Property Type

Regency Centers to Purchase Equity One in $5B Shopping Center REIT Merger

by Katie Sloan November 15, 2016

JACKSONVILLE, FLA. — Jacksonville-based Regency Centers Corp. (NYSE: REG) has agreed to acquire Equity One Inc. (NYSE: EQY), creating one of the largest shopping center REITs in the U.S. The all-stock merger will convert each share of Equity One stock into 0.45 shares of Regency stock. Based on Regency’s closing stock price on Monday, Nov. 14, that equates to $31.44 per share, for a total acquisition price of nearly $5 billion, according to the Wall Street Journal. At the close of the deal, Regency shareholders are expected to own approximately 62 percent of the combined company’s equity, and former Equity One shareholders are expected to own approximately 38 percent. The company will retain the Regency name and will continue to trade under the ticker symbol REG. The headquarters will also remain in Jacksonville. The combined company is expected to have a total market capitalization of $15.6 billion, making it the largest REIT by equity value in the shopping center index. The merger will create a national portfolio of 429 properties encompassing more than 57 million square feet. Regency’s Board of Directors will be increased from nine to 12 members, including two directors designated by Equity One and one director designated …

November 15, 2016

Features Heartland Feature Archive Multifamily Top Stories

Renovation of Older Apartment Buildings in Suburbs is a Win-Win Strategy

by Jeff Shaw November 15, 2016

Strong renter demand for affordable apartments in affluent suburbs easily outstrips the available inventory of such properties. This supply and demand imbalance creates a big gap in the market that renovated older buildings can fill. These undervalued multifamily buildings also provide a healthy investment opportunity. Cranes dot the skylines of many American cities today, and much of the development is new luxury multifamily communities. For the last 10 years, the majority of the new apartments built have been high-end apartments, often in downtown areas. Underlying reasons Two main factors are driving developers’ preference for luxury urban apartments. First, developers are turning to urban areas because many suburbs are using zoning density restrictions to prevent multifamily construction. Developers may want to build in the suburbs, but suburban communities want to maintain the relatively small class sizes in their schools and the low crime rates associated with low-density areas, so they are not granting permits for new construction. Cities, on the other hand, are eager to welcome new residents to grow their tax bases, so they’re quick to provide permits for new multifamily construction. The second factor is rising construction costs. Excluding land costs, construction costs have risen 23 percent since 2010, …

November 15, 2016

California Market Reports Multifamily Western Western Market Reports

The Bay’s Multifamily Market Experiences Some Transition

by Camren Skelton November 15, 2016

Financial markets worldwide have seen dramatic volatility in this past 12 months. The Bay Area economy and new hiring have cooled, while the San Francisco housing and condo markets have started to normalize after four feverishly overheated years. We are hearing about a big jump in apartment vacancy rates, with more apartments for rent than we’ve seen in many years just as rental rates begin to decline from recent all-time peaks. As would be expected, preliminary indicators show a transition to a cooler market when it comes to apartment building sales activity. However, as illustrated in the charts below, we haven’t seen any significant changes in the statistics. The second half of 2016 will undoubtedly provide more insight regarding the speed and scale of any market condition changes. San Francisco multifamily assets that contained more than five units experienced a plateau in cap rates year over year between 2015 and 2016. However, this same product experienced an increase in dollars per square foot, price per unit and average sale prices. The politics of new home development in San Francisco are not for the weak of heart. There are vocal disagreements between neighborhood and homeowner associations, developers, affordable housing advocates, tenant’s …

November 15, 2016

California Multifamily Oregon Seniors Housing Western

Summit Healthcare REIT Buys Interest in Seniors Housing Communities in Oregon, California for $23M

by Nellie Day November 14, 2016

CITRUS HEIGHTS, CALIF., AND CORVALLIS, ORE. — Summit Healthcare REIT has acquired 20 percent interest in two seniors housing communities — Sun Oak Senior Living and Regent Court Senior Living— for $23 million. Summit, a non-traded REIT based in Lake Forest, Calif., acquired the interest from an undisclosed, publicly traded REIT. The two properties are leased to Compass Senior Living, an Oregon-based operator. Sun Oak Senior Living is a 78-bed assisted living and memory care community in the Sacramento suburb of Citrus Heights. Regent Court is a 48-bed memory care community in Corvallis, approximately midway between Portland and Eugene. Capital One – Healthcare Financial Solutions LLC provided financing for the transaction. Blueprint Healthcare Real Estate Advisors, a brokerage firm based in Chicago, arranged the deal. Tim Cobb led the Blueprint team.

November 14, 2016

Arizona Office Western

Equus Sells 107,000 SF Scottsdale Financial Center

by Nellie Day November 14, 2016

SCOTTSDALE, ARIZ. — Equus Capital Partners has sold Scottsdale Financial Center, a 107,000-square-foot office building, for an undisclosed sum. The Class A building is located at 4110 N. Scottsdale Road in Scottsdale. It is 93 percent leased. The buyer was Alternative Investments & Manager Selection Real Estate Group, a business unit within Goldman Sachs Asset Management.

November 14, 2016

Hawaii Hospitality Western

The Grand Naniloa Hotel Hilo Opens in Hawaii

by Nellie Day November 14, 2016

HILO, HAWAII — DoubleTree by Hilton has opened the Grand Naniloa Hotel Hilo, a 320-room hotel on the Big Island of Hawaii. The historic property recently underwent a $30 million renovation. The hotel includes Hilo’s only nine-hole golf course, along with a swimming pool and fitness center. It is located at 93 Banyan Drive. WHR LLC owns the property, which Aqua-Aston Hospitality manages.

November 14, 2016

California Multifamily Western

Hillside Apartments in San Bernardino Sells for $10.2M

by Nellie Day November 14, 2016

SAN BERNARDINO, CALIF. — A private investor has acquired the 80-unit Hillside Apartments in San Bernardino for $10.2 million. The community is located at 2156-2196 Kendall Drive. It is situated just one mile from Cal State San Bernardino. Warren Berzack of Berzack Investment Property Advisors and Slavic Zlatkin of Lee & Associates represented the buyer. Lee’s Ryan O’Connor represented the seller, SB Hillside Properties, in this transaction.

November 14, 2016

Arizona Retail Western

Commercial Properties Inc. Arranges Sale of 12,849 SF Strip Center in Casa Grande

by Nellie Day November 14, 2016

CASA GRANDE, ARIZ. — Commercial Properties Inc. (CPI) has arranged the sale of a 12,849-square-foot strip center located in Casa Grande. The property was fully occupied at the time of sale by tenants including Cold Stone Creamery, UPS Store, Supercuts and Firehouse Subs. Sarge Glenn of CPI’s Industrial Team represented the seller, LBUBS 2004-C8 Retail 1664 LLC. Mike Sayre of Cushman & Wakefield represented the buyer, SimonMed Imaging, which purchased the property for $1.8 million.

November 14, 2016

Maryland Multifamily Southeast

Ares, TruAmerica Acquire Multifamily Portfolio in Suburban Baltimore for $236M

by John Nelson November 14, 2016

BALTIMORE — A partnership between funds managed by Ares Management and TruAmerica Multifamily has purchased a 1,402-unit multifamily portfolio in suburban Baltimore for $236 million. The acquisition included Dominion at Eden Brook and Dominion Kings Place in Columbia, Lakeside Mill in Owings Mills, Ellicott Grove in Ellicott City, Arborview at Riverside & Liriope in Belcamp and Dominion Constant Friendship in Abingdon. The partnership will implement a multimillion-dollar renovation and repositioning program across the portfolio. Exterior upgrades will consist of landscaping, painting, updated signage and common area updates. Approximately half of the residential units will be renovated to include new appliance packages, faux-wood hard-surface flooring, new countertops and upgrades to existing cabinets.

November 14, 2016

District of Columbia Loans Office Southeast

New York Life Originates Two Loans Totaling $90M for Office Buildings in D.C.

by John Nelson November 14, 2016

WASHINGTON, D.C. — New York Life Real Estate Investors has originated two 15-year loans totaling $90 million for a pair of office buildings in downtown Washington, D.C.’s central business district. The properties include a recently renovated, 10-story building at 1620 Eye St. N.W. and a 12-story building at 1156 15th St. N.W. New York Life Real Estate Investors originated the loans on behalf of the borrower, TF Cornerstone Inc.

November 14, 2016

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