Top Stories

Natixis Arranges $125M Construction Loan for Mixed-Use Property in Baltimore

by Kristin Harlow September 8, 2017

BALTIMORE — Natixis has served as lead arranger for a $125 million senior loan for the construction of an 800,000-square-foot mixed-use property in Baltimore. Natixis, M&T and CIT are providing the capital. In addition, HFF arranged $44 million in mezzanine financing through Bridge Investment Group Holdings. The HFF debt placement team representing the borrower included Mark Remington, Brian Crivella and Drake Greer. Madison Marquette is developing the property, which is named One Light Street. The building will be 28 stories tall and feature 280 apartment units. The Class A property will also feature 252,243 square feet of office space, over 5,000 square feet of street-level retail and 646 parking spaces. M&T Bank is the lead tenant. The property is located near to the Inner Harbor, the Baltimore Ravens M&T Bank Stadium and Oriole Park at Camden Yards. “Downtown Baltimore is undergoing major urban renewal, from renovations of older buildings by local real estate investors to billion-dollar development projects by direct users like universities and corporations,” says Greg Murphy, head of Natixis Real Estate Finance Americas. “One Light Street will further add to downtown’s revitalization.” Madison Marquette is a real estate investment manager, developer, operator and service provider headquartered in Washington, D.C. …

September 8, 2017

Features Industrial Office Texas Texas & Oklahoma Feature Archive Top Stories

Fortunes of Houston’s Industrial, Office Sectors Diverge in Wake of Hurricane Harvey

by Taylor Williams September 8, 2017

As the flooding in Houston from Hurricane Harvey begins to recede and more properties become accessible, commercial real estate firms are beginning the long, tedious process of figuring out the full magnitude of the destruction. It will likely be months before the full extent of the property damage throughout Houston is known. But the fortunes of certain classes of commercial real estate are already coming into focus. Metro Houston’s industrial market, which according to CoStar Group has experienced positive net absorption for 10 consecutive quarters, appears to be an immediate beneficiary of the storm. With recovery and restoration projects now fully underway across the metro area, demand for construction materials — wood, sheet rock, concrete — is set to rise. These products will need to be stored in warehouses and distributed throughout the metro area. This influx will likely put a dent in industrial vacancy, which rose from 5.3 percent to 5.6 percent between the first and second quarters. Rents for warehouse assets, which declined by 1 percent during the second quarter, should also rebound from the recovery effort. “On the industrial side, our people have seen a spiked level of demand that will result in more absorption,” says Tim …

September 8, 2017

Conference Coverage Features Georgia Seniors Housing Southeast Southeast Feature Archive Top Stories

Attracting Workers to ‘Non-Sexy’ Industry Is Challenge Seniors Housing Leaders Face

by Kristin Harlow September 8, 2017

ATLANTA — By offering paid internships, educational programs, community events and flexible hours, seniors housing leaders hope to combat the well-documented labor shortage and entice younger workers. There simply aren’t enough employees to keep up with the pace of development, and the industry is plagued by high turnover rates as well. That’s according to speakers during an operations update at InterFace Seniors Housing Southeast on Aug. 23 in Atlanta. The conference, held at the Westin Buckhead in Atlanta, attracted over 400 industry professionals. Lisa Welshhons, senior vice president of human resources company Aureon, noted the distinct gap between the number of workers needed and actual employees working. As moderator, she asked the panel of operators how the labor shortage is changing the way they are staffing their communities, as well as recruiting and retention strategies. “We’re often asked by our peers and partners what number of communities is our goal, but it’s not about a number of communities. It’s really about continuing to develop as long as we’re able to attract the best-in-class employees,” said Sarabeth Hanson, COO at Harbor Retirement Associates, a regional senior living development and management company in Vero Beach, Fla. Already a concern, the demand for new …

September 8, 2017

Office Texas Top Stories

Intercontinental Real Estate Purchases Office Tower in Austin’s CBD for $119M

by John Nelson September 7, 2017

AUSTIN, TEXAS — Intercontinental Real Estate Corp., a Boston-based real estate investment and development firm, has purchased 5th + Colorado, a newly built, 18-story office tower in Austin’s central business district. The company acquired the property from the developer, a joint venture between Lincoln Property Co. and Goldman Sachs, for $119 million, according to the Austin Business Journal. Located at the corner of 5th and Colorado streets within Austin’s Warehouse District, the 179,000-square-foot office tower comprises eight levels of structured parking, nine floors of Class A office space and a lobby level with 5,822 square feet of retail space. Built in 2016, 5th + Colorado is home to companies including Indeed.com, an online job search forum; Industrious, a co-working office concept; SoftServe Inc., a Ukranian software firm; Plains Capital Bank; and Sherri Hill, an Austin-based fashion brand relocating from 9011 Tuscany Way, according to the Journal. Amenities at the office tower include on-site management and security and a fitness center with showers and locker rooms. Located at 201 W. 5th St., the office building is within walking distance of Lady Bird Lake Hike and Bike Trail, the State Capitol, Austin City Hall, the Austin Convention Center and Republic Square Park. …

September 7, 2017

Features Top Stories

Real Estate Economists Answer Seven Key Questions in Wake of Lukewarm August Jobs Report

by Camren Skelton September 7, 2017

The U.S. economy added 156,000 jobs in August, falling short of expectations but not enough to sound alarm bells. In advance of the report released Sept. 1 by the Bureau of Labor Statistics (BLS), the forecast from economists surveyed by The Wall Street Journal called for an increase of 179,000 jobs. A closer look at the data shows total nonfarm payroll employment in the private sector grew by 165,000 in August, while the government sector overall contracted by 9,000, mostly at the state and local levels. It’s noteworthy that the BLS also made downward revisions to the June and July employment figures, resulting in 41,000 fewer jobs than previously reported for those two months. Meanwhile, the national unemployment rate increased 10 basis points in August to reach 4.4 percent, still quite low by historical standards. On the heels of the latest jobs report, REBusinessOnline posed seven key questions to three real estate economists: Steve Hovland, director of research at Irvine, California-based HomeUnion Inc.; Ken McCarthy, principal economist and applied research lead for the U.S. based in Cushman & Wakefield’s New York City office; and Ryan Severino, chief economist at JLL who works out of the firm’s New York City office. What follows …

September 7, 2017

Georgia Multifamily Southeast Top Stories

Independence Realty Trust to Acquire Nine-Property Multifamily Portfolio for $228.1M

by Nellie Day September 6, 2017

PHILADELPHIA — Independence Realty Trust Inc. (NYSE: IRT) has agreed to acquire a nine-property multifamily portfolio for $228.1 million. The portfolio contains 2,353 units across the U.S. The seller was not disclosed. This acquisition will allow IRT to further develop its presence in core markets like Atlanta, Indianapolis and Columbus, Ohio. It will also allow the REIT to enter two new markets, though further information regarding the assets’ locations was not disclosed. IRT maintains a large multifamily portfolio in the South and Midwest, particularly in Arkansas, Georgia, Florida, Kentucky, Missouri, North Carolina, Oklahoma, Tennessee and Texas. Rents range from $455 per month at Raindance Apartments in Oklahoma City to more than $1,265 per month at Sabal Key in Naples, Fla. The communities within the new portfolio were built or renovated between 2000 and 2011 and feature an average occupancy of 95 percent. Average effective rent per unit was $884 for the three months that ended July 31, 2017. “This acquisition represents another key milestone for IRT, bolstering our current portfolio with a collection of high-quality communities located in amenity-rich, non-gateway markets that are core to our investment thesis,” says Scott Schaeffer, chairman and CEO of IRT. “This is a tremendous …

September 6, 2017

New York Northeast Office Top Stories

Joint Venture Receives $1.5B Construction Financing for 50 Hudson Yards Office Tower in Manhattan

by Katie Sloan September 5, 2017

NEW YORK CITY — A joint venture between Related Cos., Oxford Properties Group and Mitsui Fudosan America Inc. has received $1.5 billion in construction financing for 50 Hudson Yards, a 58-story office tower located within the Hudson Yards development on Manhattan’s West Side. The joint venture has also committed $2.3 billion, bringing the total planned construction costs to $3.8 billion. Wells Fargo, Deutsche Bank, HSBC, Bank of China and Sumitomo Mitsui Banking Corp. served as co-lead arrangers for the $1.5 billion senior construction loan. Located at the northwest corner of 33rd Street and 10th Avenue, the 2.9 million-square-foot building will be New York City’s fourth largest commercial office tower, according to the joint venture. BlackRock, an investment management firm, will locate its corporate headquarters at the property, occupying 850,000 square feet across 15 floors. The building — designed by architecture firm Foster + Partners — will feature access points on all four sides and a subway concourse below; private sky lobbies; outdoor terraces; executive valet parking; on-site bike storage; connection to shops and restaurants at Hudson Yards; and an outdoor observation deck. Site work has commenced with vertical construction scheduled to begin this fall. The building is slated for completion in 2022. Related Cos. and Oxford Properties …

September 5, 2017

Conference Coverage Features Georgia Seniors Housing Southeast Southeast Feature Archive Top Stories

Smart Seniors Housing Design Can Offset Development Expenses, Says InterFace Panel

by John Nelson September 5, 2017

With construction costs rising and the supply of talented staff diminishing, doing business has never been more expensive for seniors housing developers. As such, both developers and operators are seeking new ways to save money. Increasingly, these groups are considering the role design plays in their projects, with a particular emphasis on identifying design concepts and elements that save on the bottom line without compromising the property’s sense of livability. A panel of seniors housing developers and operators gathered at the Westin Buckhead Atlanta on Wednesday, Aug. 23 as part of InterFace Seniors Housing Southeast to discuss development trends in today’s market. More than 400 industry professionals attended the conference. Moderator Will Childs, executive vice president of seniors housing for Oracle Healthcare Advisors and based in the firm’s Atlanta office, led the analysis of how construction and labor issues alike are driving developers to think outside the lines. At the most fundamental level, many new designs for seniors housing properties share the goal of repurposing common and outdoor spaces, according to panelist Alan Moise, chief investment officer for Atlanta-based Thrive Development Partners. “Overall pricing for development projects in the Southeast and mid-Atlantic is probably up about 6 percent this year,” …

September 5, 2017

Multifamily Texas Top Stories

CoStar: 27 Percent of Houston’s Commercial Real Estate May Be Flooded

by Kristin Harlow September 1, 2017

HOUSTON — CoStar Group Inc. has assessed the potential impact Hurricane Harvey could have on the Houston commercial real estate market, with findings reported that 27 percent of the gross leasable area may be flooded. This represents $55 billion in property value. The commercial real estate analytics firm reports that roughly 72,000 apartment units sit within the 100-year floodplain and are likely to be flooded. A 100-year flood is a flood event that has a 1 percent probability of occurring in any given year. The area of inundation is mapped and referred to as a “100-year floodplain.” In total, CoStar reports there are 12,000 properties with 400 million square feet of space that fall within the 500-year floodplain. This zone has a .2 percent chance of flooding each year. Only 9 million square feet of space, including 4,000 apartments, are within a designated floodway and most are probably inundated with floodwaters today. However, 175 million square feet located in the 100-year floodplain, including 72,000 apartment units and 20 million square feet of office space, are likely seeing water incursion today. Another 225 million square feet sits in the 500-year floodplain and is also at some risk of flooding, according to the report. “Unfortunately, the …

September 1, 2017

Features Multifamily Texas Texas & Oklahoma Feature Archive Top Stories

Hurricane Harvey May Accelerate Multifamily Absorption in Houston, Says RADCO CEO Norman Radow

by Taylor Williams September 1, 2017

Nearly a week has passed since Hurricane Harvey made landfall in Texas, drenching Houston and the Gulf Coast area with trillions of gallons of rainwater and sending residents scrambling for shelter. While Houston is now, in the words of Mayor Sylvester Turner, “mostly dry,” CoStar estimates that roughly 72,000 residential units are situated within Houston’s 100-year floodplain and are expected to suffer water damage, if they haven’t already. The volume of devastation has prompted property owners across all sectors of commercial real estate in Texas to issue press releases on the status of their properties. Texas Real Estate Business reached out to Norman Radow, CEO of The RADCO Cos., a private equity firm in the multifamily space whose holdings were mostly spared by Harvey. The Atlanta-based company owns seven multifamily properties in Texas, including four in Houston totaling about 1,800 units. Of those, only about 1 percent, or 18 units, were damaged by Harvey. The following interview captures his firm’s efforts to help displaced tenants, and offers insight on how Hurricane Harvey might positively impact future absorption and occupancy in Houston’s multifamily market. Texas Real Estate Business: Prior to the storm, the consensus coming out of Houston seems to have been …

September 1, 2017

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