Top Stories

CBRE Arranges $142M Sale of Duke University Medical Office Building in North Carolina

by Kristin Harlow January 19, 2018

DURHAM, N.C. — CBRE has arranged the sale of Hock Plaza, a 327,160-square-foot medical and educational office building in Durham. Harrison Street Real Estate Capital LLC acquired the 12-story building from Hines. The sales price was $142 million, according to the Triangle Business Journal. Constructed in 2004, Hock Plaza is situated on more than 2.5 acres at 2424 Erwin Road, adjacent to Duke University Hospital. The building is home to 34 different Duke University medical institutes, centers and research functions, including Duke Cancer Institute, the Center for Autism and Brain Development, and the Center for Smoking Cessation. The property, which includes a 1,057-space parking garage, is located within North Carolina’s Research Triangle. Jay O’Meara, Will Yowell, Lee Asher, Chris Bodnar and Ben Kilgore of CBRE arranged the transaction on behalf of the seller. The sales price was a record price per square foot in the state of North Carolina, according to O’Meara. Chicago-based Harrison Street is a real estate investment management firm focused on the education, healthcare and storage sectors. The firm has approximately $12.8 billion in assets under management. Houston-based Hines is a privately owned global real estate investment, development and management firm with $100 billion in assets under management. — …

January 19, 2018

Office Top Stories Washington Western

Amazon Narrows Down List of Candidates for $5B HQ2 to 20 Metros

by John Nelson January 18, 2018

SEATTLE — Amazon.com Inc. (NASDAQ: AMZN) has chosen the following 20 metropolitan areas (in alphabetical order) as potential locations for HQ2, the company’s planned $5 billion second headquarters in North America: – Atlanta – Austin, Texas – Boston – Chicago – Columbus, Ohio – Dallas – Denver – Indianapolis – Los Angeles – Miami – Montgomery County, Md. – Nashville, Tenn. – Newark, N.J. – New York City – Northern Virginia – Philadelphia – Pittsburgh – Raleigh, N.C. – Toronto – Washington, D.C. “Thank you to all 238 communities that submitted proposals. Getting from 238 to 20 was very tough — all the proposals showed tremendous enthusiasm and creativity,” says Amazon spokesperson Holly Sullivan. “Through this process we learned about many new communities across North America that we will consider as locations for future infrastructure investment and job creation.” In the coming months, Amazon will work with each of the candidate locations to dive deeper into their proposals, request additional information and evaluate the feasibility of a future partnership that can accommodate the company’s hiring plans, as well as benefit its employees and the local community. Amazon expects to make a decision this year. Amazon has emphasized that HQ2 will …

January 18, 2018

Features Loans Top Stories

Retail Bankruptcies Take Toll on CMBS Lenders, Says Trepp

by Jeff Shaw January 18, 2018

In 2017 alone, over $35 billion in CMBS loans were exposed to risk of default by retailers declaring bankruptcy, according to New York City-based Trepp LLC, which monitors the performance of securitized commercial mortgages. The loans were largely backed by mall properties that had leased space to retailers, many of which are now closing stores. “In the first 11 months of 2017 alone, more than 30 U.S. retailers filed for bankruptcy protection. That news certainly made those in structured finance take notice to the mounting concern surrounding brick-and-mortar retail,” states the report titled “The 11 Largest Retailer Bankruptcies of 2017.” As the “retail apocalypse” continues, with consumers increasingly choosing e-commerce purchases over brick-and-mortar malls, certain sectors have been particularly hard hit. Apparel and footwear sales have largely shifted on line, spurring the string of bankruptcies. The report is quick to note, though, that retail sales have actually been on the rise through 2016 and 2017, and that the “retail apocalypse” is simply a shifting of winners versus losers in a changing economic model. “In step with the rise of e-commerce, the popularity of traditional department store anchors is plunging, and hundreds of malls nationwide have reported dwindling foot traffic,” states …

January 18, 2018

Indiana Industrial Midwest Top Stories

Hillwood Buys Four Industrial Assets Totaling 1.1 MSF in Indianapolis

by Nellie Day January 17, 2018

INDIANAPOLIS — Hillwood has purchased a four-property industrial portfolio in Indianapolis that contains a total of 1.1 million square feet. The purchase price was not disclosed. The Class A portfolio contains the 448,305-square-foot Airwest 12 and the 476,225-square-foot Airwest 14 at 2301 and 2201 Reeves Road (respectively) in Plainfield, as well as the Company Drive Commerce Center in Indianapolis. The Company Drive Commerce Center comprises two buildings featuring 60,480 square feet and 100,800 square feet. “We are proud to expand our footprint in the thriving Indianapolis market,” says Tom Fishman, executive vice president of acquisitions and dispositions for Hillwood. “These acquisitions are consistent with our strategy to acquire and develop high-quality, functional industrial real estate in major U.S. markets.” The Airwest properties were built in 2015. They contain modern, flow-through cross dock designs with 36-foot clear heights, deep truck courts and car and trailer parking. Airwest 12 and 14 are situated off Interstate 70, providing access to interstates 465, 65 and 74 in the southwest industrial submarket. These routes access Chicago, Columbus, Cincinnati, Louisville and St. Louis. They also position the Airwest properties within a single day’s drive to more than half of the U.S. and Canadian population. The Company …

January 17, 2018

1401 New York Avenue NW in Washington, D.C.

District of Columbia Office Southeast Top Stories Uncategorized

AXA, Stewart Investment Acquire 210,000 SF Office Tower in D.C. for $165M

by Katie Sloan January 16, 2018

WASHINGTON, D.C. — A joint venture between Paris-based AXA Investment Managers – Real Assets and Stewart Investment Partners has acquired 1401 New York Avenue NW, a 210,000-square-foot office property located in Washington, D.C.’s East End, for $165 million. AXA holds the majority interest in the partnership. The sellers, Heitman and Minshall Stewart Properties, originally acquired the property in December 2013 from Lone Star Funds for $95 million. Stewart Investment Partners is a successor firm spun out from Minshall Stewart Properties. The 12-story building is LEED Gold certified and features ground-level retail and a below-grade parking garage. The property was originally built in 1983, and recently underwent renovations that included a redesigned lobby, retail frontage, the addition of new tenant amenities and the replacement of the building’s original masonry façade with a glass curtain wall system. This property is AXA’s second investment in the Washington, D.C., metro over the past few months. The company acquired Montgomery Tower, a 366,800-square-foot office tower located in Bethesda, Md., in October of last year for $132.8 million. Paris, France-based AXA Investment Managers – Real Assets operates offices in 20 countries throughout Europe, Asia-Pacific and North America. The company has 74 billion euros in assets under …

January 16, 2018

Features Top Stories

M&M: New Tax Law ‘Holds Favorable Prospects’ for Commercial Real Estate

by Jeff Shaw January 16, 2018

The Tax Cuts and Jobs Act — signed into law by President Trump at the end of 2017 — should be a net positive for the commercial real estate industry, according to a special report by Marcus & Millichap. By adding business-friendly provisions and reducing uncertainty, the new law “holds favorable prospects for commercial real estate,” the report states, with “potential to boost space demand and capital flows.” Among the business-positive results are minimal changes to the 1031 tax-deferred exchange system, the mortgage interest deduction for investment real estate, and asset depreciation. Uncertainty over the future of those programs had previously “caused many investors to move to the sidelines,” the report states. “This consistency in tax law will enable investors to move forward with most of their existing investment strategies.” More direct benefits to businesses include “generous tax cuts to corporations,” which may cause investors to use this opportunity to reconfigure portfolios. This, in turn, could boost capital flows throughout commercial real estate. Multifamily Demand Should Rise, but Healthcare Takes a Hit Several of the provisions in the tax bill relate specifically to individuals, but will have residual effects on the commercial real estate industry. Changes to the standard tax …

January 16, 2018

Florida Multifamily Southeast Top Stories

Camden Property Trust Acquires 358-Unit Apartment Community Near Tampa for $127M

by Taylor Williams January 15, 2018

ST. PETERSBURG, FLA. — Camden Property Trust (NYSE: CPT), a Houston-based multifamily REIT, has acquired Camden Pier District, a 358-unit apartment community in the Tampa suburb of St. Petersburg, for $127 million. The community is located at 330 3rd St., less than a mile from the waterfront and within close proximity to Tropicana Field and the University of South Florida St. Petersburg. Patrick Dufour and Richard Donnellan of ARA Newmark arranged the transaction on behalf of the sellers, Miami-based American Land Ventures LLC and global equity partner Barings Real Estate — part of Barings LLC — on behalf of an institutional investor. American Land Ventures developed the property — originally known as AER Luxury Apartments — in 2016. “AER was an especially important assignment for us as we represented the land owner in the sale of the site to the developer, sourced the equity for the development of the project, monitored the asset closely through lease up and ultimately secured an institutional buyer in the sale of the asset.” says Dufour. The sales price, which equates to about $354,745 per unit, makes this transaction the largest apartment deal in the history of the Tampa Bay area on a per-unit basis, according …

January 15, 2018

Arkansas Retail Southeast Top Stories

Sam’s Club to Shutter 63 Stores, Convert 12 to E-Commerce Facilities

by Kristin Harlow January 12, 2018

BENTONVILLE, ARK. — Sam’s Club, a division of Wal-Mart Stores Inc. (NYSE: WMT), has announced that it will close 63 club locations across the country. The company will convert up to 12 of the impacted clubs into e-commerce fulfillment centers in efforts to speed delivery of online orders. In addition, the company’s legal name will become Walmart Inc. effective Feb. 1 to reflect its growing status as an omnichannel retailer. Sam’s Club is a retailer that offers wholesale sizes and prices to individual buyers who purchase a membership to the store. “Transforming our business means managing our real estate portfolio, and Walmart needs a strong fleet of Sam’s Clubs that are fit for the future,” says John Furner, president and CEO of Sam’s Club. After the closures are completed over the next few weeks, Sam’s Club will operate a total of 597 locations nationwide. A list of affected stores was not disclosed. A facility in Memphis, Tenn. will be the first club to be converted into an e-commerce center. In addition to focusing on its e-commerce business, Sam’s Club is expected to improve its grocery selection and private-label offerings, according to national media reports. Competition from Costco and BJ’s Wholesale …

January 12, 2018

Indiana Midwest Office Top Stories

Strategic Capital Partners, Rubenstein Partners Acquire 1.1 MSF Office Park in Indianapolis for $132.7M

by Taylor Williams January 11, 2018

INDIANAPOLIS — A partnership between two investment firms, Indianapolis-based Strategic Capital Partners (SCP) and Philadelphia-based Rubenstein Partners LP, has acquired The Precedent Office Park, a 1.1 million-square-foot, Class A office complex in Indianapolis, for $132.7 million. Chicago-based LaSalle Investment Management was the seller. The property is situated on 184 acres at the intersection of Keystone Avenue and East 96th Street, just off Interstate 465 on the city’s north side. It consists of 19 buildings positioned around a 38-acre central lake. The campus is also located near a shopping and dining destination, The Fashion Mall at Keystone. Current amenities include a 6,000-square-foot fitness center, daycare center, bike-sharing program and micro-market vending options in select buildings. The buyers will implement a capital improvement program focused on enhancing the on-site amenities and upgrading the building systems. The improvements will aim to bolster the lake’s role in the amenity package by improving the landscaping and walking paths around it. Other amenity upgrades will include the renovation of the fitness center and the development of a new tenant lounge and cafeteria. “The Precedent’s location and proximity to the Fashion Mall at Keystone and other amenities is why many great local and national companies have chosen …

January 11, 2018

Features Multifamily Top Stories

Reis: Apartment Market Continues to Face Pressure From Added Supply

by Kristin Harlow January 11, 2018

NEW YORK — Over the course of 2017, asking rents for the national apartment market increased 3.9 percent while effective rents grew by 3.3 percent, according to a fourth-quarter preliminary trends release from Reis Inc. Although still representing rent growth, these rates reflect a deceleration in apartment market fundamentals compared to recent years. This deceleration is due in part to the large amount of new supply coming online. A total of 43,769 units were completed in the fourth quarter, raising the year-end total to 213,802 units. The national apartment market has not seen new completions in excess of 200,000 units since 1986, says Reis. “At 4.5 percent, the national vacancy rate increased 10 basis points from 4.4 percent in the third quarter. This represents a 30 basis point increase in year-over-year vacancy,” says the report. “Vacancies have more or less been on an upward march since the middle of 2016.” At $1,364, the national average asking rent grew 0.4 percent in the fourth quarter. This figure is well below the 0.9 percent average quarterly growth rate for the prior six quarters. Effective rent growth of 0.3 percent in the fourth quarter was also below the 0.8 percent average quarterly growth. …

January 11, 2018

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