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

Florida Multifamily Southeast Top Stories Washington Western

Avanath Capital Management Buys Workforce Housing in Florida, Seattle for $84.8M

by Jeff Shaw October 7, 2016

FORT LAUDERDALE, FLA. AND SEATTLE — Avanath Capital Management has acquired The Lodge at Peasley Canyon in Seattle and Harbour Pointe in Fort Lauderdale for a total of $84.8 million. Both properties are multifamily communities targeting middle-income families. The Lodge features 339 units while Harbour Pointe features 34 units. Oak Tree Residential was Avanath’s joint-venture partner on the Florida transaction. “Each of these assets presents an opportunity to leverage market growth while also preserving much-needed workforce housing in cities that have experienced some of the highest rent increases in the nation,” says John Williams, president and chief investment officer of Avanath. “Amidst this rent growth, there is a severe shortage of quality workforce housing that caters to middle-income families in major urban cores throughout the nation.” Built in 2004, The Lodge at Peasley Canyon’s amenities include a pool and spa, fitness center, modern kitchens with maple cabinetry and washers and dryers in most units. Avanath bought the property for $73.3 million and plans to enhance the clubhouse, lighting, kitchens and bathrooms. The seller was an institutional owner. Constructed in 1976 and renovated in 2006, Harbor Pointe is currently 100 percent occupied and features marble floors and boat slips. Avanath and …

October 7, 2016

Michigan Midwest Multifamily Seniors Housing Top Stories

Moceri to Develop $300M Seniors Housing Community in Southeast Michigan

by John Nelson October 6, 2016

STERLING HEIGHTS, MICH. — Moceri Cos., a homebuilder based in metro Detroit, plans to develop a $300 million, master-planned community for seniors in Sterling Heights. Situated adjacent to the 27-hole Maple Lane golf course, the 807-unit development, known as Verandas, will feature a mix of townhouses, condominiums and apartments targeting adults age 55 and above. “Verandas will exceed the expectations of the active adult lifestyle in the entire region,” said Dominic Moceri, vice president of Moceri Management Group. Verandas will include a 30,000-square-foot event center featuring dining, fitness, indoor and outdoor pools and spas, retail space and other venues accessible to the public, as well as private spaces for residents only. “We are thrilled to have the Verandas development coming to our city, as it represents Sterling Heights’ commitment to exploring innovative housing options to meet the desires of our community,” said Sterling Heights Mayor Michael Taylor. “This development allows our city to attract new residents, as well as provide a new housing opportunity for those currently living in Sterling Heights who no longer want to reside in a traditional single-family home.” Verandas will include the 160-unit Blossom Lane, featuring one- and two-bedroom independent and assisted living apartments and studio …

October 6, 2016

Features Multifamily Seniors Housing Top Stories

NIC: Seniors Housing Occupancy Remained Stable in Third Quarter While Asking Rents Increased

by Jeff Shaw October 6, 2016

ANNAPOLIS, Md. — The occupancy rate for seniors housing properties in the third quarter held steady, even as asking rents increased, according to the National Investment Center for Seniors Housing and Care (NIC), the industry’s main data tracking agency. NIC’s data is gathered from more than 14,000 properties across 140 metro markets nationally. The average occupancy for the quarter was 89.8 percent for seniors housing, which includes independent living, assisted living and memory care. That number was identical to the average occupancy over the last three years, and an increase of 10 basis points from the previous quarter. From a historical perspective, the average occupancy in the third quarter was 290 basis points above the industry’s cyclical low of 86.9 percent during the first quarter of 2010. Independent living properties led the industry in occupancy rate, with an average of 91.1 percent, an increase of 20 basis points over the prior quarter. The average occupancy at assisted living properties trailed at 88 percent, the same as the previous quarter but a drop of 20 basis points from the year prior. Healthy Tenant Demand Although occupancy was largely unmoved, absorption stayed positive as the market successfully took on new supply. Annual …

October 6, 2016

Georgia Hospitality Southeast Top Stories

Piedmont Atlanta Hospital Plans $603M Expansion

by Haisten Willis October 5, 2016

ATLANTA — Piedmont Atlanta Hospital in Atlanta has unveiled its plans for a 16-story expansion and renovation of the existing campus. Development costs are estimated at $603 million. Construction of the new patient tower is slated to begin in January 2017. The tower will be known as the Marcus Tower, in honor of benefactor Bernie Marcus, who gave $75 million for the project. Hospital officials have secured partnerships with 31 companies such as subcontractors, marketers and engineers. The project still requires approval from the Georgia Department of Community Health. The first phase of the project should be completed in September 2020. Phase II will begin in 2022, with one new patient floor completed per year, except for 2026 when the final two floors will be built out. The total project duration will be 10 years. In addition to the tower at the corner of Peachtree and Collier roads, the project includes major renovations to the hospital’s main campus and the addition of 114 general hospital beds, according to the Atlanta Business Chronicle. Approximately 45 percent of the hospital’s current space will soon exceed its life expectancy of 40 years, creating the need for the new construction and renovations, according to …

October 5, 2016

Loans Maryland Multifamily Southeast Top Stories

Walker & Dunlop Originates $469 Million Refinancing for 13-Property Multifamily Portfolio

by Katie Sloan October 4, 2016

BETHESDA, MD. — Bethesda, Md.-based Walker & Dunlop (NYSE: WD) has secured a $469 million refinancing for a 13-property multifamily portfolio owned and operated by Cortland Partners. The financing is comprised of seven-year, floating-rate loans featuring two years of interest-only payments followed by 30-year amortization schedules. Stephen Farnsworth of Walker & Dunlop secured the refinancing on behalf of Cortland Partners through Freddie Mac. The 13 properties within the portfolio are comprised of 4,871 units located in Texas, Georgia and Florida. The specific multifamily communities included in the deal were undisclosed. Headquartered in Atlanta, Cortland Partners develops, owns and operates multifamily properties in Colorado, Florida, Georgia, Louisiana, North Carolina, Ohio, Texas and Virginia. Walker & Dunlop is one of the largest commercial real estate finance companies in the U.S., providing financing and investment sales to owners of multifamily and other commercial properties. The company’s stock price closed on Monday, Oct. 3, at $25.54 per share, down from $27.69 one year ago. — Katie Sloan

October 4, 2016

Features Heartland Feature Archive Retail Top Stories

Turnaround Artists Share Ideas for Re-Energizing Shopping Centers

by Jeff Shaw October 4, 2016

Unlike fine wine, retail properties don’t necessarily get better with age. In order for a shopping center to remain attractive and inviting, it periodically needs to be renovated or even repositioned. Since 2010, the U.S. shopping center industry has completed an average of 198 renovation projects annually, according to JLL in a research report released early this year titled “Remaking Retail: A Tricky Proposition.” Seventy percent of shopping centers renovated after 1999 were originally built between 1960 and 1989. Centers built during the 1980s have been the most popular targets for remodeling almost every year since 2003. So-called “meat and potatoes” retail real estate underwent the most renovation work from 1999 through 2015, according to JLL. Eighty-six percent of shopping center renovations during that period took place at neighborhood, strip and community centers. In order for a redevelopment, an even bigger undertaking, to be worth the effort, an owner would expect the project to add 200 basis points to a center’s capitalization rate as a general rule of thumb, JLL points out. What follows are two case studies of shopping center makeovers, one in Kansas City, Mo., and the other in West Des Moines, Iowa, that illustrate the challenges and …

October 4, 2016

Midwest Missouri Nebraska Retail Top Stories

Bass Pro Shops to Acquire Cabela’s Inc. in a $5.5B Deal

by Nellie Day October 3, 2016

SPRINGFIELD, MO. AND SIDNEY, NEB. — Bass Pro Shops has agreed to acquire Cabela’s Inc. (NYSE: CAB) for $5.5 billion, or $65.50 per share of CAB stock. The merger brings together three of the nation’s top outdoor sporting brands: Cabela’s, which specializes in hunting; Bass Pro Shops, which specializes in fishing; and White River Marine Group, a Bass Pro Shops company that specializes in boating. The combined company will own 184 stores in the U.S. and Canada. Cabela’s Board of Directors unanimously approved the acquisition, which is expected to close in the first half of 2017. It was not immediately clear whether the deal would result in any store closures. Bass Pro Shops will also enter into a multi-year partnership agreement with Capital One, National Association, which will originate and service Cabela’s CLUB, the retailer’s co-branded credit card. The customer rewards systems for both retailers should be unaffected by the acquisition. The transaction will be completed through a cash merger and is subject to approval by Cabela’s shareholders, as well as regulatory approvals and other customary closing conditions. The Merchant Banking Division of Goldman Sachs and Pamplona provided partial acquisition financing for the deal. Goldman Sachs has committed $1.8 billion, …

October 3, 2016

Office Texas Top Stories

Gaedeke Buys 17Seventeen Office Tower in Uptown Dallas

by Jeff Shaw September 30, 2016

DALLAS — Gaedeke Holdings XIV Ltd. has purchased 17Seventeen, a 369,017-square-foot office tower in Dallas’ Uptown/Turtle Creek submarket, for an undisclosed price. The 19-floor building includes a 22-story LED illuminated light panel. The property also features a one-acre amenity deck, 1,096-space attached parking garage and views of Klyde Warren Park and the Arts District. Located at 1717 McKinney Ave., 17Seventeen was developed in 2010 on a 2.1-acre tract. Stephan Pyles’ Stampede 66 is the property’s trademark restaurant. Gaedeke acquired the 98 percent-leased property from a joint venture between Granite Properties Inc. and MetLife. 17Seventeen features 361,524 square feet of Class A office space and 7,493 square feet of retail space. Dan Yates of Gaedeke will oversee the building’s new on-site property management team.

September 30, 2016

Hawaii Loans Top Stories Western

Wells Fargo Provides $238M Refinancing for Howard Hughes Corp.’s Ward Village in Honolulu

by John Nelson September 29, 2016

HONOLULU — An affiliate of Wells Fargo & Co. (NYSE: WFC) has completed the $238 million refinancing of maturing debt for Ward Village, a 60-acre urban master-planned development underway in Honolulu. The Howard Hughes Corp. (NYSE: HHC) is the master developer of Ward Village, which features three condominium towers under construction. Upon completion, Ward Village will comprise 4,000 residences and 1 million square feet of retail and restaurant space. The development is situated between downtown Honolulu and Waikiki in the Kak’ako district. Ward Village is the only project in Hawaii to receive LEED Platinum certification for neighborhood development (LEED-ND) and the largest one in the United States to receive LEED-ND Platinum certification. The financing is secured by the existing Ward Village commercial properties, excluding the condominium towers currently under development. Ward Village’s three condominium towers underway — Waiea, Anaha and Ae ‘o — will open in late 2016, 2017 and 2018, respectively. The three towers will feature ground-floor retail space, including a Nobu restaurant, Merriman’s restaurant and the largest Whole Foods Market in Hawaii. Other mixed-use condo buildings within Ward Village include Gateway Towers and Ke Kilohana, which features a 23,000-square-foot, street-level Longs Drugs store. The financing allows Howard Hughes …

September 29, 2016

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