Top Stories

Brookfield Residential Acquires Developer OliverMcMillan, Including ‘Certain Assets’

by John Nelson February 8, 2018

CALGARY, ALBERTA AND SAN DIEGO — Brookfield Residential Properties Inc., the residential development arm of private equity firm Brookfield Asset Management, has closed on its acquisition of OliverMcMillan, a San Diego-based developer of large-scale mixed-use properties. Details of the acquisition were not disclosed, but on a conference call Wednesday (Feb. 7), Brookfield Residential chairman and CEO Alan Norris stated that the acquisition encompasses “certain assets” of OliverMcMillan. According to a release from Brookfield Residential, OliverMcMillan will continue to design and build mixed-use developments and will also continue to manage its existing real estate assets. “We simply could not have found a better long-term home,” says Dene Oliver, CEO of OliverMcMillan, in a prepared statement about the merger with Brookfield Residential. OliverMcMillan has several mixed-use projects under development across the country, including the second phases of River Oaks District in Houston and Buckhead Atlanta in Atlanta’s Buckhead district. As part of the merger, Brookfield Residential is acquiring the future pipeline of these two projects but not the operations of the existing assets, according to a source familiar with the acquisition. The second phase of Buckhead Atlanta includes 315,000 square feet of office space, according to the OliverMcMillan website. The project’s first …

February 8, 2018

California Features Top Stories Western

Investors in Buy Mode, Keen on Value-Add Opportunities, Concludes RCM Survey

by Camren Skelton February 8, 2018

CARLSBAD, CALIF. — A majority of commercial real estate investors indicate that they are in a buying mode in 2018 and are particularly focused on properties in the value-add space, according to a survey conducted by Real Capital Markets (RCM). The National Investor Sentiment Report and follow-up interviews were completed in early January by RCM, a Carlsbad-based online technology platform for buying and selling commercial real estate. RCM surveyed more than 250 investors active in all property types across the United States to gauge their investment strategies and outlook for the year ahead. More than 75 percent of respondents classified their investment strategy as buy, or buy but trending toward hold, according to the survey. “Investors across the country continue to see great opportunity and benefit in commercial real estate investing,” says Steve Shanahan, executive managing director of RCM. “Regardless of the product type or whether the strategy is core or value-add, the focus is on finding assets that can deliver strong yields that outpace other investment options.” Of the respondents, a majority (58 percent) characterized themselves as value-add investors. In other words, they are looking for growth through renovation or repositioning properties to enhance value. These types of properties are …

February 8, 2018

Midwest Ohio Retail Top Stories

UK-based EG Group to Buy Kroger’s Convenience Store Business for $2.1B

by Nellie Day February 7, 2018

CINCINNATI — United Kingdom-based EG Group has agreed to acquire Kroger’s (NYSE: KR) convenience store business for $2.1 billion. Kroger’s convenience store arm employs 11,000 workers in 18 states across 66 franchise operations. The stores operate under the brands Turkey Hill, Loaf ‘N Jug, Kwik Shop, Tom Thumb and Quik Stop. Kroger’s convenience store business generated $4 billion in revenue, including the sale of 1.2 billion gallons of fuel, in 2016. EG Group will establish its North American headquarters in Cincinnati and continue to operate the stores under their established brand names. It is the company’s first venture in the United States. Kroger’s supermarket fuel centers and its Turkey Hill Dairy are not included in the sale. Kroger plans to use net proceeds from the sale to repurchase shares and to lower its ratio of net total debt to adjusted EBITDA. Goldman Sachs & Co. LLC is acting as exclusive financial advisor to Kroger, with Weil, Gotshal & Manges LLP acting as legal advisor. Morgan Stanley, Bank of America Merrill Lynch and Barclays are acting as financial advisors to EG Group, while Allen & Overy is acting as legal advisor. EG Group was founded in 2001 by brothers Zuber and …

February 7, 2018

Georgia Restaurant Retail Southeast Top Stories

Arby’s Completes $2.9B Acquisition of Buffalo Wild Wings, Launches New Company

by Kristin Harlow February 6, 2018

ATLANTA — Arby’s Restaurant Group Inc. has completed its $2.9 billion acquisition of Buffalo Wild Wings Inc. As part of the transaction, the company launched a new restaurant company known as Inspire Brands Inc. The company will oversee the growth of Arby’s, Buffalo Wild Wings and an emerging brand, R Taco. More than 4,600 company-owned and franchised restaurants across 15 countries are within Inspire’s portfolio. The combined global sales of its restaurants in 2017 exceeded $7.6 billion. “We believe the time is right to create a different kind of restaurant company — one with a broad portfolio of distinct brands across a full spectrum of restaurant occasions,” says Paul Brown, CEO of Inspire Brands. “Our goal is to build an organization that leverages the benefits of scale, not only to save cost, but also to enable outsized investments in long-term growth initiatives.” Inspire is designed to enable each individual brand to benefit from and build off the strengths of the others. Brown of Arby’s and Neal Aronson of Roark Capital Group, a private equity firm, co-founded Inspire. The company’s headquarters will be based in Atlanta with a support center in Minneapolis. Founded in 1964, Atlanta-based Arby’s is a sandwich restaurant …

February 6, 2018

Features Top Stories

Job Growth, Wage Gains Signal Healthy Start to 2018, Say Real Estate Researchers

by Camren Skelton February 6, 2018

Total nonfarm payroll employment rose by 200,000 in January, beating economists’ expectations, while unemployment held steady at 4.1 percent, the Bureau of Labor Statistics (BLS) said in a report released on Friday, Feb. 2. Perhaps most importantly, average hourly earnings increased 2.9 percent, marking the biggest jump since the end of the Great Recession. While upward pressure on wages is good news for workers and the economy, experts caution that an increase in wages could lead to a hike in interest rates. On the heels of the latest jobs report, REBusinessOnline reached out to three real estate researchers for their insights: Ryan Severino, chief economist for JLL who works out of the firm’s New York City office; Ken McCarthy, principal economist and applied research lead for the U.S. based in Cushman & Wakefield’s New York City office; and Don Ganguly, founder and CEO of Irvine, Calif.-based HomeUnion. What follows are their edited responses. REBusinessOnline: Total nonfarm payroll employment rose by 200,000 in January. Wall Street economists had expected an increase of about 180,000, according to Bloomberg. What factor(s) led the labor market to outperform expectations in January? Ryan Severino: I don’t view a difference of 20,000 jobs as substantial, but …

February 6, 2018

Illinois Loans Midwest Office Top Stories

ING Underwrites, Closes $235.1M Acquisition Loan for Office Tower in Downtown Chicago

by Taylor Williams February 5, 2018

CHICAGO — ING Capital LLC has underwritten and closed a $231.5 million senior loan for the acquisition of One South Dearborn, an 828,538-square-foot office tower located in downtown Chicago’s Central Loop. The borrower was Connecticut-based Starwood Capital Group. ING expects to syndicate a portion of the senior loan in the coming weeks. Deutsche Asset Management provided a $62.5 million mezzanine loan for the acquisition. Hines developed the 40-story, Class A property in 2005. Law firm Sidley Austin has served as its anchor tenant since completion and recently renewed its lease. According to Crain’s Chicago, California-based Olen Properties was the building’s most recent owner. The sale closed on Jan. 24. Designed by DeStefano Keating Partners Ltd., the property features amenities such as a fitness center, conference facilities, 8,000 square feet of retail space and a 170-space parking garage. A 16,000-square-foot plaza fronts Dearborn Street and provides entry into the three-story lobby. “The opportunity to finance One South Dearborn was welcome given the quality of the property and the strength of downtown Chicago’s office market,” says Craig Bender, head of capital markets at ING. “This market has seen a significant increase in demand in recent years due to urban migration from the …

February 5, 2018

Midwest Retail Top Stories Wisconsin

Bon-Ton Unveils Locations of 42 Store Closures, Largely Across Midwest

by Kristin Harlow February 2, 2018

MILWAUKEE — The Bon-Ton Stores Inc. has unveiled the 42 store locations that will be closing as part of a previously announced “store rationalization program.” The closing locations are in addition to five other recently announced store closures, four of which the company completed at the end of January. The affected stores include locations under all of the company’s nameplates — Herberger’s, Carson’s, Bergner’s, Younkers, Elder-Beerman and Boston Store. “As part of the comprehensive turnaround plan we announced in November, we are taking the next steps in our efforts to move forward with a more productive store footprint,” says Bill Tracy, president and CEO. Third-party liquidator Hilco Merchant Resources is managing the store-closing sales, which were slated to begin Feb. 1 and run for approximately 10 to 12 weeks. Bon-Ton has dual headquarters in Milwaukee and York, Pa., and operates 260 stores across the Northeast, Midwest and upper Great Plains. For a full list of store closings, click here. Bon-Ton’s announcement comes on the heels of other large retail closings unveiled in January, including Sears, Sam’s Club and Toys ‘R’ Us. — Kristin Hiller

February 2, 2018

Mixed-Use New York Northeast Top Stories

Oxford Properties, CPPIB Acquire Manhattan Site for $700M, Plan Mixed-Use Development

by John Nelson February 1, 2018

NEW YORK CITY — Oxford Properties Group and Canada Pension Plan Investment Board (CPPIB) have closed on the $700 million acquisition of a 3.25-acre development site in the Hudson Square district of Manhattan’s Midtown South submarket. The historic St. John’s Terminal site, which will be redeveloped into a mixed-use project, is situated south of West Houston Street and features 600 feet of frontage along the Hudson River. The northern portion of the site was not included in the transaction and will be developed separately. The joint venture between Toronto-based Oxford and CPPIB purchased the site from Westbrook Partners and Atlas Capital Group. Oxford owns a 52.5 percent interest in this joint venture and will manage the future development, details of which will be announced in the second half of the year. CPPIB owns the remaining 47.5 percent interest in the site. The parcel includes an existing 1.3 million-square-foot structure that was built in 1934 as the rail freight terminus to New York Central Railroad’s West Side Line. In December 2016, the New York City Council approved the air rights rezoning of the site to develop up 1.7 million square feet of mixed-use space. Cushman and Wakefield’s New York Capital Markets …

February 1, 2018

Features Top Stories

IRR: Moderate, Steady Growth Predicted for Commercial Real Estate in 2018

by Jeff Shaw February 1, 2018

The outlook for the year in commercial real estate is cautiously optimistic, as several signs of excess that cause market corrections begin to amass, according to the 2018 edition of Viewpoint, an annual commercial real estate trends report released by Integra Realty Resources (IRR). Annual job growth dropped from 2.3 percent in early 2015 to 1.4 percent in October 2017, while real weekly incomes rose only 0.4 percent for the 12 months ending in October 2017. Production and non-supervisory workers saw an even smaller rise of only 0.3 percent during this time. These levels were not enough to spur consumption significantly in 2017, with personal consumption expenditures (69.4 percent of GDP) in the third quarter up only 2.3 percent from the prior year. If the market continues in this direction, corrections may be imminent, IRR warns. “In the short term, we find the commercial property markets solidly in their ‘expansion phase’ in most areas of the country, but now is the time for real estate owners and investors to begin thinking about defense strategies,” says Hugh Kelly, veteran commercial real estate economist and contributor to the report. “However, it should be a less severe downside for the commercial real estate industry …

February 1, 2018

Georgia Office Southeast Top Stories

Portman Holdings Secures $150M Construction Financing for Office Tower in Midtown Atlanta

by Nellie Day January 31, 2018

ATLANTA — Portman Holdings has secured $150 million in financing to build a 21-story office building in Atlanta’s Technology Square. The 352,000-square-foot, build-to-suit Anthem Technology Center will be situated near Georgia Tech in Midtown. This area is known as an innovation hotbed with research facilities, incubators, technology start-ups and the Georgia Institute of Technology campus. Healthcare insurance giant Anthem (NYSE: ANTM) will occupy the space. The offices will serve as a hub for approximately 3,000 IT professionals seeking to enhance consumer healthcare experiences, improve the quality of care and lower healthcare costs. The building will feature a 14,000-square-foot terrace area with green space. Anthem placed an emphasis on energy and water efficiency, indoor environmental quality and active design standards. The building will also include 7,000 square feet of retail space and alternating two-story spaces connected by a staircase to promote collaboration. The project’s groundbreaking is scheduled for Feb. 21. Construction is expected to take two years. John Portman & Associates designed the building for Anthem. PCCP contributed equity financing, while SunTrust acted as the lead lender. Regions also served as a lender for the project. SunTrust will open a full-service branch inside Anthem Technology Center. Atlanta-based Portman Holdings is a …

January 31, 2018

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