Top Stories

Parkway to Sell Minority Interest in Houston’s Greenway Plaza, Phoenix Tower Office Properties for $512.1M

by Jeff Shaw February 20, 2017

HOUSTON — Parkway Properties (NYSE: PKY), a Houston-based REIT, has agreed to sell 49 percent interest in Greenway Plaza and Phoenix Tower, two Class A office properties in the Greenway submarket of Houston, for $512.1 million. Ownership of the two properties will now be a joint venture between Parkway, TH Real Estate, Silverpeak Real Estate Partners and Canada Pension Plan Investment Board. Parkway will retain a 51 percent majority interest in the portfolio, with TH Real Estate and Silverpeak sharing a 24.5 percent interest, and Canada Pension Plan Investment Board owning the remaining 24.5 percent. Greenway Plaza is a 52-acre, master-planned, mixed-use development featuring 11 buildings totaling approximately 4.9 million square feet of office space as its focal point. On-site amenities include a full-service restaurant, an underground food court with 16 restaurants, multiple fitness facilities, three full-service banking centers and conference facilities. Although Phoenix Tower is technically a separate property, it’s located immediately adjacent to Greenway Plaza. The 34-story building totals 665,332 square feet and was built in 1984. Amenities include an on-site deli and a Jack Nicklaus-designed, nine-hole putting green. “This transaction helps to mitigate risk in a single office campus that represents 57 percent of our company’s overall …

February 20, 2017

Florida Industrial Southeast Top Stories

Cushman & Wakefield Brokers $67.1M Sale of Four Warehouse, Distribution Buildings in Orlando

by Katie Sloan February 17, 2017

ORLANDO, FLA. — Cushman & Wakefield has brokered the $67.1 million sale of four Class A warehouse and distribution buildings in Orlando totaling 946,379 square feet. The portfolio includes Beachline Distribution Center I and II and Crossroads Business Park V and VI. The buildings were fully leased at the time of sale to tenants including FedEx Smartpost, Dusobox, McKesson, Mattress One, Petco and US Mattress Depot. Each building offers front-load and cross-dock capabilities, tilt-wall construction, 26- to 30-foot clear heights, fire safety systems, parking and 120- to 150-foot truck courts with 55-foot concrete aprons. Mike Davis, Michael Lerner and Rick Brugge of Cushman & Wakefield represented the seller, a state pension fund advised by L&B Realty Advisors LLP. Los Angeles-based Colony NorthStar acquired the assets through its Dallas-based industrial fund, Colony Industrial. The transaction is the largest multi-tenant industrial portfolio sale in Orlando’s history in terms of square footage, according to Cushman & Wakefield. — Katie Sloan

February 17, 2017

New York Northeast Top Stories

Japanese Tech Conglomerate to Acquire Fortress Investment Group for $3.3B

by John Nelson February 16, 2017

NEW YORK AND TOKYO — SoftBank Group Corp., a Tokyo-based tech conglomerate, has entered into a definitive merger agreement under which the company will acquire equity firm Fortress Investment Group LLC (NYSE: FIG) for approximately $3.3 billion in cash. Founded in 1998, Fortress has 1,100 employees and $70.1 billion in assets under management as of Sept. 30, 2016. Private equity funds and permanent capital vehicles, including commercial real estate, comprise about 65 percent of the company’s portfolio. Within the multifamily sector, Fortress manages New Senior Investment Group Inc., a seniors housing REIT that as of Sept. 30 owned 154 properties in 37 states. “Fortress’ excellent track record speaks for itself, and we look forward to benefitting from its leadership, broad-based expertise and world-class investment platform,” says Masayoshi Son, chairman and CEO of SoftBank Group Corp. “For SoftBank, this opportunity will immediately help expand our group capabilities, and, alongside our soon-to-be-established SoftBank Vision Fund platform, will accelerate our SoftBank 2.0 transformation strategy of bold, disciplined investment and world class execution to drive sustainable long-term growth,” adds Son. SoftBank’s global portfolio of companies includes advanced telecommunications, internet services, artificial intelligence, smart robotics, clean energy technology and Internet of Things (IoT) providers. Last …

February 16, 2017

Conference Coverage Features Retail Top Stories

Building Emotional Connection to Visitors Paramount to Retail Success, Say EEE Panelists

by Katie Sloan February 16, 2017

SANTA MONICA, CALIF. — The retail landscape is changing, and the tried and true formulas for retail centers and malls are no longer cutting it. The convenience of e-commerce is cutting into purchases once almost exclusively entrusted to the local mall, and consumer tastes are evolving to demand better experiences from the centers they choose to shop at with their discretionary dollars. Those were the conclusions suggested by panelists at the third annual Entertainment Experience Evolution (EEE) conference, where over 550 retail experts and top industry players joined Shopping Center Business at the Fairmont Miramar Hotel & Bungalows in Santa Monica Feb. 7-8. Panelists and attendees were there to discuss the future of retail and the brightest and best upcoming trends for success in today’s changing landscape. Overwhelmingly, the conversation focused on creating an emotional connection with visitors. When it comes to discretionary purchases, shoppers seek a space where they can create memories, not just pick up merchandise and leave. This connection is attained through thoughtful placemaking, a carefully chosen mix of unique shopping and dining, the hosting of community events and the creation of an environment through lighting, music and landscaping. Creating Memory-Making Destinations After opening remarks by Jerry …

February 16, 2017

Multifamily Texas 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

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