Top Stories

Roadmap for Retail Development Survival in the ‘Age of Amazon’

by Katie Sloan April 21, 2016

Recently, I had the opportunity to attend the Entertainment Experience Evolution conference in Los Angeles. This is a relatively new event, focusing on retail and mixed-use destinations with entertainment components as an amenity for retail developments. What was truly interesting is that this conference was not just about adding something fun for guests; it was a profound discussion about the future of retail centers — repositioning existing facilities that are struggling, and finding the “it” factor for new projects. Many industry leaders, including my colleagues from FRCH, presented innovative ideas and perspectives at the event. As retail experts, designers and architects, we spend a great deal of effort taking the pulse of retail in the U.S. and across the globe, evaluating the needs of our guests, macro trends and the overall state of the industry. The general consensus for the future combats old formulas from the past. We know that a development anchored by a grocery or department store simply doesn’t translate positively with consumers in the age of e-commerce. The focus of discussion was on new ways of drawing guests, and on the need for every development to be local, unique and adapted to its immediate environment. While this …

April 21, 2016

TIAA Purchases Historic Boston Seaport Office Portfolio for $224M

by Haisten Willis April 20, 2016

BOSTON — An affiliate of TIAA has purchased a seven-property office portfolio totaling 408,342 square feet in Boston for $224 million, or approximately $550 per square foot. An account advised by New York-based Clarion Partners was the seller of the portfolio, which is located in the Fort Point Channel neighborhood of Boston’s seaport district. Clarion acquired the offices in 2012 for a combined $129.3 million from an affiliate of New York-based Angelo, Gordon & Co. Properties within the 97 percent leased portfolio are located at 263 Summer St.; 332 and 374 Congress St.; and 33-41, 34, 38 and 44 Farnsworth St. The six offices span between five and nine stories and were built between 1890 and 1920, according to the Boston Business Journal. The portfolio also includes a 16-space parking lot. Originally built in the early 1900s, the properties feature high-quality office space with exposed ceilings and natural lighting. Coleman Benedict and director Ben Sayles led the HFF investment sales team, which represented the seller and procured the buyer. According to the Journal, the Farnsworth Street offices will host General Electric Co. (GE) temporarily while the company builds a permanent headquarters on nearby Necco Ct. “TIAA is one of the …

April 20, 2016

Connecticut Northeast Retail Top Stories

Vestis Retail Group Declares Bankruptcy, Will Close All Sport Chalet Stores

by Katie Sloan April 19, 2016

MERIDEN, CONN. — Vestis Retail Group LLC, the parent company of sporting goods and apparel retailers Eastern Mountain Sports (EMS), Bob’s Stores and Sport Chalet, filed for Chapter 11 bankruptcy on Monday. The Meriden-based company plans to close the Sport Chalet chain entirely, while closing eight EMS properties and one Bob’s Stores location. The remaining stores will be re-evaluated in an attempt to strengthen financial performance. Collectively, Vestis Retail Group operates 144 stores and two distribution centers across 15 states, according to documents filed at the U.S. Bankruptcy Court in Wilmington, Del. Hilco Merchant Resources and Gordon Brothers Retail Partners are in charge of the liquidation sales, according to court documents. Private equity firm Versa Capital Management LLC (Versa) acquired each of the chains separately and combined them under the parent company Vestis Retail Group LLC in 2012, according to reports by The Wall Street Journal. Vestis has proposed the sale of EMS and Bob’s to funds advised by Versa, which would acquire substantially all of the remaining assets of the company. “When Vestis first acquired EMS and Sport Chalet, each company faced significant operational challenges and was on the verge of liquidation,” says Mark Walsh, CEO of Vestis. “EMS and …

April 19, 2016

Florida Hospitality Southeast Top Stories

Noble Investment Group Agrees to Buy Five-Hotel Ashford Portfolio for $142M

by Nellie Day April 18, 2016

LAKE BUENA VISTA, FLA. — Noble Investment Group has agreed to buy a five-hotel portfolio in Orlando, Atlanta and New Jersey for $142 million. The portfolio includes a total of 1,396 rooms. The acquisition includes three Marriott-managed properties in the Orlando suburb of Lake Buena Vista: the 312-room Courtyard Lake Buena Vista, the 388-room Fairfield Inn Lake Buena Vista and the 400-room Springhill Suites Lake Buena Vista. The remaining two properties, both operated by Remington Lodging, are the 146-room Courtyard Edison in Edison, N.J., and the 150-room Residence Inn Buckhead in Atlanta. The hotels achieved an average RevPAR (revenue per available room) of $84, with a 79 percent occupancy rate and ADR (average daily rate) of $106 over a 12-month basis. The portfolio has an existing debt balance of about $98 million. The seller, Ashford Hospitality Trust, expects the net proceeds from the disposition to be about $37 million after debt repayment and transaction costs. Ashford will use the proceeds for general corporate purposes, including net debt reduction, stock buybacks or the acquisition of other full-service hotels. The transaction is scheduled to close during the current quarter. “We are pleased to announce this sale as it provides a positive first step …

April 18, 2016

Conference Coverage Features Top Stories

InterFace Student Housing Conference Brings 1,200 Student Housing Executives to Austin

by Katie Sloan April 18, 2016

AUSTIN, TEXAS — The 8th annual InterFace Student Housing Conference concluded Friday after two-and-a-half great days of networking and educational sessions from leaders across all facets of the industry. The conference began Wednesday, April 13, with the SHB Open Golf Outing at Barton Creek Resort & Spa and then moved to the sixth floor of the Hilton Austin, where a record-breaking number of attendees — 1,200 — networked, discussed and dined over a range of industry topics. Speed Networking kicked off the afternoon, where over 100 industry experts participated in short, one-minute conversations designed to spur discussion and foster budding new relationships. The group then moved into over 25 “InterFace+info” roundtables to discuss a range of industry-relevant topics, from “Who’s Buying? Who’s Selling? An Investment Market Update” to “How to Win a Woman’s Lease” and “Wi-Fi & Bulk — The New World of Individual Bandwidth.” A cocktail reception followed the late afternoon roundtables, where attendees were able to continue to build new relationships and explore a variety of booths from exhibitors. A Record Breaking Year After a networking breakfast and workshop, the conference’s panel sessions picked up Thursday morning with a consortium of CEOs from the industry’s top companies in a “Power Panel.” Moderator …

April 18, 2016

Hospitality Southeast Top Stories Virginia

Apple Hospitality REIT Agrees to Acquire Apple REIT Ten for $1.3 Billion

by Christina Cannon April 15, 2016

RICHMOND, VA. — Apple Hospitality REIT Inc. (NYSE: APLE) has agreed to acquire Apple REIT Ten Inc. for $1.3 billion. The merger will create one of the largest select-service hospitality REITs in the industry with a combined 234 hotels and 30,017 rooms. The hotels are located in 94 MSAs across 33 states. The company, which will retain the Apple Hospitality REIT name and ticker symbol, will have an enterprise value of approximately $5.7 billion, according to the companies. Apple Ten, a non-traded REIT, was built and is managed by the same team that currently manages the publicly traded Apple Hospitality REIT. The $1.3 billion transaction value is comprised of $94 million in cash, roughly 49.1 million Apple Hospitality common shares issued to Apple Ten shareholders, and the assumption of approximately $239 million in debt. The merger agreement provides Apple Ten with a 45-day window to solicit alternative proposals from third parties. The termination fee for Apple Ten is $5 million if the company decides to pull out of the agreement within the 45-day window. Following that grace period, Apple Ten will have to pay $25 million to negate the merger with Apple Hospitality. The grace period ends on May 28. …

April 15, 2016

Illinois Midwest Office Top Stories

CIM Group Agrees to Purchase 39-Story Office Tower in Chicago from TIER REIT for $200M

by John Nelson April 14, 2016

CHICAGO — CIM Group, a Los Angeles-based real estate investment firm, has agreed to acquire Four40, a 39-story, 1 million-square-foot office tower located at 440 S. LaSalle St. in Chicago’s financial district. Dallas-based TIER REIT Inc. (NYSE: TIER) is reportedly selling the asset for $200 million, according to Crain’s Chicago. Sources say the deal has not closed, however, and CIM Group declined to comment. Crain’s also reports that between 2013-2014 the REIT sold the other three Chicago assets that it purchased in a four-property portfolio transaction in 2007. According to its 2015 financial results, TIER REIT’s goal for 2016 includes selling $200 million to $400 million of “non-strategic properties.” Built in 1984 and renovated in 2014, the office tower features a 40,000-square-foot amenity floor for tenants, 45,000-square-foot landscaped plaza, café, underground parking, 150-seat conference room, 24-hour staffed security and bay windows that offer 180-degree views. The tower also houses the Chicago Stock Exchange, the Arciel bar and lounge, The Everest Room and The Buckingham Club and Hotel. The Chicago Stock Exchange Inc. (CHX) signed a long-term lease renewal in May 2014 for 33,000 square feet within Four40, a consolidation of its original footprint. In addition to the office tower, new …

April 14, 2016

Features Hospitality Industrial Multifamily Office Retail 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

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