These are biz tips Insider Louisville staff and contributors have collected during the past few days, a few of which are NOT double-verified as with our daily reporting.
But this is the news you’ll be reading about next week or even next month in the conventional media.
Consider this the Dick Cheney Edition of Monday Business Briefing, filed from an undisclosed location while MBB is on the road.
Technically, a Monday off … but as you know, the business news never stops.
As always, we’ve made multiple calls/text message inquiries on these tips, which come from sources who are not merely insiders, but who have direct knowledge of the deals.
And we have to say that even for Monday Business Briefing, we have some gee-whiz scoops.
The reason? At home and around the globe, there’s a lot of cash sloshing around, looking for somewhere to go. We told you 10 days ahead of the sale about the JP Morgan Chase Bank Complex in downtown going to a Canadian investor and a Chicago firm. And we were correct … it sold for $22 million, which was something of a premium in the troubled downtown real estate market.
So as the recession fades, look for capital to start chasing bigger and bigger deals.
Like this one:
• Multiple sources tell us to look for a founder of the Toll Brothers home building company, to take a run at The Summit – Louisville shopping center. This one surprised us because we thought the 40-acre shopping center on Ky 22 at Interstate -265 was owned by Bayer Properties, the Birmingham, Ala.-based shopping center company. In fact, it’s owned by Prudential Real Estate Investment, part of the giant Prudential insurance and real estate empire based in Newark, N.J. Which has had it on the market for some time now, according to our sources. One of the interested parties is BET Investments, based in Horsham, Penn. “BET” stands for Bruce E. Toll, one of the two brothers who started Toll Brothers, the publicly traded home builder. BET Investments owns shopping centers and apartments in 12 states including Indiana, Illinois and Virginia in the area around Kentucky. So on that level it makes sense. What doesn’t make sense is, BET Investments doesn’t have any property even remotely equal to The Summit, which at 370,000 square feet of leasable space is fairly large for what’s termed in the commercial real estate business as a “festival center.” And festival centers are far more appealing these days than conventional enclosed malls. Our sources tell us Bayer Properties likely would continue to manage the property after a sale. But what a new owner would do with the center is not so clear. And wouldn’t it be nice if Louisville could add to its retail roll as a result of a new owner?
• Another shocker : Sources tell us Tafel Motors, which sells Mercedez-Benz and Mini Coopers at MINI of Louisville in two complexes in the 4000 block of Shelbyville Road, may get folded into the giant Oxmoor Automotive Group. It’s a shocker because David Peterson has invested serious millions in acquiring the Mini Cooper dealership in 2010, then building the Mini Cooper facility, THEN renovating the MB dealership. Judging by the number of Mini Coopers – which aren’t so “mini” anymore – on the streets of Louisville, this has to be one of the more popular cars. Oxmoor Automotive Group is owned by banker/businessman/thoroughbred owner/Democratic Party macher/University of Kentucky booster Tracy Farmer, who’s BFF with Gov. Steve Beshear. Acquiring Tafel/Mini of Louisville would give Farmer a near monopoly along the Shelbyville Road retail corridor, the busiest in the city. Farmer Auto Group has Oxmoor Chrysler Dodge Jeep Ram, at 4520 Shelbyville Road. The company also operates Oxmoor Toyota and Oxmoor Scion, 8003 Shelbyville Road; Oxmoor Ford and Oxmoor Lincoln, 100 Oxmoor Lane; Oxmoor Hyundai, 7913 Shelbyville Road and Oxmoor Mazda, 8107 Shelbyville Road. Farmer also owns Hyundai of Louisville at 6633 Dixie Highway.
• We keep hearing new and exciting bands are coming to Forecastle Festival, the latest rumor being Mumford & Sons. What we know for certain is that demand for rooms already is outstripping what the Galt House has available for the dates – July 12 through July 14 – and spilling into the other downtown hotels. What? You say, “How is that business?” Those same sources who are tipping us about the lineup (more this week) are telling us 2013 could have a far bigger impact on downtown than previous years. Now, if we only had some retail ….
• Speaking of downtown hotels, we hear Louisville is on the short list for a mega Ford Motor Co. meeting called the SubCon Conference, along with Lexington. (Thought why Lexington is getting any love is beyond us since Ford has two of its largest assembly plants here.) Ford sent out a request for proposal stating 275 people are expected to attend the event for five nights, yielding 1300 room nights. The meeting is scheduled for the first week in June. More as we find out the details.
• And speaking of downtown real estate, several sources sent us documentation that the Hertz Starks Building is for sale. Louisville’s first real skyscraper, the Starks has a lot going for it including an Eddie Merlot’s restaurant and a central location adjacent to Fourth Street Live at Fourth Street and Muhammad Ali Boulevard. However, we wonder if it will get snapped up like the Chase complex last week. Here are the details from the listing:
Commercial Kentucky is pleased to offer for sale the historic Starks Building, a 395,505 square foot mixed use development in Louisville’s central business district. This Louisville landmark building is currently occupied by office, retail and restaurant tenants which provides steady cash flow while providing significant upside opportunity. The building offers office tenants a unique office environment with more natural light than any other CBD office building, as well as the option of hard wood floors, all at competitive rental rates. The lobby features upscale finishes including Italian Carrera marble and hardwood. The flexibility and marketability of the vacant spaces provide the purchaser with immediate upside potential as office space, residential rental units, or even as hotel services.
Santa Monica-based Hertz Investment Group paid $12.5 million for it back in the go-go days of 2006. In keeping with our central motif for this edition of MBB, all that money sloshing around is sloshing into Louisville’s commercial real estate. The Starks Building will sell. But that doesn’t mean the new owners can fill it up.
• We – like everyone else – are worried about downtown slipping back into the doldrums of the 1970s and 1980s, when so many companies either left for the suburbs, or just left town, period. But this data has us rethinking our angst. Because to paraphrase several sources last week, “No one realizes how UPS is pumping up Louisville’s economy.” (Of course, we heard that months ago about Humana, and look where that got us.) Companies are coming to Louisville because access to UPS’s freight hub is growing more and more important for more and more types of companies, from Internet retailers to research laboratories. The result: The vacancy race for commercial/industrial property in the Louisville MSA is currently 4.4 percent – “probably a record low,” according to Doug Butcher, first vice president for Industrial Properties at CBRE | Louisville. That rate is likely to go even lower during second quarter, 2013, Butcher said. Those figures are far more encouraging than that downtown office vacancy rate Insider Louisville told you about last month – 14.5 percent and rising (according to Commercial Kentucky). Amazon.com is only the biggest and most well-known of the national suppliers that have moved their distribution centers to this area to be close to the UPS WorldPort adjacent to Louisville International Airport. (Though, to be blunt, many passengers who regularly fly out of here would suggest that Louisville’s airport is adjacent to the WorldPort – the tail wagging the dog.) Amazon took space at River Ridge, the old Army ammunition facility in Southern Indiana. Others are grabbing what space they can at Cedar Grove in Shepherdsville, Ky., which is a few exits south of the airport and WorldPort on Interstate-65. Not everybody applauds the building of the East End Bridge, when it connects with Interstate-265 in Indiana to form a complete perimeter loop around Louisville and Southern Indiana. But we may need to “build a damn fence” to keep all the potential companies from rushing us. (Apologies to John McCain.)