Top Stories

Madison Realty Provides $270M Construction Financing for 1 MSF Mixed-Use Development in Brooklyn

by Katie Sloan July 11, 2017

NEW YORK CITY — Madison Realty Capital (MRC) has provided $270 million in construction financing for the development of a 1 million-square-foot mixed-use project at the former Rheingold Brewery site in Brooklyn’s Bushwick neighborhood. The developer, Brooklyn-based All Year Management, previously received a bridge loan for site acquisition and pre-development on the project from MRC. Construction is currently underway. The Rheingold Brewery opened in 1883, and was the eighth largest brewery in the nation in 1965, according to reports by the New York Daily News. The brewery closed in 1976, and was torn down in 1981. The site has been largely vacant since then, with the exception of 300 rental and privately owned apartments that were built on the southwest corner of the site in 2003. The two-building redevelopment is located at 123 Melrose St. and 54 Noll St., and will feature 911 residential units, 20,650 square feet of retail space and 533 parking spaces. Residential space will occupy floors one through nine in both buildings, offering studio, one-bedroom and two-bedroom units. Community amenities will include multiple fitness rooms including a boxing center, yoga studio, cycling room and exercise room; libraries; spas with saunas, steam and massage rooms; locker rooms; …

July 11, 2017

Features Multifamily Top Stories

Robust Apartment Demand Leads to Healthy Occupancy, Stabilizing Rent Growth, Says RealPage

by Kristin Harlow July 11, 2017

RICHARDSON, TEXAS — Apartment demand surged to a near-record volume during second quarter of 2017, according to real estate technology and analytics firm RealPage Inc. With demand topping completions by a wide margin in the quarter, occupancy is essentially full and the annual pace of rent growth has stabilized. Richardson, Texas-based RealPage tracks the 100 markets with the most existing apartment units. Santa Rosa/Petaluma, California is the smallest market RealPage tracks, with 25,144 apartments units. New York City, spanning nearly 2 million units, is the largest market. In order for an apartment building to be tracked, it must consist of at least five units, but the average property size is approximately 200 units. RealPage reports that renters absorbed 175,645 apartments across the United States in the second quarter, up one-third from the performance level seen at the same time a year ago. “Today’s strong demand for apartments reflects the combination of solid job formation, continued limited loss of renters to home purchase and widespread availability of appealing new apartments,” says Greg Willett, chief economist for RealPage. Demand in the second quarter exceeded the 86,431 units completed in the same period, according to RealPage. However, the market is still working through the surplus …

July 11, 2017

Multifamily Top Stories Washington Western

Kennedy Wilson Sells 576-Unit Multifamily Asset in Metro Seattle for $109M

by Taylor Williams July 10, 2017

KENT, WASHINGTON — Real estate investment firm Kennedy Wilson (NYSE: KW) has sold Rock Creek Landing, a 576-unit apartment community in Kent, about 20 miles south of Seattle, for $109 million. The buyer was not disclosed. The cash proceeds of $73 million from the transaction will be used to fund the company’s recent acquisition of 90 East, a 573,000-square-foot, Class A office development in the Bellevue, Washington, area. Rock Creek Landing is located at 1024 Central Ave. North in Kent. The property offers an indoor and outdoor pool, business center, community clubhouse and a coffee bar. Kennedy Wilson purchased Rock Creek Landing in 2014 for $58 million as part of a $127 million acquisition of a three-property portfolio of multifamily assets located across several submarkets south of Seattle. The company has since invested about $6 million in upgrades to the community’s leasing center, unit interiors and common areas. During its time under Kennedy Wilson’s ownership, Rock Creek Landing generated net operating income of approximately $5.3 million. Combined, the sale of Rock Creek Landing and acquisition of the 90 East office property in Bellevue are expected to increase annual net operating income by about $7 million. “The sale demonstrates our ability …

July 10, 2017

Colorado Multifamily Top Stories Western

Gelt Acquires 580-Unit Apartment Portfolio in Lakewood, Colorado for $107M

by Kristin Harlow July 7, 2017

LAKEWOOD, COLO. — Gelt Inc. has acquired a 580-unit apartment portfolio in Lakewood, a western suburb of Denver, for $107 million. The two-property portfolio includes Ascend at Red Rocks and Elevate at Red Rocks. Built in 1981 and located at 13105 W. 2nd Place, Ascend at Red Rocks is comprised of 408 units spanning 16.5 acres. The property offers one-, two- and three-bedroom units ranging from 850 square feet to 1,260 square feet. Built in 2000 and located at 409 Zang St., Elevate at Red Rocks is comprised of 172 units across 9.5 acres. The property features one-, two- and three-bedroom units ranging from 673 square feet to 1,101 square feet. Community amenities at both properties include 24-hour fitness centers, heated swimming pools, recently renovated clubhouses, media and business centers, volleyball courts, BBQ grills and laundry rooms. Ascend and Elevate are located just minutes from the Union Boulevard/Federal Center area, the largest employment center in Lakewood, according to Gelt. Gelt plans to upgrade some of the units by installing vinyl plank flooring, stainless steel appliances and washers/dryers. At Elevate, Gelt will modernize the existing leasing office, clubhouse and playground. The fitness center will be updated at Ascend. A dog park, sports court …

July 7, 2017

California Multifamily Top Stories Western

Aimco Acquires Full Ownership of Palazzo Multifamily Portfolio for $451.5M

by Nellie Day July 6, 2017

LOS ANGELES — Apartment Investment and Management Company (Aimco) (NYSE: AIV) has acquired the remaining interest in a Los Angeles multifamily portfolio for $451.5 million. Aimco already owned 53 percent interest in the properties, and bought the remaining 47 percent from its joint venture partners, institutional investors advised by J.P. Morgan Asset Management. The acquisition now gives Aimco complete ownership of three Palazzo communities. These include the 521-unit Palazzo at Park La Brea, the 611-unit Palazzo East and the 250-unit Villas at Park La Brea. All three communities are situated in the mid-Wilshire area of Los Angeles, about two miles from Beverly Hills, Hollywood and Century City, and six miles from downtown LA and Santa Monica. “We appreciate the mid-Wilshire submarket with its highly educated and high-income customers who value the proximity to transportation, job centers and upscale retail … and where we can see clearly that future development is increasingly difficult,” says Terry Considine, CEO and chairman of Aimco. “We expect to continue the operation of the properties and to redevelop each, over time and at the right time, to serve different and distinctive market segments.” The average age of the units within the Palazzo portfolio is 12 years, …

July 6, 2017

Features Top Stories

Regional Malls Live On Through Reimagining, Repurposing, says Transwestern

by Katie Sloan July 6, 2017

We’ve all been subject to the doom and gloom reports surrounding the retail sector. E-commerce is going to be the end of brick-and-mortar retail; retailers are going bankrupt; regional malls are no longer viable. While some of this talk is true — the retail sector is undoubtedly undergoing an evolution — statistics on malls tell a more positive story, according to a recent report by Transwestern. The report — “Why Mall Reuse is Just Beginning” — opens with the fact that regional malls have had a positive net absorption since 2010, and saw a national occupancy rate of 95 percent at the end of 2016. Much of this continued success has been found through reconsidering and repurposing the traditional regional mall to fit the changing desires and needs of the community. According to the International Council of Shopping Centers (ICSC), of the $4.7 trillion in retail spending in 2015, only 8.3 percent occurred online. Furthermore, only 3.3 percent of that spending was transacted with “pure-play” online retailers like Amazon, meaning that 96.7 percent of all retail spending happened in brick-and-mortar stores or on websites affiliated with brick-and-mortar stores. Convenience and the ability for consumers to physically browse, return and interact with …

July 6, 2017

Multifamily Texas Top Stories

Greystar-Led Fund to Acquire Monogram Residential Trust for $3B

by John Nelson July 5, 2017

PLANO, TEXAS — Monogram Residential Trust Inc. (NYSE: MORE), an owner and developer of high-end apartment communities, has entered into a definitive merger agreement to be purchased by a newly formed perpetual life fund led by Greystar Real Estate Partners. The purchase price is $3 billion, including debt. Other principals of the fund, known as Greystar Growth and Income Fund LP, include affiliates of APG Asset Management, GIC and Ivanhoe Cambridge. Monogram’s stockholders will receive $12 per share in cash, which represents a premium of approximately 22 percent to Monogram’s unaffected closing stock price on July 3, the last trading day prior to the public announcement of the transaction. The ownership group has retained Walker & Dunlop to secure acquisition financing for the transaction, which includes Monogram’s share of its two joint ventures with PGGM and NPS. The PGGM joint venture will be restructured, and Greystar will purchase the joint venture interests held by NPS pursuant to a separate assignable purchase and sale agreement for approximately $500 million. JPMorgan Chase Bank N.A. has provided a commitment letter to Greystar Growth and Income Fund for $2 billion in debt financing for the transaction. The deal is expected to close in the …

July 5, 2017

Office Texas Top Stories

Canada Pension Plan Investment Board to Acquire Parkway for $1.2B

by Kristin Harlow June 30, 2017

TORONTO AND HOUSTON — Canada Pension Plan Investment Board (CPPIB) and Parkway Inc. (NYSE: PKY) have entered into a definitive agreement under which CPPIB will acquire Parkway, a Houston-based real estate investment trust, for $1.2 billion. The transaction, expected to close in the fourth quarter of this year, equates to $23.05 per share. Parkway owns the largest office portfolio in Houston, according to CPPIB. Located in the Westchase, Greenway and Galleria submarkets, the 19 properties span approximately 8.7 million square feet and were 87 percent leased as of March. Financial services, technology and commodities tenants anchor the buildings. TPG Capital and its affiliates, which collectively own approximately 10 percent of the outstanding common stock of Parkway, have agreed to vote in favor of the transaction. Parkway will pay its previously announced second quarter dividend today, but will suspend all future quarterly dividend payments through the expected close of the transaction. “We believe there are still some near-term headwinds in the office sector for Houston, but the implied asset valuation of this transaction shows CPPIB’s appreciation for the high-quality portfolio we have assembled and the near-term stability it provides during the current downturn in the market,” says James R. Heistand, president and CEO of Parkway. …

June 30, 2017

Mixed-Use Top Stories Utah Western

SALT Development Breaks Ground on $275M Multifamily, Office Project in Salt Lake City

by John Nelson June 29, 2017

SALT LAKE CITY — SALT Development, a privately held commercial real estate developer, has broken ground on Hardware Village, a $275 million, four-building mixed-use development situated on 400 West between North Temple Street and 200 North in Salt Lake City. Situated one block from the Vivint Smart Home Arena, home of the Utah Jazz NBA franchise, the project will include two seven-story multifamily buildings known as Hardware West and Hardware East, a 10-story office building known as Hardware Station and a four-story office building known as Hardware Crossings. “From the beginning we have envisioned creating a experience where residents are excited to work and live,” says Thomas Vegh, managing partner of Salt Lake City-based SALT Development. “Hardware District is the perfect complement to 4th West Apartments and the Salt Lake Hardware Building as it provides a sense of community with first-class living and working amenities.” The 265-unit Hardware West will feature 48 studios, 134 one-bedroom units and 83 two-bedroom units ranging from 450 to 1,800 square feet. The ground floor will feature 37 two-story brownstone townhomes averaging 1,400 square feet. Completion of the Hardware West building is scheduled for February 2018. The 144-unit Hardware East building will feature 32 one-bedroom …

June 29, 2017

Features Retail Top Stories

Repurposing Malls Among Retail’s Biggest Challenges, Says Coldwell Banker Commercial’s Schmidt

by Taylor Williams June 29, 2017

Given his background in business development, Fred Schmidt, president and chief operating officer of Coldwell Banker Commercial Affiliates, is accustomed to analyzing real estate trends over his 36 years in the industry. Schmidt, who joined Madison, N.J.-based Coldwell Banker Commercial in 2003 as vice president of business development, is not nearly as surprised by the spate of retail store closures as some of his colleagues seem to be. REBusinessOnline.com sat down with Schmidt at the International Council of Shopping Center’s RECon event in Las Vegas in late May. In addition to discussing his firm’s push into retail markets in major cities, Schmidt shared his insights on how to repurpose malls. REBusinessOnline.com: Why are we seeing so many store closures and retail bankruptcies at this time? Fred Schmidt: It’s not a new discussion. It’s common knowledge that Class A malls are doing very well and that the discounters — the top end and bottom end — have been doing well over the years. But there was a prediction four or five years ago that the Class B and C malls were going to suffer because they didn’t have the right merchandising. These changes are now manifesting themselves in terms of the …

June 29, 2017

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