Top Stories

Better Together: The Opportunity in Mixed-Use Retail Condos

by John Nelson August 1, 2017

A wave of high-density mixed-use development has swept across the country within the past decade. A number of forces have contributed to this activity, including demographic trends, shifts in housing demand, environmental concerns, as well as governmental forces and municipalities seeking to create sustainable, pedestrian-oriented communities that incorporate a mix of uses. As a result, developers are building ground-up mixed-use projects or converting older hotels or apartment and office buildings into residential developments featuring apartments or condominiums. The street-level retail portion of the development is, in most cases, also converted into a condominium. This process has created a specialized real estate product known as the retail condominium or commercial condominium. The retail condominium has now emerged as a popular, alternative real estate investment platform. Retail condominiums were traditionally in major metropolitan cities like New York or Chicago, but are now debuting in suburban markets throughout the country. Pasadena, long thought of as a suburban neighbor to downtown Los Angeles, now boasts mixed-use developments like the Pasadena Collection and 482 Arroyo. These projects offer a mix of residential, office and retail condominiums. The Harbor Lofts development in downtown Anaheim, Calif., also includes residential loft condominiums above ground-floor retail condominiums. The sale …

August 1, 2017

Florida Hospitality Loans Southeast Top Stories

Walker & Dunlop Arranges $218.2M in Construction Financing for JW Marriott Hotel in Orlando

by Taylor Williams July 31, 2017

ORLANDO, FLA. — Walker & Dunlop Inc. (NYSE: WD) has arranged $218.2 million in construction financing for JW Marriott Bonnet Creek, a 516-room luxury hotel and resort project in Orlando. The non-recourse financing represents 77.3 percent of the total project cost of $282 million, and comprises both senior and mezzanine debt. A partnership between Walker & Dunlop’s Miami capital markets team and SRF Ventures Inc., a New York-based real estate investment and advisory firm, provided the funds. The hotel will be situated on 10 acres near the Epcot section of the Walt Disney World Resort complex, with close proximity to local attractions such as Magic Kingdom and Universal Studios, as well as the Orlando International Airport. Designed by Dallas-based architecture and engineering firm Huitt-Zollars Inc., the project will also deliver a 1,000-space parking garage. Hotel amenities will include 50,000 square feet of meeting and banquet space, a business center, luxury spa and fitness area and a lazy river with guest pools. “This was a very marketable deal with a great sponsor,” says Kevin O’Grady, managing director of Walker & Dunlop’s Miami capital markets team. “Structuring transactions like this is right in the bull’s-eye of our expertise, and we’re very pleased …

July 31, 2017

Industrial New York Northeast Top Stories

MRC, Artemis Real Estate Acquire Two Adjacent Industrial Buildings in Queens for $78M

by Kristin Harlow July 28, 2017

NEW YORK CITY — Madison Realty Capital (MRC) and Artemis Real Estate Partners have acquired two adjacent industrial buildings in the Jamaica neighborhood of Queens for $78 million. A long-term family ownership sold the properties, which total 613,000 square feet and are located at 184-10 and 186-60 Jamaica Ave. The joint venture plans to upgrade both buildings, including enhancing the building envelope, mechanical infrastructure and elevators. At the time of sale, the properties were 75 percent occupied by several warehouse and manufacturing tenants such as French Connection, Hanky Panky and Gotham Greens. Originally built in 1923 and 1953, the buildings feature five freight elevators, two passenger elevators and 500 feet of frontage along Jamaica Avenue. Additionally, the property features 12 loading docks and a 30,000-square-foot parking lot with more than 100 parking spaces. Adam Doneger, Adam Spies, Josh King and Avery Silverstein of Cushman & Wakefield sourced Artemis as the equity partner in the transaction. Decio Baio, Fredric Stein, Steve Nadel and Paul Bralower of Pinnacle Realty represented the seller in the deal. New York-based MRC is a real estate investment firm that pursues equity and debt investments. The firm has invested in approximately $6 billion of transactions in the multifamily, …

July 28, 2017

Florida Hospitality Southeast Top Stories

Sunstone Acquires New Hotel, Marina in Key West for $175M

by John Nelson July 27, 2017

KEY WEST, FLA. — Sunstone Hotel Investors Inc. (NYSE: SHO) has purchased the 175-room Oceans Edge Hotel & Marina in Key West for $175 million. The newly constructed, oceanfront hotel and marina complex is situated across 20 land and water acres on Stock Island and is the largest purpose-built luxury resort and marina in Key West. Sunstone purchased the asset from the developer, Singh Resorts, a hotel development and management firm headed by Pritam Singh. The hotel, which opened in January, will operate as an independent property and be managed by Singh Hospitality. Oceans Edge has 86 suites, all of which have private balconies and views of the Atlantic Ocean. The hotel’s rooms are spread across four buildings and have an average size of 470 square feet, which are among the largest hotel rooms available in the Key West market, according to Sunstone. The hotel also features six swimming pools, a full-service restaurant, waterfront bar, on-site water sports and paddle shop and a fitness facility. As part of the transaction, Sunstone also acquired a combined 52 wet and dry boat slips and amenities in the attached marina, which offers direct deep channel access to popular fishing spots off the coast. …

July 27, 2017

Features Office Top Stories

M&M: Demographics Revive Interest in Suburban Office Spaces

by Taylor Williams July 27, 2017

A growing concentration of households in suburban areas throughout the country is sparking renewed interest in office properties located outside urban centers, according to a recent report from Marcus & Millichap. Millennials’ general preference to work in amenity-rich office buildings with walkable retail and dining options heightened demand for urban office space for much of the post-recession era, notes the report. Overall vacancy for urban office properties declined by 250 basis points during this period and clocked in around 14 percent as of the first quarter of 2017. This activity spurred a 7 percent increase in asking rents across America’s urban office markets, but demand for these properties is beginning to slow. The suburbs, where rents for stabilized properties land for new properties are cheaper, are currently poised to benefit from rising rents in urban sectors, according to the report. Compounding the opportunities for suburban office properties are the general demographics of those markets. According to the report, as of 2015, 64 percent of America’s households resided in the suburbs. That figure is projected to rise as high as 75 percent by 2025. Particularly in smaller areas with tighter labor markets, this proportion is an important consideration. In addition, the …

July 27, 2017

Massachusetts Multifamily Northeast Top Stories

Bell Partners Buys 196-Unit Olmsted Place Apartments in Boston for $103M

by Nellie Day July 26, 2017

BOSTON — Bell Partners has purchased the 196-unit Olmsted Place apartment complex in the Boston submarket of Jamaica Plain for $103 million. The community is located at 161 S. Huntington Ave. Olmsted Place debuted in 2015. It is fully leased. The community overlooks Jamaica Pond, part of the Emerald Necklace park system designed by legendary landscape architect Frederick Law Olmsted. The seller was a joint venture between Boston Residential Group and the Carlyle Group. The JV purchased the site in 2012 for $10 million from Home for Little Wanderers, a nonprofit, then completed the development. “We are thrilled to have created a win for our partnership and for the City of Boston by creating middle-class housing in a community that has long needed it,” says Curtis Kemeny, CEO of Boston Residential Group. Olmsted Place features studios to three-bedroom units. The units range in size from 530 square feet to 1,300 square feet. The community was the first new residential project for several decades in a rapidly improving section of Jamaica Plain. Boston Residential Group is a residential developer with projects in Boston submarkets such as Back Bay, South Boston and the Charlestown Navy Yard. The Carlyle Group is a Washington, …

July 26, 2017

New York Northeast Retail Top Stories

Fashion Retailer Michael Kors to Acquire Jimmy Choo for $1.35B

by Katie Sloan July 25, 2017

NEW YORK CITY — Global fashion retailer Michael Kors has agreed to acquire Jimmy Choo, a London-based luxury footwear and accessories brand, for approximately $1.35 billion. Jimmy Choo PLC (LON: CHOO) has approximately 150 company-operated retail stores, 560 multi-brand locations and more than 60 franchise stores in locations worldwide. The company has a strong presence in the Americas, Europe, the Middle East, and Asia. With this acquisition, Michael Kors Holdings Limited (NYSE: KORS) hopes to grow Jimmy Choo sales to $1 billion; balance its portfolio with greater product diversification; enhance the company’s position in the men’s and women’s luxury footwear segment; and enhance exposure to global markets, with a particular focus on Asia. Michael Kors expects the transaction to close during fourth-quarter 2017. “Jimmy Choo [is] an iconic brand with a rich history as a leading global luxury house,” says John Idol, chairman and CEO of Michael Kors. “We believe that Jimmy Choo is poised for meaningful growth in the future and our company is committed to supporting the strong brand equity that Jimmy Choo has built over the last 20 years.” Michael Kors has committed bridge financing from JPMorgan Chase Bank N.A. and Goldman Sachs Bank USA to satisfy fund requirements of the U.K. Takeover Code. The transaction is expected …

July 25, 2017

Features Multifamily Seniors Housing Top Stories

Seniors Housing Developers Find Big Opportunities in Small Markets

by Taylor Williams July 25, 2017

The high-profile cities that line both coasts aren’t the only places where the development of new seniors housing product is proving to be a smart investment. Less populated areas are also welcoming new communities that are designed and operated just like those facilities opening in popular urban markets. But seizing opportunities in smaller markets is a different ballgame than it is in high-density areas. A smaller list of prospects and a shorter supply of qualified talent are among the drawbacks. Still, many owners find that the pros outweigh the cons. They cite pent-up demand for newer, more modern product, lower land costs, quicker permitting and faster lease-ups among the perks of a small market. And these less populous areas are gaining in popularity among many investors. The National Investment Center for Seniors Housing & Care (NIC) tracks 31 markets that make up the largest metropolitan areas in the United States. It also tracks 68 secondary markets. NIC defines a secondary market the same way the U.S. Office of Management and Budget (OMB) does. The OMB divides smaller economic areas into core-based statistical areas (CBSAs), each of which consists of a county or counties that share an urbanized area of at …

July 25, 2017

Louisiana Multifamily Southeast Top Stories

AVR Sells Nine-Property Multifamily Portfolio in Louisiana for $250M

by Taylor Williams July 24, 2017

LAFAYETTE, SHREVEPORT AND SLIDELL, LA. — AVR Realty Co., a Yonkers, N.Y.-based multifamily investment and development firm, has sold a portfolio of nine multifamily properties totaling 2,079 units in Louisiana for approximately $250 million. Israel-based investment firm El-Ad National Properties purchased the portfolio. According to the company’s LinkedIn page, its portfolio of American properties consists of 12,700 apartment units, 1 million square feet of office space and several hotels. The holdings are spread across nine states and collectively valued at $1.2 billion. The sale represents the disposition of nine of AVR’s 11 multifamily assets in Louisiana. The portfolio includes four properties totaling 972 units in metro Lafayette, located approximately two hours west of New Orleans; three properties totaling 705 units in the metro of Shreveport in northwestern Louisiana; and two properties totaling 402 units in Slidell, approximately 30 miles north of New Orleans. Mike Kemether of Cushman & Wakefield’s Southeast Multifamily Advisory Group and Larry Schedler of Larry G. Schedler & Associates represented AVR in the transaction. El-Ad was represented internally. “This portfolio sale represents a substantial statewide multifamily investment and transaction,” says Schedler. “The high level of local and international investor interest was driven by the opportunity to purchase …

July 24, 2017

Multifamily Oklahoma Student Housing Texas Top Stories

Joint Venture Breaks Ground on $194M Mixed-Use Project at University of Oklahoma

by Kristin Harlow July 21, 2017

NORMAN, OKLA. — A joint venture between Balfour Beatty Campus Solutions LLC and Provident Resources Group (PRG) has broken ground on the first phase of a $194 million mixed-use project at the University of Oklahoma in Norman. The development will expand the university’s on-campus living options for upperclassmen as part of a public-private partnership. Located on more than 10 acres in the southern part of OU’s campus, the project will include four mid-rise buildings with 1,231 beds. Plans also call for 40,000 square feet of retail and academic space, as well as a 1,000-car parking garage. Construction of the project is slated for completion in August 2018 in preparation for the 2018-2019 academic year. OU and Balfour Beatty Communities will jointly operate and manage the housing component of the development. JE Dunn Construction is leading the project’s design/build team, in collaboration with Clark Nexsen and Oklahoma City-based Studio Architecture. RBC Capital Markets is the financial underwriter for the project. Balfour Beatty Campus Solutions provides development, asset/property management and other real estate services to higher education with a focus on public-private partnerships. PRG is a national non-profit organization that develops, owns and operates educational, healthcare, seniors housing and multifamily properties. To …

July 21, 2017

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