Top Stories

Blakefield to Develop 2,200-Acre Master-Planned Community Near Austin, Texas

by Nellie Day February 15, 2017

AUSTIN, TEXAS — The Travis County Commissioners Court has approved Blakefield LLC’s plans to develop Thomas Ranch, a 2,200-acre master-planned community off Highway 71 and Paleface Ranch Road in Western Travis County near Austin. The community will be situated around the shoreline along the Pedernales River. Thomas Ranch will include approximately 3,300 single-family homes; apartments; a marketplace of shops, entertainment venues and restaurants; a resort hotel and spa; a town square; and community gardens. The property includes five ecosystems, direct access to Lake Travis, natural creeks and miles of nature trails. An extensive network of walking, jogging and hiking trails will connect the areas. Overall, approximately one third of the development — 700 acres — is reserved for parks and trails. Construction on the community’s infrastructure is scheduled to begin in 2018, with single-family homes following in 2019. Each section will be built in four to five phases over the course of 15 to 20 years, according to the developers. Blakefield is the lead developer of the project and is partnering with Dannenbaum Engneering, Sherwood Engineers, SWCA Environmental Consultants, Kimley Horn, Ten Eyke Landscape Architects and Integra Group. Blakefield LLC is a Wilmette, Ill.-based developer of large-scale mixed-use and master-planned …

February 15, 2017

Multifamily Texas Top Stories

Provident Realty Advisors Completes $95M Multifamily Redevelopment of the Former Texaco Building in Houston

by Katie Sloan February 14, 2017

HOUSTON — Provident Realty Advisors has completed the redevelopment of the former Texaco building in Houston as a luxury multifamily complex. The project costs were estimated at $95 million. The skyscraper, located at 1111 Rusk St., has been a historic landmark in Houston since its completion over 100 years ago. The 410,000-square-foot property was built in 1915, but has been vacant since 1989. The founders of Texaco originally commissioned the building, which the famed New York architectural firm Warren & Wetmore designed, according to the Houston Chronicle. The newly opened space, rebranded as The Star, offers 286 units ranging from 730 to 1,730 square feet with 21,000 square feet of street-front retail. The property features one- and two-bedroom units with bed-to-bath parity. Community amenities include a hotel-style lobby lounge, complimentary coffee and snack bar, 24/7 concierge and free valet services. Beginning this spring, the property will also offer a fitness center with on-demand cardio and spin classes; resort-style courtyard with heated pool, summer kitchen, gas grills and cabanas; climate-controlled storage area; media/theater room; covered dog run and grooming station; and business center. The 16th floor of the building will feature a recreation area including a two-story foyer, club room, commercial demonstration kitchen, …

February 14, 2017

Features Healthcare Top Stories

Looming Repeal of Affordable Care Act Shakes Up Otherwise Healthy Forecast for Healthcare Real Estate

by Katie Sloan February 14, 2017

In 2016, the national vacancy rate for medical office buildings hit an all-time low, net absorption rose to its highest mark since 2008, rents grew and investment activity remained strong. But despite last year’s strong performance, Colliers International’s 2017 Health Care Marketplace Report shows that questions loom for the year ahead in the medical office space. While every administration change causes some degree of uncertainty, this year’s shift is markedly different as healthcare providers and system owners face the possible repeal of the Affordable Care Act and the details of the coverage set to replace it. Healthcare providers are also grappling with the implementation of the final terms for the site-neutral payment rule — which limits the way off-campus facilities are reimbursed by Medicare — and a continued rise in costs, from services provided to construction materials and labor. The report predicts that decision-making in the sector is likely to be delayed for a time, especially if policy changes surrounding the Affordable Care Act evolve over a protracted process. An additional burden to the healthcare industry is the continued aging of a large segment of the U.S. population. Healthcare expenditures per capita surpassed $10,000 in 2016, and are forecast to …

February 14, 2017

California Hospitality Top Stories Western

Sunstone Hotel Investors Sells 444-Room Fairmont Newport Beach For $125M

by Jeff Shaw February 13, 2017

NEWPORT BEACH, CALIF. — Sunstone Hotel Investors Inc. (NYSE: SHO) has sold Fairmont Newport Beach, a 444-room hotel in the Southern California city of Newport Beach, for $125 million. Although the buyer was not disclosed, Marriott has added the hotel to its website as The Duke Hotel Newport Beach. Meanwhile, Visit Newport Beach, a nonprofit organization that promotes the city’s tourism, has also begun referring to the hotel as The Duke. The hotel property features 22,000 square feet of indoor function space, a bamboo garden, 10,000 square feet of outdoor function space, water features and an outdoor fire pit. Sunstone cited low revenue per available room (RevPAR) as the reason for the sale. The hotel earned a RevPAR that was 25 percent below the company’s average, according to Robert Springer, Sunstone’s chief investment officer. Per the company’s third-quarter report, the RevPAR for the hotel was $136.42 compared to a company average of $174.44. The sales price equates to a 5.2 percent capitalization rate and results in $44 million of gains for Sunstone. “The sale, which is consistent with our capital allocation strategy, monetizes an asset at an attractive valuation, increases our portfolio quality, RevPAR and near-term growth prospects, and reduces …

February 13, 2017

Georgia Healthcare Southeast Top Stories

Children’s Healthcare of Atlanta to Build $1B Pediatric Hospital at Campus in Brookhaven, Georgia

by Kristin Harlow February 10, 2017

BROOKHAVEN, GA. — Children’s Healthcare of Atlanta (CHOA) has unveiled plans to build a new pediatric hospital in the Atlanta suburb of Brookhaven. CHOA’s total investment in the new hospital will be between $1 billion and $1.3 billion, according to the company. After construction of the new hospital is complete, CHOA will cease operations at the inpatient facility at Egleston Hospital in Atlanta. Future plans for the use of the Egleston campus have not been determined. The new project will join a medical campus at North Druid Hills Road and I-85 that will also include CHOA’s previously announced Center for Advanced Pediatrics. Construction of that 260,000-square-foot outpatient facility began last month. Based on studies of future demand and facility capacity, CHOA believes that the new, 45-acre campus will be able to meet forecasted patient care and space needs through 2026. Specific transportation, site and building plans for the campus will be developed over the next 18 months. The area is quickly becoming a new medical corridor for suburban Atlanta, as Emory Healthcare and the Atlanta Hawks unveiled plans for a nearby $50 million training and sports medicine center last year. —Kristin Hiller

February 10, 2017

Civic New York Northeast Top Stories

Lendlease-Turner Joint Venture Awarded $1.5B Expansion of Javits Center in Manhattan

by John Nelson February 9, 2017

NEW YORK — Empire State Development Corp. has selected a design-build team led by Lendlease Construction LMB Inc. and Turner Construction to oversee the $1.5 billion expansion of the Jacob K. Javits Convention Center in New York City. The team also includes Atlanta-based architect tvsdesign, which is aiming for the center’s expansion to be certified LEED Silver. Named after a former U.S. Senator from New York, the conference center is located on 11th Avenue in Manhattan’s Westside and bills itself as the busiest convention center in the country. The venue hosted events on 337 days in 2015. The six-block convention center opened in 1986 and spans 2.1 million square feet, of which 840,000 square feet is exhibition space. According to media reports, the Lendlease-Turner team is planning on a 46-month construction schedule for the expansion. The expansion will add 90,000 square feet of permanent space to the center’s current exhibit space, which will create an approximately 500,000-square-foot exhibition hall. Additionally the project will include 45,000 square feet of meeting room space and a 55,000 square-foot ballroom, the largest of its kind in New York City. The expansion will also reroute 20,000 event-related trucks off area streets each year, which is …

February 9, 2017

Features Office Top Stories

U.S. Office Sector’s Fundamentals Stall Despite Growing Economy, Says Ten-X Research

by John Nelson February 9, 2017

IRVINE AND SILICON VALLEY, CALIF. — The U.S. office real estate sector’s fundamentals appear to be stalling after years of slow recovery, as vacancy rates remain stubbornly high despite a healthy labor market and growing national economy, according to Ten-X’s latest U.S. Office Market Outlook. Ten-X cited Reis data that shows the national vacancy rate for office space has held steady at 16 percent for three consecutive quarters. Vacancies are now 40 basis points lower than a year ago and 160 basis points below their cyclical peak, but they remain well above levels seen during the last economic cycle. Only 70 million square feet of new supply has been occupied during each of the last two quarters. Rent growth has hit a similar slump, with effective rents edging up just 0.4 percent in the third quarter of 2016 and 2.8 percent over the past year — the slowest annual growth since mid-2014. The downturn in office fundamentals comes despite a strong labor market that continues to add jobs and a steadily expanding economy. Low unemployment, consistent payroll gains and rising wages should offer a boost to overall demand for office space, though the national economic picture is marked by stark differences among markets …

February 9, 2017

Industrial Midwest Texas Top Stories

DRA Advisors Buys 19.8 MSF National Industrial Portfolio for $1.1B

by Nellie Day February 8, 2017

NEW YORK — DRA Advisors has purchased a 19.8-million-square-foot industrial portfolio that spans 21 U.S. markets for $1.1 billion. The portfolio contains a total of 184 properties that are 94 percent leased to more than 500 tenants. The properties reside in industrial hubs such as Dallas, Houston, Chicago, Atlanta and Columbus, Ohio. The assets range from less than 15,000 square feet to 925,000 square feet, according to CoStar Group. Cabot Properties Fund II sold the portfolio, concluding the fund’s disposition activity. The fund was launched in late 2005. This acquisition will allow New York-based DRA Advisors to expand its industrial footprint to more than 45 million square feet. DRA’s industrial assets are primarily located in Texas, California, Illinois, Indiana and Florida. The private equity real estate firm currently has more than $10 billion of assets under management. This includes more than 70 million square feet of commercial real estate and more than 12,000 residential units. Eastdil Secured and Cushman & Wakefield represented Boston-based Cabot Properties in the transaction. The private equity real estate firm manages and operates about 160 million square feet of industrial properties throughout North America and the United Kingdom that are valued at $57 billion. — Nellie Day

February 8, 2017

Hawaii Hospitality Multifamily Top Stories Western

Salem Partners, Mandarin Oriental to Open 36-Story Luxury Hotel, Multifamily Tower in Honolulu

by Kristin Harlow February 7, 2017

HONOLULU — Salem Partners has partnered with Mandarin Oriental Hotel Group to build Mana’olana Place, a hotel and multifamily property currently under development in Honolulu. The development is slated to open in early 2020. The 36-story, 743,000-square-foot tower will be located in the Ala Moana District at the intersection of Kaipolani Boulevard and Atkinson Drive. Mana`olana Place is the first approved project in the city’s new Ala Moana transit hub. The Mandarin Oriental, Honolulu hotel will consist of 125 guestrooms and suites. The tower’s upper floors will consist of 107 private homes. The property will feature a rooftop restaurant and bar with landscaped outdoor terraces and gardens. The hotel will also feature a spa with eight treatment rooms, a fitness center and an 80-foot outdoor swimming pool. Colorado-based [au]workshop is the design architect on the project, while Architects Hawaii Ltd. will serve as the executive architect. The design team also includes Dianna Wong Architects + Interior Design and Hart Howerton Landscape Architects. Salem Partners is a Los Angeles-based investment bank and wealth management firm. Mandarin Oriental operates 29 hotels and eight residences in 19 countries and territories. —Kristin Hiller

February 7, 2017

Features Top Stories

Property Insurance Forecast for 2017: Reinsurance Industry Keeps Clouds Away

by John Nelson February 7, 2017

As commercial property owners renew their insurance programs in 2017, they’ll be pleasantly surprised to see their property premiums continue to decrease. Those owners can thank favorable meteorological and financial conditions for their good fortune. Florida hasn’t been hit by a major hurricane in more than a decade. Hurricane Matthew skirted much of Florida’s coast, ultimately wreaking damage and disruption in Jacksonville, but overall, had a relatively small impact on the state and the insurance industry as a whole. Insurers have enjoyed the good weather, which has attracted more competitors to the state at the primary and reinsurance levels, while better technology and predictive modeling have driven property catastrophe (CAT) coverage closer to a commodity, making it difficult for existing carriers to firm up rates, let alone drive increases. Weathering the Storm Even if we were to experience major storms in 2017, the effects of any jolt would be contained. As carriers begin the new year with significant surplus in their coffers and the January treaty renewals wrapping up, initial reports point to another year of declining reinsurance costs. For carriers, the cost of capital has declined materially for years and their ability to strike a better deal has cascaded down …

February 7, 2017

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