Top Stories

Declining U.S. Industrial Vacancy Rates Tied to E-commerce Growth

by Haisten Willis August 4, 2016

The U.S. industrial vacancy rate dropped 20 basis points (bps) to 8.8 percent during the second quarter of 2016, largely driven by companies building or leasing warehouse space to meet continued demand for e-commerce shopping, according to CBRE. The decline marked the 25th consecutive quarterly drop in available U.S. industrial space. “Plummeting U.S. industrial vacancy rates signify that this sector of the commercial real-estate market is benefitting from increasing acceptance of the e-commerce model,” says Chris Roach, president of BBG Valuation, an independent national commercial real estate valuation and assessment firm headquartered in Dallas. “We anticipate this downward trend in vacancy rates will continue for at least the remainder of this year.” According to CBRE’s second-quarter U.S. industrial and logistics report, the national industrial market expanded for a 25th consecutive quarter, logging 66.2 million square feet of positive net absorption. This was up 8 percent over the previous quarter. At the same time, a total of 41.6 million square feet of new supply was added nationally, which failed to keep up with demand. The growing trend in e-commerce shopping is expected to continue to fuel demand for warehouse space, which is needed to store inventory for shipping directly to consumers …

August 4, 2016

Office Texas Top Stories

Fortis Property Group Acquires Chase Tower in Downtown Dallas for Reported $300M

by Haisten Willis August 3, 2016

DALLAS — New York-based Fortis Property Group has purchased Chase Tower in downtown Dallas from Hines, a privately owned real estate investment firm based in Houston. The 55-story, 1.3 million-square-foot tower is located on a 1.5-acre site at 2200 Ross Ave. in the city’s central business district. According to the Dallas Business Journal, the tower sold for “upwards of $300 million.” The skyscraper was built in 1987. Architect Richard Keating designed the building. Though it was recently renovated, Fortis plans additional upgrades. “It is always exciting to acquire a premier and iconic skyline office tower,” says Jonathan Laudau, CEO of Fortis. “In line with our strategy to purchase best-in-class properties, Chase Tower represents the best of downtown Dallas and the Arts District. We anticipate upgrading the Ross Avenue curb appeal and building accessibility as well as the foodservice amenities at the property.” J.J. Leonard and Matthew Wieser of Stream Realty Partners’ office division in Dallas will lead leasing efforts for the property. Amenities at the Class A property include the Dallas Petroleum Club, conferencing/lounge facilities, a fitness center, concierge in the main lobby, Chase Bank retail banking facility, Starbucks, free Wi-Fi in the mezzanine, 24-hour security and a full-service car wash. …

August 3, 2016

California Seniors Housing Top Stories Washington Western

Welltower Agrees to Acquire West Coast Seniors Housing Portfolio for $1.15B

by John Nelson August 2, 2016

TOLEDO, OHIO — Welltower Inc. (NYSE: HCN), a seniors housing and healthcare facility REIT, has entered into a definitive agreement to acquire a portfolio of properties on the West Coast operated by Vintage Senior Living for $1.15 billion. The transaction spans 2,590 units in 19 independent living, assisted living and memory care communities concentrated in Southern and Northern California and in the state of Washington. Welltower will transition management of these communities to Senior Resource Group (11 properties), Sunrise Senior Living (seven properties) and Silverado (one property), once the acquisition has been completed. “This acquisition reinforces our high-quality healthcare real estate portfolio and leading presence in two of the top U.S. metro markets,” says Tom DeRosa, CEO of Welltower. “Together with our operating partners, we are excited about the opportunities to provide the best senior care with a focus on wellness and innovation.” Vintage Senior Living will continue to operate its communities until the purchase has been completed. The transaction is expected to close in tranches beginning in September and will be subject to lenders’ approvals and customary regulatory approvals. “These properties are in attractive markets, including irreplaceable locations near San Francisco’s Golden Gate Park and Nob Hill, with a …

August 2, 2016

Features Industrial Multifamily Office Retail Top Stories

Ten-X: Office, Apartment, Retail Sectors Drive Acquisition Prices Higher in July

by Haisten Willis August 2, 2016

IRVINE and SILICON VALLEY, CALIF. — Commercial real estate valuations increased by 1.1 percent in July, marking the strongest monthly increase this year and a 5.2 gain over last year, according to the latest Ten-X Nowcast. Ten-X, an online real estate transaction marketplace, uses Google Trends data, its own proprietary transaction data and investor surveys to forecast commercial real estate pricing trends. “The recent string of monthly increases confirms that overall pricing of commercial real estate remains on the upswing following the weakness seen earlier this year,” says Ten-X chief economist Peter Muoio. “That said, we are noticing distinct differences across the five major property sectors, with each telling its own story.” The office, apartment and retail sectors all saw monthly increases in July. The office sector posted the strongest gain for the second consecutive month, rising 4.8 percent from June and 7.6 percent above its level from one year ago. This was the best year-over-year gain for any of the commercial sectors since January. The multifamily sector, which has posted steady gains this year, increased 1.1 percent in July from the previous month and is 6.8 percent above last year’s level. “The apartment sector is unencumbered by technology-driven shifts …

August 2, 2016

California Healthcare Office Top Stories Western

Marin County Breaks Ground on $535M Marin General Hospital Replacement Near San Francisco

by Nellie Day August 1, 2016

SAN RAFAEL, CALIF. — Marin County officials have broken ground on MGH 2.0, the $535 million replacement for Marin General Hospital in the Greenbrae submarket of San Rafael, just across the Golden Gate Bridge from San Francisco. The original hospital opened in 1952. It will continue to operate throughout the construction process. Phase I of MGH 2.0 will include two new towers that house 114 private rooms, an expanded emergency department and six new operating/procedural suites. The buildings will feature rooftop gardens, balconies and natural light in every patient room to support a healing environment for patients and families. The new facilities are scheduled to open to patients in mid-2020. Once Phase I is complete, work will commence on a five-story, 100,000-square-foot ambulatory services building and a second parking structure. The project team has already completed MGH 2.0’s first parking facility, a five-level structure with rooftop solar panels that will be functional for both the current and future hospitals. McCarthy Building Cos. is building the hospital, which Perkins Eastman designed. The hospital is represented by Vertran Associates, which specializes in healthcare capital projects and provides project management. — Nellie Day

August 1, 2016

Florida Retail Southeast Top Stories

Weingarten Realty Acquires 664,000 SF Shopping Center in Miami for $285M

by Christina Cannon July 29, 2016

MIAMI — Weingarten Realty (NYSE: WRI) has acquired The Palms at Town & Country, a 664,000-square-foot, open-air shopping center in Miami, for $285 million. WRC Properties, an affiliate of TIAA-CREF, is the seller, according to the Miami Herald. The property features 71 retailers including Publix, Kohl’s, Nordstrom Rack, Dick’s Sporting Goods and Marshalls. National retailers comprise 87 percent of the revenue for the property. The Palms at Town & Country is located on 70 acres at 8505 Mills Drive, and was renovated in 2010. JLL is the exclusive leasing agent for the property, and has created events such as the Festival De Primavera Fashion Show, the Palms Restaurant Crawl and the All-American 4th of July Celebration that attracts thousands. Weingarten Realty’s stock price closed Thursday, July 28 at $42.67 per share, up from $34.62 per share a year ago, a nearly 19 percent increase. Weingarten Realty, a Houston-based REIT, is an owner, manager and developer of shopping centers throughout the United States.

July 29, 2016

Midwest Minnesota Mixed-Use Top Stories

Minnesota Vikings Select Architect, General Contractor for $500M Practice Facility, Headquarters

by John Nelson July 28, 2016

EAGAN, MINN. — The Minnesota Vikings have selected Crawford Architects and Kraus-Anderson Construction Co. as the architect and construction manager for the football team’s new practice facility and headquarters. Located on the former Northwest Airlines campus in Eagan, the development will cost roughly $500 million to complete, according to the Minneapolis/St. Paul Business Journal. The Vikings plan to debut their new campus in March 2018. “Establishing this leadership team is a major step forward on our new Eagan home,” says Steve Poppen, executive vice president and chief financial officer of the Vikings. “We are thrilled to once again engage in a large project with a Minnesota-based construction company such as Kraus-Anderson, as they have a tremendous body of work and strong reputation within the community.” The announcement of Crawford and Kraus-Anderson joining the project team comes on the heels of the opening of U.S. Bank Stadium, the Vikings’ $1.1 billion home arena in Minneapolis. Located at 401 Chicago Ave., the stadium opened on Friday, July 22. In late June, the Eagan City Council unanimously approved the development of the new practice facility and team headquarters on the site, which is located off I-494 at the intersection of Dodd Road and …

July 28, 2016

Features Retail Top Stories

Four Tips for Ensuring Your Retail Center Remains Relevant

by Christina Cannon July 28, 2016

Several years after a punishing recessionary cycle, Michigan’s retail marketplace finds itself at somewhat of a crossroads. Steady and sustained economic growth and a robust retail recovery have things moving in the right direction. With few new large shopping centers opening in the last five to six years, these positive trends have led to the absorption of a great deal of available space. Consequently, demand for quality space has been picking up and retail rents have recently begun rising quite rapidly. At the same time, the relative lack of new construction presents its own challenges. It has prompted more tenants to commit to long-term renewals. In addition, with quality space in prime locations at a premium, more developers and retailers are electing to enhance or expand their existing stores. Fundamentally, the state’s evolving retail marketplace looks quite different than it did in the mid to late 2000s. The 2009 economic crash delivered a real blow to the lifestyle centers that were a big part of the pre-recession expansion, and those developments have had to scramble to adapt. Many have had to convert from a traditional lifestyle center model to more of a hybrid concept, integrating more middle-market and service-oriented tenants. …

July 28, 2016

District of Columbia Mixed-Use Multifamily Office Retail Southeast Top Stories

First Potomac Realty Trust Sells Storey Park in Washington D.C. for $54.5M

by Haisten Willis July 27, 2016

WASHINGTON, D.C. — First Potomac Realty Trust (NYSE: FPO) has sold Storey Park, a mixed-use project currently under development in the NoMa submarket of Washington, to 1005 LLC for $54.5 million. When completed, Storey Park will include 350,000 square feet of office space, 65,000 square feet of retail and 300 loft apartments. An estimated completion date was not disclosed. The buyer is a partnership between Perseus Realty LLC and W-G Capital LLC, an affiliate of Four Points LLC and Greencourt Capital. First Potomac and Perseus Realty jointly acquired the site in August 2011, with First Potomac owning a 97 percent interest. The proceeds from the sale were used to repay a $22 million land loan at the property, and First Potomac used its portion of the remaining proceeds to repay outstanding borrowings on its unsecured revolving credit facility. Perseus Realty began as a Washington, D.C.-focused investment firm in 2004 and has created a development portfolio within the metropolitan area. W-G Capital is a Washington, D.C.-based private equity firm focused on real estate investments in the United States with a particular focus on the northeast corridor and the nation’s capital. FPO is a real estate investment trust that owns, operates, develops and …

July 27, 2016

Office Top Stories

Workspace Property Trust to Acquire 108 Office and Flex Properties from Liberty Property Trust for Nearly $1B

by Katie Sloan July 26, 2016

HORSHAM, PA. — Horsham-based Workspace Property Trust (WPT), in partnership with global investment firm Safanad, has agreed to buy 108 office and flex buildings from Liberty Property Trust (NYSE: LPT) for approximately $969 million. The acquired properties — located in Arizona, Florida, Minnesota and Pennsylvania — total roughly 7.6 million square feet. The sale is expected to close before the fourth quarter of this year. Of the 30 properties to be acquired in Pennsylvania, two dozen are located within the Great Valley Corporate Center in Malvern, according to reports by The Philadelphia Business Journal. The balance of the portfolio is largely located in Florida, with 34 buildings to be acquired in the Tampa market and 11 properties to be acquired in Southern Florida. At the closing of the transaction, WPT’s total portfolio will be composed of approximately 9.9 million square feet of leasable space across 149 properties in five markets. Workspace Property Trust specializes in the development, management and operation of office and flex space. The company is a partnership between Rizk Ventures, Forum Partners, JMP Group, EverWatch Capital and, with the closing of this transaction, Safanad. Liberty Property Trust is an $8.2 billion real estate investment trust, which owns …

July 26, 2016

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