Sea Island Company Reaches Agreement to Sell Substantially All Assets to Limited Partnership Formed by Investment Funds Managed by Oaktree Capital Management, L.P. and Avenue Capital Group

-(BUSINESS WIRE)--Sea Island Company, a private resort and real estate development company, today announced that it has reached an agreement to sell substantially all of its assets to Sea Island Acquisition LP (“SIA”), a limited partnership formed by investment funds managed by the global investment firms Oaktree Capital Management, L.P. and Avenue Capital Group. The sale agreement follows a robust process – begun late last year – in which Sea Island Company reviewed all of its strategic alternatives and determined that this agreement is the best possible outcome for the Company and its stakeholders.

“We are very pleased to have reached an agreement with an investment group that has come to know Sea Island well and appreciate what made us special from the start”

Under the terms of the agreement, the Company’s businesses will remain intact and retain their core values and culture. After the sale, the businesses will continue under the leadership of Bill Jones III, Chairman and Chief Executive Officer, and David Bansmer, President and Chief Operating Officer.

To facilitate the sale, Sea Island Company, Sea Island Coastal Properties, LLC and their subsidiaries today filed voluntary petitions for relief under Chapter 11 of the United States Bankruptcy Code. The Chapter 11 cases and sale enjoy the support of all of the Company’s secured lenders and are expected to be completed by year-end. In the interim, the Company has secured a debtor-in-possession (DIP) loan from certain of its secured bank lenders, providing access to additional liquidity should it be required during this period.

The action, filed in the Southern District of Georgia in Brunswick, allows the Company’s businesses to continue normal operations. All of Sea Island Company's operations, including The Lodge, The Cloister, The Cloister Spa and Fitness Center, The Sea Island Club, the Ocean Forest Golf Club, The Sea Island Beach Club, as well as the golf facilities, are open and business will continue without any disruptions to the superior service provided to members and guests. All reservations will be honored and guests will enjoy all of the facilities and experiences they booked at the time of their reservation.

In conjunction with its Chapter 11 filing, Sea Island Company today filed a Plan providing for the sale of substantially all of its assets free of its approximately $600 million of existing secured debt. SIA will own and operate the resort and golf courses without any interruption in services. All obligations owed by Sea Island Company to its trade vendors will be assumed by SIA. All existing employees of Sea Island Company will be offered employment by SIA. All club members will be offered the opportunity to continue to enjoy the same benefits and services at their respective clubs and receive full credit for their deposits paid.

The Board of Directors of Sea Island Company has approved the Asset Purchase Agreement, which is subject to a court-supervised auction process. The agreement was filed with the Court today, along with the DIP financing commitment and a variety of “First Day” motions that will allow the Company to continue to conduct its business as usual.

“We are very pleased to have reached an agreement with an investment group that has come to know Sea Island well and appreciate what made us special from the start,” stated Bill Jones III, Chairman and Chief Executive Officer of Sea Island Company. “Our commitments to our members, employees, guests and community were carefully considered throughout our review of strategic alternatives and we believe this is the best outcome. The purchasers have seen first-hand the value of what we have built – the finest collection of resort assets in the world with the highest accolades and best service. The additional financial strength gained through the transaction provides an ideal foundation for our future.”

Sea Island Company President and Chief Operating Officer David Bansmer added, “Today’s actions are the culmination of a comprehensive process initiated by Sea Island Company’s management and Board of Directors to put our financial challenges definitively in the past and secure a more certain future for our businesses. After completing the Chapter 11 process and the related asset purchase agreement, our businesses will be financially strong – with the same superior service and southern hospitality.”

Sea Island Company's financial advisors are FTI Consulting and Goldman Sachs & Co., and its legal advisor is King & Spalding LLP.

Information about the proposed sale and Sea Island Company's Chapter 11 proceedings is available on the Company's website at www.ourfuture.seaisland.com. Information about the claims process and court filings can be accessed at www.epiqsystems.com. Vendor inquiries can be directed to 1- 888-886-6162 or vendors@seaislandnews.com.

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Grubb & Ellis Predicts a Challenging 2009 for Commercial Real Estate as Economy Weathers Recession

/PRNewswire-FirstCall/ -- Grubb & Ellis Company (NYSE:GBE) , a leading real estate services and investment firm, today released its 2009 Global Real Estate Forecast, which indicates that 2009 will be a challenging year for commercial real estate with the economy starting the year 13 months into what may become the longest recession since the 1930s.

"The economy will struggle in 2009, which will dampen demand for all product types, resulting in negative absorption and increased vacancy," said Robert Bach, senior vice president, chief economist of Grubb & Ellis. "We expect total payroll job losses in the range of 1 to 2 million in 2009 on top of the 2+ million in 2008. GDP is likely to shrink by 1 percent in 2009, compared with growth of 1.3 percent and 2 percent in 2008 and 2007, respectively."

The investment market, which saw transaction volume plummet in 2008 as the financial markets collapsed and the credit markets froze, is expected to see a 15 percent increase in sales volume in 2009 as distressed properties are brought to market, particularly those acquired in the past couple of years with floating rate debt. Loan delinquencies and foreclosures will increase with more properties returning to lenders, who will be anxious to sell them. Debt capital will remain expensive and tight in 2009, but more of it will be available than in 2008, and there will be a slow increase in equity capital flowing into the market from private, institutional and offshore investors waiting on the sidelines. The coming year should be more active as the gap between buyers and sellers gradually narrows, with sellers making up most of that difference.

Debt will be the hot investment type in 2009. Investments could be made in CMBS, collateralized debt obligations or funds investing in these assets. Or debt investments could be made at the property level with owners seeking to refinance their properties. More equity investments will be made as well in 2009 as investors holding an estimated $300 to $400 billion in institutional, private and offshore equity begin to deploy their capital in response to falling prices.

The outlook is equally challenging for global markets, both developed and emerging. The previous contention that emerging markets would largely escape the financial crises in North America and Europe looks to be overly optimistic. This will not be an ordinary downturn, but rather a structural correction in global capital markets that will impact every sector of the economy and real estate market.

One benefit of the global market correction has been the rapid evaporation of inflationary pressures in most key economies. The decline in inflation has left governments less reticent in using interest rates as a weapon in the battle to stave off sharp economic and commercial decline.

Office Tenants Will Have the Upper Hand in 2009

The office construction pipeline contained 90 million square feet at year-end 2008, the lion's share of which will be delivered in 2009. This combined with a projected 45 million square feet of negative absorption, including a big jump in sublease space, will push vacancy up by two percentage points to end 2009 at 16.5 percent. Tenants will have greater negotiating leverage in 2009 with concession packages becoming more generous as the year progresses. The growing inventory of sublease space will put downward pressure on asking rental rates for direct lease space, which are expected to decline in the range of 4 to 5 percent for both Class A and B space by year-end.

"Employment growth drives demand for office space and the labor market will be shrinking in 2009," said Bach. "Government and health care will be among the few sectors with growing demand for office space."

In this difficult market, Washington, D.C. should be at the top of office investors' buy list, according to Grubb & Ellis' Investment Opportunity Monitor, a proprietary market ranking in which Grubb & Ellis annually measures 60 office, 53 retail, 56 apartment and 55 industrial markets against 13 to 17 criteria important to the performance of real estate investments. Washington, D.C., is the one market that will benefit from the credit crisis as the government expands to implement its economic recovery plan.

Following Washington, D.C., on the top 10 list are Portland, Ore.; Los Angeles; San Francisco; Austin, Texas; Dallas-Fort Worth; Houston; Raleigh-Durham, N.C.; Boston; and Oakland, Calif. The Texas markets offer strong population growth, while the others offer strong population growth as well as natural barriers to entry.

Industrial Users Strive to Reduce Costs

Businesses look at industrial space as a productivity enhancer, an integral part of their supply chain strategies. Their relentless quest for cost-saving efficiencies should sustain demand for industrial space in 2009, despite the weak economy. However, supply is expected to outpace demand with absorption dipping into the red and the vacancy rate rising by 60 basis points to end the year at 9.4 percent as the construction pipeline delivers space still underway.

"The industrial market will recover more quickly than the office market because the construction pipeline is set to thin out sooner," said Bach.

For the third consecutive year, the logistics business is driving demand for space in Grubb & Ellis' Investment Opportunity Monitor's 2009 rankings. Los Angeles retained the top spot on the list, with its proximity to the busiest ports in the U.S., negligible vacant space and little developable land. Also making the list were other cities with nearby port facilities including Houston (No. 2), Oakland, Calif., and Seattle (tied for No. 4), Miami (No. 8), Portland, Ore. (No. 9) and New Jersey (No. 10). Inland distributions hubs Atlanta (No. 3), Dallas (No. 6) and Chicago (No. 7) rounded out the list.

Will Consumer Spending Rebound in 2009?

Consumer spending hit a 28-year low in 2008 with retailers in the crosshairs of the downturn. Grocery store-anchored centers in mature trade areas will hold their ground in 2009, while centers on the urban fringe, where housing construction has stalled will suffer. Retailers will be even more conservative with their expansion plans in 2009, with more store closings and fewer openings. Expect higher vacancies and softer rental rates by year-end.

"Value retailers are garnering the majority of consumers' dollars in this challenging economic climate," said Bach. "Even the luxury retailers, which are usually immune to downturns, are feeling the pain."

According to Grubb & Ellis' Investment Opportunity Monitor, no retail market will escape the effects of the recession entirely, but some offer more protection due to factors such as strong population growth, a high median income and/or limited land for further development. Los Angeles topped the list for retail investment followed by Washington, D.C. California had an additional three cities in the top 10 with Orange County (No. 6), San Francisco (No. 7) and San Diego (No. 9). Texas appeared three times with Houston (No. 3), Dallas (No. 4) and Austin, Texas (No. 8). Also making the list were Atlanta (No. 5) and Portland, Ore. (No. 10).

Multi Housing Will See Vacancy Rising as Well

The housing slump and recession have produced countervailing forces that will both help and hurt the multifamily market in 2009. Apartments are seeing some new renters who have lost their homes to foreclosure, while landlords are able to maintain existing renters who are waiting for prices and mortgage rates to fall further. However, new graduates who can't find jobs are doubling up with a roommate or moving in with a relative to conserve cash. At the same time, the apartment market faces competition from an increasing supply of unsold condos and foreclosed homes returning to the market as rentals. The negative forces are expected to have a slight edge in 2009 resulting in slowly rising vacancies for the multi housing market this year.

Of the top 10 apartment markets in Grubb & Ellis' Investment Opportunity Monitor, seven are on the West Coast and three are on the East Coast. All offer barriers to entry, good economic prospects and high home prices. Los Angeles ranks first followed by San Francisco; Orange County and Oakland, Calif.; Washington D.C.; San Diego; New York City; San Jose, Calif.; Long Island, N.Y.; and Portland, Ore.

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Network Communications Inc. Names Marcia Bollinger President of Apartment Finder

(BUSINESS WIRE)--On the heels of accelerated growth of one of its anchor brands, Network Communications Inc. (NCI) today announced the promotion of Marcia Bollinger to the new position of president of Apartment Finder, the leading source of critical information for apartment seekers in the multi-family industry. Bollinger has served as Apartment Finder’s senior vice president since 2003, when she joined the company.

A world-class leader in the industry, Bollinger is admired by coworkers and customers alike. Indeed, Bollinger has been the driving force bringing in a top-notch management team and sales force, as well as propelling Apartment Finder from a publication primarily focused in the southeast and secondary U.S. markets to a key national player serving 114 markets. She’s been instrumental in expanding the brand into a fully integrated media business, which now encompasses ApartmentFinder.com, transforming Apartment Finder into the fastest-growing media platform in the apartment industry.

"Marcia’s talent, dedication and energy are commendable, and, because of her leadership, Apartment Finder has been experiencing explosive growth. Marcia has proven she is the right person and posseses the vision to lead the charge to continue driving the brand forward,” said Dan McCarthy, chairman and CEO of NCI. "Marcia’s constant positive, productive leadership and ideas for Apartment Finder, along with the strong team that she’s assembled, will help build on its success. I look forward to working with her to continue to build our business, customer by customer, market by market, through a constant process of innovation and delivering exceptional value.”

In the past five years, Apartment Finder has expanded its presence in print and online. It is the preferred choice for consumers, as well as a key resource that thousands of advertisers rely on for the most qualified leads in the industry. In addition to Apartment Finder, Apartment Magazine and Apartment Blue Book publications, NCI operates ApartmentFinder.com, the #1 consumer-preferred website with state-of-the-art searching and mapping features for apartment renters. It is this type of expansion that continues to make Apartment Finder the anchor of the multi-family division of NCI, the nation’s largest publisher of local real estate magazines and website.

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