Top Stories

Payless ShoeSource’s 2,100-Store Shutdown Due to Inability to Compete with Department Stores, Says Analyst

by Taylor Williams February 18, 2019

TOPEKA, KAN. — Payless ShoeSource will close all 2,100 of its stores in the United States and Puerto Rico as it moves toward liquidation. According to a statement by the company provided to USA Today, which first reported the news on the evening of Friday, Feb. 15, Payless expects all stores to remain open through March. The announcement comes nearly two years after the Topeka-based shoe retailer filed for Chapter 11 bankruptcy protection, a move that coincided with the shuttering of 673 American stores at the time. The company is also in the process of de-commissioning its online sales platform, but it remains unclear whether Payless stores in Latin America will remain open. Payless had undergone an aggressive expansion plan that required taking on a greater debt load. After filing for bankruptcy in April 2017, the company restructured its finances to eliminate $435 million in debt and whittle its store count to 3,500 locations worldwide. According to longtime retail consultant Jeff Green, Payless’ financial woes can be traced in part to the lack of name-brand shoe offerings, a product segment that is especially popular with millennial shoppers. “Even after Payless restructured its debt, the changing nature and growing competition from …

February 18, 2019

New York Northeast Office Top Stories

Analyst: Amazon Abandoning New York City HQ Will Have Greatest Impact on Condo Market

by Kristin Harlow February 15, 2019

NEW YORK CITY — The New York City condo market will likely take the biggest hit after Amazon announced Thursday that it would not move forward with plans to build a second headquarters in the city, according to one REIT analyst. The online retail giant cited a lack of support from state and local elected officials as its reason for pulling out of a massive headquarters plan in the Long Island City neighborhood of Queens. “While polls show that 70 percent of New Yorkers support our plans and investment, a number of state and local politicians have made it clear that they oppose our presence and will not work with us to build the type of relationships that are required to go forward with the project we and many others envisioned in Long Island City,” wrote Amazon in a blog post. Amazon does not intend to reopen the HQ2 search at this time. The company will proceed with its plans for a headquarters in Northern Virginia and operations hub in Nashville. James Sullivan, managing director of equity research for BTIG, says that there are a lot of residential units in the development pipeline in the Long Island City market. “The …

February 15, 2019

Data Centers Development Industrial Office Top Stories

Google to Invest $13B in 2019 on New Data Centers, Offices Across the United States

by Alex Tostado February 14, 2019

MOUNTAIN VIEW, CALIF. — Google (Nasdaq: GOOGL) has announced plans for more than $13 billion in investments during 2019 in data centers and offices across the United States, with major expansions in 14 states. According to a blog post written by Google CEO Sundar Pichai, this will mark the second year in a row that Google will grow faster outside the Bay Area than within it. With the expansions, Mountain View-based Google expects to hire tens of thousands of employees across the country, including 10,000 construction jobs in Nebraska, Nevada, Ohio, Texas, South Carolina and Virginia. The tech-giant will have a presence in 24 states, as well as data centers in 13 communities. “This growth will allow us to invest in the communities where we operate, while we improve the products and services that help billions of people and businesses globally,” Pichai said in the blog post. “Our new data center investments, in particular, will enhance our ability to provide the fastest and most reliable services for all our users and customers.” Data centers In the Western States, south Nevada is set to get a new data center. In the Midwest, data centers will pop up in Ohio, Nebraska and …

February 14, 2019

California Development Mixed-Use Top Stories Western

Related Cos., CORE USA Break Ground on $1B Mixed-Use Project in Los Angeles

by David Cohen February 13, 2019

LOS ANGELES — Related Cos. and partner CORE USA have broken ground on The Grand, a $1 billion mixed-use development in downtown Los Angeles. Located across the street from the Walt Disney Concert Hall on Grand Avenue, world-renowned architect Frank Gehry designed the project. Upon completion, the property will include more than 176,000 square feet of retail space, an Equinox Hotel and more than 400 residences. The retail portion will include chef-driven restaurants and a collection of shops, as well as a movie theater complex. Approximately 20 percent of the residences will be affordable-rate units. The Grand and the Grand Avenue Redevelopment are the result of a collaborative public-private partnership, guided by the Los Angeles Grand Avenue Authority, a joint organization of the County of Los Angeles, the City of Los Angeles, and the former Community Redevelopment Agency of the City of Los Angeles. It is estimated that The Grand will generate 10,000 new jobs and $397 million in revenues to the City of Los Angeles and $68 million in revenues to the County of Los Angeles over the next 25 years, according to the developers. The development will connect multiple areas of downtown and is organized around several key urban …

February 13, 2019

Acquisitions Mixed-Use New York Northeast Top Stories

WeWork Closes $850M Purchase of Lord & Taylor Building in Manhattan from HBC

by John Nelson February 12, 2019

NEW YORK CITY — Global coworking provider WeWork has closed on its $850 million purchase of the Lord & Taylor Building, a landmark Midtown Manhattan asset located at 424-434 Fifth Ave. The seller, Hudson’s Bay Co. (HBC), is the parent company of Lord & Taylor, which for 104 years had its flagship store on the ground level of the 11-story building. The retailer closed its doors and its famous Fifth Avenue display windows after the 2018 holiday shopping season. HBC and WeWork Property Investors (WPI), WeWork’s real estate division, originally announced the purchase back in October 2017. The final purchase price is consistent with the previously disclosed terms of the transaction. WeWork is in the midst of overhauling the property. The New York-based company is collaborating with architect BIG to restore the Lord & Taylor Building’s display windows on the street level, two-story entrance and its rooftop terrace. WeWork is preserving the basement, first and second floors for retail. “Preserving one of the most iconic buildings in New York City’s history is a monumental opportunity,” says Bjarke Ingels, founding partner at BIG. “Our design will honor Lord & Taylor’s past, building toward the future and ensuring this landmark continues to be …

February 12, 2019

Development Mixed-Use New York Northeast Top Stories

Partnership to Redevelop Former Trump-Owned Hotel in Manhattan into 2 MSF Mixed-Use Property

by Taylor Williams February 11, 2019

NEW YORK CITY — A partnership between local investment firm TF Cornerstone Inc. and MSD Partners, the investment advisory firm of tech billionaire Michael Dell, will redevelop the Grand Hyatt hotel in Midtown Manhattan. The property, once partially owned by The Trump Organization, will be converted into a mixed-use destination. According to the New York Daily News, the 26-story building represents one of President Donald Trump’s first major real estate deals in Manhattan. In 1978, The Trump Organization partnered with Hyatt to buy the property, then known as Hotel Commodore, and undertake $100 million in renovations. The paper reports that Trump sold his share of the property in 1996 for $140 million. The new development, located at 42nd Street and Lexington Avenue, would replace the existing building with office and retail space, as well as a new luxury hotel, totaling roughly 2 million square feet of commercial space. The project would also upgrade the infrastructure of the existing public transit at the site. “Hyatt first entered the critical New York market with the flagship Grand Hyatt New York, and the hotel has always been one of our most iconic properties and vital locations,” says Mark Pardue, senior vice president of operations and …

February 11, 2019

California Multifamily Top Stories Western

Hankey Investment, Jamison Properties Break Ground on $300M Residential Tower in Los Angeles’ Koreatown

by Kristin Harlow February 8, 2019

LOS ANGELES — Hankey Investment Co. LP and Jamison Properties LP have broken ground on a $300 million residential tower in Koreatown, a submarket adjacent to downtown Los Angeles. Located at 2900 Wilshire Blvd., the unnamed development will rise 25 stories. The project will include 644 apartment units and a 1,000-space parking podium. Floor plans will range from studios to three-bedroom units, as well as two-story penthouses. Monthly rents will range from $2,000 to $10,000. A one-acre amenity deck will house a gym, clubhouse, pool, spa, business center, dog park and zen garden. The project will also include 15,000 square feet of ground-floor retail space. The building’s design features a unique floor shape as to avoid casting shade on two nearby parks, as well as providing unobstructed views of downtown Los Angeles and the Hollywood Hills. “As the Los Angeles housing market continues to be impacted, additional rental units will help provide much-needed homes in a very desirable location,” says W. Scott Dobbins, president of Hankey. The project team also includes Large Architecture, Dianna Wong Architecture + Interior Design, AECOM and Wilshire Construction. Completion is slated for early 2021. — Kristin Hiller

February 8, 2019

Company News Georgia North Carolina Southeast Top Stories

BB&T, SunTrust Agree to Merge in $66B Deal, Creating Sixth Largest U.S. Bank

by Taylor Williams February 7, 2019

ATLANTA AND WINSTON-SALEM, N.C. — In a blockbuster deal, SunTrust Banks Inc. (NYSE: STI) and BB&T Corp. (NYSE: BBT) have entered into an all-stock merger agreement valued at approximately $66 billion. The marriage of these two iconic financial institutions in the Southeast will create the sixth-largest bank in the United States. Under terms of the agreement, SunTrust investors will receive 1.295 shares of BB&T for each SunTrust share they own. That equates to BB&T agreeing to pay $28.1 billion for SunTrust’s equity as of the closing price on Wednesday, Feb. 6. The combined company will operate under a new name and brand and be headquartered in Charlotte, N.C., while maintaining significant operations and investment in Winston-Salem, N.C., and Atlanta. The entity’s headquarters in Charlotte will also feature an innovation and technology center to aid with the transference of digital information. The deal, which is still subject to shareholder approval and other customary regulatory approvals, is expected to close in the fourth quarter of this year. A press release highlighting the agreement says the name of the new entity will be announced prior to the transaction closing. The agreement is being billed by both companies as a “merger of equals.” Shareholders of North …

February 7, 2019

The Shenandoah Center in Charles Town, West Virginia

Multifamily Seniors Housing Top Stories

KeyBank Provides $142.1M Acquisition Loan for 15-Property Skilled Nursing Portfolio

by Jeff Shaw February 6, 2019

PENNSYLVANIA, NEW JERSEY, CONNECTICUT, WEST VIRGINIA AND MASSACHUSETTS — KeyBank has provided a $142.1 million acquisition loan for a 15-property, 2,147-bed skilled nursing portfolio. Six of the properties are in Pennsylvania, four in New Jersey, three in Connecticut, one in West Virginia and one in Massachusetts. The total purchase price was $204 million. Manhattan-based private real estate investment firm Next Healthcare Capital entered into a real estate partnership with Genesis Healthcare to acquire the portfolio from seniors housing REIT Welltower (NYSE: WELL). Genesis acquired a 46 percent ownership interest in the portfolio. Genesis will continue to operate the facilities under a new long-term, triple-net lease that includes a Genesis purchase option beginning in 2026, plus no rent escalators for the first five years. Seven additional Welltower-owned properties were sold to a third party and Genesis will no longer operate those facilities. Henry Alonso, Jonathan Slusher and John Randolph of KeyBank Real Estate Capital arranged the $142.1 million loan. Terms of the financing were undisclosed. — David Cohen

February 6, 2019

Acquisitions California Multifamily Top Stories Western

Integral, Wanxiang Sell High-Rise Apartment Building in Denver for $110.5M

by Amy Works February 5, 2019

DENVER — A partnership between Atlanta-based The Integral Group and Chicago-based Wanxiang America Real Estate Group has sold EVIVA on Cherokee, a high-rise apartment building located at 1250 Cherokee St. in Denver’s Golden Triangle neighborhood. The partnership developed the 18-story property in 2017. The buyer and sales price were undisclosed, but multiple media outlets report that an affiliate of Chicago-based Equity Residential purchased the asset for $110.5 million. EVIVA on Cherokee features apartments averaging 820 square feet with industrial-inspired finishes, including exposed concrete, high-gloss custom cabinetry, quartz countertops, stainless steel appliances, sliding barn doors and floor-to-ceiling windows. Community amenities include a resort-style saltwater pool with private cabanas, outdoor grilling area, bocce ball court, fitness center, movie room with billiards, demonstration kitchen, private indoor/outdoor conference room, rotating art gallery throughout the common areas, dog wash and 24-hour concierge services. Jordan Robbins, Anna Stevens, Mack Nelson and Chris White of HFF represented the seller in the transaction. “The limited availability of concrete, high-rise apartment communities in Denver created significant interest in the asset,” says HFF’s Robbins. Founded in 2010, Wanxiang America Real Estate Group LLC has invested more than $1 billion of equity into nearly 100 commercial real estate investments of all product …

February 5, 2019

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