Top Stories

DiamondRock Acquires L’Auberge, Orchards Inn Resorts in Arizona for $97M

by Nellie Day March 1, 2017

SEDONA, ARIZ. — DiamondRock Hospitality Co. (NYSE: DRH) has purchased the 88-room L’Auberge de Sedona and the adjacent 70-room Orchards Inn Sedona for a total of $97 million. The resorts are situated in the Red Rock region of Sedona on the banks of Oak Creek, just south of Flagstaff. DiamondRock plans to reposition the resorts through a $5 million capital investment plan, which will enhance the luxury cottages at L’Auberge, among other improvements. The renovations will be completed during the off seasons over the next two years for minimal disruptions. “This acquisition represents a rare opportunity to own two high-quality resort properties in a coveted, high-barrier-to-entry resort market,” says Mark Brugger, DiamondRock’s president and CEO. “While we believe the initial pricing of the deal is attractive, we have identified significant opportunities to increase profitability.” About $14 million has been invested in the resorts, its guest rooms and restaurants since 2015. Sedona is one of the highest growth markets in the U.S. hospitality industry, DiamondRock notes, with RevPAR (revenue per available room) increasing 11.3 percent in 2016. L’Auberge includes dining options Cress on Oak Creek and Etch Kitchen & Bar, while Orchards Inn features 89Agave Mexican restaurant, among other casual dining …

March 1, 2017

California Colorado Multifamily Top Stories Western

Lyon Living Receives $388.4M in Freddie Mac Loans to Refinance Multifamily Portfolio in California, Colorado

by Katie Sloan February 28, 2017

NEWPORT BEACH, CALIF. — Lyon Living has received $388.4 million in loans to refinance a seven-property multifamily portfolio located in California and Colorado. The 2,152-unit portfolio consists of Trabuco Highlands in Trabuco Canyon, Calif.; The Vineyards in Anaheim, Calif.; The Arbors in Lake Forest, Calif.; Sedona in Placentia, Calif.; Monarch Coast in Dana Point, Calif.; Capistrano Pointe in San Juan Capistrano, Calif.; and Autumn Chase in Highlands Ranch, Colo. The portfolio was 94 percent leased at the time of financing. Charles Halladay, Sebastian Trujillo and Lauren LaFever of HFF worked on behalf of Lyon Living to secure the financing in seven separate loans placed with Freddie Mac’s CME Program. HFF will service the securitized loans, each of which has a fixed-rate term of 10 years with a minimum five years of interest-only payments. Loan proceeds were used to refinance expiring debt on the properties. Newport Beach-based Lyon Living develops, owns and operates a portfolio of multifamily communities in California, Colorado, Georgia and Florida. — Katie Sloan

February 28, 2017

Features Mixed-Use Top Stories

AIA’s First Architecture Billings Index for 2017 Slips into Negative Territory

by John Nelson February 28, 2017

WASHINGTON, D.C. — The first Architecture Billings Index (ABI) of the year slipped below the positive mark, reflecting a decline in demand for design activity at architecture firms. The American Institute of Architects (AIA) reported the January ABI score was 49.5, down from a very strong 55.6 in December 2016. The score reflects a decrease in design activity, with any score above 50 indicating an increase in billings. The new projects inquiry index was 60.0, up from a reading of 57.6 the previous month, and the design contracts index, which is an early indicator of construction contract awards, was also positive with a mark of 52.1. Given the positive showing for the new projects inquiry and design contracts indices, Kermit Baker, AIA’s chief economist, isn’t too concerned about the ABI starting 2017 in the negative territory. “This small decrease in activity, taking into consideration strong readings in project inquiries and new design contracts, isn’t exactly a cause for concern,” says Baker. “The fundamentals of a sound nonresidential design and construction market persist.” Regionally, the West was the only geographic region with a negative showing (48.8). The South led the way with a 54.2 mark, followed by the Northeast (53.0) and …

February 28, 2017

Office Southeast Top Stories Virginia

Meridian Group Purchases 763,965 SF Office Portfolio in Metro D.C. for $227M

by Taylor Williams February 27, 2017

MCLEAN, VA. — The Meridian Group has purchased Tysons Metro Center, a 763,965-square-foot development of Class A office space in McLean’s Tysons district, roughly 17 miles west of Washington, D.C., from an affiliate of Beacon Capital Partners for $227 million. The portfolio consists of four buildings: Tysons Metro Center I, a 168,006-sqaure-foot, 12-story building constructed in 1984 and renovated in 2012, features a rooftop terrace with outdoor seating, a fitness center and an on-site deli; Tysons Metro Center II, A 129,926-square-foot, six-story property built in 2002 and revamped in 2015, offers an exterior patio and a lounge and gaming center for workplace collaboration; Tysons Metro Center III, a 257,824-square-foot, 12-story site that was erected in 1980 and underwent $18.1 million in improvements in 2014, boasts a 2,800-square-foot café and locker rooms with showers; Tysons Metro Center IV, a 208,219-square-foot, 13-story building, was built in 1999 and later renovated. The four buildings share several amenities, most notably a tenants-only sports court equipped for basketball, short-court tennis and volleyball. The properties span the 8251-8285 stretch of Greensboro Drive, close to the Greensboro Metro station and two malls, Tysons Galleria and Tysons Corner Center. The complex is adjacent to two properties already owned …

February 27, 2017

Multifamily New York Northeast Top Stories

Pantzer Properties, Savanna Sell 795-Unit Apartment Community in New York for $208M

by Kristin Harlow February 24, 2017

BELLPORT, N.Y. — A joint venture between Pantzer Properties Inc. and Savanna has sold Atlantic Point Apartments in Bellport, on Long Island, for $208 million. The 795-unit apartment community is located at 1220 Orchid Circle. The community was built in two phases in 2003 and 2004. Situated on 115 acres, the property comprises 137 two-story buildings totaling 183 one-bedroom, 346 two-bedroom and 266 three-bedroom apartment units. The units average 1,133 square feet. Amenities include outdoor swimming pools, tennis courts, and a two-story clubhouse with a fitness center, locker rooms, half-court basketball court, media room, business center, community room and kitchen/bar area. The property was 96 percent leased at the time of sale. Jose Cruz, Kevin O’Hearn, Michael Oliver and Stephen Simonelli of HFF represented the seller in the deal. The buyer was not disclosed. Pantzer Properties is an East Coast-based apartment owner with nearly $3 billion in real estate assets. Savanna, a real estate investment manager and institutional fiduciary based in New York City, focuses on property investments throughout the city’s five boroughs. Since 2006, the company has invested over $3 billion in properties totaling nearly 14 million square feet. —Kristin Hiller and Amy Works

February 24, 2017

Alabama Mixed-Use Southeast Top Stories

White-Spunner, Poarch Band of Creek Indians to Deliver First Phase of $500M Resort in Alabama

by John Nelson February 23, 2017

FOLEY, ALA. — White-Spunner Construction (WSC) and the Poarch Band of Creek Indians are underway on OWA, a $500 million entertainment and retail district in Foley, a town in south Alabama near the Gulf of Mexico. WSC is constructing 154,000 square feet of retail and dining space for the $240 million first phase of OWA, which is set to open this summer. Phase I of OWA will also feature a themed amusement park and a 150-room Marriott TownePlace Suites hotel. Future phases call for a water park, additional hotels and a resort-level RV park. “This will be an exciting new family-friendly destination for locals and visitors alike in Baldwin County,” says John White-Spunner, president of WSC. “We’re proud to be a part of such an innovative entertainment concept that will bring thousands of new jobs and draw more tourism to the Gulf Coast.” When completed, the OWA development is expected to generate nearly 3,500 direct and indirect jobs and draw about 1 million visitors a year. Plans call for the development to include three themed districts that offer shopping, dining and other entertainment. Located off the Foley Beach Express and County Road 20, OWA is nine miles from Gulf Shores …

February 23, 2017

Features Loans Top Stories

After Strong 2016, Commercial Lenders Prepare for a Slightly Better 2017

by Kristin Harlow February 23, 2017

SAN DIEGO — Commercial mortgage lenders, their correspondent lenders and brokers gathered this week in San Diego at the annual MBA CREF Conference held at the Manchester Grand Hyatt. The Mortgage Bankers Association (MBA) reports 3,200 attendees at this year’s conference, a 10 percent rise in attendance over 2015. Mortgage bankers are fresh from one of the strongest years in originations in an era that shows few signs of a slow down. While there are some possible speed bumps in 2017, many attendees were upbeat and positive about 2017 and beyond for the commercial real estate lending industry. MBA reported its results for the industry in a session with its chief economist and senior vice president of research and technology, Michael Fratantoni, and vice president, commercial real estate research, Jamie Woodwell. Volume was up in commercial mortgage lending in 2016, with a record $502 billion in originations. MBA has forecasted 2017 to have a slightly larger volume of $515 billion. MBA cites continuing strong commercial real estate fundamentals as the main reason for the predicted increase in 2017, with other factors including a strong job market and relatively low interest rates. MBA’s forecast does not include any possible economic stimulus — …

February 23, 2017

California Loans Office Top Stories Western

Natixis Provides $232.5M Loan for Acquisition of Apple’s Sunnyvale Office Complex

by Nellie Day February 22, 2017

SUNNYVALE, CALIF. — Natixis has provided a $232.5 million loan for the acquisition of Crossroads III, a 349,758-square-foot office property in Sunnyvale that is fully leased to Apple. The complex is located at 410, 420 and 430 N. Mary Ave. in the Silicon Valley submarket. Tristar Capital acquired the campus. The property was built between 1990 and 1992. Each building features two wings around one central core. There are also two courtyards with fountains between the buildings. The Santa Clara Light Rail station is situated approximately a half mile north of Crossroads III. The property also sits adjacent to the Technology Corners development along West Moffett Place Drive. Richard Horowitz of Cooper-Horowitz arranged the finance. David Edelstein heads Tristar Capital. — Nellie Day

February 22, 2017

Georgia Restaurant Retail Southeast Top Stories

Parent Company of Burger King Acquires Popeyes Louisiana Kitchen for $1.8B

by Katie Sloan February 21, 2017

ATLANTA — Restaurant Brands International Inc. (RBI) (NYSE: QSR) has agreed to acquire Atlanta-based Popeyes Louisiana Kitchen Inc. (NASDAQ: PLKI) for $1.8 billion. Ontario, Canada-based RBI is the parent company of fast food giants Burger King and Tim Hortons. The company owns a portfolio of over 20,000 restaurants throughout the world. Popeyes will continue to be managed independently in the U.S. following the close of the transaction, which is slated for April of this year. RBI plans to expand the Popeyes brand at an increasing pace in both the U.S. and international markets over the next few years. The concept, founded in New Orleans in 1972, has over 2,600 restaurants in the U.S. and 25 other countries. “Popeyes is a powerful brand with a rich Louisiana heritage that resonates with guests around the world,” says Daniel Schwartz, CEO of RBI. “With this transaction, RBI is adding a brand that has a distinctive position within a compelling segment and strong U.S. and international prospects for growth.” Under the terms of the transaction, Popeyes shareholders will receive $79 per share in cash at closing. Following the successful completion of the tender offer, RBI will acquire all remaining shares through a second-step merger …

February 21, 2017

Features Top Stories

Rising Interest Rates Top Concern for Real Estate Executives, According to Seyfarth Market Sentiment Survey

by Kristin Harlow February 21, 2017

CHICAGO — Rising interest rates continue to dominate concerns for U.S. commercial real estate executives in 2017, according to Seyfarth Shaw’s second annual survey of the commercial real estate market. Seyfarth’s 2017 Real Estate Market Sentiment Survey found that respondents are even more hawkish about interest rate increases this year (98 percent concerned) compared to last year (90 percent concerned). Of these “hawks,” 77 percent expect multiple rate increases in 2017. Other topics rounding out the top three concerns include supply/demand issues and banking regulations. Notably, political change-over and tax policy rank fourth and fifth this year, overtaking maturing CMBS loans from the previous year. Concern regarding the industry’s ability to refinance record levels of maturing CMBS loans remains strong with 86 percent of respondents expressing concern, nearly matching the 87 percent in 2016. Participants were also asked their primary source of equity for 2017, to which 36 percent of respondents indicate that institutional investors would be their primary source of equity. Comparatively, 21 percent report no engagement of third-party equity. Over two-thirds of respondents believe that the Trump presidential administration will have a positive impact on the 2017 commercial real estate market. Of those respondents, deregulation was top of …

February 21, 2017

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