Top Stories

ULI Forecast: Property Transaction Volume to Decline Nationally Over Next Three Years

by Christina Cannon April 14, 2016

WASHINGTON — U.S. commercial property transaction volume is expected to decline over the next three years to $475 billion in 2018, according to a new economic forecast from the Urban Land Institute (ULI) Center for Capital Markets and Real Estate. The latest ULI Real Estate Consensus Forecast, a semi-annual outlook, is based on a survey of 48 of the industry’s top economists and analysts representing 36 of the country’s leading real estate investment, advisory and research firms and organizations. The survey provides forecasts on broad economic indicators such as real estate capital markets, property investment returns, vacancy and rental rates and housing starts and prices. The recently released consensus forecast calls for continued economic expansion over the next three years, but at a somewhat slower pace than the prior two years. It also anticipates continued commercial price appreciation and positive returns, but at more subdued and decelerating rates, and above average but decelerating rent growth rates in all property sectors. “Compared to six months ago, real estate researchers are predicting slower economic growth, slipping real estate fundamentals and lower returns from both the public and private markets,” says William Maher, ULI leader, survey participant and director of North American strategy for …

April 14, 2016

Loans Multifamily New Jersey Northeast Top Stories

Ironstate Development Receives $170M in Financing for Apartment Tower in Jersey City

by Haisten Willis April 13, 2016

JERSEY CITY, N.J. — Ironstate Development has received $170 million in permanent mortgage financing for the newly completed 70 Columbus, a 545-unit, Class A apartment tower in downtown Jersey City, located just across the Hudson River from downtown Manhattan. Holliday Fenoglio Fowler (HFF) arranged the financing on behalf of Ironstate and Panepinto Properties. Northwestern Mutual Real Estate provided the 10-year, fixed-rate loan, which replaced the existing construction financing. Designed by Gwathmey, Siegel, Kaufman and Associates Architects (GSKA) and HLW International, 70 Columbus includes studio, one- and two-bedroom rental residences featuring views of the New York skyline, wood floors, stainless steel appliances and quartz countertops. Common-area amenities include a lobby with fireplace lounge and social spaces designed by Noé Duchaufour Lawrance, bike room, business center, 60,000-square-foot roof deck with swimming pool, sport court, table tennis, grilling stations, dog run, and a 30,000-square-foot fitness center. The 50-story tower is located at 70 Christopher Columbus Drive at the road’s intersection with Warren Street, and within walking distance of the Hudson River. Ground-floor retail space at 70 Columbus includes a Sunac Natural Market and a Base Fitness Gym. The apartment tower is part of a series of Ironstate developments on the street. The company also built 50 …

April 13, 2016

Northeast Office Top Stories

German Investor Buys 101 Seaport Office Building in Boston for $452M

by Nellie Day April 12, 2016

BOSTON — German investor Union Investment Real Estate GmbH has purchased 101 Seaport, a 440,000-square-foot office building in Boston, for $452 million. The seller, Skanska, developed the building, which it also uses as its Boston headquarters. Skanska broke ground on the LEED-Platinum project less than three years ago. At the time, it was Seaport Square’s first office tower. PricewaterhouseCoopers and Red Thread/Steelcase also use the building as New England headquarters. The office building includes an on-site fitness center. It is situated within walking distance of Q-Park, Seaport Square Green and the Harbor Walk, a pedestrian promenade in the city’s Seaport district. The office building is one of Skanska’s three Seaport Boulevard developments. The company is also building 121 Seaport, a neighboring office tower with ground-floor retail, and recently completed Watermark Seaport, a luxury residential tower with ground-floor retail that Skanska developed with Twining Properties. Newmark Grubb Knight Frank’s Robert Griffin Jr., Edward Maher and Matthew Pullen represented Skanska in the transaction. The firm’s Bill Anderson and David Martel represented the company on the leases as well. This is Union Investment’s third recent acquisition in Boston. “After the acquisition of the Godfrey Hotel and the Converse Headquarters at Lovejoy Wharf, we …

April 12, 2016

Features Loans Top Stories

Seven Ways Commercial Property Owners Can Save on Defeasance Costs

by Christina Cannon April 12, 2016

Commercial real estate owners are increasingly confronting defeasance clauses in conduit or CMBS loans. These clauses require strict prepayment penalties in order to refinance or sell a property prior to maturity. In commercial real estate, defeasance is the process of releasing a commercial property from the lien of a mortgage and replacing it with a portfolio of government securities that are placed in a collateral account and pledged to the lender. This structure allows the borrower to sell or refinance the collateral property prior to loan maturity. Unlike a prepayment on the loan, however, the defeasance structure keeps the loan payment stream in place for the lender. While many of the parameters in a CMBS loan agreement are difficult to negotiate, well-versed property owners can negotiate a few specific clauses to minimize future costs should they decide to defease their loans. What follows are seven ways to save money later with proper planning at the beginning of the loan process. Negotiate the Length of the Open Window — The loan’s open window is the timeframe in which you can prepay your loan without penalty or interest. Generally, CMBS loans allow open windows of two to three months. However, there are …

April 12, 2016

Healthcare New York Northeast Top Stories

Skanska to Build $230M Ambulatory Care Pavilion at Westchester Medical Center in New York

by Katie Sloan April 11, 2016

VALHALLA, N.Y. — Westchester Medical Center Health Network has selected Skanska to build a $230 million, 279,861-square-foot Ambulatory Care Pavilion adjacent to Westchester Medical Center on its campus in Valhalla, approximately 25 miles north of Manhattan. The eight-story steel and glass pavilion will include 185,000 square feet of ambulatory care service space featuring an advanced imaging center, ambulatory surgery center and a heart and vascular institute. The development will also feature an entry canopy for patient drop-off, a 20,000-square-foot private-room expansion for Westchester Medical Center and an additional 75,000 square feet of physician offices. Construction is expected to begin this June, with completion expected in September 2018. Skanska’s contract for the project is valued at $140 million. According to the hospital, the development is considered the largest healthcare project in the Westchester area since Westchester Medical Center’s 400,000-square-foot main tower was built in 1977 and its 250,000-square-foot Maria Fareri Children’s Hospital was built in 2004. Skanska is a project development and construction firm with expertise in construction, development of commercial and residential properties, and public-private partnerships. The Westchester Medical Center Health Network is a 1,400-bed healthcare system headquartered in Valhalla, spanning seven hospitals in the Hudson Valley. — Katie Sloan

April 11, 2016

New York Northeast Office Top Stories

MHP Real Estate, HNA Property Holdings Acquire Office Building in New York for $210M

by Christina Cannon April 8, 2016

NEW YORK CITY — MHP Real Estate Services, in a partnership with HNA Property Holdings, has acquired 850 Third Avenue, a 617,000-square-foot office building in New York. Shorenstein Properties sold the 21-story building in an off-market transaction. MHP will serve as the operating partner of the joint venture, with HNA serving as majority partner. Morgan Stanley provided approximately $238 million in financing for MHP in the transaction, according to The Real Deal. The financing consists of a $210 million acquisition loan, a $17 million building loan, a $465,000 project loan and $10 million in debt transferred from the seller. The building, located between East 51st and 52nd streets, marks the second joint venture between MHP and HNA, with the partnership now owning more than 1 million square feet of office space. HNA will set up its U.S. headquarters at the property. Other tenants include Discovery Communications, Radio One and the City of New York. “The Midtown East office market is experiencing an extraordinary renaissance that will further redefine the city and reshape a time-tested enclave of New York business,” says Norman Sturner, CEO of MHP Real Estate Services. “The East Side rezoning efforts, along with the area’s existing transportation infrastructure and addition of the Second …

April 8, 2016

Georgia Mixed-Use Southeast Top Stories

Allen Morris Co. to Develop $210M Mixed-Use Project in Atlanta’s West Midtown District

by John Nelson April 7, 2016

ATLANTA — The Allen Morris Co., a Coral Gables, Fla.-based real estate developer, has announced plans for Star Metals, a $210 million mixed-use development in Atlanta’s West Midtown neighborhood. The project will feature an upscale apartment building known as Star Metals Residences and a 12-story office building known as Star Metals Offices. The buildings, which will both feature ground-floor retail space, will be situated across Howell Mill Road from one another. “Although Atlanta has always been a great place to live and work, West Midtown’s cultural center of gravity is becoming stronger and the economic and lifestyle potential is greater than ever before,” says W. Allen Morris, chairman and CEO of The Allen Morris Co. “We see our sites as fundamental building blocks and a keystone in West Midtown’s evolution where tenants and residents can enjoy a well-rounded lifestyle.” Oppenheim Architecture + Design LLP is the lead architect for both buildings. Warner Summers Architecture and Interior Design is designing the interior of Star Metals Offices, and DWELL Design Studio and Lord Aeck Sargent are teaming up for Star Metals Residences’ interior work. “We are proud to have assembled world-class architectural teams that believe in developing projects that enhance Atlanta and …

April 7, 2016

Features Multifamily Top Stories

Alden Torch Financial Claims No. 1 Spot in NMHC’s Ranking of 50 Largest U.S. Apartment Owners

by Jeff Shaw April 6, 2016

WASHINGTON, D.C. — Alden Torch Financial, which spun off from Hunt Cos. last year in a management buyout deal, has burst onto the multifamily scene to become the largest multifamily housing owner in the United States. As of Jan. 1, 2016, Alden Torch owned 191,759 multifamily units, topping the next largest owner by more than 57,000 units, according to the National Multifamily Housing Council (NMHC). The Washington, D.C-based organization this week released the 2016 edition of the NMHC 50, which ranks the top owners, managers, developers and contractors in the U.S. multifamily sector. The rankings are based on the number of units owned and managed at the start of 2016, or units of new construction started in 2015 for developers and contractors. “The apartment industry continued its bull run in 2015, as demand for both apartment homes and apartment properties intensified,” says Mark Obrinsky, NMHC’s senior vice president of research and chief economist. “Big transactions were more common than usual, causing some noteworthy changes in the NMHC 50 rankings.” Hunt Cos. was the top multifamily owner for two years running before spinning off its multifamily portfolio, so it’s no surprise that Alden Torch leads owners despite being a brand-new company. …

April 6, 2016

Midwest Office Top Stories Wisconsin

Associated Bank Purchases Milwaukee Center for $60.5M

by Haisten Willis April 6, 2016

MILWAUKEE — Associated Bank (NYSE: ASB) has purchased the Milwaukee Center office building at 111 E. Kilbourn Ave. in downtown Milwaukee. The purchase price was not disclosed, but the Milwaukee Business Journal reported it was $60.5 million. Chicago-based Hub Milwaukee River Center Properties sold the 28-story downtown building to Milwaukee Center Management LLC, a Green Bay, Wis.-based affiliate of Associated. Reinhart Boerner Van Deuren represented Associated Bank in the transaction. Associated will occupy between one-fourth and one-third of the building when the lease on its current regional office expires in 2022. Around 320 Associated employees currently occupy 97,000 square feet of the Plaza East towers at 330 East Kilbourn Ave. “Our purchase of this iconic, city-center building aligns with our efforts to become the city’s hometown bank,” says Philip Flynn, president and CEO of Associated Bank, which is based in Green Bay. The Class A property was built in 1988 and is 426 feet tall, with a total size of 373,000 square feet. It was 81.7 percent leased at the time of sale. Milwaukee Center is attached to a 220-room InterContinental hotel, Milwaukee Rep Theaters and Pabst Theater. Amenities include three on-site dining options and an on-site fitness studio. Associated Bank’s stock …

April 6, 2016

Hospitality Loans Office Retail Top Stories Western

Developers Receive $225M Loan to Finance The Bloc Mixed-Use Project in Downtown Los Angeles

by Nellie Day April 5, 2016

LOS ANGELES — The developers of The Bloc, a 1.1 million-square-foot office, retail and hospitality redevelopment in downtown Los Angeles, have received a $225 million permanent loan to finance the project. The Bloc is located at 700 S. Flower Street. The site was originally built in 1973 as a traditional mall. The redevelopment will transform the space into an open-air urban complex. It will be the largest mixed-use property in Los Angeles, according to developers The Ratkovich Company, National Real Estate Advisors and Blue Vista Capital. The Bloc is scheduled to open this summer. A renovated flagship Macy’s will anchor the center. The Bloc will also offer a variety of artisanal retailers and restaurants, as well as creative-leaning office space and a newly renovated, 496-room Sheraton Los Angeles Downtown. The new loan replaces an existing CMBS loan inherited when the property was purchased in 2013, with a final payoff amount of about $121.6 million. It also provides additional proceeds to finalize the redevelopment and fund leasing costs at the property. “This financial commitment lends further credence to the vibrant revitalization underway in downtown and lays the foundation for continued growth in the decades ahead,” says Jeff Kanne, president of National …

April 5, 2016

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