Top Stories

SL Green, Ivanhoe Agree to Sell Office Condo Portion of Tower in Manhattan for $633M

by Camren Skelton April 12, 2018

NEW YORK CITY— SL Green Realty Corp. (NYSE:SLG) and joint venture partner Ivanhoé Cambridge have agreed to sell their office condominium space at 1745 Broadway in Manhattan for $633 million. The 930,000-square-foot tower includes retail spaces, offices and residential condominiums. SL Green and Ivanhoé will sell their portion of the property, totaling 674,000 square feet and spanning floors two through 26, to an institutional client of Invesco Real Estate. In deals separate from Ivanhoé Cambridge, SL Green also agreed to sell two suburban office properties in New York —115-117 Stevens Ave. in Valhalla and Reckson Executive Park in Rye Brook — to two different buyers for a combined price of $67 million. The transactions are expected to generate combined net proceeds to SL Green of approximately $190 million, which will be used toward the company’s $1.5 billion stock repurchase program. To date, SL Green has repurchased a total of 12.3 million shares. “We continue to make strategic divestments of non-core assets to both support the stock repurchase program and strengthen our portfolio,” says Isaac Zion, co-chief investment officer of SL Green. 1745 Broadway occupies the entire block front between 55th and 56th streets and is located three blocks from Central Park and …

April 12, 2018

New York Northeast Retail Top Stories

Retailer Nine West Files for Bankruptcy, Will Close All 70 Stores

by David Cohen April 11, 2018

NEW YORK CITY — Nine West Holdings Inc., a New York-based women’s shoe and apparel wholesaler, has filed for bankruptcy after accumulating $1.6 billion in debt. As a result, the company plans to close all 70 of its brick-and-mortar retail stores. The company joins Toys ‘R’ Us, The Walking Company, Bon-Ton and Claire’s as prominent retailers to file for bankruptcy in the last year. An unidentified lender has provided $300 million in debtor-in-possession financing. The company also entered into a restructuring support agreement with the holders of 78 percent of its secured term debt and 89 percent of its unsecured term debt. The loan and agreement will allow the Nine West to remain an ongoing wholesale entity during bankruptcy proceedings. More than 80 percent of Nine West’s sales come from wholesale distribution and sales to department stores and off-price retail “This is the right step to address our two divergent business profiles,” says Ralph Schipani, Nine West Holdings’ Chief Executive Officer. “We will retain our strong, profitable and growing apparel, jewelry and jeanswear businesses, and continue to operate them under a new capital structure so that we can leverage their existing strengths to drive even greater growth.” “Once we complete the reorganization process, …

April 11, 2018

Development New York Northeast Office Property Type Top Stories

Tishman Speyer to Break Ground on $3.7B, Pfizer-Anchored Office Tower in Manhattan

by John Nelson April 10, 2018

NEW YORK CITY — Tishman Speyer, a New York-based owner and developer of trophy office assets around the world, plans to break ground in June on The Spiral, a $3.7 billion office tower that will rise 65 stories at 66 Hudson Blvd. in Manhattan. Global pharmaceutical company Pfizer recently signed an 800,000-square-foot, 20-year lease at The Spiral, which is slated for completion in 2022. Pfizer will occupy floors seven through 21, as well as some lobby space. The Spiral will serve as Pfizer’s new home, replacing its existing global headquarters at 235 E. 42nd St. in Manhattan. Blackstone Mortgage Trust Inc. (NYSE: BXMT) recently provided a $1.8 billion construction loan for the project. Tishman Speyer will finance the remaining $1.9 billion of development costs with its own equity, as well as financing from more than a dozen other institutional, pension fund and individual investors. Designed by BIG-Bjarke Ingels Group, each floor of The Spiral’s façade will feature landscaped terraces and hanging gardens that will be accessible to tenants. At one outdoor terrace per floor, the tower’s façade will be wrapped around by green space in a swirling pattern that serves as the tower’s signature element. The trophy office tower will …

April 10, 2018

Loans Mixed-Use Texas Top Stories

Berkadia Arranges $198.3M Refinancing for Office Component of Mixed-Use Asset in Brooklyn

by Taylor Williams April 9, 2018

NEW YORK CITY — Berkadia has arranged a $198.3 million loan for the office component of Brooklyn Renaissance Plaza, a 1.4 million-square-foot, mixed-use property in Brooklyn. The deal restructures existing debt on the property’s 465,000-square-foot office condominium space. This section of Brooklyn Renaissance Plaza is fully leased to the Kings County District Attorney (KCDA). That lease has 10.5 years left on it. The borrower is a joint venture between New York-based Muss Development Corp. and San Diego-based HomeFed Corp. The loan features a 21.5-year term and a 4.47 percent interest rate. Mark Vogel and Dan Geuther of Berkadia secured the funds through CGA Capital Corp., a Maryland-based private lending and investment firm. “In seeking to obtain a loan duration of over 20 years, we were presented with two significant challenges,” says Vogel. “The ground-lease payment will reset to unknown market rates in 2021 and 2031, and the KCDA lease expires in 2028.” “Working with CGA, we were able to craft a custom credit solution that enabled us to underwrite through these significant risk events and accomplish the client’s objective of long-term fixed-rate financing,” he added. Brooklyn Renaissance Plaza is located at 345 Adams St. In addition to the office condo, the …

April 9, 2018

Acquisitions Industrial New York Northeast Top Stories

Gramercy Acquires Six Distribution Centers for $538M

by Kristin Harlow April 6, 2018

NEW YORK CITY — Gramercy Property Trust (NYSE: GPT), a New York-based REIT, has acquired six distribution centers located throughout the United States. The properties are the first acquisitions for a Gramercy-led e-commerce joint venture, which was launched in August 2017. The venture was established to acquire, own and manage Class A distribution centers across the country. Gramercy is a 51 percent partner in the venture. An undisclosed sovereign investor is the other partner. The portfolio is composed of six newly constructed distribution properties totaling 5.2 million square feet for a combined purchase price of $538 million. The first two properties were acquired on Jan. 31 for $178 million. The second pair of properties, totaling $181 million, closed on April 3. The remaining two assets are under contract for $179 million, with the sale expected to close between late 2018 and early 2019. Each building is expected to be fully leased to an e-commerce company on an initial 15-year term. Two of the properties are located in California’s Inland Empire, with the remainder in Dallas; Jacksonville, Fla.; southern New Jersey; and Winchester, Va. Gramercy is a real estate investment trust that specializes in acquiring and managing assets in the United States and Europe. The company’s stock …

April 6, 2018

Acquisitions Hospitality Massachusetts Northeast Top Stories

Iconiq Capital Acquires $196M Stake in 90-Year Old Taj Boston Hotel

by Camren Skelton April 5, 2018

BOSTON — San Francisco-based Iconiq Capital has invested in the 90-year old Taj Boston hotel, located at 15 Arlington St. in Boston. Financial terms were not disclosed, but the Boston Business Journal reports the private equity firm — which manages money for Facebook founder Mark Zuckerburg — acquired a $196 million stake in the property. A group of investors including New England Development, Eastern Real Estate, Rockpoint Group, Lubert-Adler and Highgate originally acquired the 273-room hotel in 2016 for $125 million, and will retain an interest in the asset. The new partnership plans to execute a major capital improvement program that will include a comprehensive renovation of guestrooms, public areas and food and beverage outlets. According to a release, hotel owners have spent the past two years working with a team of architectural and interior design firms, consultants and engineers to develop a new vision for the property. A construction timeline for the project was not disclosed. Situated at the corner of Newbury and Arlington streets in Boston’s high-end Back Bay neighborhood, the hotel overlooks the Boston Public Garden and is adjacent to the city’s retail district. Amenities include nightly turndown, a 24-hour fitness center, business center, and onsite dining and bar …

April 5, 2018

Acquisitions Illinois Midwest Office Property Type Top Stories

JLL Brokers $176M Sale of Office Portion of Iconic Sullivan Center in Chicago

by David Cohen April 4, 2018

CHICAGO — JLL Capital Markets has arranged the sale of the 833,000-square-foot office portion of the iconic Sullivan Center in Chicago for $176 million. The buyer was New York-based 601W Companies. The seller, a venture between New York-based private equity firm KKR and Madison Capital, had owned the property since 2016. Originally constructed in 1899 as a department store, Sullivan Center has been a national historic landmark since 1970. Between 2001 and 2012, the building underwent major renovations to modernize the mechanical systems and restore historical features at a cost of more than $200 million. The upper floors were converted to office space in the early 2000s. The former owners of the property sold Sullivan Center’s 176,000 square feet of retail space, which includes the two lower floors and basement level, to Acadia Realty Trust in 2016 for $147 million. “This asset received significant investor interest because of its excellent location, strong tenant base and the fact that it is one of the few larger floor plate buildings catering to the progressive tenants driving demand in this market,” says Bruce Miller, JLL’s international director who co-heads the capital markets group in Chicago. “At nearly full occupancy, it is clearly the …

April 4, 2018

Acquisitions Maryland Multifamily Property Type Southeast Top Stories

Strata Equity Buys Multifamily Portfolio in Metro D.C. from FCP for $302M

by John Nelson April 3, 2018

ST. CHARLES, MD. — An affiliate of San Diego-based Strata Equity Group has purchased an 11-property multifamily portfolio in Suburban Maryland for $302 million. This is the first purchase in the Mid-Atlantic region for the privately held firm. Totaling 1,731 units, the properties are situated within St. Charles, a master-planned community roughly 30 miles south of Washington, D.C. The portfolio comprises Class A and B communities with an average unit size of 998 square feet. The buildings are 21 years old on average. Renovations have been ongoing since 2014, and Strata plans to complete all remaining interior rehabs while making other capital improvements. Each property is part of a neighborhood association that provides residents access to a community center and recreational facilities such as swimming pools, tennis courts and playgrounds. The seller, Federal Capital Partners (FCP), originally purchased the portfolio in 2009 for $43.6 million plus debt as part of its acquisition and privatization of American Community Properties Trust, which formerly traded on the New York Stock Exchange under the symbol APO. That acquisition included 11,000 residential units and 5 million square feet of commercial development, mostly in St. Charles and Puerto Rico. FCP has been repositioning and selling portions …

April 3, 2018

California Loans Office Top Stories

HFF Arranges $384.8M Refinancing for Two Office Towers in San Francisco

by Taylor Williams April 2, 2018

SAN FRANCISCO — HFF has arranged $384.8 million in refinancing for Genesis North and South Towers, two office and life science buildings in San Francisco that feature 717,883 square feet of lab and office space. HFF secured two loans on behalf of San Diego-based Phase 3 Real Estate Partners Inc. The financing package included a $199.8 million, three-year loan for Genesis North Tower and a $185 million, five-year loan for Genesis South Tower. An undisclosed life insurance company provided the funds for the first loan, while a national bank provided the funds for the second. Genesis North Tower, which was recently completed, stands at 21 stories and spans roughly 390,000 square feet. Genesis South Tower was completed in 2016, standing at 12 stories and encompassing approximately 328,000 square feet. The two-property campus, which serves as the hub for the city’s biotech industry, is located adjacent to U.S. Highway 101 on the city’s south side. The site includes a seven-story parking garage. Amenities include a performing arts center, a bakery and market, two fitness centers, meeting and conference center, and a shuttle service. Upon completion of Genesis North Tower, the fitness center at Genesis South Tower will be converted into amenity space …

April 2, 2018

Acquisitions California Retail Top Stories Western

Rodeo Drive Retail Property Sells for $110M, Double the Purchase Price from 24 Hours Earlier

by Kristin Harlow March 30, 2018

BEVERLY HILLS, CALIF. — A subsidiary of Paris-based LVMH has purchased a 6,200-square-foot retail building at 456 N. Rodeo Drive in Beverly Hills for $110 million. Just one day earlier, Palm Beach, Fla.-based Sterling Organization purchased the same asset for $55 million from The Karl B. Schurz Trust. According to a news release, an intermediary had approached LVMH, parent company of Louis Vuitton, to lease space at the property, but the luxury goods conglomerate expressed interest in acquiring the space instead. The sale equates to roughly $17,750 per square foot and a net gain of approximately $55 million for Sterling and its institutional investor partners in its Sterling Value Add Partners II fund. The property is located in the Golden Triangle, between Santa Monica Boulevard and Brighton Way. Rodeo Drive is home to luxury retailers such as Louis Vuitton, Chanel, Celine, Hermes, Ralph Lauren, Hugo Boss, Vera Wang, Salvatore Ferragamo, Versace, Tiffany & Co., Gucci, Cartier, Fendi, Givenchy, Loro Piana, Rimowa, Prada and Burberry. “On the West Coast, it’s all about those three, high-value blocks of Rodeo Drive where the world’s premier luxury brands must have a presence by planting their flag,” says Brian Kosoy, president and CEO of Sterling. In contrast, he says luxury …

March 30, 2018

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