New Faris Lee Office in NYC Aims to Navigate Tough Retail Waters

Despite the chilly economy, Faris Lee Investments is in an expansion mode.  The company has opened a New York office, and has named Richard Berlinghof to head the retail investment sales and advisory firm’s East Coast team. The move is a natural for the firm, said Richard Walter, Faris Lee’s president. “We have a lot of clients on the East Coast, and there is a need for them to receive intelligence on a real time basis,” Walter said. “There is something new that happens every day, so we decided to move down the street from them.” Berlinghof (pictured), who has been named a principal at Faris Lee, is what Walter called a “perfect fit” for the company. Formerly a director at Merrill Lynch, Berlinghof was responsible for national originations of fixed and floating rate commercial real estate loans. He also was an investment sales broker with Chesterton International. Walter said that Berlinghof will spearhead Faris Lee’s initiative to buy loans on behalf of its clients. “An investor may be getting one-and-a-half percent interest on money sitting in the bank,” Walter said. “That investor can get a higher return by buying a performing loan.” Faris Lee can also offer an “exit strategy” to investors, as it can manage or sell the asset if the investor were to acquire the asset if the loan turns sour, Walter said. Many retail centers are challenged today by what Walter called “real estate issues,” rather than loan maturity problems. These issues are caused by increasing retail vacancies, many of them the result of some major retailers that have gone dark. The bankruptcy of Circuit City in particular has caused problems for many owners of retail centers, Walter said. “Many owners are having cash flow problems,” Walter said. “We can sit down with a lender and the owner, and look at different strategies, such as selling some of the pads.” New York City is seeing retail vacancy rise, according to a report released today by the Real Estate Board of New York. The report found that average asking rents for retail space in Manhattan showed their first meaningful decline since the Sept. 11 terrorist attacks, falling 11 percent since Fall 2008, to $115 per square foot. The declines ranged from 6 percent in Midtown to 22 percent on the West Side compared to the fall of 2008. The organization’s advisory board, made up of retail brokers, said the drop is a needed correction to the market’s upward spiral, that tenants are still signing leases, and that the decline will present opportunities for new retailers to enter the market. Faris Lee also announced that Eric Rosa has been named the managing director of financial institutions, and will be based in Faris Lee’s Irvine, Calif., office.