The kids aren't alright
In June, Six Flags announced it was mulling the sale of six amusement parks in Buffalo; Denver; Seattle; Houston; and Concord, California; as well as Magic Mountain, north of Los Angeles. The company said in a call with analysts that the Magic Mountain park—and its 17 roller coasters—is increasingly attracting that most incorrigible of customer: rowdy teenagers.
Opened in 1971, Six Flag bought the Magic Mountain park in 1979. A longtime Southern California favorite, the park has been featured in films like
While the teens are drawn to the cheap thrills of the park's rides, they don't spend any money. And worse than that, according to Six Flags' chief executive officer Mark Shapiro, they scare off the more lucrative family demographic. “Once you burn mom, she is not rushing back,” Shapiro said on the call.
Six Flags, which is suffering from a decline in attendance, could trade in the surly teens now sulking around the park for an injection of cold, hard cash. Real estate developers are champing at the bit for the chance to convert the sites to retail or housing, particularly the site in Suburban Valencia.
Michael Adler of Adler Realty Investments in nearby Woodland Hills estimated that developable land in the suburb could fetch between $750,000 (€596,000) and $1 million an acre according to the
And, if a mall developer buys the land, the teens may still have some place to go, too.
A hot market gets hotter
According to the head of the country's largest office REIT, demand for office space in the Big Apple is growing. “I have never seen anything like this,” Richard Kincaid, chief executive officer of Equity Office Properties Trust, said at a recent conference. Kincaid said growth in white-collar sectors was fueling the demand.
“You have still got a lot of big financial services firms that want space,” he said. “Where the economy is growing plays into New York's strengths. It's professional services. It's consulting. Advertising is back. Investment banks are hiring like crazy.” He added: “For accounting, Sarbanes-Oxley has been a boom in hiring.”
Kincaid noted that in the broader US office market, easy financing could lead to future bargains for opportunistic investors. Equity Office, founded by Sam Zell, currently has a market capitalization of $12.6 billion.
The warehouse Olympics
Industrial REIT ProLogis is developing a logistics park in Beijing, which will serve as the main facility for the 2008 Olympic Games. Olympics organizers will use the 1.08 million-square-foot facility, located at Beijing Capital International Airport, for storage, administration and light assembly work in the lead-up to the event. The organizers have already leased an existing 283,000 square foot facility for the airport; the Denver-based logistics group will be developing an additional 793,000 square feet of space at the project, which is 15 kilometers from Beijing's central business district. Total investment in the project is estimated to be around $34 million (€27 million). The firm has secured 19 development projects in China over the past two years, in addition to investing in Japan in a joint venture with the investment arm of the Government of Singapore.
Prudential Real Estate Investors has formed a joint venture with a Thai-based property group, Ananda Development, to make $210 million (€167 million) of investments in residential projects in the Suvarnabhumi area outside Bangkok. The site will be the location for a new airport, due to open up at the end of this year. The JV, known as Ananda One, will reportedly invest in the middle- to lower-end market, particularly in projects like standalone houses costing less than five million baht ($130,000; €103,000), townhouses priced between 1.5 million and 2 million baht, and moderately priced condominiums. Ananda has said it expects a 15 percent IRR for the project. The venture is Prudential's first move into both Asian residential and Thai property, a sector which is still largely dominated by smaller local players.