Raleigh’s office market is the strongest it’s been in years, with employment and corporate investments continuing to climb throughout the Triangle region. A current lull in the delivery of new construction and the market’s increased popularity have created a space crunch for Class A office space, especially for tenants seeking large blocks. While a good amount of new construction started or continued in 2015, there’s still a gap in “move-in ready” space. Vacancy fell from 11.7 percent in the second quarter to 11.2 percent in the third quarter, causing rent growth for Class A space. Direct asking rent increased from $23.81 per square foot in the second quarter to $24.14 per square foot in the third quarter and is expected to continue to increase until delivery of new construction picks up, which will likely be mid-2016/early 2017. The market has definitely shifted in favor of the landlord, and concessions that were made during the recession have fallen off as owners no longer have to offer them to secure tenants. Desire for Class A space in the Triangle has pushed pre-leasing rental rates to a historic high north of $33 per square foot — and they are likely go higher before …
MIAMI BEACH, FLA. — A joint venture between New York-based EL Group and Fort Lauderdale-based InSite Group purchased the Sagamore Hotel, a historic 93-room hotel in Miami Beach’s South Beach neighborhood. The venture purchased the asset for $63 million, according to The Real Deal. The property is situated on Collins Avenue and 16th Street near Lincoln Road. The two-building hotel features indoor/outdoor function space, a swimming pool, pool bar and a full-service restaurant. The beach building, which features two-story suites, was added during a property restoration in 2001. EL Group and InSite Group plan to fully renovate the property and add new food and beverage options.
TAMPA, FLA. — Marcus & Millichap has arranged the $47.9 million sale of a three-property, 2,291-unit self storage portfolio in the metro Tampa area. The properties are situated in Saint Petersburg, Palm Harbor and Tampa. Michael Mele and Luke Elliott of Marcus & Millichap’s Tampa office represented the seller, a New York-based REIT, and the buyer, a Pennsylvania-based REIT. The 223,903-square-foot portfolio includes climate-controlled and non-climate-controlled units ranging in size from 12 to 600 square feet.
LOUISVILLE, KY. — Hilton Worldwide has opened a dual-branded Hampton Inn by Hilton Louisville East/Hurstbourne and Home2 Suites by Hilton East/Hurtsbourne in Louisville. The 160-room property is owned and operated by Kana Hotel Group. The property is situated at 1150 Forest Bridge Road with access to the University of Louisville and the Louisville International Airport. The property has two separate lobbies and dining areas. The Hampton portion features a breakfast area, to-go breakfast bags Monday through Friday, free Wi-Fi, 24-hour business center and a 24-hour fitness center. The Home2 Suites portion features fully equipped kitchens, modular furniture, complimentary Internet, community spaces, pet-friendly rooms and trademark Home2 Suites amenities such as Home2 MKT for grab-and-go items and Spin2 Cycle, a combined laundry and fitness area. The property will also feature a heated indoor saline pool and outdoor patio with a grill area.
CHARLOTTE, N.C. — CBRE has arranged the $33.8 million sale of Fairview Center, two office buildings totaling 183,654 square feet. The properties are located at 6230 and 6302 Fairview Road in Charlotte’s SouthPark submarket. Atlanta-based Fairlead Commercial Real Estate purchased the assets from Beacon Partners. Fairview Center’s tenant roster includes McAngus Goudelock & Courie, United States Secret Service and ZAPATA. Patrick Gildea and Anne Vulcano of CBRE represented Beacon Partners in the transaction.
ALPHARETTA, GA. — New York Life Real Estate Investors has provided a $29.6 million for Brookside I and II, two Class A office buildings in Alpharetta totaling 267,000 square feet. Cushman & Wakefield’s Washington, D.C., office arranged the loan through New York Life on behalf of the borrower, Equus Investment Partnership X LP, a discretionary fund managed by Equus Capital Partners Ltd. The floating-rate loan features a five-year term.
RICHMOND, VA. — Apple Hospitality REIT Inc. (NYSE: APLE) has agreed to acquire Apple REIT Ten Inc. for $1.3 billion. The merger will create one of the largest select-service hospitality REITs in the industry with a combined 234 hotels and 30,017 rooms. The hotels are located in 94 MSAs across 33 states. The company, which will retain the Apple Hospitality REIT name and ticker symbol, will have an enterprise value of approximately $5.7 billion, according to the companies. Apple Ten, a non-traded REIT, was built and is managed by the same team that currently manages the publicly traded Apple Hospitality REIT. The $1.3 billion transaction value is comprised of $94 million in cash, roughly 49.1 million Apple Hospitality common shares issued to Apple Ten shareholders, and the assumption of approximately $239 million in debt. The merger agreement provides Apple Ten with a 45-day window to solicit alternative proposals from third parties. The termination fee for Apple Ten is $5 million if the company decides to pull out of the agreement within the 45-day window. Following that grace period, Apple Ten will have to pay $25 million to negate the merger with Apple Hospitality. The grace period ends on May 28. …
COVINGTON, LA. — Dallas-based Cypress Equities has acquired Covington Nord du Lac shopping center, a 460,000-square-foot regional retail power center located in Covington, roughly 40 miles north of New Orleans. The center comprises 214,000 square feet of existing space, 83,000 square feet of partially built improvements and 162,000 square feet of planned development space. Tenants including Hobby Lobby, Academy Sports + Outdoors, Petco and Kohl’s anchor the center. Kyle Stonis, Scott Tiernan and Pierce Mayson of SRS Real Estate Partners represented Cypress Equities in the transaction.
WASHINGTON, D.C. — SunTrust Banks Inc. has closed $32.3 million in financing to fund Phase III of the Town Hall Education Arts Recreation Campus (THEARC), a cultural, educational and social services center located in southeast Washington, D.C. THEARC is run by Building Bridges Across the River (BBAR), a nonprofit established by W.C. Smith for the purpose of building and managing the facility, including THEARC Theater and THEARC Farm. In addition to BBAR, THEARC houses nine nonprofit partners and provides dance, art and music classes, medical and dental care, afterschool activities, performances, education and social services to underserved communities in D.C.’s Wards 7 and 8. Phase III of THEARC will add approximately 92,000 square feet to the existing 110,000-square-foot development. The new addition will be home to an expanded clinic run by Children’s National Medical Center, Appletree Institute for Education Innovation Inc. (classroom, training and administrative space), the Bishop Walker School for Boys and The Phillips Collection. The new building will also include a black box theater. The project will be completed in 2017. The deal was led by SunTrust Community Capital and included $32.3 million in New Markets Tax Credit (NMTC) allocations. Three community development entities (CDEs) each contributed $10 …
ENGLEWOOD, FLA. — Love Funding, a Washington, D.C.-based lender, has provided a $17.8 million construction loan to build Heritage Oaks Assisted Living and Memory Care, a 118-unit seniors housing community in Englewood, located between Tampa and Fort Myers. Tammy Tate of Love Funding secured the 40-year, non-recourse financing through the HUD 232 program. Heritage Oaks will include 86 assisted living units and 32 memory care units in a two-story building. The initial 10-acre site will be part of a larger 60-acre campus. Phase II of development will add independent living to the community. Georgia-based CDH Partners is design architect for the project, which Florida-based Core Construction Services will build. When complete, Beacon Communities will operate the community. No timeline for construction was disclosed.