SAN FRANCISCO — Lincoln Property Co., led by Lincoln’s LPC West team in San Francisco, has partnered with affiliates of the Goldman Sachs Merchant Banking Division to purchase 1045 Sansome Street, a four-story creative office building in San Francisco’s North Waterfront/Jackson Square neighborhood. Constructed in 1926, the nearly 90,000-square-foot building was originally home to a printing press before its conversion to creative office space. The property has undergone several improvements, including high ceilings on the ground level, a unique sawtooth glass roof, open floor plans, polished concrete floors and large windows throughout. At the time of sale, the building was 95 percent leased to a diverse mix of tenants in a variety of fields, including technology, architecture, nonprofit, business and media. Terms of the transaction were not released.
BOTHELL, WASH. — CBRE Capital Markets’ Debt & Structured Finance group has secured $38 million in financing for Canyon Park East, a business campus in Bothell. CBRE arranged the financing for Kennedy Wilson Fund VI, which purchased the property in December 2019 for $54.6 million. The $38.6 million loan closed on Jan. 30 with financing from an East Coast-based bank. Brad Zampa, Mike Walker and Megan Woodring of CBRE arranged the six-year, non-recourse, floating-rate financing with full-term interest-only payments. The loan will finance a portion of the acquisition and provide funding for future capital expenditures and leasing costs. Tom Pehl and Lou Senini with CBRE Capital Markets in Seattle represented the undisclosed seller in the acquisition deal. Situated on 16.5 acres, Canyon Park East comprises five office, R&D and warehouse buildings offering a total of 269,369 square feet of rentable space. At the time of financing, the property was 83 percent occupied.
DENVER — H.I.G. Realty Partners, an affiliate of H.I.G. Capital, has funded a $33.1 million loan for the acquisition of an industrial/flex office portfolio located in Denver. The borrower is CW Capital Partners. The three-building portfolio features 264,000 square feet of industrial and flex office space. At the time of acquisition, the portfolio was 80 percent occupied by a diverse group of tenants. The floating-rate, five-year loan allows for future advances for the lease-up of the portfolio over time.
PHOENIX — Ready Capital has closed a $17.2 million, non-recourse, hybrid-rate loan that is pari passu, part fixed and part floating rate. The undisclosed sponsor used the financing for the acquisition, renovation, unit buyouts and stabilization of a 146-unit, Class B, fractured condominium property in Phoenix’s Maryvale submarket. The loan features a 60-month term, flexible prepayment and is inclusive of a facility to provide future funding for the capital expenditure and future unit purchases.
MADERA, CALIF. — Evans Senior Investments (ESI) has arranged the sale of Cedar Creek Senior Living, a 112-unit independent living, assisted living and memory care community. The property is located in Madera, approximately 25 miles northwest of Fresno. Originally built in 2005, the community averaged 87.6 percent occupancy in the year leading up to the sale. ESI represented the seller, an independent owner. A California-based REIT acquired the property for an undisclosed price.
INDIANAPOLIS — Simon Property Group (NYSE: SPG) has agreed to acquire an 80 percent interest in Taubman Centers Inc. (NYSE: TCO), a Michigan-based retail owner-operator, for approximately $3.6 billion. Under the terms of the agreement, Simon is buying all of Taubman’s common stock at a price of $52.20 per share in an all-cash deal. The transaction is expected to close in mid-2020. The purchase price represents a 51 percent premium over Taubman’s closing price of $34.67 per share on Friday, Feb. 7. Taubman’s existing debt, which Simon will assume, was factored into the price, which represents a capitalization rate of 6.2 percent. Taubman will continue to operate as a separate entity. Taubman’s portfolio spans 26 super-regional malls and power centers totaling more than 25 million square feet of gross leasable space in the United States and Asia. “By joining together, we will enhance the ability of Taubman to invest in innovative retail environments that create exciting shopping and entertainment experiences for consumers, immersive opportunities for retailers and substantial new job prospects for local communities,” says David Simon, CEO of Simon Property Group. Simon Property Group’s stock price opened at $142.11 per share on Monday, Feb. 10, down from $185.30 per …
Nashville has experienced record multifamily demand in recent years, largely driven by an influx of young professionals and the growing presence of high-earning jobs within the urban core. With investment activity flourishing at more than $2 billion in sales volume year-over-year as of the third quarter, Nashville remains poised as a city on the rise. Nashville investors have continued to aggressively pursue the value-add and suburban submarkets in search of higher yield transactions, as the market’s average price per unit increased by over 15 percent year-over-year. Momentum continues to build in Nashville, making it an attractive destination for national investors looking to maximize their investment potential. Migration expansion One of Nashville’s greatest strengths remains its ability to attract and retain its highly educated, millennial workforce. Nashville is among the fastest growing markets in the United States, with over 58,500 people projected to enter the workforce between 2019 and 2024. The market consists of a highly educated resident pool, with 33.1 percent having earned a bachelor’s degree or higher. That number is expected to increase by 13.4 percent through 2024, with four major universities producing college graduates who enter the Nashville workforce. With such a sophisticated talent pool to occupy the …
Despite enduring a federal government shutdown for 35 days that temporarily put a crimp in loan processing, the HUD/FHA Section 232 mortgage insurance program used to finance seniors housing properties rallied to post a solid performance in fiscal year 2019. The volume of loans closed during the 12-month period that started Oct. 1, 2018 and ended Sept. 30, 2019 totaled $3.7 billion. That’s up from $3.6 billion the prior fiscal year. The HUD/FHA Section 232 program — more commonly referred to as the HUD Lean program — helps finance nursing homes and assisted living facilities, as well as board and care facilities. The Lean process developed by HUD in 2008 is a methodology based on the Toyota model to increase efficiency by reducing waste. In short, the goal is to eliminate historical inefficiencies in the processing and approval of HUD loan applications. Dissecting the data Although the government shutdown that occurred in late December 2018 and January 2019 resulted in the program’s loan count dropping from 317 to 288 on a year-over-year basis, the average loan amount increased 14 percent during the same period to reach a record high of nearly $13 million. “This was driven not only by some …
The Denver office market remains strong. Vacancy continued to compress in 2019 as rental rates and sale prices forged ahead to the highest levels in history, allowing landlords and sellers to remain in control of the market. Class A office transactions accounted for $1.7 billion in office sales in Denver Metro over the past year, versus $1.2 billion of Class B office sales, with average market cap rates of 6.6 percent and 7 percent, respectively. Interestingly enough, vacancy rates are higher in Class A product at 11.7 percent versus 10.1 percent in Class B. Sale prices and rental rates continued to grow in both classes. However, there was a significant difference in rental rate and sale price numbers as Class B lagged by about 20 percent to 25 percent in both categories. With a potential downturn looming, it begs the question, is Class A or Class B office a better long-term value? Considering rental rates and income are a direct derivative of what investors will pay for office buildings, investors must ask themselves whether rental rates are sustainable. It is apparent that the “chase” for the cool, hip, new Class A office is real, but the question is whether Class …
HARKER HEIGHTS, TEXAS — JLL has negotiated the sale of Market Heights Shopping Center, a 417,167-square-foot regional lifestyle center in the Central Texas city of Harker Heights. Built in 2008, the property sits on 62.2 acres and was 89.4 percent leased at the time of sale. Tenants include Cinemark, Dick’s Sporting Goods, Barnes & Noble, Ross Dress for Less, Old Navy, Petco, Ulta Beauty and Bed Bath & Beyond. Adam Howells of JLL represented the undisclosed institutional seller in the off-market transaction, and procured the buyer, Direct Retail Partners. Mark Brandenburg and Tim Jordan of JLL arranged a four-year, floating-rate acquisition loan for the buyer through Bayview Asset Management.