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

Indiana Midwest Multifamily Top Stories

Milhaus Sells 1,803-Unit Multifamily Portfolio for $320.5M

by Nellie Day January 10, 2018

INDIANAPOLIS — Milhaus has sold a 1,803-unit multifamily portfolio that spans four states for $320.5 million. Four separate buyers acquired the assets. The nine properties included in Milhaus’s Urban Core Portfolio are the 354-unit Highland Row in Memphis, Tenn.; the 131-unit Gantry in Cincinnati; the 329-unit Lift in Oklahoma City; and the 258-unit Artistry, 54-unit Mosaic, 265-unit Circa, 65-unit Mozzo, 105-unit Maxwell, and 242-unit Mentor & Muse in Indianapolis. “The portfolio consists of small and large assets in four distinct metros, but the common theme … is that each of these markets have expanding employment bases of young talent with plenty of runway left in this cycle,” says Steve LaMotte Jr. who, along with CBRE’s Central Midwest Multifamily team, represented developer Milhaus in this disposition. “The rare opportunity to deploy a sizeable amount of capital in newly constructed, best-of-class, urban-walkable assets was duly noted by the market.” Indianapolis-based Milhaus developed, built and operates the majority of the portfolio. The firm focuses on Class A, urban multifamily buildings in growing secondary markets in the eastern half of the U.S. Indiana-based Gene B. Glick Co. was the seller of one of the assets, which Milhaus only operated. Five assets were recapitalized by …

January 10, 2018

Industrial Top Stories

Blackstone Property Partners to Acquire Pure Industrial Real Estate Trust for $3.8B

by Katie Sloan January 9, 2018

VANCOUVER, BRITISH COLUMBIA — An affiliate of Blackstone (NYSE: BX) has entered into an agreement to acquire Vancouver-based Pure Industrial Real Estate Trust (PIRET) (TSX: AAR-UN) for $8.10 per trust unit — $3.8 billion — in an all-cash transaction. The transaction price represents a 21 percent premium to the closing price of PIRET units on the Toronto Stock Exchange on Jan. 8. Blackstone will complete the acquisition through its real estate investment arm, Blackstone Property Partners. “The trust has accomplished tremendous growth in the 10 years since the initial public offering in August 2007,” says Rick Turner, chairman of PIRET’s Board of Trustees. “Since inception, we have generated a total return in excess of 345 percent and we have built a platform that has made us a leader in the Canadian industrial REIT space.” The transaction is structured as a statutory plan of arrangement under the British Columbia Business Corporations Act. Completion of the transaction, which is expected to occur in the second quarter of this year, is subject to customary conditions. PIRET will continue to pay its normal monthly distributions through closing of the transaction. BMO Capital Markets is acting as financial advisor to PIRET, while Greenhill & Co. Goodmans …

January 9, 2018

Features Heartland Feature Archive Midwest Multifamily Top Stories

Aided by Tax Credits, Adaptive Reuse Pays Off for Developers

by Kristin Harlow January 9, 2018

Transforming older, historic buildings into apartment rental units opens myriad opportunities for developers beyond simply saving a neighborhood building. The process enables them to create unique floor plans and hip spaces that resonate with many of today’s renters and lease up quickly. These adaptive reuse projects are often costlier than new construction and fraught with challenges, but the consensus among developers is that the reward is worth the risk. “It’s economic development,” says Nick Anderson, a developer with Plymouth, Minnesota-based Dominium. “Converting these historic structures into apartments is very labor-intensive, so the projects generally create a lot of construction jobs. The properties themselves become their own little communities and can have a catalyzing effect on the surrounding neighborhood.” Preserving history Dominium completed construction of Millworks Lofts in Minneapolis in July of this year. The 78-unit affordable housing property was 100 percent leased prior to opening its doors in August, says Anderson. The building, which dates back to the 1920s and was formerly home to Lake Street Sash & Door Co., is on the National Register of Historic Places. Dominium purchased the vacant building in 2016 and financed the project using both federal and state historic tax credit equity. All major …

January 9, 2018

Georgia Office Southeast Top Stories

NCR, Cousins Open $450M Global Office Campus in Midtown Atlanta

by John Nelson January 8, 2018

ATLANTA — NCR Corp. (NYSE: NCR), an ATM maker and financial tech firm, and Cousins Properties have opened NCR’s two-tower global office campus in Midtown Atlanta. Development costs comprising both private and public investment are estimated at $450 million. The 750,000-square-foot development is situated at the corner of 8th and Spring streets and is expected to house roughly 5,000 employees, who will begin moving into the first tower today, with the second tower opening later this year. “This campus symbolizes the power of reinvention, says Bill Nuti, chairman and CEO of NCR, which moved its headquarters from nearby Duluth in Gwinnett County. “Our move to Midtown is part of our vision for transforming Atlanta into the Silicon Valley of the East.” NCR and Cousins Properties (NYSE: CUZ) entered a long-term, build-to-suit lease for the campus, which will be owned by Cousins. Construction of the first 20-story tower began in November 2015, and in September 2016 NCR announced it would expand the campus and build a second 14-story tower. “We are proud to have helped NCR achieve its vision for a new cutting-edge corporate headquarters in Midtown,” says Larry Gellerstedt, chairman of the board and CEO of Atlanta-based Cousins Properties. “This …

January 8, 2018

Illinois Midwest Ohio Retail Top Stories

Sears, Kmart, Macy’s Unveil List of Store Closures for Early 2018

by Kristin Harlow January 5, 2018

HOFFMAN ESTATES, ILL. AND CINCINNATI — Sears Holdings Corp. has announced that 64 Kmart stores and 39 Sears stores will close nationwide between March and early April of this year. Sears had previously unveiled an effort to close unprofitable stores and “right size” store footprints. Eligible associates impacted by these store closures will receive severance and will have the opportunity to apply for open positions at area Kmart or Sears stores. Liquidation sales will begin as early as Jan. 12 at the stores set to close. The company is closing three Kmart stores and three Sears stores in its home state of Illinois. For a full list of store closings, click here. Meanwhile, Cincinnati-based Macy’s has also announced the planned closure of 11 stores, four of which were previously disclosed. With these closures, the retailer will have completed 81 of the approximately 100 planned store closures announced in August 2016. The company intends to close approximately 19 additional stores as leases or operating covenants expire or sales transactions are completed. Including the newly announced stores, Macy’s has closed 124 stores since 2015. A majority of the Macy’s stores closing in early 2018 are located in California and Florida. A full list is available here. …

January 5, 2018

California Office Top Stories Western

CIM Commercial Trust Agrees to Purchase Nine-Story Office Building in Beverly Hills for $130M

by John Nelson January 4, 2018

BEVERLY HILLS, CALIF. — CIM Commercial Trust Corp. (NASDAQ: CMCT), a REIT that owns and manages Class A office assets, has signed a definitive agreement to purchase a nine-story office building located at 9460 Wilshire Blvd. in the Golden Triangle area of Beverly Hills. The sales price was undisclosed, but multiple media outlets are reporting the Dallas-based REIT bought the Class A office building from Beverly Union Co. for approximately $130 million. The acquisition is expected to close this quarter. “9460 Wilshire is in a highly desirable and high-barrier-to-entry office market. It is a strong addition to CIM Commercial Trust’s portfolio,” says Charles Garner, CEO of CIM Commercial Trust. “The property has not changed ownership in almost 40 years, and is positioned for growth by tapping CIM’s operational expertise and long-term experience in the Los Angeles market.” The 97,000-square-foot office building was built in 1959 and last renovated in 2008. The building is located at the corner of Wilshire Boulevard and Beverly Drive, adjacent to the Four Seasons Beverly Wilshire Hotel and one block from the future Metro Purple Line Wilshire/Rodeo Station. Beverly Hills is situated within the Los Angeles West office submarket, which had a vacancy rate of 12.7 …

January 4, 2018

Features Retail Top Stories

What Are the Prospects for an Amazon Merger With Target? Analysts Weigh In

by Jeff Shaw January 4, 2018

When Gene Munster, managing partner of Minneapolis-based venture capital firm Loup Ventures, predicted that e-commerce giant Amazon (NASDAQ: AMZN) would buy department store chain Target (NYSE: TGT) this year, he knew such a declaration would make waves. In a New Year’s Day post on the Loup Ventures website titled “8 Tech Predictions for 2018,” Munster admitted it was his “boldest prediction.” “Seeing the value of the combination is easy. Amazon believes the future of retail is a mix of mostly online and some offline,” wrote Munster. “Target is the ideal offline partner for Amazon for two reasons: shared demographics and a manageable-but-comprehensive store count.” Business websites and magazines were quick to respond with skepticism, authoring headlines such as “Stop The Insanity Amazon Will Not Be Buying Target” (TheStreet), “Amazon Buying Target Isn’t as Likely as One Tech Analyst Seems to Think” (Adweek) and “No, Amazon Isn’t Buying Target in 2018” (Forbes). Garrick Brown, vice president of retail research for the Americas with Cushman & Wakefield, says “the rumor’s been floating around for a while” that Amazon is looking to buy Target. He estimates the odds of the deal happening at between 25 percent and 33 percent. Jeff Green, president and …

January 4, 2018

Illinois Midwest Multifamily Student Housing Top Stories

Scion Student Communities Buys 24-Property Student Housing Portfolio for $1.1B

by Nellie Day January 3, 2018

CHICAGO — Scion Student Communities has purchased a 24-property student housing portfolio containing 13,666 beds across 18 states for $1.1 billion. The portfolio involves 20 leading national universities. The transaction also includes the recapitalization of two communities previously owned by Scion-affiliated private syndications. Five different Harrison Street Real Estate Capital funds owned the properties in partnership with multiple operators. Chicago-based Scion Student Communities is a joint venture between the Scion Group, GIC and Canada Pension Plan Investment Board (CPPIB). The portfolio contains a mix of recently developed Class A properties in primarily Tier 1 university markets, as well as select value-added assets. “This is a compelling investment opportunity to efficiently build further scale in the U.S. student housing sector with a portfolio of high-quality, well-located properties in new and existing joint venture markets,” says Hilary Spann, managing director and head of U.S. real estate investments for CPPIB. Harrison Street sold an additional nine-property student housing portfolio to Scion this past March for $465 million. These assets were within a larger 11-property portfolio the JV acquired from four different owners. This portfolio contained a total of 5,000 beds at eight universities. Scion Student Communities notes it plans to pursue additional opportunities to …

January 3, 2018

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