Watch List (June 17-23): Caught Up in Fraud

In this week's issue of The Watch List we update you on the latest development in the bankruptcy case involving the 1031 Tax Group and identify in the Watch List several properties that have ties to the owner of the troubled exchange intermediaries. There is much more news: North Carolina has put the breaks on a $100 million development alleging widespread fraud; loan delinquencies on the rise in industrial and multifamily properties; two new value-added funds are launched; a hedge funds argues for sale of Sunrise Senior Living; Commerce Bank may have to cancel some leases; and dairy operations are going to get milked. Plus we give you the latest facility closure, mass layoffs and properties on the Watch List.

Owner of Bankrupt 1031 Exchange Intermediaries Promises To Make Good

Edward Okun, the owner of several bankrupt 1031 exchange intermediaries, is offering to make good on more than $150 million owed to hundreds of investors caught up in the collapse of the groups.

Last month, Okun's 1031 Tax Group and 16 other exchange intermediary affiliates, filed petitions for relief under chapter 11 of the bankruptcy code. Since then, Okun has been negotiating with both the debtors and the unsecured creditors in the case, according to bankruptcy court filings.

Under terms being discussed, a lender (debtor in possession) would fund the debtors, which would in turn pay off the creditors, including possibly paying administrative expenses of the chapter 11 cases and other expenses.

Okun is working with Stillwater Capital Partners Inc. in New York, which runs a series of hedge funds. Stillwater Capital, a U.S. Securities & Exchange-registered investment adviser, provides alternative investment services.

Stillwater is negotiating with JPS Capital Partners, also in New York, which specializes in commercial real estate bridge loans on otherwise hard to fund deals.

Okun, through other of his various entities, including Okun Holdings Inc. and Investment Properties of America LLC (IPofA), would pledge up to all of their material assets to the potential lender in connection with the loan transaction.

IPofA is a full-service real estate investment company that offered qualified investors ownership in institutional quality properties through tenant in common and LLC ownership structures. It acquired under-performing retail, industrial, and light office properties in first and second tier markets throughout the U.S. prior to syndication with the intent of turning them into stable, income-producing assets for investors of all sizes.

Further details of the transaction were to be filed with the court, but were to be filed under seal. Okun, through his attorneys, argued that the "confidential information regarding the Okun Entities’ holdings that, if disclosed in a pleading filed on the public docket, would give competitors to the Okun Entities’ access to confidential and commercial information related to business relationships which are in the process of being negotiated. Such information, if disclosed, would significantly hamper the Okun entities' ability to conduct business, which directly impacts the recoveries of creditors in these cases."

Diana Adams, the U.S. Trustee assigned to the cases has an objection to that request. She argues that real estate information that is otherwise already a matter of public record does not qualify as protected information under the Bankruptcy Code.

While the extent of Okun's real estate holdings is not known, CoStar Group has identified numerous properties identified through public records and CoStar Group databases that are believed to be either owned, managed or leased in part by affiliates of IPofA or other Okun affiliates. We list these properties in The Property Watch List below.

News of the deal came at court hearing last week, at which it was also revealed that: Okun has relinquished any control over or management or operational role in the exchange intermediaries; has turned over his passport to his lawyers; and pledged not transfer, encumber or sell any of the assets he would put up as security on the loan without prior notice to the bankruptcy court.

At that hearing, the court also denied a motion to convert the case to a chapter 7 liquidation, at least in part because of the potential for achieving a prompt funding arrangement.

According to attorneys representing some of the creditors, the mood of creditors has been cautiously optimistic. Most parties were prepared to give this "deal" a chance, attorneys said.

The court scheduled a follow up hearing for July 2, 2007, to decide on the plan.

While Okun has been working to settle up in the 1031 Tax Group proceedings, he also reached an agreement with financial services firm First Montauk Financial Corp. to settle four separate lawsuits arising out of the termination of a merger agreement Okun had with First Montauk. Under the settlement, the parties exchanged general releases and Okun affiliates surrendered a potion of his shares in First Montauk.

The deal reduces Okun’s interest in First Montauk to less than 25% of the remaining outstanding shares of common stock. First Montauk has also received an exclusive 60-day option to purchase those remaining shares for $2.5 million. First Montauk also returned a $2 million deposit to Okun, when the deal was first proposed.

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NC Attorney General Stops $100 Mil. Mountain Real Estate Scheme

North Carolina Attorney General Roy Cooper won a court order last week to stop a real estate venture that sold overpriced lots in the North Carolina mountains by promising consumers they could make a profit without having to invest any of their own money.

The defendants' complicated investment scheme used inflated appraisals and phony second mortgages as down payments to entice consumers to borrow millions of dollars to purchase property in the Village of Penland development in Mitchell County. The planned community was to comprise a mix of retail and residential, including single-family homes, condos and craft studios.

"These developers squandered more than $100 million in financing, leaving consumers stuck with property that isn't worth what they owe on it," said Cooper. "We're putting a stop to this scheme before any more consumers get caught up in it."

Cooper is also asking the court to permanently stop the developers' deceptive practices and to order them to pay refunds to consumers to satisfy consumers' loans on properties sold by the developers.

Developers involved in the Village of Penland project and named in Cooper's complaint include: Peerless Real Estate Services, Village of Penland, MFSL Landholdings, Communities of Penland, COP Land Holdings, PG Capital Holdings, and West Side Development, all of Spruce Pine.

Also named as defendants are the following individuals connected with these companies: Frank Amelung, Richard Amelung and Michael Yeomans of Florida; J. Kevin Foster of Georgia; and Anthony Porter and Neil O'Rourke of North Carolina. A. Greg Anderson, a licensed appraiser in North Carolina, is also named as a defendant.

Wake County Superior Court Judge Michael Morgan ordered the group of developers behind the Village of Penland to stop using misrepresentations to encourage consumers to take out loans to purchase lots. Morgan also appointed Joseph W. Grier III of Grier, Furr & Crisp in Charlotte as receiver for the property

According to Cooper's complaint, around 2002 the defendants purchased at least 1,200 acres of land in Mitchell County and subdivided it into more than 2,000 lots to create the Village of Penland development. The developers set up the companies listed above and have since received more than $100 million in loan proceeds by marketing the lots to consumer investors.

Cooper alleges that the developers have failed to complete any part of the project and instead used the money to fund other failed projects in South Carolina and St. Thomas and to pay for trips such as a cruise of the Greek isles and a ski trip to Switzerland.

As alleged in the complaint, the defendants sold most lots in the development for $125,000 based on inflated appraisals by Anderson even though the lots had tax values of $20,000 or less. Many of the lots could not realistically be used to build homes because none of the lots included water and sewer systems, and many were too small to support a septic tank or a well.

Cooper alleges that the defendants promised consumers that they would profit from the Village of Penland without ever having to invest any of their own money. The developers used several different schemes to entice consumers to use their credit to purchase lots. In one scenario cited in Cooper's complaint, the developers told consumers to apply for credit to buy 10 lots for a total of $1.25 million and promised to buy back the lots at the same price within three years. Consumers were told that these ten lots would then be developed and that they would receive $100,000 when each home sold. In other cases, developers asked consumers to buy 20 lots for $2.5 million. The developers promised to buy the lots back in two years and deed consumers an additional 20 lots plus a house, which the companies said they would then rent from the consumer for $280,000 a year as a model home.

Cooper alleges that consumers who agreed to invest in the Village of Penland were told by the developers to fill out four or five loan applications. Without most consumers' knowledge, the defendants sent all of the loan applications to different lenders at the same time so that the lenders were unaware that the consumers were taking out multiple loans. The developers provided illusory second mortgages to cover the down payments on these loans through a company related to one of the defendants. These second mortgages were not shown on required closing statements that instead showed deposits of earnest money, which the consumers did not make.

On May 30, 2007, defendant Anthony Porter notified some of these consumers that the developers would not be able to make the monthly mortgage payments as promised, leaving consumers stuck with large debts and no way to sell their lots for enough money to cover the loans.

Multiple community, regional and super-regional banks, in and out of North Carolina, are connected to the project with a wide range of investments at risk. For example, Capital Bank in Raleigh, NC, said its exposure consists of three loans: One loan, in the amount of $1.2 million, is to one of the named developers and is collateralized by 60 lots in the project. Capital Bank's collateral is the wholesale value of the lots, which is $20,563 per lot.

Another loan was to an attorney/surveyor tied to the initial development in the amount of $249,000. A third loan was a consumer loan made to a Triangle resident for $95,838 to purchase a residential lot in the development.

"We believe the third loan is the only one involved in the alleged scheme outlined by the Attorney General," stated Capital Bank CEO Grant Yarber. "We have scoured our portfolio and this is the extent of our exposure."

Multifamily, Industrial Delinquencies Tick Up

Delinquencies for multifamily, industrial and self-storage properties moved up while the overall delinquency rate went down, according to the latest U.S. CMBS loan delinquency index by Fitch Ratings.

The overall CMBS loan delinquency rate fell one basis point each in April (0.32%) and May 2007 (0.31%) due largely to a large drop in office delinquencies in both months.

However, "while retail and hotel properties ended May with a lower delinquent dollar balance than in March, multifamily, industrial, self-storage and other CMBS ended last month with a higher delinquent dollar balance than at the end of April," said Michelle Thomas, director.

In May, multifamily delinquencies rose by $25.9 million (7.1%), due in large part to four related loans in one transaction located in Oklahoma ($22.3 million) that defaulted at maturity, and five unrelated loans in Texas ($13.5 million).

Of note is a parking garage loan in Detroit that caused the balance of the other category to more than double in May from $23.2 million to $48.7 million. A garage located in the heart of downtown Detroit collateralizes the $25.5 million loan. The loan was 60 days late at the end of May and was transferred to the special servicer.

While the delinquency rate decline in April was due to decreased delinquencies, in May the entire decline is attributable to the addition of three new deals totaling $14.5 billion to Fitch's deal universe.

Realm Targeting Office Fixer-Uppers

Realm Real Estate and The Bascom Group launched a joint venture known as "Realm Group" to acquire and develop office buildings throughout Southern California. The venture has the ability to invest up to $100 million per transaction in either repositioning value-add or developing ground-up office buildings.

Already next month, Realm Group will commence construction on a 230,000-square-foot office campus in Palmdale, CA.

"Launching this venture allows Realm Group to take advantage of Southern California's fundamentally strong office environment of low vacancies, increasing rents and rising employment," said Jerry Fink, Bascom Group managing director and co-founder.

"Our focus is to acquire distressed and/or poorly performing office buildings and move them up a class through modernized façade and common area improvements. Coupled with a refocused leasing plan, the building's market value will be increased," said J.R. Pearce, principal of Realm.

"Bascom has an established track record of repositioning multifamily properties and significantly enhancing operating results, which Realm can capitalize on and apply to office properties" said Darrin Olson, principal of Realm.

Principal Forms Funds To Invest in Distressed Debt

Principal Real Estate Investors recently closed a new fund, Principal Mortgage Value Investors LP, which will invest in value-added commercial real estate debt, including bridge loans and subordinated debt. The closed-end fund has capital commitments totaling approximately $225 million from selected institutional clients, including a 10% co-investment from Principal Life Insurance Co.

"The creation of Principal Mortgage Value Investors enables us to expand our real estate platform and offer a wider array of potential debt options to borrowers," said Margie Custis, managing director of Principal Real Estate Investors and a long-time veteran of the commercial mortgage-backed securities market. Custis is the portfolio manager for the fund. "Until now, Principal Real Estate Investors has generated higher-yielding investments through its affiliate, Principal Commercial Acceptance. With this new source of capital, we are able to leverage the experienced staff, market knowledge and underwriting expertise of both Principal Commercial Acceptance and Principal Real Estate Investors to more aggressively seek out good quality bridge loans and subordinate debt investments."

Principal Mortgage Value Investors plans to use capital markets financing to enhance returns to investors in the vehicle and expects to issue a commercial real estate CDO in early 2008.

"With $40 billion in commercial real estate assets under management and substantial operations in all four quadrants of the real estate investment arena - public, private, debt and equity - we have a unique perspective of the real estate capital markets and are well positioned to originate and manage value-added debt investments on behalf of our clients," Custis said.

Hedge Fund Argues for Sale of Sunrise Senior Living

Millennium Partners, L.P., a New York-based multi-strategy hedge fund, sent a letter to the board of Sunrise Senior Living Inc. calling on them to either sell the company or to replace management.

Sunrise had not responded as of this writing.

Millennium Partners owns about 2.5% (1.3 million shares) of the common stock of Sunrise. The U.S. Securities and Exchange Commission has commenced a formal investigation into Sunrise regarding insider stock sales, timing of stock option grants and matters relating to the company’s historical accounting practices. Sunrise is cooperating with the SEC.

In the letter, Eduardo Abush, portfolio manager of Millennium Partners, and Simon Lorne, vice chairman and chief legal officer Millennium Partners, write that they are "deeply disturbed and distressed at the current state of affairs."

"We believe that the assets of Sunrise have real value ... yet it is apparent that the market does not recognize the value of those assets, leading to a considerable disconnect between the company's public market value and its intrinsic value. Furthermore, it is clear to us that the public activities and statements of management have served to exacerbate, rather than ameliorate, the market's misunderstanding of the company's intrinsic value, and we worry that maintaining the status quo might lead to further value destruction," they write.

Millennium said it views Sunrise is two different companies: a real estate developer/owner and a health care facility operator.

And given the unprecedented global liquidity and demand for real estate-backed businesses from private and public investors, Millennium argues that now is an opportune time to explore alternatives in order to realize the embedded value in the company.

Sunrise operates 444 communities in the United States, Canada, Germany and the United Kingdom, with a combined capacity for more than 52,000 residents. At quarter end, Sunrise also had 42 communities under construction.

Commerce Bank Likely To Cancel Some Leases

Fitch Ratings has placed the ratings of Commerce Bancorp Inc. on rating watch negative following the company holding company's disclosure that it has been advised that it expects its bank subsidiary, Commerce Bank NA, to enter into a consent order with the Office of the Comptroller of the Currency relating to issues of corporate governance, related party transactions, as well as policies and procedures for real estate related transactions.

The Cherry Hill, N.J.-based bank - which has 11 branches in South Florida - signed an unspecified number of leases for land and bank premises with companies affiliated with CEO Vernon W. Hill II, according to its 2006 proxy statement.

The Federal Reserve Bank of Philadelphia has also advised Commerce Bancorp that it expects the company to enter into an informal memorandum of understanding related to these same issues.

These anticipated regulatory actions could adversely affect the company's strategic growth initiatives or disrupt its operations, Fitch said.

Commerce Bank said in a regulatory filing last week that it would terminate questionable leases and is reviewing and implementing several changes to its real estate development policies and practices, including the creation of a real estate committee and a management real estate development committee, and the recruitment of a senior executive as its new director of real estate.

Dairy Outlook Souring

This following story doesn't fit the usual realm of Watch List news, but Dean Foods, the company involved, is my current dairy of choice and their projection of what is happening with milk prices is pretty scary. And if it comes to pass, I'm sure dairies across the country will be forced to cut costs.

In conjunction with a company presentation at an investor conference in Paris last week, Dean Foods Co. lowered its expectations for adjusted earnings in 2007.

"We are faced with an unusually broad set of challenges across the portfolio," said Gregg Engles, chairman and CEO. "First, conventional milk prices have risen rapidly and forecasts for the back half of the year have increased significantly as foreign and domestic market forces have combined to put significant pressure on the U.S. dairy industry. As a result, it has become increasingly likely that conventional raw milk prices will reach all-time highs by the third quarter. We expect this steep rise in dairy costs to put pressure on dairy group profit growth, especially in the second and third quarter."

"Second, as we've mentioned before, our Horizon Organic brand is facing a significant near-term industry-wide oversupply of raw organic milk. This oversupply is largely due to a change in the regulations governing the organic transition and certification process that caused many farmers to enter the one-year transition process prior to the new regulation taking effect in June 2006," Engles said. "The resulting oversupply of milk is creating a considerable disruption in the organic milk market as competitors compete aggressively to expand sales and distribution."

"Based on these unprecedented challenges across the Dean Foods portfolio, we have reduced our full year expectations for adjusted earnings," Engles said. "We expect the third quarter to be particularly challenging as we face steep month-over-month increases in conventional raw milk costs, with an improvement in trend in the fourth quarter."

Downsizings: Facility Closures and Mass Layoffs

As part of an ongoing review of its real estate portfolio, Hewitt Associates Inc., a human resources services company in Lincolnshire, IL, intends to consolidate facilities, and in some cases, exit certain properties. The actions are expected to result in a pretax charge of between $30 million and $45 million over the next two or three quarters, beginning in the fourth quarter of fiscal 2007. The facilities to be affected have not been identified.

Rogers Corp. plans to restructure its custom electrical components segment workforce and reduce other related costs. The company is moving the work to China. The reductions will impact Rogers' Durel division, which is based in Chandler, AZ.

The following future facility closures and mass layoffs were reported in California. As they have all year, significant portions of the lay offs are again coming from the residential lending sector.
· American Racing Equipment is laying off 30 employees at 19200/19067 S. Reyes Ave. in Rancho Dominguez on July 2.
· AMPCo System Parking is laying off 107 employees at the Parking Garage at the SF International Airport in San Francisco on June 30.
· ATA Airlines Inc. is laying off 48 employees at 300 World Way in Los Angeles on July 1.
· Berry Plastics Corp. is laying off 91 employees at 3301 Sturgis Road in Oxnard on June 25.
· Citigroup Inc. is laying off 77 employees at 1800 E. Imperial Hwy. in Brea on June 29 and 101 employees at 12731 Jefferson Blvd. in Los Angeles on June 30.
· Ditech.Com is laying off 181 employees at 3200 Park Center Dr. Suite 150 in Costa Mesa on July 3.
· E&J Gallo Winery is laying off 130 employees at 5610 E. Olive Ave. in Fresno on June 29 and 176 employees at 18000 W. River Road in Livingston on July 2.
· Federated Logistics & Operations is laying off 5 employees at 15541 E. Gale Ave. in City of Industry on July 10.
· First Student is closing down at 1989 Massachusetts Ave. in Riverside on June 30 affecting 115 employees.
· Fremont Investment & Loan is laying off 15 employees at 2727 E. Imperial Hwy. in Brea on July 23.
· GHN Neon Inc. is laying off 70 employees at 7472 Chapman Ave. in Garden Grove on July 3.
· H&R Block Mortgage Corp. is laying off 133 employees at 3 Ada in Irvine and 39 employees at 9130 Anaheim Place in Rancho Cucamonga on July 14.
· Hitachi Global Storage Technologies Inc. is laying off 59 employees at 3403 Yerba Buena Road in San Jose on July 21.
· Home Loan Center Inc. / Lendingtree Loans is laying off 271 employees at 163 Technology Dr. in Irvine on July 10.
· Hyperion Solutions Corp. is closing down at 5450 Great America Pkwy. in Santa Clara on June 29 affecting 101 employees.
· ING Advisors Network is laying off 98 employees at 200 N. Sepulveda Blvd. Suite 1200 in El Segundo on June 25.
· Intuit Inc. is laying off 16 employees at 4820 Eastgate Mall in San Diego on July 25 and closing down at 781 W. 2nd St. in San Bernardino on the same date affecting 84 employees.
· Jabil Inc. is closing down at 13550 Stowe in Poway on July 15 affecting 143 employees.
· Koret of California Inc. is closing down at 1100 Marauder St. in Chico on July 13 affecting 140 employees.
· Lifescan Inc. is laying off 91 employees at 1000 Gibraltar Dr. in Milpitas on July 27.
· Medtronic Cardio Vascular Inc. is laying off 132 employees at 3576 Unocal Place in Santa Rosa on July 21.
· Monrovia Growers is closing down at 18331 E. Foothill Blvd. in Azusa on July 2 affecting 60 employees.
· Monster Cable Products Inc. is laying off 85 employees at 450/455/480 Valley Dr. in Brisbane on July 9.
· NorCal Waste Services Inc. is closing down at 3514 Emery St. in Los Angeles on June 29 affecting 104 employees and at 1120 Berryessa Road in San Jose on the same day affecting 155 employees.
· Opteum Financial Services is laying off 130 employees at 27422 Portola Pkwy. Suite 200 in Foothill Ranch on June 23.
· Pac-West Telecom Inc. is laying off 84 employees at 4210 Coronado Ave. in Stockton on April 30.
· Power-One Inc. is laying off 34 employees at 740 Calle Plano in Camarillo on July 17.
· Printegra is closing down at 23281 La Palma Ave. in Yorba Linda on June 29 affecting 64 employees.
· Pureology Research LLC is closing down at 2010 Main St. Suite 650 in Irvine on July 18 affecting 47 employees.
· Raytheon Space And Airborne Systems is closing down at 7418 Hollister Ave. in Goleta on June 30 affecting 27 employees.
· Sara Lee Foodservice is closing down at 20389 Corsair Blvd. and at 23541 Eichler Ave. both in Hayward on June 29 affecting 71 employees.
· Sears Holdings is closing down at 4121 Valley Road in Los Angeles on July 17 affecting 445 employees.
· Sirenza Microdevices is laying off 18 employees at 1860 Hartog Dr. in San Jose on July 3.
· Smurfit-Stone is closing down at 2001 E. 57th St. in Los Angeles on June 30 affecting 101 employees.
· Summerville Senior Living is laying off 67 employees at 3000 Executive Pkwy. Suite 530 in San Ramon on July 1.
· Sutter Medical Center is laying off 36 employees at 2800 L St. in Sacramento on July 13.
· Target is closing down at 170 Cochrane Plaza in Morgan Hill on July 24 affecting 117 employees.
· Team Health Inc. is closing down at 7535 Southfront Road Bldg. B in Livermore on July 6 affecting 84 employees.
· The Hershey's Co. is closing down at 1400 S. Yosemite Ave. in Oakdale on July 9 affecting 99 employees.
· The Old Spaghetti Factory is closing down at 5939 Sunset Blvd. in Hollywood on June 19 affecting 89 employees.
· United Launch Alliance is closing down at 2205 E. Belt in San Diego on June 6 affecting 542 employees.
· U-Tech Media USA is closing down at 2880 E. Philadelphia St. in Ontario on July 11 affecting 80 employees.
· Welch Allyn Inc. is closing down at 7420 Carroll Road in San Diego on June 29 affecting 181 employees.
· WMC-GEMB Mortgage Corp. is closing down at 6121 Bollinger Canyon, Suite 400 in San Ramon and at 3100 Thornton Ave. in Burbank and at 600 Anton Blvd. Suite 1900 in Costa Mesa on June 18 affecting 417 employees.
· Zomax Inc. is closing down at 2727 Systron Dr. in Concord on June 29 affecting 67 employees.

Escala Group Inc., a leading auctioneer of stamps, coins, arms, armor and militaria, and other memorabilia, it is undertaking a facilities consolidation plan designed to reduce fixed costs and improve operating efficiency. Under the plan, the company's North American philatelic operations, which is currently operating out of three locations in West Caldwell, NJ, Danbury, CT, and New York City, will be combined under one roof in newly leased facilities in Bethel, CT. In addition, the company's corporate headquarters will move from New York City to the same Bethel location. The consolidation plan is expected to be fully implemented by Oct. 30.

The following future facility closures and mass layoffs were reported in Florida.
· DiVosta Building Corp. is laying off 101 employees at 10385 Ironwood Road in Palm Beach Gardens starting June 26 and 134 employees at 6003 Honore Ave., Suite 106 in Sarasota starting Aug. 7.
· Georgia Pacific is laying off 35 employees at 400 S.R. 70 West in Lake Placid on Aug. 12.
· Specialty Elsastomers Technologies Inc. is laying off 49 employees at 8052 Armstrong Road in Milton on July 6.

The following future facility closures and mass layoffs were reported in Kentucky in the past month; no specific dates were identified.
· BWI is laying off 280 employees at 1847 Mercer Road in Lexington.
· First Transit is laying off an unknown number of employees at 1534 Production Dr. in Burlington.
· Fleetwood Travel Trailers is laying off 127 employees at 800 Industrial Drive in Campbellsville.
· Kentucky Derby Hosiery Co. Inc. is laying off 53 employees at 123 W. 7th St. in Hopkinsville.
· Samaritan Hospital is laying off 550 employees at 310 S. Limestone St. in Lexington.
· Topy America is laying off 225 employees at 980 Chenault Road in Frankfort.

Bowne & Co. Inc. is reducing the amount of space it leases at 55 Water St. in New York. It is vacating the 10th floor (approximately 61,000 square feet) and will make a $2 million lease termination payment to do so.

The following future facility closures and mass layoffs were reported in Ohio.
· EGS Neer plans to close operations at its facility in Lexington in mid 2007 and will be laying off 72 employees.
· The Columbus Board of Education removed First Student from its list of vendors forcing it to close its operations at 1160 Alum Creek Drive in Columbus this month and laying off all employees.
· NuTone Inc. plans to completely cease its operations and layoff its remaining workforce of 61 people at its Cincinnati facility at 4820 Red Bank Road. The layoffs are scheduled to commence Aug. 4. The facility closure is expected to occur by the end of the year.

Ultralife Batteries Inc. will relocate its McDowell Research communications accessories manufacturing operation from Waco, TX, to Ultralife's facilities in Newark, NY. The target date for completing the move is Sept 30. Approximately 100 employees will be affected.

The following future facility closures and mass layoffs were reported in West Virginia.
· Cabot Corp. will close its carbon black manufacturing facility in Waverly in March 2008 with customer shipments from the facility continuing through the middle of 2008. The decision to close the facility was driven by changes in the tire manufacturing industry. Over the past 18 months, tire manufacturing has seen a significant restructuring, with multiple tire capacity reductions in North America and the expansion of tire manufacturing facilities in China and other countries in the Asia Pacific and South America regions.
· Spencer Veneer LLC is closing its operations at 270 Industrial Park Road in Spencer this week affecting 132 employees.

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Watch List is now available as an e-mail newsletter. The weekly e-mail is the quickest way to review all of the news in this column as soon as it is published and link directly to the news and features you want. It's free. Just e-mail me your name, title, company, city, state, and e-mail address. You can reach me by clicking on the byline above or e-mailing me at mheschmeyer@costar.com

Property Watch List

The following properties are identified through public records and CoStar Group databases and we believe appear to be either owned, managed or leased in part by affiliates of IPofA or other Okun affiliates. See the first story in this column above.

Property: West Oaks Mall
Address: 1000 W. Oaks Mall
City: Houston
State: TX
Special Servicer: LNR Partners, Inc.
CMBS: Greenwich 2006-GG7
Property Type: Retail, 1.1 million square feet, super regional mall built in 1984, renovated in 2004; owned by affiliates of Investment Properties of America.

Property: Columbus Works
Address: 6200 E Broad St.
City: Columbus
State: OH
Special Servicer: Not applicable
CMBS: Not applicable
Property Type: Manufacturing, approximately 2 million square feet built in 1957; fully leased to Lucent Technologies; owned by affiliates of Investment Properties of America.

Property: Central Mall
Address: 2259 S. 9th St.
City: Salina
State: KS
Special Servicer: Not applicable
CMBS: Not applicable
Property Type: Retail, 587,512-square-foot regional mall building built in 1987, which boasts the largest aquarium in Kansas, home to from 50 to 100 species of fish native to Kansas; owned by affiliates of Investment Properties of America.

Property: Richmond Square Mall
Address: 3801 National Road East
City: Richmond
State: IN
Special Servicer: Not applicable
CMBS: Not applicable
Property Type: Retail, a 385,714-square-foot regional mall built in 1966 and renovated in 1997.

Property: Crossroads Transportation & Logistics
Address: 5201 W. 86th St.
City: Indianapolis
State: IN
Special Servicer: Not applicable
CMBS: Not applicable
Property Type: Industrial, 458,909-square-foot warehouse building built in 1960 with 100,000 square feet listed as available for lease; owned by affiliates of Investment Properties of America and home to Crossroads Transportation & Logistics, a company owned through another affiliate of Edward Okun.

Property: 4201 Millersville Road
Address: 4201 Millersville Road
City: Indianapolis
State: IN
Special Servicer: Not applicable
CMBS: Not applicable
Property Type: Industrial, a fully lease 130,000-square-foot, Class C manufacturing building built in 1901; owned by affiliates of Investment Properties of America.

Property: Crooked Creek Centre
Address: 7818-7880 N. Michigan Road
City: Indianapolis
State: IN
Special Servicer: Not applicable
CMBS: Not applicable
Property Type: Retail, 51,184-square-foot neighborhood center building built in 1989 with 9,200 square feet available for lease at an average asking rent of $10/sf/yr; owned by affiliates of Investment Properties of America.

Property: 10 Highway 35
Address: 10 Highway 35
City: Red Bank
State: NJ
Special Servicer: Not applicable
CMBS: Not applicable
Property Type: Office, 27,135-square-foot, Class B building built in 1978 with 27,135 SF available for lease at an average asking rent of $32/sf/yr; property is also listed for sale; owned by affiliates of Investment Properties of America, which purchased it out of a bankruptcy court action involving Solomon Dwek for $6.1 million in August of last year.

Property: Centergate at Gratigny
Address: 5306 E. 10th Ave.
City: Hialeah
State: FL
Special Servicer: Not applicable
CMBS: Not applicable
Property Type: Industrial, 978,164-square-foot Class A distribution building built in 1999; Crossroads Transportation & Logistics, an Okun-owned entity, inked a long-term lease in March 2007 to fully occupy this building.

Property: Winchester Building
Address: 10800 Midlothian Turnpike
City: Richmond
State: VA
Special Servicer: Not applicable
CMBS: Not applicable
Property Type: Office, 127,946-square-foot, Class A building built in 1987 of which approximately 13,000 square feet is leased to Okun affiliated entities; 21,639 square feet is listed as available for lease with at an average asking rent of $16.75/sf/yr.

Property: 394 S. Hibiscus Drive
Address: 394 S. Hibiscus Drive
City: Miami
State: FL
Special Servicer: Not applicable
CMBS: Not applicable
Property Type: Single-family residence, 5,434 square feet, six bedrooms, seven baths built in 1930; purchased by Edward Okun in September 2005 for $5.15 million.

Compiled by CoStar Group from the following sources: Fitch Ratings, Standard & Poor's, Moody's Investors Service, CoStar Property Professional, Securities & Exchange Commission CMBS filings; CMBS bondholder reports, Worker Adjustment and Retraining Notifications and corporate news releases.