Top Stories

Duke Realty Identifies Five Healthcare Real Estate Trends to Watch in 2016

by John Nelson March 15, 2016

INDIANAPOLIS — What does the future hold for the healthcare real estate industry in 2016? In a new white paper penned by Keith Konkoli, executive vice president of healthcare at Duke Realty (NYSE: DRE), the author predicts the industry will experience an increase in the development of new facilities, as well as an uptick in consolidation in 2016. Here’s a summary of five key trends and issues the firm expects this year and beyond: 1. Healthcare real estate construction will continue to increase — Healthcare development has been strong in recent years, and there should be no letup in activity in 2016. A recent study by the American Institute of Architects (AIA) says it expects “healthy growth” for non-residential construction this year. That includes the healthcare sector, which AIA predicts will experience a 5.8 percent increase in construction in 2016. The industry is experiencing an uptick in the development of a wide variety of healthcare properties, including rehabilitation hospitals, medical office buildings and off-campus emergency rooms/community micro-hospitals. Even so, the industry hasn’t reached a point of saturation and providers aren’t yet overbuilding. 2. Healthcare providers will need to deal with the challenges of ‘site neutrality’ — An important but perhaps overlooked …

March 15, 2016

Hospitality Top Stories

China’s Anbang Insurance Group Buys Strategic Hotels & Resorts for $6.5B

by Nellie Day March 14, 2016

CHICAGO — Beijing-based Anbang Insurance Group Co. has agreed to purchase Strategic Hotels & Resorts, which owns 16 hotels throughout the U.S. Several news outlets, including The Wall Street Journal, report the purchase price as $6.5 billion, citing anonymous sources involved in the not-yet-announced deal. Anbang is purchasing the portfolio from Blackstone Group, which acquired Strategic Hotels about three months ago. The Chinese insurer is paying about $450 million more than Blackstone paid for the assets. Properties under the Chicago-based Strategic Hotels & Resorts flag include the JW Marriott Essex House in New York City; the Montage in Laguna Beach, Calif ; the Hotel del Coronado in San Diego; Ritz Carlton properties in Moon Bay and Laguna Niguel, Calif.; InterContinental hotels in Chicago and Miami; and Four Seasons hotels in Washington, Austin, Texas, and Silicon Valley, Calif. Anbang purchased the famed Waldorf-Astoria in New York from Hilton Worldwide Holdings for nearly $2 billion in late 2014. The acquisition was one of the highest price-per-room hotel transactions ever, according to Fortune magazine. Anbang also submitted a $12.8 billion bid to takeover Starwood Hotels & Resorts Worldwide, which could disrupt a pending deal with Marriott International. The consortium offered to pay an …

March 14, 2016

Multifamily Top Stories Washington Western

Kennedy Wilson Real Estate Fund V Acquires Two Apartment Communities in Metro Seattle for $140.8M

by Christina Cannon March 11, 2016

MUKILTEO AND LYNNWOOD, WASH. — Kennedy Wilson Real Estate Fund V (Fund V) has acquired two multifamily properties in the metro Seattle area for a total of $140.8 million. Fund V invested $50 million in equity and secured the remainder of the capital through Freddie Mac. Kennedy Wilson (NYSE: KW), a global real estate investment company, is a 12 percent investor in Fund V. In the first transaction, Fund V acquired Alara Harbour Point for $46.5 million from SVF Harbour Pointe Mukilteo LLC. The 230-unit multifamily property is located at 4500 Harbour Pointe Blvd. in Mukilteo, a northern suburb of Seattle. The property features amenities such as a fitness center, picnic areas, business center, swimming pool and clubhouse. Unit amenities at Alara Harbour Point include stainless steel appliances, walk-in closets, high-speed Internet access and balconies or patios. The complex was built in 1998 and is situated on 12 acres within a master-planned community. All buildings within the complex are three stories. In the second transaction, Fund V purchased Tivalli, a 383-unit property, for $94.3 million from GRE Ash way LLC. Amenities at the complex include a 7,000-square-foot lodge, swimming pool, indoor basketball court, yoga studio, outdoor amphitheater, outdoor lounge with fireplace and …

March 11, 2016

Retail Texas Top Stories

Tailored Brands to Close 250 Men’s Wearhouse, Jos. A. Bank Stores in FY 2016

by John Nelson March 10, 2016

HOUSTON — Tailored Brands Inc. (NYSE: TLRD), the recently formed parent company of the Men’s Wearhouse and Jos. A. Bank menswear brands, plans to close approximately 250 of its stores in fiscal year 2016, according to the company’s fourth-quarter earnings report released March 9. The store closures will include 80 to 90 Jos. A. Bank stores, all 58 of its outlet locations and 100 to 110 of its MW Tux stores. Houston-based Tailored Brands ended fiscal year 2015 on Jan. 31, 2016, with a $1 billion net loss. According to the earnings report, the generally accepted accounting principles (GAAP) operating loss includes a $1.15 billion “goodwill and intangible asset impairment charge,” which was related to Jos. A. Bank’s poor sales performance, as well as a store reorganization program that Tailored Brands initiated in the fourth quarter of fiscal 2015. Jos. A. Bank’s comparable sales in the fourth quarter decreased 31.9 percent from fourth-quarter 2014 due to a decline in average transactions per store. Men’s Wearhouse’s fourth-quarter comparable sales increased 4.3 percent in that same time period. “While our fourth-quarter and full-year results were consistent with our revised guidance, we remain very disappointed by the weak Jos. A. Bank results,” says …

March 10, 2016

InterFace Seniors Housing West Conference, Los Angeles

Conference Coverage Features Top Stories

InterFace Panelists: Seniors Housing Industry Faces Stiff Competition from Each Other, Multifamily Developers

by Jeff Shaw March 10, 2016

LOS ANGELES — Investors of all types are clamoring to cash in on the Baby Boom generation, as this aging population readies to kick off a 20-year need for care and seniors services. That’s according to panelists at InterFace Conference Group’s Seniors Housing West conference, held March 3 at the Omni Los Angeles Hotel. Those looking for a long-term investment are betting heavily on the Boomer population, which is 76.5 million strong, with the oldest being 69 and the youngest turning 50 this year. “The first Boomers are only turning 70 this year,” said keynote speaker Lynne Katzmann, president and founder of Juniper Communities. “They have a decade to go before they need services, but they are today’s primary buyer.” Much of this demographic will have a strong understanding of seniors housing options by the time they need the services themselves, Katzmann asserted, because they will have been down that road before with their aging parents. With this in mind, Katzmann believes it’s incumbent upon the current developers and operators to not just offer the best in senior care, but to invest in their facilities and in client (aging parents and their children) education as well. “We must take action …

March 10, 2016

Illinois Midwest Office Top Stories

Hilco, Executives of MB Real Estate Acquire Historic Office Tower in Chicago

by Katie Sloan March 9, 2016

CHICAGO — Hilco Real Estate LLC, in a joint venture with Peter Westmeyer and Kevin Purcell, both of whom are senior executives with MB Real Estate Services Inc. (MBRE), has acquired One North LaSalle, a historic office building located in Chicago’s Central Loop. No terms of the transaction were disclosed. Built in 1929, the 500,000-square-foot office building is situated on the northeast corner of LaSalle and Madison streets, and offers easy access to public transportation and highways, as well as a variety of hotels, restaurants and retail. The most recent building renovation included restoration of the Art Deco detailing and installing new elevators, HVAC, electrical and plumbing systems. The 47-story property is set to undergo an extensive redevelopment under its new ownership, which will include high-end tenant amenities, the addition of spec suites and remodeling the building’s interior. Once complete, the property will feature a renovated lobby, tenant corridors and restrooms, and first-class tenant amenities including a rooftop deck, tenant lounge, conference facility, fitness center and bike room. A multi-million dollar capital budget is being put forth by the new ownership group, and MBRE has been contracted to provide ongoing management, leasing and construction oversight for the property. MBRE’s Mark …

March 9, 2016

InterFace Net Lease conference, March 1, Omni Los Angeles Hotel

Conference Coverage Features Top Stories

Net Lease Investors Are Realists About Potential Changes in the Market, Say InterFace Panelists

by Jeff Shaw March 9, 2016

LOS ANGELES — The net lease market has, by and large, enjoyed a steady run post-recession. But many investors are entering 2016 with a sentiment that an uncertain future may lie ahead, according to panelists at InterFace Conference Group’s Net Lease West conference, held March 1 at the Omni Los Angeles Hotel. This sobering reality was inspired by a few factors, including a likely hike in interest rates, a bulk of CMBS loans coming due, a discrepancy in pricing between buyers and sellers, rising cap rates, the possible dissolution of 1031 exchange transactions and a bull market that has lasted longer than average. CMBS Wall Creates Opportunities for Buyers Gordon Whiting, managing director at Angelo, Gordon & Co. and a “State of the Industry and 2016 Outlook” panelist, believes now is a good time for buyers to begin infiltrating the market due to the girth of CMBS loans coming due. More than $300 billion is set to mature between 2015 and 2017, according to the Mortgage Bankers Association. Rather than refinancing, panelists noted some borrowers were choosing to sell ahead of maturity. “I have clients who have chosen to put their properties on the market because the debt is …

March 9, 2016

California Retail Top Stories Western

Taubman Unveils Plans for $500M Renovation at Beverly Center in Los Angeles

by Katie Sloan March 8, 2016

LOS ANGELES — Taubman Centers Inc. (NYSE: TCO) has unveiled plans for a $500 million renovation at Beverly Center, an 886,000-square-foot shopping mall located on Beverly Boulevard in Los Angeles. Renovations will include new skylights, a new exterior with a perforated steel façade, a state-of-the-art smart parking system and a new streetscape with refreshed landscaping. Taubman also plans to develop a row of street-level restaurants along West Third Street with an additional valet for quick access to the new dining options. Upon completion, the center will also feature a refreshed tenant mix and a flexible center court featuring a large LED screen, places to sit and room for exhibitions and installations. “In re-envisioning Beverly Center, we are looking to create LA’s signature urban shopping and dining experience, as well as an exciting, pedestrian-friendly anchor to one of the most creative and diverse neighborhoods in the world,” says Robert Taubman, CEO and president of Taubman Centers. “The center is a key asset in our portfolio, and after renovation we believe it will become one of the top ten retail centers in the nation.” The shopping mall opened March 31, 1982, according to Taubman. Sheldon Gordon and E. Philip Lyon originated the …

March 8, 2016

Colorado Retail Top Stories Western

Vestar Acquires Bowles Crossing Shopping Center Near Denver for $76.1M

by Nellie Day March 7, 2016

LITTLETON, COLO. — Vestar has acquired Bowles Crossing, a 409,457-square-foot regional shopping center in the Denver suburb of Littleton, for $76.1 million. The 53.8-acre Bowles Crossing is one of the area’s top regional shopping destinations in the southwest Denver metro area. Tenants at the center include Trader Joe’s, DSW Warehouse, Ross Dress for Less, Gordmans and a newly renovated AMC Theatre. The center is located at 8055 W. Bowles Ave., at the northeast corner of Wadsworth Boulevard and Bowles Avenue. Vestar plans expand the shopping center, adding new retail, restaurants and a multifamily component. “Over the past 12 months, Vestar has acquired five retail centers valued at $670 million throughout the Western states,” says Clint Marchuk, the firm’s vice president of acquisitions. “Our goal is to continue acquiring strategic centers in key markets with strong demographics.” Vestar also recently acquired the 623,205-square-foot, open-air retail and entertainment portion of The Gateway, a retail, residential and office complex in downtown Salt Lake City. Phoenix-based Vestar is a privately held real estate company that specializes in the acquisition, management and development of commercial real estate, particularly retail. The company owns and manages more than 25 million square feet of retail assets in the …

March 7, 2016

Features Retail Top Stories

Sports Authority Unveils List of 140 Store Closures

by Katie Sloan March 7, 2016

ENGLEWOOD, COLO. — Englewood-based Sports Authority Inc. has made public a list of 140 stores it plans to close in conjunction with the retailer’s move to file for Chapter 11 bankruptcy protection. Sports Authority has received access to up to $595 million in debtor-in-possession financing in conjunction with the Chapter 11 filing in the District of Delaware. The company has received court approval to begin liquidating stores with a portion of its $595 million bankruptcy loan. The decision to close stores follows a comprehensive review of the Sports Authority portfolio in light of the increasing amount of shopping that is occurring online, the company stated in a March 2 press release. “As a result of these changes in consumer buying patterns, Sports Authority determined that it needs fewer stores as part of its long-term business model,” according to the press release. (For more on what ultimately led the sporting goods retailer to file for Chapter 11 bankruptcy protection, click here.) The following store locations are set to close in the coming months based on a review of the court filing by REBusinessonine.com State City Address Arizona Casa Grande 1004 N Promenade Parkway, Ste 159 Arizona Mesa 1812 W Rio …

March 7, 2016

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