NYC investors spend millions to modernize Pyramids

-New York-based investors are pumping in millions of dollars and luring new tenants to restore luster to an Indianapolis landmark office building, the Pyramids at College Park on the Northwestside.

Fred Wilpon, owner of the New York Mets, heads Sterling American Property Inc., which bought the three unique, 11-story, glass-and-concrete structures several months ago and has launched the renaissance of the 34-year-old complex.

Construction crews are currently renovating the dated lobbies, gutting the interiors to restore Class A office quality, reworking the heating and air-conditioning systems, renovating the 69 restrooms, repaving the 1,300 parking spaces and installing a conference center and caf.

Work begins soon to renovate the glass-and-suspension system forming the reflective southside wall of each of the buildings.

Real-estate brokers Darrin Boyd and David Moore of Colliers Turley Martin Tucker, leasing agents for the Pyramids, said the investment is paying off with new tenants in the buildings, which recently had a vacancy rate of more than 50 percent.

An announcement is expected within two months from Education Management Corp., based in Pittsburgh, about plans to open a post-secondary school of the arts, culinary trades, and hospitality at the Pyramids.

Executives of the publicly traded company disclosed plans to open a school in Indianapolis during a May 5 conference call with analysts.

While the company declined to disclose the precise location, a permit from the Indiana Commission on Post-Secondary Education shows that Education Management will open the Art Institute of Indianapolis at 3500 DePauw Blvd., the address of the Pyramids.

The art school is to be based on three floors in two buildings, making the school the largest tenant in the complex's 443,000 gross square feet of space.

Sterling bought the buildings and 45 acres for an undisclosed price from an Alaskan government employees pension fund. "The architectural significance of the Pyramids had a lot to do with our decision to buy the property," said Matt Harvey, Sterling's asset manager.

Sterling specializes in buying and renovating undervalued properties. Harvey said the Pyramids' price cut to a fraction of its replacement cost, in part because the property needed a lot of updating even though renovations were done in the 1980s and early '90s. The occupancy rate fell after the loss of anchor tenants including Resort Condominiums International that took up most of the 100,000 square feet in Pyramid 3.

Undeterred, Harvey said, "These buildings were world-renowned, and we are fans of great architecture. It is a rare opportunity to own and renovate such buildings."

Even on an unclear day, the Pyramids' silhouette is visible for miles along the north leg of I-465 near Michigan Road on the city's Northwestside.

The buildings were treated like an eighth wonder of the world when they were constructed in 1971 by Indianapolis business leader John W. Burkhart to be the headquarters for his College Life Insurance Co. of America.

Ownership changed hands several times ending in a sheriff's sale in 1990, then a $3.6 million face-lift. College Life was sold, and the headquarters moved from the Pyramids.

The Pyramids, which were frequently photographed, featured on postcards and on television shows, had already become an icon of architecture in the Midwest.

While the complex's primary architect is pleased with its resurgence, he's not happy with all of the changes -- particularly not the lighted signs that now grace two of the buildings' once blank walls and advertise anchor tenants Indiana Tech and Bluegreen.

"I think it's a shame if they have to put signs on them," Kevin Roche said.

Roche said Burkhart's master plan envisioned up to nine identical pyramids, linked by third-floor walkways and underground tunnels and totaling over 1 million square feet. "John was interested in building an expandable headquarters," Roche said.

But there was never enough demand for the additional office space and the project stopped with three.

The inspiration for the pyramid shape was as much practical as aesthetic, he said. "The idea began with the hierarchical system in business at the time, putting large numbers of people on the lower levels and moving up to the (executive) levels at the top," he said.

The Pyramids is riding a wave of development along nearby Michigan Road that forms the western boundary of College Park.

Developers acknowledged the area dotted with about a dozen hotels and countless restaurants, fell on hard times. A three-year road-construction project hurt many businesses.

Real-estate brokers say several national restaurant chains including Cheeseburger in Paradise and others are now scouting locations in the Michigan Road corridor south of I-465.

A 93-acre site southwest of the interchange is for sale, and national-level developers are quietly proposing shopping centers and hotel complexes on the site.

Big-box retailers also have discovered the Michigan Road corridor. Costco opened a large store at 9010 Michigan Road three years ago.

And Mark Pearlstein of Linder Co., real-estate leasing agents, said negotiations are under way for redevelopment of a long-vacant Kmart.

"The area has been undergoing some changes, but the road construction is finally stable," he said.

Just north of the I-465 interchange, Indianapolis-based Duke has West Carmel Marketplace under construction at 9900 Michigan Road.

Duke vice president Cindy Schembre said the plans include about 400,000 square feet of retail and restaurant space with the first shops to open before Christmas.

Employees at Pathfinders Corp., a continuing education provider in the insurance and securities industries, have enjoyed the view from the 11th floor of Pyramid 1 since 1979, making the company one of the longest-running tenants.

"Working in a landmark is wonderful," said Mac Spears, vice president of Pathfinders, while enjoying the view of the Downtown Indianapolis skyline from 10 miles away.

"Everybody told (John) Burkhart that he was nuts for building out here, because it was so far from (the other insurance company headquarters) Downtown. In fact, it was visionary."

THE PYRAMIDS AT COLLEGE PARK:

-- Location: 3500 DePauw Blvd. in the College Park area southeast of Michigan Road and I-465.

-- Owner: Sterling American Property Inc.

-- Height: Each of the three pyramid office buildings is 11 stories tall.

-- Size: The three buildings contain a total of 443,852 square feet including lobbies, halls and underground levels, passageways and loading docks.

-- Land: Building and 1,300 parking spaces on 16.99 acres; 24.9 acres of lake; 3.17 acres of woods; property totals about 45 acres.

-- History: Built in 1970-71 as the headquarters of College Life Insurance Co., the complex cost a reported $15 million.

"In the state and in Hampton Roads, the economy is still holding up pretty well," Mezger said.

Virginia's unemployment creeps up to 2.9 percent

Virginia's unemployment rate inched up in October to 2.9 percent, a 0.1 percentage-point increase over September, fueled in part by layoffs in the mortgage banking industry, state officials said Wednesday.

Hampton Roads' jobless rate climbed to 3.1 percent from 3.0 percent in September. It was 3.2 percent in October 2006.

The real estate sector in Hampton Roads experienced the worst decline of any job category, shedding 800 positions last month -- a drop of 4.6 percent -- according to the report by the Virginia Employment Commission. Those job losses are part of continued fallout from a nationwide housing decline and the subprime lending crunch.

William Mezger, the commission's chief economist, said many of those losses stemmed from rollbacks in seasonal employment related to short-term rental properties and maintenance -- jobs more prevalent during summer months.

Still, he said, those numbers likely include losses in residential home building, real estate sales and the mortgage industry.

At Virginia Beach-based Resource Bank, for example, employment has dropped from 325 to 150 employees after significant financial losses stemming from defaults on subprime mortgages.

The state also lost 8,900 leisure and hospitality industry jobs last month, as resorts, theme parks and other recreational sites scaled back fall operating levels.

Virginia's seasonally adjusted unemployment rate still bests the national rate of 4.4 percent, which fell slightly from 4.5 percent in September.

Despite the job losses, the state's nonfarm employment of 3.81 million last month was the second-highest on record. One reason the unemployment rate declined is that the state's labor pool rose by 7,700 workers in October, the report said.

Unemployment rates among metropolitan areas ranged from 5.4 percent in Danville to 2.2 percent in Northern Virginia.

Oklahoma City-Area Industrial Park to Unveil Expansion Plans Today

Details of expansion under way at Mid America Business Park will be revealed today by the Texas owner-developer.

The expansion includes a large warehouse-distribution center and a three-story, 58,000-square-foot office building, real estate sources say.

Local representatives of the industrial park, south of Interstate 240 between Sooner Road and Air Depot Boulevard, declined to give details before an announcement to be made today.

Dirt work is visible at the industrial park. A sign at what appears to be the warehouse site indicates that it is a build-to-suit project -- that is, a center for a specific tenant, rather than a speculative building.

Wichita, Kan.-based Key Construction has a construction trailer on site. Key Construction is proceeding in a joint venture with a Texas developer, a local source said.

Last July, owner Burk Collins, an Oklahoma native now based in the Dallas-Fort Worth, Texas, area, said he planned to spend $12 million to eventually quadruple the space at Mid America Business Park, which was started by W&V Properties in 1998.

Collins paid $13 million for the park last year. Most tenants have some connection to General Motors or Tinker Air Force Base. Collins said then he planned five more buildings.

Miami Beach, Fla., firm pays $15 million for Palm Beach County office property

The Forum, one of Palm Beach County's largest office properties, has been sold on the cheap for about $15 million.

Miami Beach-based GW Partners, headed by Bernard Werner and David Garfinkle, bought the three-building site for $54 a square foot from GE Capital Corp. GE acquired the complex in 1989 when it foreclosed on two loans worth more than $19 million.

Five years ago, when GE started marketing the 10-story buildings, real estate brokers predicted The Forum might fetch $30 million.

The 276,000-square-foot property at Palm Beach Lakes Boulevard and Congress Avenue in West Palm Beach has struggled in the past decade because tenants prefer more upscale suburban markets, such as Palm Beach Gardens, broker Jonathan Satter said.

The vacancy rate along Palm Beach Lakes is around 20 percent, among the highest in the county.

"This was one of the first office buildings not part of the central business district, and in the last 20 years there have been a plethora of suburban buildings built," West Palm Beach broker Hank Porcher said Wednesday.

Ocwen Financial Corp., which occupied most of The Forum before downsizing in recent years, said in June that it's pulling out entirely next spring and moving to a smaller site in West Palm. Even with Ocwen, a mortgage-services company, The Forum is only about 70 percent leased.

But Werner and Garfinkle expect to attract new tenants, mostly professional service firms, with quick deals featuring low-cost rental rates of $18 to $20 a square foot, including expenses.

"What David and Bernie saw here was an opportunity to capture a portion of the (office) market that was not being met," said Jonathan Kingsley, managing director at Grubb & Ellis, which is leasing The Forum for the new owners.

The partners also are planning a renovation of the complex built by developer Llwyd Ecclestone in the 1970s. Before Kingsley and Garfinkle bought The Forum several weeks ago, some real estate observers speculated it's time to raze the buildings and redevelop the site with a residential or retail project.

"It's never going to be the crown jewel it was," Jupiter broker Peter Reed said. "Newer buildings are so much more efficient, but it could serve as good back-office-support type of space."

Garfinkle has turned around distressed properties before, Kingsley said.

He bought, renovated and then sold New World Tower in downtown Miami and the International Building in Fort Lauderdale. Garfinkle also owns another Miami office building and is trying to boost leasing activity there.

New tower is planned for Walnut St.

Parkway Corp., the city's largest owner of parking garages and lots, plans to build an office, residential or hotel tower with up to 275,000 square feet of space atop an existing garage at 800 Walnut St.

Parkway president Robert Zuritsky said yesterday that low office-space vacancy rates in Center City had prompted him to test the market for the site, above the 700-car parking garage.

"It's starting to get good in town again with a lot of things -- including apartments and condos," he said. "And office space now, with the rents that are being quoted on the A buildings in town, you can start to justify a new office building."

Real estate brokers say the vacancy rate for Class A office space in the East Market Street district from Seventh to Broad Street was about 5.2 percent, compared with 15 percent two years ago.

The average price per square foot downtown is in the high $20s, but trophy buildings, such as One Liberty Place, the Comcast Center, and the Mellon Bank Center, can fetch up to $35 per square foot.

"The overall market downtown has tightened up," but the East Market Street area "has significantly tightened up," said Jim Egan, senior vice president at Grubb & Ellis Co., who is representing Parkway on the site. "Anytime it gets below 10 percent, that is considered a tight market."

Parkway is in a partnership with Urban Residential to develop a 30-story W Hotel and residences at the southwest corner of 12th and Arch Streets, where ground is expected to be broken this fall. It also is building 1706 Rittenhouse, a 32-story condominium, in a joint venture with developer Tom Scannapieco.

Zuritsky said the Walnut Street site, located on the PATCO line and in proximity to restaurants and retail shops, was ideal for any one of the possible uses.

Parkway entered into the Eighth and Walnut project in 1984. The original master plan included a single parking garage that could support two towers.

Zuritsky said his former partner, Historic Landmarks for Living, pulled out of its plans to develop the twin towers.

Parkway spent years developing a 70,000-square-foot office building on one end of the garage. In 2002, Wills Eye Medical Center acquired the air rights above that building and built a mid-rise tower on its roof.

Now Parkway wants to build its long-awaited second tower. "An office tower would be my first choice," Zuritsky said of his vision for Eighth and Walnut, "but we are putting this out so it is available to developers to partner with us with whatever else is out there."

Zuritsky said there had been discussions in the past with developers to build a hotel there, "but they only wanted to build 100 to 120 units, and that was not enough."

He said the site could accommodate a structure as high as 25 additional stories on top of the six-story garage.

"That's what it was designed for," he said.

Experts say several factors have contributed to Center City's low office-vacancy rate. Among them was that Comcast Corp. itself absorbed most of the space in the Comcast Center -- more than 1 million square feet -- and the center did not get Keystone Opportunity Improvement Zone status, in which businesses are exempted from certain city and state taxes for 15 years.

"Other office buildings didn't become disadvantaged by the availability of that block of space being tax-free," said Dave Campoli, vice president of the Philadelphia-based Northeast Central Region for HRPT Properties Trust, of Newton, Mass. HRPT owns 5 million square feet of Class A commercial office space in a number of downtown buildings, including Center Square, the Mellon Bank Center, the PNC Bank Center and GlaxoSmithKline. "It kept us all in a level playing field."

Andrew Liverman, a research associate at Cushman & Wakefield Inc. who specializes in commercial real estate, said there also had been a lot of organic growth among existing city office tenants, particularly with health organizations, such as the University of Pennsylvania, which is seeking to move administrative offices off-campus.

A 2006 report by Grubb & Ellis cited 20 percent growth among existing tenants in Center City.

"Philly is recognized as having one of the strongest life-science markets in the country, and the ripple effects are also seen in the commercial business district in the downtown market," Liverman said. "Definitely, we are seeing across-the-board growth in industries, and new tenants, like financial groups, are opening offices here that weren't here before."

Added Campoli: "There has really been no flight to the suburbs. Employers in the past went where they opted to go, and now employers are following the employees, who want to be in the city."

Hands-On Mobile Climbs the Property Ladder with Launch of Monopoly Tycoon 2007

Hands-On Mobile, a leading global publisher of mobile lifestyle, games and personalisation products, announced today the launch of Monopoly Tycoon 2007, the much anticipated sequel to Hands-On Mobile's blockbuster, Monopoly Tycoon, both under license from HPG, the licensing arm of Hasbro.

Monopoly Tycoon 2007, based upon the best-selling Atari PC title, is an economic strategy game about building real estate empires. Much like Hasbro's classic Monopoly board game, the world's most popular game, Monopoly Tycoon 2007 is easy to learn but hard to master and will appeal to both casual gamers and those who enjoy strategy-based games. Monopoly Tycoon 2007 features many significant improvements over its predecessor. New features include:

* Players can now employ managers to help with the day-to-day running of the properties.
* New graphics bring a living, breathing city to life with bustling pedestrians and realistic moving traffic.
* In addition to the classic utilities, Monopoly Tycoon 2007 enables players to take control of other exciting businesses such as grocery stores, bars and restaurants.
* New Community Chest and Chance cards add the feel of playing the Monopoly board game.

"We've enjoyed working with Atari in developing Monopoly Tycoon 2007, which represents a real improvement over the previous version," said Jonathan Sacks, CEO, Hands-On Mobile. "We're really excited about this launch and anticipate great success for the game following on from the popularity of Atari's original PC version and, of course, the iconic board game."

For more information, please visit, www.HandsOn.com

Click on the link to view images. High resolution screenshots available upon request.

http://www.ccnmatthews.com/docs/MonopolyTycoon2007.jpg

About Hands-On Mobile, Inc.

Hands-On Mobile is a leading global publisher of mobile lifestyle, games and personalisation products targeting all market segments of the mobile handset marketplace. With operations in four continents, Hands-On Mobile develops, publishes and distributes mobile content to more than 150 of the world's leading operators in 40 countries.

About Atari

New York-based Atari, Inc. (Nasdaq: ATAR) develops interactive games for all platforms and is one of the largest third-party publishers of interactive entertainment software in the U.S. The Company's 1,000+ titles include hard-core, genre-defining franchises such as DRIVER(tm), The Matrix(tm), Stuntman(tm) and Test Drive?, and mass-market and children's franchises such as Backyard Sports(tm), Nickelodeon's Blue's Clues(tm) and Dora the Explorer(tm), and Dragon Ball Z?. Atari, Inc. is a majority-owned subsidiary of France-based Infogrames Entertainment SA (Euronext - ISIN: FR-0000052573), the largest interactive games publisher in Europe.For more information, visit www.atari.com.

About HPG

HPG, the licensing arm of Hasbro, Inc. (NYSE: HAS), translates one of the industry's richest portfolios of brands into a world of fun and excitement for children and adults globally.Through a host of publishing, lifestyle and entertainment platforms, HPG is able to surround fans worldwide with consumer products that expand Hasbro's core brands, such as TRANSFORMERS, LITTLEST PET SHOP, MY LITTLE PONY, MONOPOLY, G.I. JOE, TONKA and PLAYSKOOL, beyond the toy and game aisle, creating rich lifestyle experiences.

Montgomery Ward Store May Come to Arlington, Texas, Mall

Three years after the loss of anchor J.C. Penney dealt a heavy blow to Six Flags Mall, the mall's owners say they are close to signing a new tenant for the former Penney's building. Real estate and retail sources have said that Montgomery Ward & Co. has been negotiating to lease the 150,000-square-foot space, which Penney sold to the mall's owners. Six Flag's owners said yesterday that they are under a confidentiality agreement and can't say who the tenant will be. "I can't discuss who it is," said Tom Morris, who said he represents Six Flags Mall LP, which bought the mall in 1999. "The final terms and conditions of the lease are being negotiated and I think within two weeks the lease should be signed." Yesterday, Ward's spokesman Chuck Knittle said only, "We have made no decisions to lease any new stores in the Dallas-Fort Worth area." Ward has a store several miles south of Six Flags Mall at Festival Discount Mall. Getting a Montgomery Ward outlet would be a coup for Six Flags, which like Festival is older and has been struggling against intense competition from newer, more upscale malls and shopping centers. Festival general manager Bob Cesare said he also has heard that Ward will open a store at Six Flags. Montgomery Ward is a main traffic driver for Festival, and the mall doesn't want to lose it to a mall near enough to be a competitor, he said. "We have a great relationship with Montgomery Ward's." Ward, whose Festival store has 155,000 square feet, asked Festival about leasing as much as 30,000 square feet for a pilot project, a clearance center, in addition to its anchor store. Cesare said Festival's owners told Ward the space wasn't available but asked Ward to consider converting its Festival location into a clearance center. Dillard operates its only area Dillard's Clearance Center at Festival Mall. Morris said that in addition to finding a tenant for the Penney's building, Six Flags Mall has other deals in the works. A longtime tenant, the Gym, is moving from next to Sears to several buildings nearby that were occupied by a movie theater and a restaurant. Morris said a Dallas development group is converting the Gym's space into a 12,000-square-foot women's day spa, Salons of Six Flags. Morris said Six Flags also plans an 18,000-square-foot food court within the mall with space for 10 tenants. The mall has three food court tenants.