Top Stories

Beacon Capital Partners Acquires AMA Plaza in Chicago for $467.5 Million

by Katie Sloan October 18, 2016

CHICAGO — Beacon Capital Partners has acquired AMA Plaza, a 1.2 million-square-foot office building and an adjacent 902-stall parking garage, for $467.5 million. The Class A asset is located in the River North neighborhood of Chicago. The office component of the property is located above a 316-room Langham Hotel, which was not included in the sale. The hotel is housed on levels two through 13 of the building. The LEED Gold-certified property is situated on the banks of the Chicago River, and is a designated Chicago landmark listed on the National Register of Historic Places. It is also the last and largest American building designed by German-American architect Ludwig Mies van der Rohe. The building was 96-percent leased at the time of sale to tenants including the American Medical Association, the law firm of Latham & Watkins LLP, SmithBucklin Corp., BDO USA LLP and Swanson, Martin & Bell LLP. Originally opened in 1973, the property recently underwent $73.8 million in renovations including the addition of all new mechanical systems, elevators, HVAC, restrooms and a green Roof. Jaime Fink, Jeff Bramson, Mark Katz, Michael Kavanau, John Pelusi, Gerard Sansosti and Patrick Shields of HFF represented the seller, an affiliate of Five …

October 18, 2016

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Features Top Stories

Zandi: Brexit Timing Will Determine Effect on U.S., European Real Estate

by Haisten Willis October 18, 2016

WASHINGTON, D.C. — Mark Zandi, chief economist at Moody’s Analytics, believes that despite bank and analyst predictions of a world recession if the United Kingdom voted to leave the European Union, the global economy is actually “OK for now.” He adds that the timing of the Brexit completion would likely determine stability of economies throughout Europe as well as the United States over the next three to five years. Zandi’s comments came at The Counselors of Real Estate annual convention, held Sept. 25-28 in Washington, D.C. Zandi led discussion about Brexit, when British voters decided on June 23 to leave the E.U., and its economic impact with a panel of real estate advisors representing France, Germany, Turkey, the U.S. and the U.K. He said the overall economy is “amazingly resilient,” because very little negative effect has been felt so far in Europe or the U.S. as a result of the vote. He noted that the European economy is actually growing and the U.S. is stable. Long-Term Process But, Zandi said, it’s too early to know the full effect Brexit will have until the process officially begins, which could potentially be longer than the timing called for in the Lisbon Treaty …

October 18, 2016

Multifamily Northeast Pennsylvania Top Stories

Milhaus Breaks Ground on $100M Mixed-Use Development Near Pittsburgh

by Nellie Day October 17, 2016

PITTSBURGH — Milhaus Development has broken ground on Phase I of a residential and retail development in Lawrenceville, a suburb northeast of Pittsburgh. The development, called Arsenal 201, will encompass an entire block from 39th to 40th streets. The first phase will contain 243 apartment units and 19,000 square feet of retail. Development costs will total more than $100 million upon completion. Arsenal 201 will be situated on the original site of Allegheny Arsenal, which was the largest arsenal in the Union during the Civil War. The name is in homage to the site’s history, with the numbers being the last three digits in the Lawrenceville zip code. Amenities include Arsenal Alley (a pedestrian walkway), Canteen Resident Lounge, Ammunition Fitness/Wellness Center, a courtyard with hammocks that serves as an outdoor entertainment area called the Fort, and Cannonball Deck and Pool. Arsenal Alley will connect Butler Street to a new one-acre public park and existing riverfront amenities. The first apartments will be available for pre-lease in summer 2017. CBRE’s Jason Cannon, Chad Kosanovic and Carey Miklos are handling the retail leasing. Milhaus Development is an Indianapolis-based developer of multifamily-focused mixed-use properties, specializing in Class A, urban projects. — Nellie Day

October 17, 2016

Healthcare Indiana Loans Midwest Top Stories

Union Hospital in Western Indiana Receives $266.6M Mortgage Refinancing

by Jeff Shaw October 14, 2016

TERRE HAUTE, IND. — AMS Health Care Mortgage Corp., Piper Jaffray & Co. and JLL Capital Markets have closed on the funding of a $266.6 million FHA/GNMA-insured mortgage loan for Union Hospital in Terre Haute. Founded in 1892, Union Health provides care for the 277,657 residents of west central Indiana and eastern Illinois. The regional healthcare system is comprised of the flagship Union Hospital (Terre Haute), a 347-bed acute care hospital; Union Hospital Clinton, a 25-bed critical access hospital; and two rural health clinics (Clay City, Ind., and Marshall, Ill.), employing a total of 2,878 physicians and staff. The loan refinancing, insured under HUD’s Section 242 Mortgage Insurance for Hospitals program, significantly reduces the system’s annual debt service, saving Union Health and its patients approximately $148 million over the life of the loan. AMS is an FHA-approved mortgage lender that specializes in obtaining financing for hospitals. Piper Jaffray, an investment bank specializing in healthcare finance, worked closely with AMS in structuring the transaction, assisting Union Health in defeasing its existing tax-exempt debt and placing the GNMA securities with end investors. JLL, working closely with AMS and Piper Jaffray, is the FHA mortgagee of record and will service the loan over …

October 14, 2016

California Office Top Stories Western

Alexandria Real Estate Equities Buys Torrey Ridge Science Center in San Diego for $182.5M

by John Nelson October 13, 2016

SAN DIEGO — An affiliate of Alexandria Real Estate Equities Inc. (NYSE: ARE), an urban office REIT based in Pasadena, Calif., has purchased Torrey Ridge Science Center in San Diego’s Torrey Pines submarket. Walton Street Capital and SteelWave sold the campus to Alexandria for $182.5 million. Torrey Ridge Science Center is a Class A life science campus leased to companies such as Regulus Therapeutics, Pacira Pharmaceuticals, Nitto BioPharma, Interpreta and BP Technology Ventures. The three-building, 291,799-square-foot campus was 87 percent leased at the time of sale. “This was a highly strategic acquisition for Alexandria in Torrey Pines, one of our core San Diego submarkets,” says Daniel Ryan, executive vice president and regional market director of San Diego for Alexandria Real Estate Equities. Located at 10578, 10614 and 10628 Science Center Drive, Torrey Ridge Science Center was built in 2004 and since 2012 the sellers invested $55 million in base building and tenant improvements. The renovations included upgrading common areas, signage and landscaping, as well as creating a new dedicated central plant and adding chilled water systems for each building. The campus also features newly built tenant amenities including a fitness center, conference center and Wich Addiction café. “The Torrey Ridge …

October 13, 2016

Features Louisiana Multifamily Southeast Student Housing Top Stories

NMHC 2016 Conference: Student Housing Remains Robust, Transaction Volume and Investor Interest High

by Katie Sloan October 13, 2016

NEW ORLEANS — The 14th annual National Multifamily Housing Council (NMHC) Student Housing Conference & Exposition was held Sept. 28-30 at the New Orleans Marriott in Louisiana, with over 700 leaders from all facets of the sector convening to network, discuss and dine over a range of industry topics. The outlook throughout the conference was overwhelmingly bright. Each panel and session showed the sector to be robust, with reports of rising rental rates, a record year in asset sales in the sector, and increasing investor interest and capital entering the student housing market. The conference began on Wednesday, Sept. 28, with opening remarks by NMHC president Doug Bibby, followed by a panel titled “Keeping Count: The Public Company Perspective.” Led by CEO of Peak Campus Bob Clark, the panel went in-depth with the CEOs of the two public REITs in the industry — Bill Bayless, president and CEO of American Campus Communities (ACC), and Randy Churchey, chairman and CEO of Education Realty Trust (EdR). Clark began the panel with a variety of statistics on the sector today, as reported by Axiometrics. New supply deliveries for the last five years have been 61,000-beds in 2013; 62,000-beds in 2014; 47,000-beds in 2015; 48,000-beds in 2016; and 36,000 …

October 13, 2016

Loans New York Northeast Office Top Stories

Paramount Completes $850M Refinancing of 1.8 MSF Office Building in Manhattan

by Jeff Shaw October 12, 2016

NEW YORK CITY — Paramount Group Inc. (NYSE: PGRE) has received an $850 million refinancing for 1301 Avenue of the Americas, a 1.8 million-square-foot trophy office building located between 52nd and 53rd streets in Midtown Manhattan. The 45-story office tower includes 30,000 square feet of ground-floor and concourse-level retail space. The property also features in-building access to Rockefeller Center and views of Central Park. Cushman & Wakefield arranged the five-year, interest-only loan, which matures in October 2021 and has two one-year extension options. The net proceeds from the financing were used to repay the company’s 2017 debt maturities at 900 Third Avenue in Manhattan and Waterview in Washington, D.C. Paramount plans to use the remaining proceeds to help fund the previously announced acquisition of One Front Street in San Francisco, which is expected to close by the end of the year. “By capitalizing on today’s attractive credit markets for our high-quality, Class A assets, we strengthen our balance sheet and fortify our position in the market,” says Albert Behler, chairman, CEO and president of Paramount. “Over the past 10 months, we have successfully financed over $2.35 billion of debt at attractive rates,” adds Wilbur Paes, chief financial officer of Paramount. …

October 12, 2016

California Multifamily Top Stories Western

Strata Equity Group Acquires 24-Property Multifamily Portfolio in Southeast for $720M

by Katie Sloan October 11, 2016

SAN DIEGO — Strata Equity Group has acquired a 24-property multifamily portfolio from an affiliate of New York City-based DRA Advisors LLC for $720 million. The Southeast Residential Portfolio consists of 6,294 units located throughout 13 metropolitan areas in Georgia, North Carolina, Tennessee and South Carolina. The properties were built between 1985 and 2000, with an average year built of 1996. Over the past three years, net rental income for the portfolio has increased 12.2 percent while averaging 95.3 percent occupancy. Malcom McComb of CBRE negotiated the transaction on behalf of the seller. Bill Chiles and Robert LaChapelle of CBRE also secured $500 million in acquisition financing for Strata. The financing features a mixture of seven- and 10-year fixed- and floating-rate loans provided by Freddie Mac. “We negotiated a portion of the portfolio under a newly created version of the Freddie Mac Revolving Credit Facility,” says Chiles. “This facility gives Strata Equity Group more financing flexibility for certain assets, as well as an attractive vehicle for new purchases with similar business plans.” The names of only three properties in the portfolio were disclosed: Alta Mills, 1650 Anderson Mill Road, Austell, Ga.; Eagle Pointe Apartments, 8608 Eagle Pointe Drive, Knoxville, Tenn.; …

October 11, 2016

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

Highs, Lows of Texas Apartment Market Under Microscope at InterFace Conference

by Jeff Shaw October 11, 2016

DALLAS — The multifamily market in Texas has cooled off on the lending and development front, and even leasing activity isn’t as robust as it once was in some markets. That’s the consensus of panelists at Interface Multifamily Texas, which took place last Thursday, Oct. 6 at the InterContinental Dallas. The conference’s opening panel, “What’s the Big Picture for Multifamily Supply, Demand & Demographics?” featured three economists specializing in the Texas multifamily market, all of whom agreed the sector was slowing from the same time a year ago. “‘Noise’ is a great term to use, and in our company we are using ‘chop’ to describe the market,” said Ryan Davis, senior economist with Witten Advisors. “Apartments are steady, but the economy is slowing from the ramp-up.” That said, the Texas economy is generating plenty of new jobs, which is a positive sign for apartments in certain markets, added Davis. Dallas Metroplex Shines Among individual markets, all agreed that Dallas/Fort Worth displayed the strongest real estate fundamentals. With the area benefiting from some large corporate relocations, demand for apartments is rising. Rents have grown in the market 7.7 percent over the past 12 months, and there are more than 30,000 units …

October 11, 2016

Hospitality New York Northeast Top Stories

BH Properties Buys Three Hotel Leases in Manhattan for $338.2M

by Nellie Day October 10, 2016

NEW YORK — BH Properties has purchased a portfolio of three New York City hotel leases for $338.2 million. Lexington Realty Trust sold the leased fee positions, which give the owner rights to the rent revenue without actually owning the property, similar to a ground lease. The acquisition is BH Properties’ first transaction in Manhattan and the largest transaction in the firm’s history. The deal was structured as a reverse 1031 exchange. BH Properties restructured its balance sheet to acquire the assets. The firm plans to divest up to 25 properties throughout the country in the next six months. Acquiring the leased fee positions in New York provided the firm with an opportunity to dispose of some properties that are either outside its target market or are no longer a focus for its investment strategy, according to Steve Gozini, the firm’s president. Ascott Residence Trust owns the Element, a 411-room hotel on 311 W. 39th St., and the 369-room Sheraton Tribeca at 370 Canal St. Magna Hospitality owns the 399-room Doubletree Hotel at 8 Stone St. Magna also manages all three assets. The three hotels were built in 2010, opened in 2011 and stabilized in 2012. Magna was the original developer of …

October 10, 2016

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