WASHINGTON -- 1997 was the best-ever money-raising year for the two major real estate advisers that buy and finance real estate with union labor.
The Multi-Employer Property Trust raised a record $208.9 million. The firm now has $1.4 billion under management, said Shepherd Burr, co-chairman of the MEPT Operating Committee.
The AFL-CIO had a record year with the Building Investment Trust, which raised $148 million, bringing its total to $638 million, said Gregory Dyson, marketing manager.
The Housing Investment Trust, another AFL-CIO commingled fund, raised $185 million, Mr. Dyson said. It now has $1.6 billion under management.
New investors in the Building Investment Trust include: the IUE Pension Fund; Roofers Local 11; San Diego Hotels & Restaurant; Southern Nevada Culinary and Bartenders Pension Trust; The New York Carpenters Pension Fund; and the IBEW Local 134.
The Housing Investment Trust now lets investors contribute properties to and receive units in the fund. Previously, it took only cash.
The Washington-based MEPT is an open-end commingled real estate fund that invests in property in markets where its clients are located. The fund also finances development using union labor.
The newest investors in MEPT are: New York City District Council of Carpenters Pension Fund; Chicago Area International Brotherhood of Teamsters Pension Trust Fund; Carpenters Pension Fund of Illinois; San Diego Electrical Trust Fund; Carpenters Labor-Management Pension Fund; Southern Iron Workers Pension Fund; Pattern Makers' Pension Trust Fund; Chicagoland Race Meet Operators and Local Union 134 International Brotherhood of Electrical Workers Joint Pension Trust; Fox Valley and Vicinity Laborers Pension Fund; Local Union No. 9, International Brotherhood of Electrical Workers and Outside Contractors Pension Plan; DuPage County Cement Masons' Local 803 Pension Fund; and Retirement Plan for Employees of International Brotherhood of Electrical Workers, Local 134.
UBS timber group leaves to set up own firm
NEW LONDON, N.H. -- The investment professionals who built UBS Resource Investments International into the second-largest timber manager for pension funds have left to form their own firm.
Citing organization cultural differences and personnel turmoil at the parent company, Edward Broom and his sons, Chris and Tom, started Strategic Timber Investments in December, almost three years after Union Bank of Switzerland bought their company, Resource Investments.
Three presidents of asset management have led UBS during that period, said Tom Broom, executive vice president of Strategic Timber.
James McCaughan, president and chief executive of UBS Asset Management, New York, replaced Thomas Messmore in 1996. Mr. Messmore replaced Richard Zecher in 1995.
"They became more of a hindrance than a help," Tom Broom said about UBS. "Institutional investors liked us because we were small."
When they were with UBS, he said, "we shut the door on those (investors) that like small organizations. We saw more of an opportunity to do better on our own."
Mr. McCaughan characterized the departure as amiable. He expects UBS and Strategic Timber to do deals together in the future.
The elder Mr. Broom remains a director of some of the UBS funds. Resource Investment Advisers, an affiliate company operated by Mr. Broom, is a general partner of a UBS fund, Mr. McCaughan said.
Edward Broom will serve as chief executive officer, and Chris Broom as an executive vice president of the new firm.
Peter Mertz replaces Edward Broom as president and chief executive of the timber group. Scott Hancock replaces Chris Broom and Carl Bahler replaces Tom Broom, Mr. McCaughan said. Mr. Hancock is vice president and director of marketing; Mr. Bahler is a vice president and will be the fund manager for UBS' Chilean timber investment fund, as well as assist with performance analysis.
Non-compete agreements prevent the new group from taking any of UBS' 52 timber clients, which have invested $1.5 billion.
Strategic Timber Investments will continue with the principals' strategy of international timber investments in joint ventures with local partners. The group made investments in Chile and New Zealand when it was a part of UBS.
Malls, shopping centers poised for a comeback
CHICAGO -- Shopping centers have not yet joined the recovery in commercial property, but that might soon change, according to the Institute of Real Estate Management, Chicago.
After several years of flat or declining income performance, both enclosed malls and open shopping centers reported increases in net operating income in 1996, according to the 1997 edition of the Income/Expense Analysis: Shopping Centers, Open and Enclosed.
Also, operating expenses decreased for both types of centers, reversing the previous year's trend, the report stated.
For open centers, median income increased 6.6% in 1996 to $9.52 per square foot, up from $8.93 in 1995. Income for malls increased 2.8% to $11.43 per square foot, from $11.12 in 1995.
The decline in operating expenses for shopping centers was minuscule in 1996 -- $5.13 per square foot for enclosed malls compared with $5.15 per square foot in 1995; $2.60 per square foot for open malls compared with $2.64.