Top Stories

Equity Commonwealth to Sell 55-Story Office Tower in Philadelphia for $451.6M

by Alex Tostado January 31, 2019

PHILADELPHIA — Equity Commonwealth (NYSE: EQC) is under contract to sell BNY Mellon Bank Center, a 55-story, 1.3 million-square-foot office building located at 1735 Market St. in downtown Philadelphia. The price is $451.6 million. The buyer was undisclosed, though multiple media outlets report that a partnership between New York-based Silverstein Properties Inc. and Philadelphia-based Arden Group is acquiring the building. Proceeds after credits for capital costs, contractual lease costs, and rent abatements are expected to be approximately $435.6 million. The sale is slated to close by March 27. The asset is the fourth-largest building in Philadelphia. Amenities include The Lounge at 1735, a 19,000-square-foot space offering a 100-person classroom-style conference facility, fireplaces, wine lockers and TVs; Pyramid Club, a lounge on the 52nd floor offering a 360-degree view of Philadelphia, a bistro bar and a sit-down restaurant; the Philadelphia Sports Club, a 25,000-square-foot, two-story fitness center offering a sauna, rowing machine, group fitness classes, and massage therapy; and covered bike parking. BNY Mellon Bank Center was built in 1990 and designed by Kohn Pedersen Fox Associates. The building is situated less than a mile from Philadelphia City Hall and Logan Square, and less than two miles from the Liberty Bell. Chicago-based …

January 31, 2019

Hawaii Industrial Loans Top Stories Western

Industrial Logistics Properties Trust Secures $650M Refinancing for Hawaiian Portfolio

by David Cohen January 30, 2019

OAHU, HAWAII — Industrial Logistics Properties Trust (NASDAQ: ILPT) has secured a $650 million mortgage loan secured by an industrial portfolio in Oahu. The portfolio includes 186 properties, which total approximately 9.6 million square feet. The 10-year loan applies to approximately 57 percent of ILPT’s total owned square footage in Hawaii. As of Dec. 31, 2018, the average remaining lease term for these properties was more than 14 years and the occupancy was nearly 100 percent. “We are pleased to term out our floating rate debt with attractive, long-term, fixed-rate debt and to demonstrate the tremendous value of these unique Hawaiian assets,” says John Murray, CEO of Industrial Logistics Properties Trust. “While the underlying assets had a net book value of less than $500 million at year end 2018, this loan provides us with $650 million of capital to fund value-enhancing external growth opportunities.” Terms of the non-amortizing financing included a fixed interest rate of 4.3 percent. Morgan Stanley, Citi, UBS and J.P. Morgan provided the capital. Sullivan & Worcester LLP provided legal counsel to Industrial Logistics Properties Trust in the transaction. ILPT stock closed at $20.79 per share on Tuesday, Jan. 29, down from $22.47 one year ago. — David …

January 30, 2019

Development Mixed-Use North Carolina Southeast Top Stories

Beacon Partners to Build 15-Acre Mixed-Use Project in Charlotte’s South End Neighborhood

by John Nelson January 29, 2019

CHARLOTTE, N.C. — Beacon Partners, a Charlotte-based mixed-use developer, plans to build a 15-acre project in Charlotte’s South End neighborhood. Named LoSo Station, the project will include more than 500,000 square feet of creative office space, 30,000 square feet of retail and restaurants, 350 multifamily residences and a 150-room boutique hotel. The master plan also calls for rooftop entertainment, meeting space, outdoor retail plazas and other athletic amenities for tenants and residents. The transit-oriented development will be situated at the Scaleybark station for the LYNX Blue Line light rail system, as well as along Charlotte Rail Trail, a 3.5-mile long public trail for walking, biking and scooter access through South End. South End is an up-and-coming neighborhood in Charlotte, with nearby attractions including Queen Park Social, Victory Brewery and OMB (The Olde Mecklenburg Brewery). “The LoSo Station master plan is such a unique and rare opportunity to plan and develop a transit-oriented development at the convergence of South End and ‘LoSo,’” says Mike Harrell, senior partner at Beacon Partners, referring to the lower portion of South End (LoSo). “We are looking forward to bringing forth the mixed-use amenities that will enhance and complement the already existing business and merchant base …

January 29, 2019

Acquisitions Colorado Industrial Top Stories Western

Etkin Johnson Sells 19-Property Industrial Portfolio in Colorado to Berkeley Partners for $247.5M

by Taylor Williams January 28, 2019

DENVER — Etkin Johnson Real Estate Partners, a Denver-based investment and development firm, has sold its portfolio of industrial assets in Colorado to San Francisco-based Berkeley Partners for $247.5 million. The deal represents the largest industrial portfolio sale ever closed in Colorado. The portfolio, which was 93 percent leased at the time of sale, comprises 19 properties totaling approximately 1.95 million square feet of industrial space. The facilities range in size from 26,078 to 293,510 square feet. Etkin Johnson acquired the properties between 1990 and 1998. All 19 assets are located in cities within Colorado’s Front Range, including Denver, Boulder, Colorado Springs, Aurora and Golden. “This was a very well-constructed portfolio of infill industrial,” says Matt Novak, partner at Berkeley Partners, which has more than $625 million in assets under management. “The Denver metro has been experiencing rapid growth, and this acquisition provides us a critical mass of properties in the market. Our goal is to hold these assets for 10- to 20-plus years, benefiting from the favorable long-term industrial supply-demand fundamentals.” Jim Bolt, Jeremy Ballenger, Tyler Carner and Mike Winn of CBRE represented Etkin Johnson in the transaction, which marks Berkeley Partners’ first acquisition in Colorado. — Taylor Williams

January 28, 2019

Acquisitions Healthcare Midwest Top Stories Wisconsin

Hammes Sells 23-Property Medical Office Portfolio for $400M

by Kristin Harlow January 25, 2019

MILWAUKEE — Hammes Partners has sold a 23-property medical office portfolio across nine states for $400 million. The Class A properties, totaling 979,000 square feet, are located in Virginia, Washington, North Carolina, Illinois, New York, New Jersey, Pennsylvania, Alabama and Texas. Mindy Berman and Steve Leathers of JLL Healthcare Capital Markets brokered the sale on behalf of Milwaukee-based Hammes. Giant healthcare REIT Welltower Inc. (NYSE: WELL) was the buyer, according to media reports. “Selling points included the portfolio’s alignment with major health systems, durable income and locations in strong metro markets,” says Berman. Hammes Partners is a private equity platform that invests on behalf of institutional investors, with a focus on the U.S. healthcare real estate market. Toledo, Ohio-based Welltower is a real estate investment trust that mostly invests in healthcare and seniors housing properties. — Kristin Hiller

January 25, 2019

Acquisitions Hospitality New York Northeast Top Stories

Ashford Hospitality Trust Acquires Embassy Suites in Manhattan for $195M

by Alex Tostado January 24, 2019

NEW YORK CITY — Ashford Hospitality Trust Inc. (NYSE: AHT) has acquired the Embassy Suites by Hilton New York Midtown Manhattan for $195 million, or $629,000 per room. The 41-story, 310-room hotel is located on 37th Street between 5th and 6th avenues, near Bryant Park and Times Square. While the seller was not disclosed, The Real Deal reports that AIG Global Real Estate owned the majority stake in the property. This is Ashford’s first direct hotel investment in New York City. According to data analytics firm STR, the number of hotel rooms in Manhattan that opened in 2018 was down 32 percent from 2017. Furthermore, for the first time since 2013, demand outpaced supply in both 2017 and 2018. “The hotel is a high-quality, well-positioned asset that we expect will benefit from the positive trends occurring in the dynamic Manhattan market,” says Douglas Kessler, Ashford’s president and CEO. “Having recently opened in 2018, the property is still ramping up operations, and we believe there is significant growth and upside to occur.” Indeed, Ashford reports that there are several new development projects in Midtown that are expected to fuel growth in the area. On a trailing three-month basis ending Dec. 31, 2018, the …

January 24, 2019

California Company News Leasing Activity Top Stories Western

Facebook Signs Lease for 803,000 SF Office Campus Near San Francisco

by David Cohen January 23, 2019

BURLINGAME, CALIF. — Tech giant Facebook has signed a lease to fully occupy Burlingame Point, an 803,000-square-foot office campus currently under construction in Burlingame. Located on more than 18 acres at the edge of the San Francisco Bay, Burlingame Point is being developed by Kylli, a subsidiary of China-based Genzon Investment Group Co. The campus is 16 miles south of San Francisco. Mike Moran and Clarke Funkhouser of Cushman & Wakefield represented Kylli in the transaction. Facebook was represented by JLL. “We couldn’t be more excited that one of the world’s leading technology firms has selected Burlingame Point to expand its Northern California footprint, says Moran. “This is a testament that strong design elements do make a difference to the discerning tenant.” In addition to four new Class A office buildings with bay views, the project will include public amenities that include an improved Bay Trail, a pedestrian promenade and an improved roadway for cyclists and motorists. Facebook first announced the lease was in negotiations in August and the lease was fully executed in the fourth quarter of 2018. Burlingame Point is expected to open in 2020. The project is the first Class A office campus developed by Kylli in the …

January 23, 2019

Loans Midwest Ohio Top Stories

Fairmount, DiGeronimo Refinance Mixed-Use Village in Suburban Cleveland with $171.5M Loan

by John Nelson January 22, 2019

ORANGE VILLAGE, OHIO — The developers behind Pinecrest in suburban Cleveland have obtained a $171.5 million loan to refinance the 750,000-square-foot mixed-use project. Square Mile Capital Management LLC provided the loan to a joint venture between Cleveland-based Fairmount Properties and the DiGeronimo Cos., which opened Pinecrest in spring 2018. Situated on 58 acres in Orange Village, Pinecrest features 400,000 square feet of retail and restaurant space that houses Whole Foods Market, REI, Silverspot Cinema, Pinstripes, West Elm, Williams Sonoma, Pottery Barn, Vineyard Vines and Orangetheory Fitness, as well as chef-driven restaurants. About 160,000 square feet of creative office space sits atop the ground-level shops and restaurants. Pinecrest also features 87 high-end apartment residences and a one-acre park, as well as a 145-room AC Hotel by Marriott that wasn’t included in the financing. Trey Morsbach and Jim Curtin of HFF’s Dallas office led the debt placement team to arrange the floating-rate loan, which will be used to refinance a $142 million construction loan that HFF arranged for the developers in spring 2017. HFF also assisted the developer in securing joint venture equity for the project in June 2016. “This refinancing reflects the viability and strength of our asset,” says Eric Louttit, …

January 22, 2019

Leasing Activity Massachusetts Northeast Office Top Stories

PUMA North America to Open 150,000 SF Office Headquarters Near Boston

by Taylor Williams January 21, 2019

SOMERVILLE, MASS. — Sports apparel and accessories company PUMA North America will open a new, 150,000-square-foot office headquarters at Assembly Row, a mixed-use destination in the northwestern Boston metro of Somerville. Federal Realty Investment Trust (NYSE: FRT) is developing Assembly Row. The new headquarters will be located at 455 Grand Union Blvd. The new building will total 300,000 square feet upon completion, and will bring together PUMA’s two nearby offices in Boston and Westford. The company expects the space to house about 550 employees across five floors beginning in 2021. The transit-served building also features a 19,000-square-foot roof deck complete with a recreational area and basketball court. Additional amenities include a fitness center, a kids’ room and bike storage. “We need to be faster than ever in the way we react and adapt,” says Adam Petrick, PUMA’s global director of branding and marketing. “Somerville is a city buzzing with creative, diverse energy that will help us live out our ‘Forever Faster’ mentality.” Assembly Row is a 40-acre project located along Interstate 93 and the MBTA Orange Line. The developer has launched Phase III of the project, which will feature more than $475 million in new development. Phase III will deliver a 500-unit …

January 21, 2019

Acquisitions Colorado Office Top Stories Washington Western

Unico Sells 11-Property Office Portfolio in Seattle, Denver for $710M

by Kristin Harlow January 18, 2019

SEATTLE AND DENVER — Real estate investment and operating firm Unico Investment Group LLC has sold 11 office assets totaling 1.8 million square feet in Seattle and Denver for $710 million. Broad Street Principal Investments LLC, an affiliate of Goldman Sachs, was the buyer. The portfolio includes 10 creative office assets and one parking garage. The collection of properties is 85 percent leased to more than 190 tenants. Since 2014, Unico has invested $87 million in capital improvements for the properties. Some of the fully repositioned assets include the iconic Smith Tower in Seattle’s Pioneer Square, 1505 Fifth Ave. in Seattle’s central business district (CBD) and the DC Building in Denver’s CBD. The 27-building portfolio also includes new-construction buildings such as the Circa Building, which is located along Denver’s Platte Street. The Class A asset received the Mayor’s Design Award for Sustainability in 2018. Unico will retain a stake in the portfolio and will continue to operate and manage the properties on behalf of the new partnership. “We look forward to working with Goldman Sachs to fully complete the property repositions and new development opportunities still embedded within the portfolio,” says Jonas Sylvester, Unico president. Jason Flynn and Paul Nelson …

January 18, 2019

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