Top Stories

Cousins Agrees to Acquire Parkway Properties for $2B in Stock, Spin Off Houston Properties

by Jeff Shaw May 2, 2016

ATLANTA — Cousins Properties (NYSE: CUZ) and Parkway Properties (NYSE: PKY) have agreed to a $1.95 billion stock-for-stock merger. The deal will simultaneously spin off of both companies’ Houston-based assets, creating a new publicly traded REIT called HoustonCo. The combined company will operate under the Cousins Properties name and continue to own Class A office towers in Sun Belt markets. The combined portfolio will include 41 properties totaling 15.8 million square feet of space in Atlanta; Austin, Texas; Charlotte, N.C.; Phoenix; and Orlando and Tampa, Fla. Although Parkway currently owns properties in Jacksonville, Fla., a Cousins investor presentation about the merger implied those buildings will be sold. Under the agreement, Parkway shareholders will receive 1.63 shares of Cousins stock for each share of Parkway stock they own. The combined company will create HoustonCo via a special dividend distributed to its shareholders once the merger is complete. Jim Heistand, Parkway’s CEO, will head HoustonCo after the spin-off. Cousins and Parkway shareholders will own about 52 percent and 48 percent, respectively, of both Cousins and HoustonCo. Both companies’ boards of directors approved the transactions unanimously. Affiliates of TPG, which own about 21 percent of Parkway’s outstanding common stock, have also agreed to …

May 2, 2016

Industrial New York Northeast Top Stories

Gramercy Property Trust Acquires Industrial Portfolio for $115.2M

by Christina Cannon April 29, 2016

NEW YORK — Gramercy Property Trust (NYSE: GPT) has acquired a 12-building industrial portfolio for $115.2 million. The seller in the deal was undisclosed. The portfolio consists of approximately 1.5 million square feet. The majority of the assets are located in major markets including New Jersey, Los Angeles, Chicago, Baltimore and Toronto. The aggregate net operating income for the first year is approximately $9.4 million with an 8.1 percent initial cap rate. The weighted average remaining lease term is 13 years. In addition to the acquisition, Gramercy assumed three mortgages totaling $37.3 million and one mortgage totaling approximately $10.9 million in Canadian dollars. Collectively, the loans have a remaining term of 5.5 years and a weighted average interest rate of 4.8 percent. Gramercy is a real estate investment trust specializing in acquiring and managing single-tenant, net-leased industrial and office properties. The company’s stock price closed Thursday, April 28 at $8.46 per share, up from $7.79 a year ago.

April 29, 2016

Hospitality Top Stories

Chinese Investment Group Agrees to Acquire Carlson Hotels

by John Nelson April 28, 2016

BEIJING AND MINNETONKA, MINN. — HNA Tourism Group Co. Ltd., a Chinese conglomerate with stakes in industries such as aviation and real estate, has entered into an agreement to purchase Carlson Hotels Inc., which owns the Radisson and Country Inns & Suites hotel brands. The purchase price for the Minnetonka-based hotel company and its hotels was undisclosed. “Carlson Hotels owns a powerful set of global brands and this historic agreement provides tremendous opportunities for growth,” says David Berg, CEO of Carlson Hospitality Group. “We look forward to working within HNA Tourism Group, a greatly respected global enterprise, in what will be an exciting new chapter in the history of Carlson Hotels. As part of HNA Tourism Group, Carlson Hotels will have an opportunity to advance our commitment to providing guests with hospitality worldwide.” Founded in 1938 by Curt Carlson, Carlson Hotels’ portfolio now spans 1,400 hotels in operation and under development with more than 220,000 rooms. The hotels are spread across 115 countries and territories. The company and its branded hotels employ roughly 90,000 people. “We have great respect for the Carlson family and a deep appreciation for its history and special culture,” says Bai Haibo, board member of HNA …

April 28, 2016

Features Top Stories

Commercial Real Estate Owners Need to Consider Investing in Cyber Insurance

by John Nelson April 28, 2016

Almost daily the media is reporting on another data/security breach, and today’s cyber criminals are becoming increasingly sophisticated while the technology needed to combat them lags behind. To date, more than $75.5 million has been spent on cyber claims losses, according to the most recent Cyber Claims Study published by NetDiligence, a cyber risk assessment and data breach services company. The study noted personally identifiable information was the most frequently exposed data at 94 percent, followed by payment card information at 27 percent. Analysts predict that cyber risk protection will be the top growing type of insurance for commercial real estate owners and operators. Without coverage, any business using a point of sale (POS) system or that stores data is at risk, especially those that store consumer data that can be used for criminal gain such as credit card information. This puts property managers of retail and apartment properties and retail tenants in a direct line of vulnerability for cyber criminals. Cyber criminals seek out information like rental applications, credit reports, leases and rental agreements, which contain personal information of applicants and tenants. Companies are required to dispose of these materials under the Fair and Accurate Credit Transactions Act federal …

April 28, 2016

vantage-luxury-apartments-henderson-nevada

Multifamily Nevada Top Stories Western

Camden Property Trust Divests Entire Las Vegas Multifamily Portfolio for $630M

by Haisten Willis April 27, 2016

LAS VEGAS — Camden Property Trust (NYSE: CPT) has sold its Las Vegas portfolio, largely consisting of apartment communities, for $630 million. The portfolio includes 15 garden-style apartment communities totaling 4,918 units, a retail center and 19.6 acres of undeveloped land. With the sale, Camden is exiting the Las Vegas market, according to the Houston Business Chronicle. Company executives will discuss the sale during a first-quarter earnings call slated for April 29. The buyer was not named. However, Las Vegas business journal Vegas Inc. reports the purchaser is a joint venture between Irvine, Calif.-based Bascom Group and Los Angeles-based Oaktree Capital Management. The joint venture also owns Vantage Lofts, a luxury apartment project in the Las Vegas suburb of Henderson. Camden Property Trust is a publicly traded real estate firm that owns, manages, develops, redevelops, acquires and builds multifamily communities. The Houston-based company owns and operates 158 properties totaling 55,254 units across the United States. The company’s stock price closed at $82.64 per share on Tuesday, April 26, up from $76.28 one year ago. — Haisten Willis

April 27, 2016

California Loans Multifamily Top Stories Western

ING Capital Provides $148M Loan for the Acquisition, Repositioning of Luxury Apartment Complex in Silicon Valley

by Katie Sloan April 26, 2016

MENLO PARK, CALIF. — ING Capital LLC has provided a $148.6 million secured term loan to a joint venture between Maximus Real Estate Partners and Deutsche Asset Management. The money will be used to acquire and renovate Sharon Green Apartments, a 296-unit luxury multifamily complex in Silicon Valley. The seller, Essex Property Trust (NYSE: ESS), is a publicly traded REIT. The property is located in Menlo Park, along the San Francisco Bay midway between San Francisco and San Jose. The senior loan is secured by a first mortgage on the 328,024-square-foot apartment complex. A majority of the loan proceeds will go towards the acquisition of the property, with the rest earmarked for renovations over a three-year period. “Sharon Green Apartments is the top-located garden apartment complex in the country for offering tenants unparalleled education, employment and transportation opportunities within walking distance and centrally located in the heart of Silicon Valley,” says Craig Bender, managing director of ING Capital LLC. The asset is located on 17 acres of land near Stanford University at 350 Sharon Park Drive. The property offers one-, two- and three-bedroom units. Community amenities include a clubhouse with billiards, two pools and spas, a fitness center, two tennis …

April 26, 2016

Features Industrial Top Stories

U.S. Industrial Vacancy Approaches Historic Low After First-Quarter Absorption Gains, Says Cushman & Wakefield

by John Nelson April 26, 2016

NEW YORK — The U.S. industrial market absorbed 57.8 million square feet of space in the first quarter of 2016, up 9.3 percent from the first quarter a year ago, according to Cushman & Wakefield’s first-quarter industrial report. This marked 24 consecutive quarters of positive net occupancy gains for the sector, placing the current expansion among the longest on record, as well as among the strongest. The U.S. industrial market shed more than 182 million square feet of occupancy during the economic downturn, but it has absorbed more than 990 million square feet in the expansion. The national industrial vacancy rate continued to decline in the first quarter, falling by 20 basis points from the prior quarter and 70 basis points from the prior year to 6.1 percent. Industrial vacancy is currently tracking at the lowest level of the past 30 years and is now a full 240 basis points below the 10-year historical average. Kevin Thorpe, chief economist of Cushman & Wakefield, says the outlook for the industrial sector remains promising, and he expects 2016 to be another year of strong growth. “Going forward, the demand drivers for industrial remain firmly intact,” says Thorpe. “Much of what drives demand …

April 26, 2016

Industrial Northeast Pennsylvania Top Stories

GE Opens First Phase of $400M Advanced Manufacturing Works Plant in South Carolina

by Nellie Day April 25, 2016

GREENVILLE, S.C. — GE (NYSE:GE) has opened the 125,000-square-foot Advanced Manufacturing Works (AMW) plant in Greenville. AMW is GE Power’s first advanced manufacturing facility. The facility will serve as an incubator for the development of advanced manufacturing processes and rapid prototyping of new parts for GE’s energy businesses. These include power, renewable energy, oil and gas, and energy connections. GE has invested $73 million in the facility to date and will invest another $327 million across the GE Power Greenville campus over the next several years. The new facility created approximately 80 engineering and manufacturing jobs, according to GE. The company broke ground on the facility in mid-2014. “This facility will ignite the digital industrial revolution for our company and the industry,” says Steve Bolze, GE Power’s president and CEO. “We’re building a skilled workforce and culture that’s devoted to delivering breakthrough innovations that deliver better, faster outcomes for our customers and unlock new productivity and growth.” GE entered the Greenville market more than 40 years ago with a 340,000-square-foot property. That site has now grown close to 1.7 million square feet of factories, offices and laboratories focused on manufacturing advanced products for worldwide distribution. GE has more than 3,200 …

April 25, 2016

Industrial Top Stories

W. P. Carey Acquires 49-Property Industrial Portfolio in Sale-Leaseback Transaction for $217M

by Christina Cannon April 22, 2016

NEW YORK CITY — W. P. Carey Inc. (NYSE: WPC) has acquired a 4 million-square-foot industrial portfolio for $217 million. The portfolio consists of 43 assets in the United States totaling 3.5 million square feet and six properties in Canada totaling 500,000 square feet. The buildings were purchased in a sale-leaseback transaction with wholly owned subsidiaries of Forterra Building Products, a manufacturer of concrete and clay building products. The properties each feature a 20-year triple net lease that includes fixed annual rent escalations of 2 percent. The facilities include offices, concrete manufacturing, concrete quality control testing and storage facilities. “Providing steady, predictable cash flows, compelling returns and annual rent escalations, the investment is also supported by the long-term lease and the strength of Forterra’s guarantee,” says Gino Sabatini, managing director and head of net lease investments for W. P. Carey. “Consistent with our established investment criteria, we believe the acquisition is a sound addition for W. P. Carey Inc.’s portfolio, which extends its weighted average lease-term and is accretive to cash flow.” Brian Scott and Andrew Sandquist of CBRE represented Forterra in the transaction. New York-based W. P. Carey Inc. is an internally managed net lease REIT specializing in corporate sale-leaseback, …

April 22, 2016

New York Northeast Office Top Stories

SL Green, Citigroup Agree on Early Purchase of Office Campus in Manhattan

by John Nelson April 21, 2016

NEW YORK — SL Green Realty Corp. (NYSE: SLG), New York City’s largest commercial property owner, has reached an agreement with an affiliate of Citigroup Inc. (NYSE: C) to accelerate the sale of the global bank’s office campus at 388-390 Greenwich St. in Manhattan’s Tribeca neighborhood. The early sale is pursuant to the $2 billion purchase option that Citigroup exercised in January. Separately, SL Green announced that it has reached an agreement for the early termination of Citigroup’s lease at the property as a result of the sale acceleration. The sale is now scheduled to close in June. SL Green will realize approximately $1.8 billion in sale proceeds at closing, including the lease termination payment. The REIT plans to repay a portion of its corporate credit facility and retire the $1.45 billion mortgage on the office campus. “We are pleased to reach an agreement on the early sale of 388-390 Greenwich Street. In addition, by retiring approximately $1.8 billion of debt, we further strengthen our balance sheet and enhance our liquidity position to in excess of $1.4 billion,” says Marc Holliday, CEO of SL Green. “Our longstanding, multi-faceted relationship with Citi, one of the world’s leading financial institutions, has been …

April 21, 2016

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