When we last reported on the health of Hawaii’s industrial market in 2018, we offered rationale for a then 2.02 percent Oahu industrial vacancy rate. This rate was fueled by the completion of many large residential high rises in urban Honolulu, the ongoing construction of a $9.2 billion light rail system (voter approved at less than $5 billion), and booming tourism and military sectors, our two biggest economic drivers. Oahu’s small, 41 million-square-foot industrial market was under further compression as industrial product was either being taken — or functionally interrupted — by the state to support light rail construction or lost to high-rise residential construction and the expansion of our main Honolulu harbor. A prohibitive industrial construction cost scale, which generally exceeds $125 per square foot for metal skin shell warehouse, had also slowed spec and build-to-suit construction. Fast forward to late 2019, and our market reflects an Oahu industrial vacancy rate of just 2.13 percent, a monthly industrial base rent average of $1.24 per square foot and monthly operating expenses of $0.41 per square foot. Much of this rate is composed of property taxes, which have increased more than 30 percent year over year in some areas, and 50 …
SANTA BARBARA, CALIF. — Rental rates are on the decline for the U.S. self-storage market as owners look to increase absorption of their new supply, according to a December self-storage report from research firm Yardi Matrix. Overall asking rents for 10-by-10-foot, non-climate-controlled units declined by 4.1 percent year-over-year in November, while rents for climate-controlled units of similar sizes dropped by 2.2 percent. The report cites that there may be some seasonality behind the rental rate decline, but new self-storage completions are the main culprit for the downward pressure. Units under construction and in the planning stages currently account for 9.7 percent of the existing national inventory, a 10-basis-point increase over November, reflecting construction starts in high-demand markets. Development activity is most pronounced in Portland and Nashville, where projects in the pipeline account for 29.7 percent and 23.7 percent of inventory, respectively. In New York City, planned and under-construction projects represent 16.1 percent of existing inventory. That said, the market’s inventory per person of around 3 net square feet is still only half the national average of 6 net square feet per person, according to Yardi Matrix. Only three of the major markets tracked (Las Vegas, San Diego and Inland Empire) …
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Omega Healthcare Investors Agrees to Acquire MedEquities Realty Trust for $600M
HUNT VALLEY, MD. AND NASHVILLE, TENN. — Real estate investment trust Omega Healthcare Advisors (NYSE: OHI) has agreed to acquire MedEquities Realty Trust (NYSE: MRT) in a cash and stock transaction valued at $600 million. As part of the transaction, Omega will acquire the fee simple interest in 34 facilities operated by 11 operators in seven states. Omega will also acquire approximately $34 million in mortgage loans. Under the terms of the transaction, MRT shareholders will receive $2 in cash and 0.235 OHI shares for each MRT share owned, which represents $10.26 per share based on Monday’s closing price for OHI. The boards of directors for both companies have unanimously approved the transaction. “This acquisition reinforces our commitment to the skilled nursing and senior housing industry, while adding new asset types to our portfolio furthering our strategic objectives,” says Taylor Pickett, CEO of Hunt Valley-based Omega. “MedEquities has built a high-quality diversified portfolio, which should provide Omega with meaningful future growth opportunities.” Omega is a real estate investment trust that invests in the long-term healthcare industry, primarily in skilled nursing and assisted living facilities. As of Sept. 30, 2018, Omega’s total portfolio consisted of 917 facilities spread across 41 states and the United Kingdom. …
CHICAGO — A joint venture between CIM Group and Golub & Co. has acquired 444 N. Michigan, a 36-story office tower along Chicago’s Magnificent Mile. Germany-based GLL Real Estate Investors sold the asset for $138 million, according to Crain’s Chicago Business. Built in 1976, the 517,000-square-foot building also includes ground-floor retail space. Technology, media, healthcare, law, real estate and professional services tenants occupy the office portion. CIM Group and Golub & Co. are in the midst of redeveloping the landmark Tribune Tower into luxury condos.
WEST DES MOINES, IOWA — R&R Realty Group has opened its new headquarters at Westfield Campus, a 180,000-square-foot, multi-tenant office property in West Des Moines. The campus includes two 80,000-square-foot buildings connected by Westfield Commons, a meeting space with conference areas, a coffee shop, fitness center and rooftop terrace. R&R occupies the entire second floor of the north building for approximately 25,000 square feet. Joining R&R at the office property are several other businesses whose spaces are currently under construction. Tenant names will be disclosed at a later date. R&R is a full-service real estate company serving Iowa and Nebraska.
KANSAS CITY, MO. — Newmark Grubb Zimmer (NGZ) has arranged the sale of Northpointe Tower in Kansas City for an undisclosed price. The 109,193-square-foot office building is located at 10220 N. Ambassador Drive. The property is 25 percent occupied after anchor tenant Dairy Farmers of America moved its headquarters to Kansas City, Kan. Michael VanBuskirk and Chris Robertson of NGZ brokered the sale. A local investor group purchased the asset from BACM 2006-5 North Ambassador Drive LLC.
MUNCIE, IND. — Albanese Cormier Holdings (ACH) has purchased Muncie Marketplace for an undisclosed price. Built in 2014, the 77,871-square-foot shopping center is located at 600 E. McGalliard Road in Muncie. Dick’s Sporting Goods, Michaels, Five Below, McAlister’s Deli, Men’s Wearhouse, Kay Jewelers and GameStop fully occupy the property. Amy Sands and Clinton Mitchell of HFF represented the undisclosed seller.
KIRKWOOD, MO. — Hanley Investment Group Real Estate Advisors has brokered the sale of Kirkwood Square near St. Louis for $8.2 million. Built in 2017, the 15,944-square-foot retail center is situated on 1.3 acres on Manchester Road in Kirkwood. Mercyhealth Family Medicine, Mercy-GoHealth Urgent Care, AT&T, Treats Unleashed and Sport Clips fully occupy the property. Jeff Lefko and Bill Asher of Hanley, along with Kevin Shapiro of L3 Corp., represented the seller, Kirkwood Square LLC. Steve Maynard of Maynard Group represented the buyer, a Los Angeles-based private investor.
HICKSVILLE, N.Y. — Cushman & Wakefield has arranged a $28 million construction loan for the development of a 195,610-square-foot distribution facility in Hicksville. Located at 344 Duffy Ave., the ground-up construction project sits on an approximately nine-acre lot. John Alascio, Sridhar Vankayala and Noble Carpenter III of Cushman & Wakefield secured the financing for the borrower, Lincoln Equities Group. The lender was Heitman Capital Group. Terms of the financing were not disclosed.
NEW YORK CITY — Brax Realty has brokered the $4.7 million sale of a 15-unit apartment building in the Hell’s Kitchen neighborhood of Manhattan. Located at 340 W. 48th St., the property consists of 14 studio and a single one-bedroom apartment. Of the 15 units, six were vacant at the time of sale. Alan Stenson of Brax Realty represented the seller, 340 W. 48th Street LLC, in the transaction. The seller had owned the property for 44 years. The buyer was undisclosed.