Top Stories

Brennan Investment Group to Develop $1B Technology Park Near O’Hare International Airport

by John Nelson July 20, 2017

ELK GROVE VILLAGE, ILL. — Brennan Investment Group, a private real estate investment and development firm based in Chicago, plans to develop Elk Grove Technology Park, a new 85-acre infill development situated roughly three miles from O’Hare International Airport. The project could cost nearly $1 billion to develop, according to the Daily Herald. “Opportunities to develop near airports, in major metropolitan areas — and in scale — are virtually non-existent,” says Michael Brennan, chairman and managing principal of Brennan Investment Group. “We are confident this will become the most desirable and significant industrial development in the Chicago region, and perhaps in the United States.” Brennan Investment plans for Elk Grove Technology Park to house data centers and industrial space for digital manufacturing and robotics uses. Upon completion, four speculative industrial facilities will be built with opportunities for an additional five buildings, including sites for data centers. Brennan Investment will initially build out the infrastructure of the park with ponds, water features, sculptures, bike paths and pedestrian walkways. The site for Elk Grove Technology Park is bounded by Higgins Road to the north, Lively Road to the east, Oakton Boulevard to the south and King Street to the west. “Elk Grove …

July 20, 2017

Features Loans Multifamily Top Stories

Fannie Mae Off to Hot Start, Freddie Mac Pushing Past Market ‘Disruption’ That Slowed Its First-Quarter Production

by John Nelson July 19, 2017

Fannie Mae started off the year with a bang, producing $17.4 billion in multifamily financing in the first quarter, up about 38 percent compared to the first quarter of 2016. The quarterly total was also up 20 percent from its fourth-quarter 2016 production. Compared to its counterpart, Freddie Mac had a slower start to the year, producing $12.7 billion in the first quarter, down about 28 percent from both first-quarter and fourth-quarter 2016. Hilary Provinse, Fannie Mae’s senior vice president of customer engagement, says the driver of Fannie Mae’s hot start is the increased activity in its green product lines, which incentivize borrowers to perform energy and water efficiency improvements at their properties to qualify for financing with reduced interest rates. “Fannie Mae is the market leader in green rehab financing,” says Provinse. “In 2016, we did $3.6 billion in green financing volume. In the first quarter of 2017 alone we did $5 billion.” David Brickman, executive vice president of Freddie Mac’s multifamily business, says that Freddie Mac’s first-quarter production was more affected by the “pause” in the market in late 2016 and early 2017 than Fannie Mae. “There was a little disruption in the fourth quarter of last year …

July 19, 2017

Retail Southeast Top Stories

Inland Real Estate Group Arranges Sale of 49 CVS Pharmacy Properties in 16 States for $211M

by Nellie Day July 19, 2017

OAK BROOK, ILL. — Inland Real Estate Group has arranged the sale of 49 newly developed CVS Pharmacy properties across 16 states for more than $211 million. Inland handled the deal on behalf of the buyer, an affiliate of the company. The portfolio contains a total of 651,216 square feet. The CVS Pharmacy properties are located in Arizona, Georgia, Illinois, Indiana, Iowa, Kansas, Kentucky, Louisiana, Ohio, Oklahoma, Missouri, Nebraska, Tennessee, Texas, Utah and Vermont. “This was an attractive acquisition opportunity due to the fact that we were able to buy all 49 CVS stores in one transaction,” says Joe Cosenza, vice chairman of Inland Real Estate Group and president of Inland Real Estate Acquisitions, the purchasing arm for the company’s various entities. “I like CVS, I like the properties and the investment is good for Inland.” This portfolio acquisition follows on the heels of Inland’s October 2016 purchase of 24 additional newly developed CVS Pharmacy properties for more than $116 million. Those assets are located in Arkansas, Georgia, Illinois, Kentucky, Louisiana, Michigan, Minnesota, New York, Ohio, Pennsylvania, South Carolina, Texas, Virginia and Wisconsin. David Neboyskey and Kristin Orlando acted as in-house counsel for Inland in this latest portfolio transaction. The Inland …

July 19, 2017

California Mixed-Use Office Top Stories Western

Lincoln Property Co., Alcion Ventures Break Ground on $141.6M Phase I of Creative Office Campus in California

by Katie Sloan July 18, 2017

ORANGE COUNTY, CALIF. — Lincoln Property Co. and Alcion Ventures have broken ground on Phase I of FLIGHT at Tustin Legacy, a 38-acre creative office campus located within the master-planned community of Tustin Legacy in Orange County. ACORE Capital and iStar Inc. recently provided the joint venture with $141.6 million in construction financing for the initial phase of the development. Mark Wintner and Doug Bond of HFF secured the three-year loan on behalf of the borrowers. The mixed-use campus, at completion, will include 18 low-rise office buildings, retail and open space for gathering. The first phase of the development will offer 470,000 square feet of office space including a collection of four custom-built, incubator-style buildings dubbed Platform Campus, a 12,000-square-foot food hall and a 7,000-square-foot conference center. Campus amenities will include outdoor meeting spaces and flexible break-out rooms; indoor and outdoor fitness areas; a bike share program; dog walk and walking trails; and electric vehicle charging stations. The 12-vendor food hall, known as Mess Hall Market, will serve breakfast, lunch and dinner and offer a full-service bar. Anchor tenants for the space will be announced this fall, with the completion of Phase I slated for late 2018. The project is …

July 18, 2017

Company News Features Retail Top Stories

Amazon-Whole Foods Merger ‘Reinforces Importance of Brick-and-Mortar Presence,’ Says Marcus & Millichap

by Jeff Shaw July 18, 2017

The recent announcement that online retail giant Amazon plans to acquire upscale grocery chain Whole Foods for $13.7 billion sent ripples through the commercial real estate industry when it was announced in June. The move signals a lot of trends and changes within the retail sector, according to a newly released report by real estate brokerage firm Marcus & Millichap. “The purchase highlights the importance of omnichannel platforms, which incorporate a blend of brick-and-mortar establishments with an online footprint to drive traffic and sales,” states the report. “In addition, grocery stores are typically retail center anchors, underscoring the importance of strip and neighborhood centers in the retail landscape.” The 11 largest grocery chains in the country all plan to expand this year, with many doing so aggressively. Discount grocer Aldi, which already has more than 1,600 locations, expects to open 900 new stores by 2022. This expansion within the grocery sector is snapping up a lot of available real estate. Combined with a low rate of new retail construction over the past seven years since the Great Recession, retail vacancy has reached a 16-year low of 5.4 percent. The flip side is that existing space is extremely constrained, and increased …

July 18, 2017

Industrial Top Stories

Ivanhoé Cambridge Acquires 150-Property Industrial Portfolio for Reported $1B

by Taylor Williams July 17, 2017

MONTREAL, SAN FRANCISCO AND FORT WORTH, TEXAS — Montreal-based investment firm Ivanhoé Cambridge has acquired the 150-property portfolio of Evergreen Industrial Properties from TPG Real Estate. Canadian newspaper The Globe and Mail reports a sale price of approximately US$1 billion. Evergreen specializes in operating infill, multi-tenant assets under 250,000 square feet. The portfolio totals roughly 16 million square feet across 18 major American markets, including Dallas, Portland, Atlanta, Denver and Chicago. Evergreen’s industrial facilities largely focus on handling logistics of local distribution for e-commerce companies. San Francisco- and Fort Worth-based TPG created Evergreen in 2014, building the platform with a 7.5 million-square-foot portfolio as its base. In subsequent years, Evergreen acquired an additional 127 properties via 11 different transactions. “Industrial real estate offers an attractive current return and good diversification for our office portfolio in terms of underlying economic drivers,” says Arthur Lloyd, president of Ivanhoé Cambridge’s North American office. “We believe we have found the right fit with Evergreen.” With the acquisition, Ivanhoé Cambridge’s holdings total roughly CA$56 billion, or US$44.3 billion, based on the exchange rate on Monday, July 17. TPG’s assets under management now total approximately $73 billion. — Taylor Williams

July 17, 2017

Affordable Housing Florida Michigan Midwest Multifamily Southeast Texas Top Stories Wisconsin

KeyBank Provides $142.4M Financing for Six-Property Affordable Housing Portfolio in Texas, Florida, Midwest

by Kristin Harlow July 14, 2017

TEXAS, FLORIDA, WISCONSIN AND MICHIGAN — KeyBank Real Estate Capital has provided $142.4 million in loans for a six-property affordable housing portfolio across Texas, Florida and the Midwest region. The loans were used for a variety of purposes, including refinancing, acquisitions and renovations. KeyBank provided $115.7 million in Fannie Mae loans for Limestone Canyon, a 260-unit apartment complex, and Parkside Crossing, a 218-unit apartment complex, both located in Austin, Texas; Sendero Ridge, a 384-unit apartment property located in San Antonio, Texas; Arcade Apartments, a 75-unit apartment building in Racine, Wis.; and Pasco Woods, a 200-unit complex in Wesley Chapel, Fla. All properties reserve at least 50 percent of units for tenants making 60 percent or less of the area median income. KeyBank provided an additional $14.8 million bridge-to-HUD loan for Lakestone Apartments in Ann Arbor, Mich. The 144-unit property consists of one-, two- and three-bedroom units designated for those earning 50 to 60 percent of the area median income. Built in 1998, the apartment building features amenities such as a clubhouse, pool, recreation center, basketball court, computer center and laundry facilities. Harmony Housing, a nonprofit organization, was the borrower. KeyBank also provided an $11.9 million loan to the organization to …

July 14, 2017

District of Columbia Office Southeast Top Stories

Ocean West Capital, Hana Asset Management Purchase NASA Headquarters Building in D.C. for $360M

by John Nelson July 13, 2017

WASHINGTON, D.C. — An investment group led by Ocean West Capital Partners and Hana Asset Management Co. Ltd. has purchased Two Independence Square in Washington, D.C. The seller, Piedmont Office Realty Trust (NYSE: PDM), has invested roughly $50 million to renovate the building. Constructed in 1992 as the headquarters for NASA, the nine-story, 606,000-square-foot property is located at 300 E St. S.W., about three blocks off the National Mall in Washington’s Southwest submarket. Two Independence Square houses NASA leadership, who provide overall guidance and direction to the U.S. government. The building’s James E. Webb Memorial Auditorium hosts agency news conferences and social events. Designed by Kohn Pederson Fox Associates, NASA’s headquarters also feature a lending library, NASA Exchange store, the history office and archives and production facilities for NASA TV. The agency occupies 99 percent of the building and renewed its lease in 2011 with a lease term running through 2028. Hana Asset Management, a subsidiary of Hana Financial Group, is the largest financial group in Korea. The firm comprises 21 subsidiaries, including banks, securities, trusts, asset management firms, investment banks and life insurance companies. The company employs 23,000 professionals worldwide and manages $5 billion of assets throughout Asia, the …

July 13, 2017

Features Single-Family Rental Top Stories

Was Accelerated Job Growth in June a Sign of Things to Come? Economists Weigh In

by Kristin Harlow July 13, 2017

If Steve Hovland’s near-term outlook for U.S. job growth is correct, the second half of 2017 looks quite promising for the commercial real estate industry. “The pace of hiring should accelerate in the second half of the year as Congress moves past healthcare reform and begins to lift regulations that stymie growth,” says the director of research at Irvine, California-based HomeUnion Inc., an online real estate management firm that helps individuals invest remotely in rental properties. “Furthermore, companies will have a better understanding of how policy changes will evolve with the new administration, giving them more confidence to resume hiring,” continues Hovland. “We expect 1.4 million new jobs to be created over the final two quarters of 2017.” The comments from Hovland come on the heels of the latest jobs report from the Bureau of Labor Statistics (BLS), which shows total nonfarm payroll employment increased by 222,000 in June, beating economists’ expectations. Leading up to the release of the report last Friday, the consensus among the nation’s top forecasters was that the U.S. economy had added 180,000 jobs in June. The BLS also revised the job gains for April and May upward by 47,000. Meanwhile, the unemployment rate rose slightly …

July 13, 2017

Oregon Retail Top Stories Western

Kimco Realty Acquires 746,000 SF Shopping Center in Portland for $131.8M

by Nellie Day July 12, 2017

PORTLAND, ORE. — Kimco Realty Corp. (NYSE: KIM) has acquired Jantzen Beach Center, a 746,000-square-foot open-air shopping center in Portland, for $131.8 million. The property is located at in northern Portland near the Oregon-Washington border. Jantzen Beach Center was 96 percent occupied at the time of sale. Notable tenants include Home Depot, Target, TJ Maxx, HomeGoods, Ross Dress for Less, Burlington, Petco, Best Buy, DSW and Michaels. Jantzen Beach Center was built in 1972. It underwent more than $40 million in renovations and upgrades between 2010 and 2014. The center’s location near the Oregon-Washington border allows it to pull visitors from more than 70 miles away due to Oregon’s lack of sales tax. “The center pulls customers from the 9 percent sales tax state of Washington into the no-sales-tax state of Oregon,” says Nick Kassab of HFF, who, along with Brian Ley, represented the unnamed seller in this transaction. “Given that opportunities to acquire a top-performing center of this size and scale in the Pacific Northwest are few and far between, the sale received significant interest from institutional investors across the country.” Kimco purchased the center free and clear of any existing debt. The New Hyde Park, N.Y.-based REIT acquired …

July 12, 2017

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