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

Acquisitions Midwest Missouri Multifamily Property Type Top Stories

Monarch Investment Acquires Six-Property Multifamily Portfolio in St. Louis for $180M

by Camren Skelton March 29, 2018

ST. LOUIS AND VALLEY PARK, MO. — Berkadia has arranged the sale of a six-property multifamily portfolio located in St. Louis County. The 2,000-unit portfolio sold for nearly $180 million. Andrea Kendrick and Ken Aston of Berkadia represented the seller, New Jersey-based GEM Property Management. Joe Harms and Julie Irvin of Salivar Harms LLP acted as legal counsel to GEM. “This transaction is indicative of the strength of the St. Louis multifamily market,” says Aston. “It is the largest portfolio transaction in the history of St. Louis real estate.” Berkadia’s Peter Benedetto also arranged Fannie Mae acquisition financing on behalf of the buyer, Colorado-based Monarch Investment and Management Group. “The portfolio included six apartment communities with long-term ownership,” says Kendrick. “In recent years, the seller invested more than $50 million into capital improvements.” Five of the properties in the portfolio are located in St. Louis: the 320-unit Canyon Creek, 256-unit Southwoods, 388-unit Heritage Estates, 550-unit Villages at General Grant and 196-unit Village Royale. The portfolio also includes the 260-unit Forest Woods in Valley Park, roughly 20 miles southwest of St. Louis. The garden-style communities feature amenities such as swimming pools, playgrounds, fitness centers, picnic areas and sports courts. Monarch will take …

March 29, 2018

Acquisitions Hospitality Northeast Pennsylvania Top Stories

RLJ Lodging Sells 364-Room Hotel in Philadelphia for $95.5M

by David Cohen March 28, 2018

PHILADELPHIA — RLJ Lodging Trust (NYSE: RLJ) has sold Sheraton Society Hill, a 364-room hotel located in Philadelphia, for $95.5 million. The price represents a capitalization rate of 5.6 percent on the hotel’s net operating income (NOI) for 2017, as well as a price per room of approximately $262,000. Maryland-based RLJ has now generated $300 million from asset sales since merging with Texas-based FelCor Lodging Trust Inc. in September 2017. The company is planning to generate an additional $200 million to $400 million in proceeds this year, according to Ross H. Bierkan, president and CEO of RLJ. “The sale of another non-core asset at a highly accretive valuation highlights the meaningful progress we have achieved in realizing the embedded value from the FelCor merger,” says Bierkan. The Buccini/Pollin Group purchased the property and plans a multi-million dollar renovation and rebranding. PM Hotel Group, a national hotel management company, will manage the hotel. Located in the Old City district of Philadelphia at One Dock St., the hotel offers a close proximity to a number of historic attractions, including the National Constitution Center and Penn’s Landing. Amenities at the hotel include an indoor swimming pool, fitness center and onsite restaurant, as well …

March 28, 2018

Acquisitions Company News Illinois Midwest New York Northeast Property Type Retail Top Stories

Brookfield to Buy Mall Owner GGP for $9.25B in Cash Plus Stock

by John Nelson March 27, 2018

NEW YORK AND CHICAGO — Brookfield Property Partners (NASDAQ: BPY) has agreed to acquire all remaining shares of GGP Inc. (NYSE: GGP), a Chicago-based mall owner. BPY, a global real estate company based in New York City, and its affiliates already hold a 34 percent stake in GGP. The deal struck between the two parties is for GGP shareholders to receive $23.50 per share in cash, a total cash consideration of $9.25 billion. Alternately, shareholders may elect to receive stock in either BPY or a new REIT that BPY plans to list on one of the major U.S. exchanges. “This is a compelling transaction that enables GGP shareholders to receive premium value for their shares and gives them the ability to participate in the long-term upside of their investment,” says Brian Kingston, CEO of BPY. The newly agreed-upon deal comprises a cash-to-equity ratio of 61/39, which is more cash-centric than BPY’s original 50/50 cash-to-equity offer to acquire the remainder of GGP last November. Shares in the new REIT will be equivalent to that of a BPY unit. BPY’s parent company, Brookfield Asset Management (NYSE: BAM), has guaranteed the exchange of the shares between the two stocks (totaling 254 million units) …

March 27, 2018

Acquisitions Industrial Top Stories

FRP Holdings to Sell 41 Warehouses to Blackstone for $358.9M

by Taylor Williams March 26, 2018

JACKSONVILLE, FLA. — Jacksonville-based investment firm FRP Holdings Inc. (NASDAQ: FRPH) has entered into an agreement to sell 41 warehouses to an affiliate of The Blackstone Group (NYSE: BX) for $358.9 million. Two of the properties include adjacent lots that were included in the sale. The individual locations of the warehouses were not disclosed. However, according to the company’s 8-K form filed with the Securities & Exchange Commission (SEC), FRP’s portfolio is largely located in the Baltimore and Washington, D.C. metro areas. The sale is expected to close during the second or third quarter of 2018. Following the transaction, FRP will continue to own a portfolio of properties. Some of the retained assets are located within the RiverFront on the Anascotia development near Capitol Hill. The company will also retain ownership of properties situated within the Windlass Run Business Park in Baltimore County, as well as a large parcel in Hampstead, Md. For several of the assets, the company will offer first rights of refusal purchase options to the tenants. FRP Holdings plans to use proceeds from the sale to pay off existing debt and implement capital improvements on its remaining properties. The company also plans to reinvest a portion …

March 26, 2018

Acquisitions Healthcare Oklahoma Texas Top Stories

OU Medicine Acquires HCA’s Interests in Oklahoma City Medical System for $1.1B

by Kristin Harlow March 23, 2018

OKLAHOMA CITY — OU Medicine Inc. has acquired interests in OU Medical System (OUMS), a series of hospitals and medical facilities in and around Oklahoma City. The buyer received nearly $1.1 billion in financing for the transaction. The seller was HCA Healthcare, which sold its full interest in the system. OU Medicine is an affiliate of University Hospitals Authority and Trust (UHAT). HCA Healthcare is a joint operating company operated by HCA and UHAT. OU Medicine, a newly formed 501(c)(3) corporation, completed the acquisition with a $900 million bridge financing and $175 million subordinated debt issuance. Proceeds from the combined nearly $1.1 billion financing were also used to provide liquidity on OU Medicine’s balance sheet, fund a portion of a bed tower expansion and redeem $42.4 million of outstanding UHAT bonds. The bridge financing included $673.4 million of tax-exempt direct purchase senior bonds and a $232.5 million taxable senior loan. UHAT retained Cain Brothers as its exclusive M&A advisor to negotiate the termination of the existing joint operating agreement with HCA. Cain Brothers also acted as financial advisor to assist in sourcing and structuring the bridge financing. OU Medicine was formed to own and operate OUMS, a health system of three …

March 23, 2018

Development Florida Mixed-Use Multifamily Office Retail Southeast Top Stories

Feldman Equities, Two Roads Development to Build 50-Story Mixed-Use Tower in Downtown Tampa

by Katie Sloan March 22, 2018

TAMPA, FLA. — A partnership between Feldman Equities and Two Roads Development has announced plans for Riverwalk Place, a 50-story, mixed-use development located on Ashley Drive in downtown Tampa. The building will be the tallest on the west coast of Florida, according to the development team. The property will include 10 floors of office space and 33 floors housing more than 200 luxury condominiums accessed by private elevators. The property will also feature an integrated parking structure connected by plaza with up to five waterfront restaurants and retail tenants. The development may also feature an adjacent marina for use by residents. An existing building on the property has been vacated, and will be demolished soon in preparation for construction. A timeline for the development was not disclosed, and a rendering has not yet been released. Both parties of the joint venture have invested significant capital into the project, which is currently in the pre-construction phase. The next phase of development will include taking reservations and deposits, followed by going to market for construction funding. Reid Boren, managing partner of Two Roads Development, has noted that several banks are willing to provide financing prior to reservations being taken, but the developer prefers …

March 22, 2018

Development Midwest Minnesota Mixed-Use Top Stories

Bloom International Realty to Develop Two Mixed-Use Towers in Minnesota for $180M

by Camren Skelton March 21, 2018

ROCHESTER, MINN. — Bloom International Realty of United Arab Emirates plans to develop a pair of mixed-use towers along the Zumbro River in Rochester. Total project costs for the 1 million-square-foot development will be $180 million. The Rochester City Council gave the planned use for the property unanimous approval on Monday, March 19. Before the development can move forward, the council still needs to approve a land sale to Bloom and a $20 million tax increment financing package, according to the Minneapolis/St. Paul Business Journal. At full build-out, the development will include a 180-room hotel with 130 branded condominiums, a 215-unit seniors housing community and 37,000 square feet of ground-floor retail and restaurant space. The first tower will span 22 stories and the second will span 26, according to local media reports. In addition, the project will include an indoor winter garden, a public plaza on 3rd Street, a rooftop terrace park and a boardwalk that will provide access to the Zumbro Riverfront. Pittsburgh-based architecture firm AE7 is designing the project. A construction timeline for the development was not disclosed. — Camren Skelton

March 21, 2018

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