Top Stories

BRP, CNY Group Break Ground on $407M Transit-Oriented Development in Queens

by John Nelson April 27, 2017

NEW YORK CITY — Developer BRP Cos. and general contractor CNY Group have broken ground on The Crossing at Jamaica Station, a $407 million, two-building development in downtown Jamaica in the Queens borough of New York City. The 669-unit affordable housing development will be situated at the Metropolitan Transit Authority’s (MTA) Jamaica Station, which features a link to AirTrain JFK, John F. Kennedy’s International Airport’s mass transit line. The Crossing will feature a 30-story high-rise located at Archer Avenue and Sutphin Boulevard between the Long Island Rail Road and three MTA subway lines. The other building will span 15 stories. FXFOWLE Architects designed both buildings to achieve LEED Silver certification. In addition to housing, the property will feature 45,000 square feet of retail and community space and 187 above-grade parking spaces. The development is part of Greater Jamaica’s revival and represents the largest private investment in downtown Jamaica in decades, according to CNY Group. Goldman Sachs provided $300 million in construction financing on behalf of BRP. The developer will also use $41.6 million in Low Income Housing Tax Credit equity and $65.2 million in tax-exempt bonds issued by the New York City Housing Development Corp. The New York City Department …

April 27, 2017

Conference Coverage Features Top Stories

Food, Fitness, Entertainment Firms Will Save Houston Shopping Centers, Says InterFace Panel

by Katie Sloan April 27, 2017

HOUSTON — As brick-and-mortar retailers such as Sears, Macy’s and hhgregg continue to shutter stores throughout the country at a furious pace, Houston developers are rapidly warming to the idea of anchoring their shopping centers with restaurants, fitness centers and entertainment-based businesses. Retail executives throughout the Houston area convened at the InterFace Houston Retail conference on April 18 to discuss the impact of this trend and others on the metro’s retail real estate market. David Luther, first vice president and district manager at Marcus & Millichap moderated a panel of five industry experts who addressed everything from the threat of e-commerce to parking wars between tenants. In Houston, the rampant growth of e-commerce contributed to 1.3 million square feet of big-box space being returned to the market in 2016, according to CBRE. In addition, the first quarter of 2017 saw net absorption of only 182,000 square feet. The end result is that developers are being forced to repurpose shopping centers anchored by traditional big-box retailers. As such, they are increasingly turning to businesses that offer a lifestyle product or service to fill the void. Larry Levine, president of Houston-based development firm Levcor Inc. and a conference panelist, noted that big-box …

April 27, 2017

Florida Multifamily Southeast Top Stories

Harbor Group International Buys 700-Unit Apartment Property Near Miami for $158.5M

by Nellie Day April 26, 2017

PEMBROKE PINES. FLA. — An affiliate of Harbor Group International LLC has acquired the 700-unit Montage at City Center in Pembroke Pines, a suburb of Miami, for $158.5 million. Montage at City Center contains 12 mid-rise buildings and 28 townhome buildings. The community offers a mix of one-, two- and three-bedroom units. The property is currently 95 percent leased with an average market rent of $1.55 per square foot. Montage at City Center was built in two phases between 2014 and 2015. Unit interiors feature formica countertops, espresso cabinetry, stainless steel appliances and hard-surface flooring. Property amenities include a LEED Gold-certified clubhouse, two resort-style pools, a fitness center, business center, game room and demonstration kitchen. Private garages and storage units are also available for rent. The multifamily complex is located adjacent to Pembroke Pines City Center, a 47-acre mixed-use project that will feature retail, office and residential components. Terra Group is developing the project. Phase I will deliver 200,000 square feet of retail anchored by a 45,600-square-foot Publix. Phase II will add 450 apartments and 100,000 square feet of office. The City of Pembroke Pines is also building a $60 million civic and cultural center, which includes a new city …

April 26, 2017

Hospitality Texas Top Stories

Joint Venture Breaks Ground on $79M Marriott Hotel and Conference Center in Odessa, Texas

by Katie Sloan April 25, 2017

ODESSA, TEXAS — A joint venture between the City of Odessa, Eofficial Enterprises and Gatehouse Capital has broken ground on a Marriott Hotel and conference center in Odessa. The development will include a seven-story, 218-room hotel, 67,500-square-foot conference center, 365-stall parking garage and full-service Starbucks Coffee. Plans also include the refurbishment of Ector Theater, a historic performance and event venue originally built in 1951. The theater is located next to the new development. Construction is expected to take approximately 18 months, and will cost $79 million. Funding for the project will include $48 million from Sondra and Toby Eoff with Eofficial Enterprises, and $31.6 million from city officials. The development team includes general contractor UEB Builders; architect RTKL; hotel operator Aimbridge Hospitality; hotel brand Marriott Hotels and Resorts; structural engineer DCI; and interior designer Duncan Miller Ullman. Founded in 1997, Gatehouse Capital is a national real estate investment and development firm that has launched major mixed-use lifestyle developments, including hotels in the Hilton, Marriott and other brand families totaling more than $1 billion in completed development. — Katie Sloan

April 25, 2017

Features Top Stories

The Current and Future State of Class B Regional Malls

by Katie Sloan April 25, 2017

There’s no question that regional malls, especially those outside major metropolitan areas, are feeling the brunt of market disruption. The brick-and-mortar retail environment has long been fighting the battle against e-commerce encroachment, shifting consumer habits and changing demographics. In the last five years, based on CoStar data: Retail rents in general have grown only 1 percent on average annually since 2011 while multifamily and office rents have seen 5 percent increases during that same time period. Class B and C regional malls have experienced a negative annual average growth of -3 percent; rents are down by approximately 19 percent. Also decreasing is the square footage being leased, from approximately 17,000 square feet on average to 11,000 square feet between 2010 and 2015. Currently, one-fifth of all U.S. malls have vacancy rates above 10 percent as department stores retrench. On the flip side, CoStar reports regional mall asset sales volume has risen significantly over the past three years, demonstrating that these properties can still-be attractive investments, particularly among private equity investors and REITs. They are buying Class B malls at relatively high capitalization rates at times approaching 8 percent or 9 percent (compared to a sub-6 percent cap for Class A …

April 25, 2017

Hospitality Top Stories

RLJ Lodging, FelCor Merge to Create $7B REIT

by Taylor Williams April 24, 2017

BETHESDA, MD. — RLJ Lodging Trust (NYSE: RLJ) has entered into an agreement to acquire Texas-based FelCor Lodging Trust Inc. (NYSE: FCH), creating a REIT with a pro forma equity market capitalization of $4.2 billion and an enterprise value of about $7 billion. The all-stock transaction, which will make RLJ the third largest pure-play lodging REIT, is expected to close by the end of 2017. The newly combined entity will own 160 Marriott, Hilton, Hyatt and Wyndham hotels totaling 31,467 rooms across 26 states and Washington, D.C. At 41 percent and 36 percent, respectively, Marriott- and Hilton-branded hotels comprise the majority of the rooms in the portfolio. Under the terms of the transaction, the newly formed entity will continue to trade under the “RLJ” stock symbol. The Bethesda-based firm will also assume FelCor’s debt and preferred stock upon closing, with its shareholders expected to own approximately 71 percent of the FelCor’s diluted equity. Felcor’s current shareholders are expected to retain ownership of the remaining 29 percent. In addition, each share of FelCor common stock will be converted into 0.36 shares of RLJ common stock. The acquired company’s operating units will be exchanged for limited partnership units in RLJ’s operating partnership …

April 24, 2017

Florida Loans Multifamily Southeast Top Stories

CMC Group Receives $236M Financing to Develop Luxury Condominium Tower in Miami

by Kristin Harlow April 21, 2017

MIAMI — CMC Group has received $236 million in financing for the development of Brickell Flatiron, a 549-unit luxury condominium tower in Miami’s Brickell financial district. The 64-story building will be located at 1001 S. Miami Ave., across from The Shops at Mary Brickell Village and near the Brickell City Centre mixed-use development. Upon completion in mid-2019, the project will be the tallest residential tower south of New York City, according to CMC. Amenities will include a rooftop deck with spa, fitness center and pool, private movie theater, meeting rooms, wine cellar and concierge service. Revuelta Architecture designed the property. Jim Dockerty of HFF arranged the loan on behalf of CMC Group. HFF secured a $138.3 million senior loan and a $98 million mezzanine loan, which will be used to complete the project and market the remaining units. Bank of the Ozarks provided the senior loan, while RFR provided the mezzanine loan. Sales to date at Brickell Flatiron are in excess of $300 million. Miami-based CMC Group is a real estate development company focused on luxury residential, commercial and retail properties. — Kristin Hiller

April 21, 2017

Retail Texas Top Stories

Whitestone REIT to Purchase Two Retail Assets in Houston, Dallas for $204.6M

by John Nelson April 20, 2017

HOUSTON AND DALLAS — Whitestone REIT (NYSE: WSR) has entered into separate purchase agreements to acquire BLVD Place in Houston and Eldorado Plaza in Dallas for a combined $204.6 million. The sellers were undisclosed. The Houston-based REIT expects to close the acquisitions in May, subject to customary closing conditions. Upon closing, BLVD Place will be Whitestone’s 28th property in the Houston region and Eldorado Plaza will be the company’s seventh property in the Dallas area. Situated at 1800 Post Oak Blvd. in Uptown Houston, the 216,944-square-foot BLVD Place was 99 percent leased at the time of sale to tenants such as Whole Foods Market, Elaine Turner, North, Peska, Pinkberry, True Food Kitchen, New Balance and Verizon Wireless. The brewpub within Whole Foods was the first brewery located inside a grocery store in the United States. BLVD Place also features office space, including the regional headquarters for Frost Bank. Houston-based Wulfe & Co. developed the first two phases of BLVD Place. The acquisition of BLVD Place includes 1.4 acres of land that Whitestone REIT will use to develop a $45 million, six-story mixed-use building. The future project will feature 46,000 square feet of retail space on the first two floors and …

April 20, 2017

Features Hospitality Top Stories

M&M: Job Growth Fuels Bright Outlook for Hotels in 2017

by Taylor Williams April 20, 2017

Hoteliers are poised to see higher revenues in 2017, thanks in large part to the shrinking national unemployment rate, according to a new report from Marcus & Millichap titled “U.S. Hospitality Investment Forecast.” The unemployment rate, which the Bureau of Labor Statistics (BLS) reports fell 20 basis points to 4.5 percent in March, is powering hospitality forecasts in several ways. Most fundamentally, as the economy expands and more jobs are created, wages begin to increase, leaving consumers with more disposable income for leisure and travel. Economic expansion also breeds more interstate commerce between businesses, driving up levels of work-related travel. In March 2017, the country added 56,000 jobs in the professional and business services sector, according to the BLS. Furthermore, since 2011, the U.S. has added between two and three million jobs per year. This growth has enabled workers to hold jobs for longer periods of time, giving them more accrued vacation days. Finally, as the workforce grows, younger employees gradually phase out older ones, leading to a growing segment of retirement-age consumers. These job-growth trends all point to increased consumer traveling and spending in 2017. As such, the hospitality sector is projecting a 1.4 percent growth in room demand …

April 20, 2017

Multifamily Top Stories

Blackstone Buys Six-Property TA Realty Multifamily Portfolio for $430M

by Nellie Day April 19, 2017

BOSTON — Blackstone Real Estate Income Trust has purchased a six-property multifamily portfolio that spans four states for $430 million. The assets contain a total of 2,514 units. TA Realty LLC sold the portfolio on behalf of its Realty Associates Fund IX. The assets are situated in high-barrier-to-entry markets such as Dallas, Chicago and Orlando, supported by favorable demographic trends and positive economic indicators, according to TA Realty. Although the specific properties were not disclosed, CoStar notes that TA recently sold a 461-unit complex in Orlando for $105 million. Other properties CoStar believes to be included in the acquisition are the 483-unit Preserve at Osprey in Gurnee, Ill.; the 479-unit San Merano at Mirasol in Palm Beach Gardens, Fla.; the 312-unit Mason Park in Katy, Texas; and the 309-unit West End at City Center in Lenexa, Kan. “We believe the outcome of this transaction represents compelling value for Fund IX investors,” says Tom Landry, managing partner at TA Realty. “The price we were able to command for this well-located portfolio of apartment communities reflects the significant value created through strategic operational and capital improvements over the ownership period.” This is TA Realty’s second major disposition this month. On April 4, …

April 19, 2017

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