Top Stories

Edens to Build $200M Mixed-Use Development in Boston’s South Bay

by Nellie Day May 16, 2016

BOSTON — The Boston Redevelopment Authority Board has given approval for Edens to construct a 700,000-square-foot mixed-use development in the South Bay submarket of Boston. The 10-acre, $200 million development will sit adjacent to Edens’ South Bay Center in Boston’s Dorchester neighborhood. This approval was the last hurdle to starting the project, and Edens plans to break ground in June. The proposal calls for 113,000 square feet of restaurants and shops, a 12-screen luxury AMC Theatre with IMAX, a flagship Wahlburger’s, a 130-room hotel and two parking garages. Edens will also partner with Mill Creek Residential to develop 475 multifamily units at the project. The multifamily component will contain a mix of studio to three-bedroom apartments. The mixed-use project will be built on a site that currently contains a vacant industrial property and concrete plant. During construction, Edens also plans to upgrade the 427,289-square-foot South Bay Center, which is home to tenants such as OfficeMax, Marshalls, Old Navy, Target, The Home Depot, Bed Bath & Beyond and TJ Maxx. Columbia, S.C.-based Edens develops, owns and operates community shopping centers in primary U.S. markets. Its institutional-quality portfolio contains more than 130 retail centers. Mill Creek Residential Trust LLC is a national …

May 16, 2016

Florida Office Southeast Top Stories

Flea World Demolition Clears Way for $300M Reagan Center Mixed-Use Development Near Orlando

by Nellie Day May 13, 2016

SANFORD, FLA. — Demolition work has commenced on Flea World, the one-time home of “the nation’s largest flea market under one roof,” in Sanford approximately 25 miles north of Orlando. The 118-acre site is being cleared to make way for Reagan Center, a mixed-use project that could eventually include as much as 2.4 million square feet of offices, restaurants, retail stores, apartments and townhomes. The property is situated on U.S. Route 17 at Ronald Reagan Boulevard and County Home Road. The 34-year-old flea market space is situated directly across from the Seminole County Government Operations Center, the courthouse and Seminole State College. Reagan Center’s construction will kick off a 20-year effort by the municipalities of Seminole County, Sanford, Lake Mary, Winter Springs, Longwood and Casselberry to create an economic development corridor along Route 17. “Reagan Center will create employment opportunities for thousands of Central Floridians over the next decade and will be a major economic engine,” says Paul Partyka, partner at NAI Realvest in Orlando and the broker of record for the $300 million development. “Because of its location, size and economic impact, Reagan Center will rank as one of Florida’s benchmark development projects.” Hastings Homes is carrying out the …

May 13, 2016

Florida Mixed-Use Southeast Top Stories

Off to the Races: International Speedway Breaks Ground on ONE DAYTONA Mixed-Use Project

by John Nelson May 12, 2016

DAYTONA BEACH, FLA. — International Speedway Corp. (ISC), a motorsport event promoter and owner/operator of 13 motorsport entertainment facilities, has broken ground on ONE DAYTONA, a 300,000-square-foot mixed-use project in Daytona Beach. The development will be situated across from ISC’s Daytona International Speedway, which is home of the Daytona 500 NASCAR race. Set to open in fall 2017, ONE DAYTONA will feature retail, dining, entertainment and residential space, as well as two hotels. Development costs are estimated to total between $120 million and $150 million. ONE DAYTONA will be anchored by a 67,000-square-foot Bass Pro Shops Outpost and a 12-screen Cobb Theatre. Vertical construction has begun on the movie theater, and Bass Pro Shops will begin construction on its building in the coming weeks. Additionally, ISC has recently executed leases with first-to-market retailers such as Guitar Center, Tervis, It’Sugar, Jeremiah’s Italian Ice and Venetian Nail Spa. “We are very pleased to be announcing these five outstanding tenants,” says Jeff Boerger, vice president of corporate development at ISC. Kansas City, Mo.-based Legacy Development is managing the leasing efforts for ONE DAYTONA. “We are delivering an environment and mix of uses unlike any other in the country,” continues Boerger. Other components at …

May 12, 2016

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Features Hospitality Top Stories

Highland Group: Extended-Stay Hotels Continue to Outperform Overall Hotel Industry

by Haisten Willis May 12, 2016

Extended-stay hotels had a very good start to 2016 as they maintained higher growth in revenue per available room (RevPAR) than the overall hotel industry, according to the Highland Group’s First Quarter U.S. Extended Stay Lodging report. Extended-stay demand continues to increase at about 5 percent quarterly, and there appears to be no significant change to that trend on the horizon, according to the report. Occupancy also remains high compared with historic averages and there is more than enough supply growth to accommodate increasing demand, the researchers conclude. However, the accelerating increase in supply is reducing occupancy, and for the first time in more than five years all three extended-stay segments reported a quarterly decline in occupancy. Overall extended-stay occupancy has now declined slightly for four consecutive quarters and is likely to continue declining throughout 2016. At the same time, room revenues are up more than 10 percent and gains in average daily rate (ADR) are strong enough to continue positively impacting RevPAR, which is up 3.5 percent year over year in the extended-stay sector. RevPAR grew at 2.7 percent for the hotel industry overall. There were 397,003 extended-stay hotel rooms open at the end of first quarter 2016, which is an increase of …

May 12, 2016

Hospitality New York Northeast Top Stories

SBE Entertainment Agrees to Purchase Morgans Hotel Group In High-End Niche

by Haisten Willis May 11, 2016

LOS ANGELES AND NEW YORK CITY — SBE Entertainment has agreed to purchase Morgans Hotel Group Co. (NASDAQ: MHGC). The deal has a reported equity value of about $82 million. Morgans is the operator of high-end hotels, including the Mondrian in Los Angeles and the Royalton in New York City. When the transaction closes, Los Angeles-based SBE will acquire Morgans’ portfolio of 13 owned, operated or licensed hotel properties in London, Los Angeles, New York, Miami, San Francisco, Las Vegas and Istanbul, including its Hudson New York and Delano South Beach properties. The $82 million purchase price equates to $2.25 per share in cash, according to a statement from Morgans. Under terms of the agreement, SBE will acquire all of the outstanding shares of Morgans common stock in cash, which, together with the exchange of Morgans’ Series A preferred securities, the assumption of debt and transfer of capitalized leases, represents a total enterprise value of approximately $794 million The per share price represents a 69 percent premium over Morgans’ unaffected closing price on May 5, and a 54 percent premium to Morgans’ volume weighted average price for the 30 days up to and including May 5. “Morgans’ board of directors carefully …

May 11, 2016

Florida Office Southeast Top Stories

Dockerty Romer & Co. Arranges $105.3M Acquisition of Aventura Corporate Center in Suburban Miami

by Katie Sloan May 10, 2016

AVENTURA, FLA. — Dockerty Romer & Co. has arranged the $105.3 million acquisition of Aventura Corporate Center, a 242,244-square-foot office complex located in Aventura, roughly 18 miles outside of Miami. The Class A property, located along Biscayne Boulevard, comprises two five-story buildings, one six-story building and three parking garages with additional development rights. Major tenants at the complex include Morgan Stanley, South Broward Hospital, Regus and Serendipity Labs. Buildings I and II, located at 20801 and 20803 Biscayne Blvd., were constructed in 1987 and 1988, respectively, and underwent renovations in 2005. Building III, located at 20807 Biscayne Blvd., was built in 2007. Bob Dockerty of Dockerty Romer & Co. arranged the transaction on behalf of the 1031 exchange buyer, Renaissance Aventura LLC. HFF represented the seller, ACC/GP Development LLC and ACC/GP Investment LLC, in the transaction. The 1031 exchange buyer, which is affiliated with investors Kenneth and Robert Fishel, sold an asset located in Manhattan before acquiring Aventura Corporate Center. The investors primarily own multifamily and office assets across the New York City metro area. Dockerty Romer also secured a seven-year, $50 million acquisition loan on behalf of the buyer through Prudential Mortgage Capital Co. Since its inception in January 2000, …

May 10, 2016

Features Hospitality Industrial Multifamily Office Retail Top Stories

U.S. Commercial Property Values See 7 Percent Annual Growth, According to Ten-X

by Haisten Willis May 10, 2016

IRVINE, CALIF. — Commercial real estate values in the United States increased by 7 percent from April 2015 to April 2016, according to Ten-X, an online real estate marketplace. The company has released its latest Commercial Real Estate (CRE) Nowcast. The pricing index, which combines Google Trends data, Ten-X’s proprietary transaction data and investor surveys to forecast CRE pricing trends in real time, reveals that commercial valuations increased by 0.6 percent month-over-month in April and are back above their year-end 2015 level. The Ten-X CRE Nowcast (formerly the Auction.com CRE Nowcast) is a price index covering the entire U.S. commercial market, including individual price trends for the office, apartments, retail, industrial and hotel sectors. “Even though the April all-sector increase is significantly stronger than the prior month’s slight gain of 0.2 percent, this still is the slowest annual growth rate from pricing for the cycle,” says Ten-X chief economist Peter Muoio. “April’s uptick in growth was seen across all major CRE sectors except hotel, where that segment’s fundamentals, as well as its pricing, continue dwindling. Meanwhile, the multifamily sector displayed the strongest pricing trends with a 1.8 percent gain in April.” The Ten-X Hotel Nowcast dipped 1 percent from March …

May 10, 2016

California Healthcare Multifamily Seniors Housing Top Stories Western

HCP to Spin Off HCR ManorCare Portfolio of Skilled Nursing, Assisted Living Assets Into Separate REIT

by Christina Cannon May 9, 2016

IRVINE, CALIF. — HCP (NYSE: HCP), one of the largest healthcare real estate investment trusts in the United States, will spin off its HCR ManorCare portfolio of skilled nursing and assisted living assets into an independent, publicly traded REIT. The company’s board of directors approved the plan today. The newly formed REIT, SpinCo, will be composed of more than 320 properties operated by HCR ManorCare. The portfolio has an expected in-place annual rent of approximately $485 million. “Post spin, HCP will own a stable, private-pay portfolio that has a track record of delivering consistent, attractive returns,” says Lauralee Martin, president and CEO of Irvine-based HCP. “HCP will be able to sharpen its focus on high-growth healthcare sectors.” This is the second major REIT to spin off its skilled nursing portfolio in the past year. In August, Ventas created Care Capital Properties as a way to spin off its skilled nursing assets. “We need to eliminate the overhang that exists from the current challenges facing HCR ManorCare so the rest of our business can flourish,” said Micheal McKee, executive chairman of the board, on the company’s first-quarter earnings call this morning. “As we reviewed our options, for many reasons it became clear …

May 9, 2016

Features Top Stories

April Jobs Report Falls Short of Expectations, But Office-Based Hiring Surges

by Matt Valley May 9, 2016

A modest pullback by U.S employers in April doesn’t signal an end to the recent trend of strong job creation, but it adds to a string of subpar economic reports, says Robert Bach, director of research for the Americas at brokerage firm Newmark Grubb Knight Frank. The U.S. Bureau of Labor Statistics (BLS) reported a net gain of 160,000 nonfarm payroll jobs in April, well below the 200,000 jobs projected in Bloomberg’s survey of economists. What’s more, the increase in total nonfarm payroll employment for February was revised from 245,000 to 233,000, and from 215,000 to 208,000 in March. That means the U.S economy added 19,000 fewer jobs in February and March than first believed. The nation’s real gross domestic product (GDP) grew at an annualized rate of only 0.5 percent during the first three months of 2016, Bach points out, the weakest quarterly pace in two years. Weaker than expected retail sales, softness in business capital expenditures and a pullback in corporate earnings also have raised some red flags. “Taken together, these data points confirm the economy is navigating a soft patch that merits close observation in the months ahead, particularly with the added uncertainty created by the November …

May 9, 2016

New York Northeast Office Top Stories

Construction Begins on $380M Tech and Innovation Building in Brooklyn’s Navy Yard

by Christina Cannon May 6, 2016

NEW YORK CITY — Construction is underway on Dock 72, a $380 million project that will bring 675,000 square feet of tech and innovation space to the Brooklyn Navy Yard. The 16-story building is currently slated for delivery in late 2017. Dock 72 is part of Mayor Bill de Blasio’s commitment to spur job growth around Navy Yard, a 300-acre modern industrial and office park. With this project, Navy Yard has over $700 million of construction activity underway or in the planning stages. The new projects at the Brooklyn Navy Yard are expected to increase the number of permanent jobs at the Navy Yard from 7,000 to 16,000 by 2020. Boston Properties Inc. and an affiliate of Rudin Management Company Inc. (Rudin Development) are developing the building in conjunction with Brooklyn Navy Yard Development Corp. (BNYDC). S9 Architecture designed the building, which is centrally located within the Yard on a 60,000-square-foot strip of land that juts out into the East River between two active dry-docks. WeWork, a provider of collaborative co-working office spaces, is also involved in the development process and will anchor Dock 72. WeWork will occupy 222,000 square feet, and the remaining floor plates will range from 40,000 …

May 6, 2016

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