Top Stories

Stability, Yield Drive Healthcare Real Estate Investment Activity, Say InterFace Panelists

by Camren Skelton September 19, 2017

DALLAS — Investor demand for healthcare properties throughout the country is soaring, driven by the recession-resistant nature of the asset class and its ability to consistently generate strong returns. Confidence in the property type also stems from the prevailing realization that legislation opposing the Affordable Care Act (ACA) has thus far been unsuccessful. After multiple failed attempts to repeal and revise the law, the Republican Party introduced a bill today that aims to cut overall funding for healthcare and give states more control over their individual healthcare budgets. Other demand drivers for the healthcare sector include a growing number of aging Americans, the tendency of healthcare tenants to sign long-term leases and an expectation that government spending on healthcare, as a percentage of gross domestic product (GDP), is set to rise above its current level of 15 percent. It all adds up to a remarkably healthy flow of capital into the healthcare sector from institutional, private and foreign investors alike. Five healthcare real estate panelists at last week’s InterFace Healthcare Real Estate conference discussed a variety of topics within the healthcare investment market, including the profiles of the investors, the pressures they face to deploy their capital in a timely …

September 19, 2017

Multifamily New Jersey Northeast Top Stories

Kushner Acquires 1,032-Unit Apartment Community Near Princeton for $190M

by Taylor Williams September 18, 2017

PLAINSBORO, N.J. — New York-based development and management firm Kushner has acquired Quail Ridge Apartments, a 1,032-unit multifamily community located in Plainsboro, roughly midway between Philadelphia and New York City, for $190 million. The garden-style property is situated on 52 acres at 2005 Quail Ridge Drive, approximately six miles from Princeton University. Amenities include two pools, basketball and tennis courts, a playground, 24-hour fitness center and an on-site dog park. American International Group Inc. (AIG) provided acquisition financing for the transaction. The sale is in line with Kushner’s larger strategy of acquiring multifamily properties with high investment potential. Most recently, Kushner closed on the $520 million purchase of a portfolio of 5,517 multifamily units in Maryland. The company says it will continue to target similar investment opportunities throughout the Northeast and Mid-Atlantic areas. “Quail Ridge presents an outstanding opportunity to continue the expansion of our multifamily portfolio while helping to improve an already-great community,” says Laurent Morali, president of Kushner. “It reflects our strategy of vigorously pursuing investment where we see significant value.” Kushner’s recent acquisition activity also includes The Watchtower, an 830,000-square-foot property in Brooklyn that it plans to convert into a corporate campus, as well as 203,000 square …

September 18, 2017

Loans Maryland Mixed-Use Southeast Top Stories

Goldman Sachs Provides $233M Private Equity Investment for Mixed-Use Redevelopment in Baltimore

by Kristin Harlow September 15, 2017

BALTIMORE — Goldman Sachs has committed $233 million to the Port Covington redevelopment project in Baltimore. This is the largest single private equity investment made by the firm’s Urban Investment Group (UIG) to date, according to a Port Covington news release. Port Covington is a 235-acre mixed-use redevelopment located on Baltimore’s waterfront adjacent to I-95. At completion, the 25-year project will include up to 18 million square feet of retail, entertainment, office, hotel and residential space. In addition, the project will encompass 2.5 miles of restored waterfront and 40 acres of parks and green space. Sagamore Development Co. and the UIG have entered into an agreement to jointly own the project and develop the infrastructure in Port Covington. Marc Weller of Sagamore Development will lead the infrastructure development team. The joint venture will own and develop the land in Port Covington that is adjacent to the campus of the future global headquarters of Under Armour. The footwear and sports apparel company owns 50 acres of Port Covington land, and is not involved in this transaction. Other businesses with land parcels in Port Covington that are not part of the joint undertaking include City Garage, Nick’s Fish House, Sagamore Spirit Distillery …

September 15, 2017

Conference Coverage Features Multifamily Texas Texas & Oklahoma Feature Archive Top Stories

Combination of Multifamily, Office Space is Hot Concept in Texas, Say InterFace Panelists

by Taylor Williams September 15, 2017

DALLAS — Say the words “mixed-use” in commercial real estate circles today and generally the first thought that comes to mind is a property featuring a combination of multifamily and retail space. But there’s no written rule that says what property classes can or can’t be included in mixed-use. As such, a number of multifamily developers in Texas are redefining the term’s scope and application by bringing together apartment living and an office component in newer projects. As part of the InterFace Multifamily Texas conference, a panel of real estate experts convened Sept. 13 at the Westin Galleria in Dallas to address this topic and other emerging trends in the apartment sector, most of which center on ways of improving amenity packages for tenants. Approximately 200 real estate professionals attended the event. The move toward developing apartment communities with office space — not business centers — stems from landlords’ need to differentiate their amenity packages from the competition. These new office elements within multifamily properties are taking a variety of forms in their infancy, ranging from large co-working spaces and conference rooms to individualized desks and cubicles. “Having amenities like a knockout pool and an awesome fitness center doesn’t really …

September 15, 2017

Hawaii Mixed-Use Top Stories Western

Salem Partners to Develop $750M Mixed-Use Project in Honolulu

by John Nelson September 14, 2017

HONOLULU — Salem Partners, a commercial real estate developer based in Los Angeles, is moving forward on its $750 million, two-tower project in Honolulu. The Honolulu City Council recently gave Salem Partners approval to build the 450-unit condominium and hotel development, which is part of Honolulu’s Ala Moana Transit Oriented Development Plan. The first development in the plan is Salem Partner’s Mana’olana Place project, which is slated to break ground across from the Hawaii Convention Center in the second quarter of 2018. A new Mandarin Oriental Hotel will anchor the development. “We have enthusiastically embraced the city’s new TOD plan and look forward to the completion of the transit system in 2022,” says James Ratkovich of Salem Partners. Salem Partners received a special transit permit to build up to 400 feet high instead of the 250 feet previously allowed. The developer has also proposed for 78 affordable apartments to be built in collaboration with EAH Housing at the site, which spans 1.42 acres at 1500 Kapiolani Ave. “It is an innovative solution for deeply needed affordable units in Honolulu,” says Ratkovich. At this time the affordable units are designated for seniors housing. Colorado-based architect [au] workshop designed the two towers, …

September 14, 2017

Features Florida Industrial Southeast Top Stories

Lessons Learned: Hurricane Andrew Helped Prepare South Florida’s Industrial Market for Irma

by John Nelson September 14, 2017

Hurricane Irma made landfall in Florida on Sunday afternoon, tearing through The Keys and heading up the western portion of the state through the Tampa area. For a time, it appeared the hurricane was heading straight for Miami before it ultimately changed course. “A few days ago when we are all staring down the barrel of a Category 4 storm that was heading straight for us, it was concerning,” says Ken Krasnow, executive managing director of Colliers International’s South Florida division. “We ended up having some Category 2 force winds, but we feel fortunate that the storm changed course.” Despite being out of Irma’s direct path, parts of Miami were flooded and most of the region experienced power outages, with many residences remaining without power as of this writing. Irma was the worst storm to hit South Florida since Hurricane Andrew in 1992, but the destruction caused by the storm 25 years ago was much worse, specifically for the industrial sector. “Hurricane Andrew was the worst this market experienced,” says Walter Byrd, senior managing director of Transwestern’s industrial team. “It blew through entire floors on projects in the southern part of Miami-Dade County.” Byrd says that the difference this go-around …

September 14, 2017

Multifamily New York Northeast Top Stories

Fortis Property Group Obtains $297M Construction Loan for 325,000 SF Mixed-Use Project in Brooklyn

by Nellie Day September 13, 2017

NEW YORK CITY — Fortis Property Group has received a $297 million construction loan to develop River Park, a three-building mixed-use project in the Cobble Hill neighborhood of Brooklyn. The 325,000-square-foot project will feature 172 luxury condominium units, 66,900 square feet of community space and 328 parking spaces. Fortis acquired 18 buildings on three adjacent sites that formerly housed the Long Island College Hospital (LICH) medical campus. The company purchased LICH in 2015 for $240 million from the State University of New York. Fortis financed the first phase of the acquisition with a $107.25 million bridge loan from Madison Realty Capital (MRC). The new loan proceeds from MRC will be used to retire the previous bridge loan and complete construction of the three luxury residential condominium buildings. This includes a waterfront tower at 350 Hicks St. (“1 River Park”); a high-rise condominium tower at 95 Pacific St. (“2 River Park”); and a contextual condominium building at 349 Henry St./112 Pacific St. (“5 River Park”). River Park 1, 2 and 5 will anchor the new Brooklyn Waterfront District. Rogers Partners is designing the properties. Brooklyn-based Fortis Property Group is a real estate investment, operations and development company. It has acquired, developed …

September 13, 2017

Mixed-Use Multifamily Northeast Office Pennsylvania Retail Top Stories

Cronheim Mortgage Secures $117.5M Financing for Madison Farms Mixed-Use Development in Pennsylvania

by Katie Sloan September 12, 2017

BETHLEHEM, PA. — Cronheim Mortgage has secured $117.5 million in permanent and construction financing for Madison Farms, a mixed-use development in Bethlehem, located north of Philadelphia and west of New York City. The development, upon completion, will feature 152,000 square feet of retail anchored by a 67,400-square-foot ShopRite; a two-story, Class A medical office building occupied by the Lehigh Valley Health Network; and 570 luxury one- and two-bedroom residential units across 15 buildings. Tenants at the property’s retail center include Starbucks Coffee, Chipotle Mexican Grill, Provident Bank, Pure Barre, Pet Valu and Supercuts. The residential property features a 6,500-square-foot clubhouse with a billiards room, multimedia center, fitness center, golf simulator and business center, as well as an outdoor deck with a pool, barbecues and fire pits. The financing — provided by American General Life Insurance Co. — consists of two separate loans placed on behalf of Madison Farms Retail and Madison Farms Residential with 20-year terms and 30-year amortization schedules. For Madison Farms Retail, Cronheim arranged $32 million in permanent financing. For Madison Farms Residential, the company secured an $85.5 million credit facility with two years of interest-only payments. This loan provides permanent financing for the 294-unit first phase of residential development, …

September 12, 2017

Features Industrial Multifamily Office Retail Texas Texas & Oklahoma Feature Archive Top Stories

CBRE Research: Houston’s Commercial Real Estate Shows Resilience in Wake of Hurricane Harvey

by John Nelson September 12, 2017

HOUSTON — It’s much too soon to know the extent of the damage Hurricane Irma has inflicted on Florida and the Southeast, but a clearer view is starting to emerge with regard to the total impact that Hurricane Harvey has had on the Houston commercial real estate market. Hurricane Harvey, a Category 4 storm that made landfall on Aug. 25 near Rockport, Texas, was the strongest storm to hit the Texas Gulf region since 1961, according to CBRE Research. The hurricane dumped more than 50 inches of rain across the region in a matter of days and caused extensive property damage due to flooding. Moody’s Analytics estimates that the hurricane caused anywhere from $81 billion to $108 billion in property damage and economic loss, including the closing of Port Houston and many oil and gas refineries. If these estimates are correct, this would make it the second costliest natural disaster in the history of the United States, only trailing Hurricane Katrina in 2005. Just a few weeks later, Hurricane Irma became the first Category 4 storm to make landfall in Florida since 2004. In its wake, the hurricane has caused severe damage in Miami, the Florida Keys and Naples, as …

September 12, 2017

Alabama Florida Illinois Industrial Michigan Midwest Minnesota Southeast Top Stories

Brennan Investment, Arch Street Acquire $100M Industrial Portfolio in Midwest, Southeast

by Taylor Williams September 11, 2017

CHICAGO AND GREENWICH, CONN. — A joint venture (JV) between Chicago-based Brennan Investment Group and Greenwich-based Arch Street Capital Advisors LLC has acquired a portfolio of 11 industrial properties totaling roughly 2.5 million square feet. The portfolio is valued at approximately $100 million. The properties are located in various markets throughout the Midwest and Southeast, including Chicago, Minneapolis and Grand Rapids, Mich., as well as Jacksonville, Fla., and Birmingham, Ala. The transaction marks the JV’s sixth acquisition since its formation in 2011. Since that time, it has acquired more than $1 billion in single-tenant, net-leased industrial properties. “This acquisition represents the breadth and depth of our net-lease platform,” says Michael Brennan, chairman and managing principal of Brennan. “We have the ability to both acquire large portfolios and to aggregate individual long-term, net-lease assets and can invest across the U.S. in both long- and short-duration net-leased properties with an emphasis on mission-critical assets.” The JV will continue to target investment opportunities involving all types of industrial properties, including assembly plants, research and development facilities and distribution centers. Specifically, it will pursue properties that are located in a top 100 market, have a remaining lease term of at least 10 years and …

September 11, 2017

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