Top Stories

Tax Attorney Daniel Smith: When Law Firms Collaborate, Property Owners Reap the Benefits on Their Bottom Line

by Katie Sloan July 19, 2016

Traditionally, a commercial real estate owner would retain several law firms, each with its own area of expertise. One firm might handle development, construction, acquisition and leasing issues, while another firm would oversee contract disputes and litigation. Although it may have become conventional, this service model is losing its appeal. Law firms with mutual clients often fail to communicate with each other, sending mixed signals to the client and leading to inconsistent advice. As owners become more astute and the market for legal services grows increasingly competitive, owners can now demand that law firms seeking their business distinguish themselves from the competition. One-stop shop One of those distinguishing attributes is the ability of the firm or its real estate practice group to address an owner’s overall real estate needs, not just a specific function. This approach better enables the law firm or practice group to demonstrate their understanding of the owner’s business and commitment to achieving the owner’s goals. Some service-oriented law firms recognize this and have learned to provide value in practice areas beyond those for which they were hired. They are now looking to bring in additional professionals to ensure that their client-service teams have the expertise to …

July 19, 2016

Senior Housing Properties Trust Secures $620M Loan for Life Sciences Buildings in Boston

by Nellie Day July 18, 2016

BOSTON — Senior Housing Properties Trust (NYSE: SNH) has obtained a $620 million mortgage loan for two life sciences buildings in Boston’s Seaport District. The 15-story, Class A towers include 1.6 million square feet of lab space, corporate office space, structured parking and ground-floor retail space. SNH purchased the towers in May 2014 for $1.1 billion. They are 96 percent leased to Vertex Pharmaceuticals through 2028. Vertex is the manufacturer of hepatitis C and cystic fibrosis pharmaceutical treatments. The 10-year loan is interest-only, carries a fixed interest rate of 3.53 percent and matures in August 2026. SNH will use the loan proceeds to repay a portion of the outstanding borrowings under the company’s $1 billion unsecured revolving credit facility, as well as for general business purposes. Following the repayment, there will be approximately $900 million available under SNH’s unsecured revolving credit facility. “We are pleased to take advantage of the current low interest rate environment to term out the majority of the outstanding balance on our unsecured revolving credit facility and to extend the average maturity of our debt to 8.9 years,” says David Hegarty, SNH’s president and chief operating officer. “We believe that this transaction also highlights the value …

July 18, 2016

Hospitality Southeast Tennessee Top Stories

North Point Hospitality Breaks Ground on $137M Marriott Hotel in Nashville

by Katie Sloan July 15, 2016

NASHVILLE, TENN. — Atlanta-based North Point Hospitality has broken ground on a $137 million Marriott Hotel in Nashville. The 470-room Marriott property will consist of a 209-room AC Hotel, a 136-room Residence Inn and a 125-room SpringHill Suites. Visitors to the hotel will enter through one main entrance. Once inside, the property will be divided amongst the three distinct brands. All guests of the hotels will have access to a wide variety of shared amenities, including a fitness center and six food and beverage options, including major restaurants at street level and an indoor/outdoor pool bar. A rooftop bar and patio will offer panoramic views of the Nashville skyline. The property will also feature 4,000 square feet of meeting space located on the top floor. North Point recently unveiled an original 300-pound model of the hotel made with 63,636 LEGO bricks. Award-winning artist Sean Kenney designed the model. The property, located next to the Music City Center convention facility, is scheduled for completion in mid-2018. North Point Hospitality is a hotel development and operations company. Currently, the company owns and operates seven Hilton- and Marriott-branded hotels in the Southeast, with an additional nine under construction or in active development, resulting …

July 15, 2016

California Hospitality Top Stories Western

Carey Watermark Investors 2 Purchases San Jose Marriott in Silicon Valley for $154M

by John Nelson July 14, 2016

SAN JOSE, CALIF. — Carey Watermark Investors 2 Inc. (CWI 2), a non-traded lodging REIT, has acquired the San Jose Marriott for $154 million. The recently renovated hotel includes 510 guestrooms and is located in downtown San Jose, one of Silicon Valley’s strongest lodging markets. CWI 2 financed the acquisition using $88 million of senior debt. Built in 2004, the San Jose Marriott features 23,000 square feet of meeting and event space, three food and beverage outlets, a concierge lounge, business center, fitness center and an outdoor swimming pool. “Given the limited supply of institutional-quality assets in the Silicon Valley market, the San Jose Marriott represented a unique investment opportunity,” says Michael Medzigian, CEO of CWI 2. “The property is the newest hotel in downtown San Jose and the acquisition adds a top-performing, well-located asset in a high growth market with high barriers to entry to CWI 2’s portfolio.” The hotel is connected to the newly renovated and expanded San Jose McEnery Convention Center and is in close proximity to San Jose State University and attractions such as the Tech Museum of Innovation, the San Jose Museum of Modern Art and the SAP Center, home of the NHL’s San Jose …

July 14, 2016

Features Office Top Stories

San Francisco Remains Top Tech Market, But Cost of Living Boosts Other Metros, Says CBRE

by John Nelson July 14, 2016

LOS ANGELES — The San Francisco Bay Area remains the nation’s leading tech market, but the competition for talent is getting tougher as more highly skilled tech workers — especially Millennials — are flocking to cities where the cost of living is lower and tech jobs are plentiful, according to CBRE Group Inc.’s (NYSE: CBG) research report, “Scoring Tech Talent.” The annual report ranks 50 U.S. and Canadian markets according to their ability to attract and grow tech talent. To appeal to skilled talent at a lower cost of doing business, both new and expanding companies are establishing footprints in more affordable markets — including Nashville, Charlotte, Tampa, Seattle and Phoenix — leading to a rise in demand for office space and a decrease in office vacancy. “Tech talent markets share several distinct characteristics, including high concentrations of college-educated workers, major universities producing tech graduates and large Millennial populations,” said Colin Yasukochi, who authored the report on behalf of CBRE Research. “The robust entrance of Millennials into the labor pool contributed greatly to the growth in tech talent across all 50 downtown markets in our ranking this year.” Tech Talent Scorecard Established tech markets, namely the San Francisco Bay Area, …

July 14, 2016

Multifamily Top Stories Washington Western

Kennedy Wilson Acquires 430-Unit Multifamily Property in Metro Seattle for $81M

by Haisten Willis July 13, 2016

AUBURN, WASH. — Global real estate investment company Kennedy Wilson has purchased a 430-unit multifamily property in the Seattle suburb of Auburn for $81 million. Belara at Lakeland is a garden-style apartment community built in 2006 on 40 acres within the Lakeland Hills master-planned community. The property features a resident clubhouse, fitness center, outdoor pool and playground and is located in the Dieringer school district. “We are excited to expand our footprint in the Seattle area,” says Shem Streeter, managing director of Kennedy Wilson Multifamily Investments. “This submarket has experienced both high-income job growth and a rapidly growing population, and we will continue to look for opportunities to increase our presence in this area.” Auburn is located at the convergence of the SR-18, SR-167 and I-5, offering access to Seattle, Bellevue and Tacoma. Kennedy Wilson invested $19 million of equity, inclusive of closing costs, and secured a 10-year loan of $62.6 million through Freddie Mac at a fixed rate of 3.6 percent to acquire the property. Kennedy Wilson’s global apartment portfolio includes 135 communities with approximately 26,000 units. The company has an ownership interest in 9,893 units across 39 communities in the state of Washington. — Haisten Willis

July 13, 2016

Multifamily New York Northeast Top Stories

Fairstead Capital Acquires Savoy Park Apartments in Harlem for $315M

by Christina Cannon July 12, 2016

NEW YORK CITY — Fairstead Capital has acquired Savoy Park Apartments, a 1,790-unit multifamily campus in the Central Harlem neighborhood of Manhattan, for $315 million. An investor group that includes L+M Development Partners and Savanna sold the property, which is situated on 10.5 acres. Savoy Park consists of seven 16-story buildings, and is 100 percent rent-stabilized. Under the terms of the deal, Fairstead Capital will maintain the apartments as affordable housing until at least 2052. Fairstead Capital plans to upgrade the complex with renovations to interior common spaces, landscaping, public spaces and security systems. Savoy Park offers studio, one- and two-bedroom units and includes amenities such as walking paths, courtyards, playgrounds, laundry facilities, on-site parking and on-site maintenance and management. The complex, built in 1959, was last renovated in 2005. A real estate fund created by Citigroup and L+M purchased the complex, formerly known as Delano Village, in 2012, according to Real Estate Weekly. The deal, which prevented the property from going into foreclosure, was valued at $210 million. Savills Studley’s Jeffrey Baker and Graham Hobbs, along with Ariel Property Advisors’ Victor Sozio and Shimon Shkury, brokered the deal. Fairstead Capital is a real estate investor and manager specializing in …

July 12, 2016

Features Industrial Top Stories

Record Absorption Leads to Lowest U.S. Industrial Vacancy Rate of Past 30 Years, Says Cushman & Wakefield

by John Nelson July 12, 2016

NEW YORK — The U.S. industrial market has absorbed a record-setting 70.1 million square feet of space in the second quarter, up 6 percent from the same period a year ago, according to Cushman & Wakefield. Year-to-date, the industrial sector has absorbed 132.2 million square feet. The second-quarter figure marks 25 consecutive quarters of net occupancy gains for the industrial sector, with the current quarter’s absorption reaching a new cyclical high. Nationally, the industrial vacancy rate is currently tracking at 5.8 percent, the lowest level of the past 30 years and 270 basis points below the 10-year historical average. Additionally, 38 U.S. markets reported more than 1 million square feet of absorption during the second quarter, with 11 markets recording more than 2 million square feet of absorption. Kevin Thorpe, Cushman & Wakefield’s chief economist, says that despite a series of shocks to the U.S. economy this year and heightened uncertainty emanating from Europe, economic fundamentals remain mostly solid, which ultimately benefits the U.S. industrial sector. “We expect to see some headwinds form in manufacturing and exporting created by the stronger U.S. dollar, but other important industrial-related indicators, such as containerized traffic flows, transportation indices, and business inventories, demonstrate that …

July 12, 2016

California Hospitality Loans Top Stories Western

Next Century Partners Receives $1B in Construction Financing for Century Plaza Mixed-Use Project in Los Angeles

by Nellie Day July 11, 2016

LOS ANGELES — Next Century Partners has received $1 billion in construction financing for the Century Plaza mixed-use project in Los Angeles. The $2.5 billion project will include two residential towers, restaurants and retail shops. The existing, five-star Century Plaza Hotel on the site will also undergo a renovation. The project is located at 2025 Avenue of the Stars in the Century City submarket. Construction is scheduled to commence later this summer. The hotel closed for renovations in March, and is set to reopen in early 2018. It will include a redesigned open-air lobby that connects public plazas and fountains to a two-acre garden surrounded by restaurants and retail. The hotel has hosted a number of notable events over its 50-year run, including the Grammy Awards and the “Dinner of the Century” in 1969, which honored the first astronauts to reach the moon. The full, mixed-use project will feature about 100,000 square feet of retail. The 46-story residential towers will include 290 luxury residences. A variety of loans provided the $1 billion in financing, including a $446 million senior loan from J.P. Morgan Chase; $120 million mezzanine financing from an investment vehicle managed by Colony Capital; and $450 million of …

July 11, 2016

California Office Top Stories Western

Hudson Pacific Closes on $311 Million Office Acquisition in Los Angeles

by Jeff Shaw July 8, 2016

LOS ANGELES — Hudson Pacific Properties (NYSE: HPP) has closed on its previously announced $311 million acquisition of 11601 Wilshire Boulevard, formerly known as the Wells Fargo Center, in Los Angeles. 11601 Wilshire was built in 1983 and serves as the gateway to the Brentwood/Westside office market, with its location at the corner of San Vicente and Wilshire boulevards. The building has 25 floors totaling 500,475 square feet. HPP bought the property from funds managed by The Blackstone Group. The building was 83 percent occupied at the time of closing. Blackstone bought the building in 2006 for $164 million, according to the Los Angeles Business Journal. HPP plans to renovate and increase occupancy at the building. “We intend to further elevate this asset within the marketplace, spending capital wisely to facilitate lease-up and create value for our stockholders,” says Victor Coleman, chairman and CEO of HPP. HPP is among the tenants in the building, where the REIT has had its headquarters since the company’s initial public offering in July 2010. To build capital for the acquisition, HPP sold One Bay Plaza, a 195,739-square-foot office tower in Burlingame, for $53.4 million in early June. The company also received $28.5 million in proceeds from …

July 8, 2016

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