Top Stories

Kane Realty, KBS to Develop $100M High-Rise in Raleigh

by John Nelson February 11, 2016

RALEIGH, N.C. — Kane Realty Corp., a Raleigh-based commercial real estate developer, has joined with Newport Beach, Calif.-based KBS Realty Advisors as a joint venture partner for the development of Park Central in Raleigh. The development costs for the 16-story, mixed-use tower are estimated to total $100 million, according to Triangle Business Journal. “We are delighted for our partnership with KBS Realty Advisors to continue with Park Central,” says John Kane, CEO of Kane Realty Corp. “The vision we’ve shared with KBS fulfills the [area’s] demand for an upscale, urban lifestyle that’s rich with amenities. As Raleigh continues to grow, we are proud to provide a vibrant community … for residents and workers to enjoy.” The 252,204-square-foot high-rise retail and apartment building will be located at the intersection of Six Forks Road and the 440 Beltline in Midtown Raleigh’s North Hills district. Construction is already underway on the project, which is situated adjacent to Midtown Park. “We truly believe Park Central’s dynamic location within an attractive market like Raleigh, coupled with the luxury style of living we’re offering, will be a very attractive draw to tenants,” says Marc DeLuca, regional president of KBS. “Raleigh has become an appealing location for …

February 11, 2016

Lancaster Pollard Seniors Housing Survey

Features Top Stories

Pace of Seniors Housing Development to Hold Steady in 2016, Says Lancaster Pollard Survey

by Jeff Shaw February 11, 2016

COLUMBUS, Ohio — A clear majority of seniors housing executives plan to start new construction projects in 2016, although they are slightly less ambitious than they were a year ago, according to an online survey of 295 executives by Columbus-based lender Lancaster Pollard. Respondents to the survey included owners, operators, developers and investors. The survey found that 70 percent of respondents are either “somewhat likely” or “extremely likely” to start a new seniors housing project this year. This is a drop-off from last year, when 80 percent indicated they expected to undertake new construction. “Overall, our survey findings depict an environment similar to [last year],” the report states. ”New construction and renovation projects are increasingly being pursued, particularly in regard to assisted living and memory care.” The majority of respondents — 61 percent — believe that memory care will be the fastest growing subsector of seniors housing this year. Skilled nursing facilities and continuing care retirement communities are least likely to lead the way in growth, according to the findings. Survey respondents also suggest that the current seller’s market is starting to take a toll on owners’ approach to mergers and acquisitions. Some 65 percent indicate they are extremely or somewhat …

February 11, 2016

lipstick-building-885-third-avenue-manhattan-new-york-city

Multifamily New York Northeast Office Top Stories

SL Green Completes Sale of Two New York Assets for $508M

by Haisten Willis February 10, 2016

NEW YORK CITY — SL Green Realty Corp. (NYSE: SLG), New York City’s largest commercial property owner, has completed the sale of two properties with a total value of $508 million. The first sale is the leased fee interest in 885 Third Ave. in Manhattan, also known as “The Lipstick Building,” for a gross sales price of $453 million, or $713 per square foot. The deal was originally announced in October. A partnership between Ceruzzi Properties and Shanhai Municipal Investment USA is the buyer, according to the Commercial Observer, a New York-based publication covering commercial real estate transactions. SL Green acquired the leased fee interest in 885 Third Ave. in a joint venture in 2007 at a gross asset valuation of $317 million and fully consolidated its position in 2010 at a valuation of $352 million. As part of the transaction, SL Green will retain a preferred equity position. The sale, executed at a capitalization rate of 3.8 percent, will generate net proceeds to SL Green of approximately $45 million. The second sale is the company’s 90 percent stake in the residential condominium at 248-252 Bedford Ave., a 72-unit multifamily building in Williamsburg, Brooklyn, at a gross asset valuation of $55 …

February 10, 2016

North Carolina Retail Southeast Top Stories

CBL Completes Sale of Majority Interest in Triangle Town Center to DRA Advisors

by Katie Sloan February 9, 2016

RALEIGH, N.C. — CBL & Associates Properties Inc. (NYSE: CBL) has closed on a new joint venture with DRA Advisors LLC that significantly reduces the retail real estate investment trust’s ownership stake in Triangle Town Center and Commons mall in Raleigh. The new joint venture acquired the property from an existing 50/50 joint venture between CBL and The Richard E. Jacobs Group for a total consideration of $174 million, including the assumption of a $171.1 million loan secured by the property. CBL now holds a 10 percent ownership position in the asset and is responsible for leasing and managing the property. DRA Advisors holds a 90 percent ownership position. The center, which was 96 percent occupied at the end of 2015, is anchored by North Carolina’s only Saks Fifth Avenue location, and is located at the intersection of Triangle Town Boulevard and I-540 near Capital Boulevard and Old Wake Forest Road. The $171.1 million loan on the property, which matured in December 2015, has been modified and restructured with an initial term of three years maturing in December 2018. The loan includes two one-year extension options available to the new joint venture for a final maturity date of December 2020. …

February 9, 2016

Features Top Stories

New Construction Starts in Commercial Real Estate Rose 8 Percent in 2015, Dodge Data Shows

by Jeff Shaw February 9, 2016

NEW YORK CITY — New construction starts increased 8 percent across the U.S. commercial real estate industry in 2015 with the multifamily sector leading the way, according to a report by New York-based data firm Dodge Data & Analytics. The national total was $162.7 billion in new starts for the office, retail, hotel, warehouse, garage and multifamily sectors, up from $150.3 billion in 2014. Most property sectors “held steady,” according to the report, while multifamily’s 18 percent spike caused the bulk of the increase. By location, the New York City metropolitan statistical area (MSA) led the way with a striking 66 percent increase in construction starts over 2014, representing $34.9 billion in new construction starts in 2015. Other MSAs in the top five for total volume were Miami ($6.3 billion), down 8 percent; Dallas-Ft. Worth ($6 billion), up 35 percent; Chicago ($5.9 billion), up 14 percent; and Washington D.C. ($5.9 billion), down 4 percent. The largest percentage increase after New York was Kansas City, which jumped to 18th place thanks to a 56 percent spike in new starts to $1.8 billion. Among the top 20 metros by construction starts, Philadelphia saw the greatest drop in production — a 57 percent …

February 9, 2016

Industrial New Hampshire Northeast Top Stories

Calpine Corp. Buys Granite Ridge Energy Center in New Hampshire for $500M

by Nellie Day February 8, 2016

LONDONDERRY, N.H. — Calpine Corp. (NYSE: CPN) has purchased the Granite Ridge Energy Center power plant for $500 million. The natural gas-fired, combined-cycle plant is located at 21 N. Wentworth Ave. in the Southeast New Hampshire town of Londonderry, near the Massachusetts border. The seller was Granite Ridge Holdings. The power plant features two combustion turbines, two heat recovery steam generators and one steam turbine. It began operating in 2003. Granite Ridge has a nameplate generating capacity of 745 megawatts, resulting in a purchase price of approximately $671 per kilowatt. “The addition of Granite Ridge strategically enhances our footprint in New England,” says Thad Hill, Calpine’s president and CEO. “Now with approximately 2,000 megawatts of modern gas-fired capability in the region, Calpine is well positioned to provide clean, flexible and reliable energy and capacity to the market.” Calpine financed the transaction with proceeds from a $550 million first lien term loan, secured in December 2015. Calpine Corporation is America’s largest generator of electricity from natural gas and geothermal resources. Champion Energy, the company’s wholesale power operations and retail business, serves customers in 20 states and Canada. Calpine’s stock closed at $15.31 on Friday, Feb. 5, down from $22.16 one year …

February 8, 2016

Multifamily New Jersey Northeast Top Stories

AIG Global Real Estate Sells Multifamily Property in Flanders, N.J. for $183.3M

by Christina Cannon February 5, 2016

FLANDERS, N.J. — AIG Global Real Estate Corp. (AIG) has sold a 1,224-unit multifamily property in Flanders, approximately 45 miles west of Jersey City, for $183.3 million. The undisclosed buyer acquired the asset, Oakwood Village, clear of existing debt. Oakwood Village, located at 77 Oakwood Village along Route 206, is situated on 167 acres. The property is comprised of 107 two- and three-story buildings. The buildings feature one- and two-bedroom units that average 823 square feet. Amenities at Oakwood Village include a swimming pool, tennis court, multiple playgrounds, two dog parks and garage parking. The property is 95 percent leased. “There is significant upside in Oakwood, and the buyer will be capitalizing on that,” says Jose Cruz, senior managing director for HFF. “The proximity to the highway and easy access to retail shops and restaurants make this asset very valuable.” Jose Cruz, Andrew Scandalios, Kevin O’Hearn, Michael Oliver, Steve Simonelli and Mark Thomson make up the investment sales team for HFF that represented the seller in the transaction. This transaction follows the sale of a 12-property multifamily portfolio that HFF brokered on behalf of AIG in December. The disposition of the 13 properties totals $348.8 million.

February 5, 2016

Hospitality New York Northeast Top Stories

Hersha Hospitality Trust Sells JV Interest in Seven Manhattan Hotels for $571.4M

by John Nelson February 4, 2016

NEW YORK CITY — Hersha Hospitality Trust (NYSE: HT) has signed definitive agreements to sell ownership interests in seven of its limited-service hotels in Manhattan for a total purchase price of $571.4 million. The Philadelphia-based hotel REIT sold its interests to joint venture partner Cindat Capital Management Ltd. Totaling 1,087 rooms, the hotels include Holiday Inn Express Times Square, Candlewood Suites Times Square, Hampton Inn Times Square, Hampton Inn Chelsea, Hampton Inn Herald Square, Holiday Inn Wall Street and Holiday Inn Express Wall Street. “Manhattan’s preeminence as a financial, cultural and technological hub, combined with the security and scarcity of its real estate, provides significant yield for a strategic, long-term partner such as Cindat,” says Neil Shah, president and chief operating officer of Hersha Hospitality. “We intend to utilize a portion of the sale proceeds to make hotel investments in Washington, D.C., and California, continue our share repurchase program and repay debt.” The proposed joint venture is structured with Cindat as the preferred joint venture partner holding a 70 percent ownership stake, while Hersha retains a 30 percent equity interest. Cushman & Wakefield represented Hersha in the transaction. Hersha will continue to fully own 10 hotels in New York City …

February 4, 2016

Features Loans Multifamily Top Stories

CBRE is Freddie Mac’s Top Multifamily Lender for 2015 with $6.96B in Volume

by Haisten Willis February 4, 2016

ORLANDO, FLA. — CBRE was Freddie Mac’s highest-producing multifamily mortgage seller in 2015, originating $6.96 billion in loans last year. Freddie Mac made the announcement at the Mortgage Bankers Association’s commercial real estate finance and multifamily housing convention in Orlando on Feb. 2. In total, Freddie Mac bought $47.3 billion in new multifamily loans in 2015, comprising 650,000 rental units. “CBRE had another terrific year placing loans with Freddie Mac and earning its top producer award for the seventh consecutive year,” says Mitchell Kiffe, a senior managing director of debt and structured finance at CBRE. “CBRE utilized Freddie Mac’s expanded product offerings, such as its small balance loan program, to achieve the number one ranking. We look forward to another big origination year as multifamily loan demand remains strong.” Freddie Mac securitizes about 90 percent of the multifamily loans it purchases, thus transferring the vast majority of the expected credit risk from taxpayers to private investors. “We have a tremendous partnership with our lender partners, who work tirelessly every day to provide apartment financing,” says John Cannon, senior vice president of Freddie Mac’s multifamily production and sales. “Support for this market is more important than ever, especially with the increased …

February 4, 2016

marriott-springhill-suites-hotel-seattle

Hospitality Top Stories Western

Moody National REIT II to Purchase SpringHill Suites Seattle for $74.1M

by Haisten Willis February 3, 2016

SEATTLE — Moody National REIT II has entered into an agreement to purchase the Marriott SpringHill Suites Hotel in Seattle for $74.1 million, excluding closing costs. The SpringHill Suites Seattle is a select-service hotel consisting of 234 guest rooms. Located on the southeast corner of Stewart Street and Yale Avenue in downtown Seattle, the SpringHill Suites Seattle is situated along one of the city’s major transportation routes with access to the corporate homes of Amazon.com, Microsoft, Nordstrom and REI. The hotel is also located near Puget Sound and is within walking distance of the Seattle Space Needle. “Located downtown in a global gateway city accommodating travelers from around the world, and home to companies including Amazon.com, Microsoft, Boeing and Starbucks, this investment presents itself as an attractive addition to our portfolio,” says Brett Moody, CEO and chairman of REIT II. Forbes magazine named Seattle the “No. 1 Best City for Jobs in 2015” based on 16 metrics including job opportunities, employment growth, monthly median starting salary, median annual income, time spent working and commuting, and housing affordability. Due to its geographic location, Seattle is a national hub for manufacturing, technology industries, international business, trade and tourism. Moody National REIT II …

February 3, 2016

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