income-property rentals are moving back up to where they had been four and five years ago. During the recession, when Citystapes slowed its investment activity, some rentals had declined as much as 50 percent.

Presently, he said, Cityscapes portfolio encompasses investments of over a million square feet. These include the multi-tenanted Southwide Industrial Park, Jackson, Tenn., and the P.F.I. Industrial Park in South Plainfield, N.J. Both of these properties, he noted, have weathered the recession storm and are 100 percent leased.

"While Cityscapes invests for itself, it also acts as an advisor to offshore groups, pension funds, and private limited partnerships," Berger said. He explained that for these investment entities, as well as Cityseapes itself, he is seeking:

* Positive cash flow with growth in excess of inflation;

* Deals involving all cash to a seller, or cash over seller financing and negotiated sale-leaseback arrangements;

* Industrial property credit net leased deals of any size, and multi- or single-tenant rental properties of 200,000 square feet at the minimum;

* Turnaround situations where his special expertise, including hands-on marketing, leasing and management, can help create value;

* Investment opportunities involving $2 million at a minimum and $20 million at the maximum.

With these as guidelines, Berger said Citystapes has attracted a broad group of overseas investors. Currently, he said, it represents foreign investors from such diverse economies and cultures as China, Latin America and Europe.

Berger, who has headed Cityscapes since its inception 15 years ago, is formerly chief executive officer of Helmsley-Greenfield, Inc., and senior vice president of Helmsley-Spear, Inc.