Top Stories

BIG Shopping Centers, RED Development Acquire 516,268 SF Shopping Center Near Kansas City

by Christina Cannon September 2, 2016

LEE’S SUMMIT, MO. — A joint venture between BIG Shopping Centers USA and RED Development has acquired Summit Fair, a 516,268-square-foot shopping center, for an undisclosed price. Located 25 miles southeast of Kansas City in Lee’s Summit, Summit Fair is anchored by Macy’s and JCPenney. Other tenants in the open-air lifestyle center include Victoria’s Secret, Chico’s, Francesca’s and LOFT. Summit Fair boasts approximately 50 tenants. Along with the news of the acquisition, the joint venture also announced a 50,000-square-foot DICK’S Sporting Goods and a 20,000-square-foot H&M will open at Summit Fair in spring 2017. DICK’S Sporting Goods will relocate to Summit Fair from its existing store currently open at RED’s sister property, SummitWoods Crossing. An additional 5,000 square feet of space is available in the H&M building. “Summit Fair is already a dynamic, high-performing retail property serving a vibrant market, and the addition of DICK’S Sporting Goods, H&M and other top-drawing retail concepts sets the stage for continued success,” says Mike Ebert, managing partner at RED Development. The joint venture, known as BIG RED Portfolio LLC, has a portfolio consisting of 10 retail assets totaling over 3.5 million square feet in four states. Within the joint venture, BIG USA, acts primarily as a co-investment …

September 2, 2016

California Office Top Stories Western

Kilroy Sells Minority Stake in Two Office Towers in San Francisco for $452.9M

by John Nelson September 1, 2016

SAN FRANCISCO — Kilroy Realty LP, the operating arm of Kilroy Realty Corp. (NYSE: KRC), has agreed to sell minority interests in two Class A office towers in San Francisco to Norges Bank Real Estate Management for $452.9 million. Norges Bank is the real estate investment arm of the government pension fund of Norway. Under the terms of the agreement, Norges Bank will invest in a 44 percent common equity interest in two existing companies that own the towers, which are located at 100 First St. and 303 Second St. in San Francisco’s SOMA district. The sales price is based on an appraisal value of $1.16 billion for both assets and includes Norges Bank’s proportionate assumption of the existing mortgage debt, or $55.3 million. Kilroy will remain the majority owner of the two office towers and will continue to provide property management, leasing and construction management services for the properties. The two office towers span approximately 1.2 million square feet combined. The assets were 96.4 percent leased as of July 31. The transaction was structured with a staggered closing, whereby the 100 First St. venture closed on Aug. 30 with a contribution by Norges Bank of $191.4 million. The 303 …

September 1, 2016

Illinois Midwest Mixed-Use Office Top Stories

CIM Group to Buy Tribune Tower in Chicago for $205M

by Haisten Willis August 31, 2016

CHICAGO — Tribune Media Co. (NYSE: TRCO) has agreed to sell the iconic Tribune Tower in downtown Chicago to Los Angeles-based CIM group for $205 million in cash at closing. The buyer could pay up to an additional $35 million based on contingencies and conditions, which could bring the total up to $240 million. The sale is expected to close by the end of September. Built in 1925, the building features 35 stories and nearly 740,000 square feet. The sale also includes a 36,000-square-foot development site located directly to the east of Tribune Tower, fronting Cityfront Plaza. “Tribune Tower has been a unique part of Chicago’s skyline since the 1920s,” says Peter Liguori, Tribune Media’s president and CEO. “It is a gem of architectural and structural accomplishment and a constant reminder of the important role that Tribune has played in the development of the city itself.” Since the beginning of the year, Tribune Media has sold several smaller properties in markets ranging from South Florida to Seattle for gross proceeds of approximately $89 million. Earlier this year, the company agreed to sell the north block of the Los Angeles Times Square property and the nearby Olympic printing plant, both in Los …

August 31, 2016

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

Should Seniors Housing Developers Focus More on Hospitality or Healthcare?

by John Nelson August 31, 2016

ATLANTA — Seniors housing by design has both elements of hospitality and healthcare. But which is more important to developers trying to build the next wave of senior facilities? Each developer has a different opinion, based on a development panel at the third-annual InterFace Seniors Housing Southeast conference, held Aug. 25 at the Westin Buckhead in Atlanta. The all-day event drew approximately 315 industry professionals. Zach Bowyer, managing director of CBRE, moderated the panel entitled “The Outlook for Seniors Housing Development: What’s Being Built, Where, and are Supply and Demand in Balance?” Jeff Arnold, chief operating officer of The United Group of Cos., mostly develops independent living assets in New York, Florida and Georgia. Arnold’s main concern is with the hospitality side of the business, as his projects tend to be lower acuity than some of his counterparts on the stage. “From a design standpoint, we’re trying to drive our age down as much as we can. Right now we trend at about 78 years old. If we could push that under 75, that will give us longevity,” said Arnold. “We try to design more active communities, focusing on things that are more modern.” The independent living sector has legs …

August 31, 2016

Georgia Southeast Top Stories

The Atlanta Falcons Secure $850 Million Financing for New Stadium

by Katie Sloan August 30, 2016

ATLANTA — The Atlanta Falcons organization has received $850 million in permanent financing for the team’s new $1.2 billion Mercedes-Benz Stadium, scheduled to open next year. Bank of America, SunTrust Banks and 18 institutional investors provided the financing, which will convert the stadium’s construction loans to long-term financing, according to reports by The Atlanta Journal Constitution. The Falcons will repay the institutional investors — which provided roughly two-thirds of the financing — over 26 years, with the banks receiving payment over a shorter term. The 2 million-square-foot development — designed through a collaboration between HOK, tvsdesign, Goode Van Slyke Architecture and Stanley Beaman & Sears — will have the capacity to seat up to 71,000 for NFL games. The stadium will also be home to the city’s new MLS soccer team, Atlanta United. The Mercedes-Benz Stadium will feature a retractable roof designed in the shape of a Falcon’s wing; a 360-degree, HD halo video board built into the stadium’s roof; a technology lounge; a 100-yard bar; an exterior fan plaza; and a floor-to-ceiling window offering views of downtown Atlanta. Developers are seeking LEED Platinum certification for the project. — Katie Sloan

August 30, 2016

Features Multifamily Student Housing Top Stories

Student Housing Sees Robust Deals, Investment Sales, Development Numbers

by Christina Cannon August 30, 2016

As we pass the mid-year point of 2016, the student housing industry is again poised to have a strong year. Favorable market conditions, chief among them low interest rates, have pressed development and acquisitions forward during 2016. Pre-leasing for fall 2016 was strong through the summer, though slightly down from fall 2015 for many owners, while a number of owners reported rent growth for the upcoming year. The industry has seen a lot of activity in buying and selling during the first half of the year. In addition to smaller portfolios and one-off transactions, the sector saw two of its largest M&A transactions to date close during the first half of this year. Harrison Street Real Estate Capital closed on the $1.9 billion acquisition of Campus Crest Communities, adding more than 30,000 beds to its portfolio. In June, The Scion Group, GIC and CPPIB closed on their $1.4 billion acquisition of the assets of University House Communities from InvenTrust Properties, adding more than 10,000 beds to Scion’s portfolio. In addition, movers and shakers like The Preiss Company, Vesper Holdings and Pierce Education Properties have been acquiring a number of properties in 2016. Many properties came to market in January and …

August 30, 2016

Indiana Midwest Office Top Stories

Hertz Investment Group Buys Midwest Office Portfolio for $416.9M

by Nellie Day August 29, 2016

CHICAGO — Hertz Investment Group has purchased four office buildings in the Midwest for $416.9 million. Equity Commonwealth sold the 3.1 million-square-foot portfolio. The transaction includes 111 Monument Circle and 101-115 West Washington Street in Indianapolis, North Point Office Complex in Cleveland, and 100 East Wisconsin in Milwaukee. The portfolio was 86.5 percent leased at closing. Formerly known as Chase Tower, 111 Monument Circle is now referred to as Salesforce Tower in honor of its newest tenant. At 48 stories high, it is the tallest building in Indianapolis. The PNC Center sits at 101-115 W. Washington St. It features a 16-story atrium. The center houses the Hyatt Regency Indianapolis hotel, along with PNC Bank. North Point Office Complex includes a five-story and a 19-story office building connected through a nine-story atrium. It is home to Jones Day law firm, among other tenants. The Faison Building sits at 100 East Wisconsin Ave. The 37-story tower is the second highest building in Wisconsin, behind the U.S. Bank Center. It’s home to Wells Fargo Bank, Michael Best & Friedrich, Marcus Corp. and PricewaterhouseCoopers. Equity Commonwealth, a Chicago-based REIT, also sold a 121,901-square-foot office property at 8701 North Mopac in Austin, Texas, earlier this …

August 29, 2016

Midwest Missouri Mixed-Use Top Stories

Lawrence Group Breaks Ground on $340M City Foundry Saint Louis Development

by Christina Cannon August 26, 2016

ST. LOUIS — Lawrence Group has started construction of City Foundry Saint Louis at Cortex, a $340 million mixed-use redevelopment. The building was the former site of the Federal Mogul Foundry in St. Louis, and environmental remediation work on the property is underway. The first phase of the project will include 48,000 square feet of restaurant and food hall space with approximately 20 food stalls and up to four full-service restaurants; 124,000 square feet of creative office space; 133,000 square feet of retail space accommodating up to 45 retailers; a 511-car parking garage in addition to surface spaces; a connector trail to the Great Rivers Greenway Trail System; and amenities such as public plaza spaces, bike sharing, electric recharging stations and a dedicated ride sharing drop-off. The Cortex District is a 200-acre section of Midtown St. Louis centered around several research and technology buildings. A nonprofit joint venture between Washington University in St. Louis, BJC Healthcare, University of Missouri – St. Louis, St. Louis University, and the Missouri Botanical Garden operates the district. “The City Foundry Saint Louis redevelopment represents another example of the continued investment and expansion of the Cortex brand. This will be a tremendous amenity to the …

August 26, 2016

Features Top Stories

How To Ensure Brick and Mortar Stores Stay Relevant

by Katie Sloan August 26, 2016

With increasing pressure from online retailing, traditional retail environments must strive to remain at the forefront of innovation and reinvention. While some may feel brick and mortar retailing is facing extinction, the data say otherwise. Petrie Richardson Ventures (PRV), founded in 2000 by Chairman Walt Petrie, recently commissioned a large-scale survey that examined the influence of evolving social, lifestyle, entertainment and technology developments on shopping habits across the US. The more than 75 question online survey of a demographic representative of 1,018 shoppers 18 years of age and older was conducted by ORC International, one of the American Marketing Association’s Top 50 Research Firms. It’s all about the experience The critical takeaway from our results is that Americans — especially millennials — place a high value on the total shopping experience. Specifically, the survey showed that what shoppers value most about retail experiences at malls and shopping centers versus online shopping is the physical experience of the actual brick and mortar retail environment — with 85 percent of respondents reporting that holding products or trying on clothing is key to their shopping experience. It’s simple: experiential retail environments are what online retailers simply cannot offer. Online retailing may seem to be …

August 26, 2016

District of Columbia Mixed-Use Southeast Top Stories

Balfour Beatty to Build $196M North Block Phase of D.C.’s Capitol Crossing Development

by Christina Cannon August 25, 2016

WASHINGTON, D.C. — Balfour Beatty has been awarded a $196 million contract to build the North Block phase of Property Group Partners’ Capitol Crossing development in Washington, D.C. The North Block phase will include the construction of two 12-story, mixed-use office buildings totaling 960,000 square feet that will be connected by a glass connector bridge. Capitol Crossing is a 2.2 million-square-foot project that will span three blocks and seven acres once complete. The project will include 70,000 square feet of retail space, garden promenades, 1,100 parking spaces, a fitness center and 440 bicycle spaces. The average floor plate at Capitol Crossing will be 30,000 square feet. “Property Group Partners has a strong belief in reimagining cityscapes and revitalizing neighborhoods through sustainable building and innovative engineering,” says Leon Blondin, president of Balfour Beatty’s Mid-Atlantic division. “We’re honored to be their construction partner in building this truly historic development in the downtown core that will reconnect long-divided Capitol Hill to the East End. Having already managed the preconstruction, utility relocation and platform construction phases, it’s very gratifying to continue our work to take this project vertical and deliver its first two mixed-use buildings.” Work is scheduled to first begin on the building …

August 25, 2016

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