Top Stories

Fortuna Acquires Wyndham Hotel in New York’s Flatiron District for $60M

by Katie Sloan March 1, 2016

NEW YORK CITY — Fortuna Realty Group LLC has acquired a Wyndham-franchised hotel located at 37 W. 24th St. in Manhattan’s Flatiron District for $60 million. Fortuna plans to convert the 124-key hotel — built in 2008 — into a high-end boutique hotel. The investor bought the property out of bankruptcy at auction from an undisclosed seller. The hotel is situated directly off Fifth Avenue, and around the corner from Mario Batali’s acclaimed Italian marketplace Eataly and Madison Square Park. The hotel’s neighborhood has emerged as a popular location for New York’s technology, advertising, marketing and information technology sector, and is a hub for restaurants and nightlife. The new acquisition will join Fortuna’s portfolio of upscale “lifestyle hotels,” including Hotel Hugo and Hotel Indigo Chelsea, both in Manhattan, and The Garden City Hotel, located on Long Island. Wayne Cook and David Glanz of law firm Windels Marx LLP represented Fortuna in the transaction. U.S. Trust provided an undisclosed amount of acquisition financing. Based in New York City, Fortuna Realty Group LLC is a privately held real estate investment and development company with a focus in hospitality. — Katie Sloan

March 1, 2016

Features Multifamily Office Retail Top Stories

Construction Deliveries Increase Across Property Types, Says Reis

by Christina Cannon March 1, 2016

As 2015 came to an end, construction deliveries for the office, retail and apartment sectors were on the rise, according to Reis. That trend is expected to continue through 2016, the New York-based commercial real estate data firm says. For the fourth quarter of 2015, the apartment sector recorded its third consecutive quarter above 50,000 units delivered. Deliveries for office properties were above 9 million square feet for the third consecutive quarter. Retail deliveries increased for the second consecutive quarter. Apartment Sector Ramps Up “2015 was the highest year for apartment construction since 1999,” says Ryan Severino, senior economist and director of research at Reis. “With the pipeline continuing to swell, completion figures for 2016 are expected to exceed those from 2015.” Texas markets led deliveries for new apartment units, with Houston posting 4,330 new units and Dallas delivering 3,178 units in the fourth quarter of 2015. Behind the Lone Star State is Seattle, posting 2,806 newly constructed units. Los Angeles delivered 2,795 units, and Denver added 2,671 units to the multifamily landscape. Office Sector Stays Steady Office construction has slowly increased over the last few quarters. The fourth quarter of 2015 ended with just under 11 million square feet …

March 1, 2016

Hospitality Southeast Top Stories Virginia Western

Hilton to Spin Off Real Estate into 70-Property Hotel REIT

by Nellie Day February 29, 2016

MCLEAN, VA — Hilton Worldwide (NYSE: HLT) has announced plans to spin off the majority of its real estate business into a publicly traded REIT. The company also plans a second spinoff, putting its Hilton Grand Vacations timeshare business into a third publicly traded company. The company hopes the spinoffs will help focus Hilton Worldwide’s model on its core business. “The transactions we announced today will result in three pure-play companies, enabling dedicated management teams to fully activate their respective businesses,” says Christopher Nassetta, president and CEO of Hilton Worldwide. “We intend to have the appropriate leadership, strategies and capital structures in place to set up all three companies for further success.” If approved by the Securities and Exchange Commission (SEC), Hilton’s new REIT will include about 70 properties and 35,000 rooms, comprising one of the largest and most geographically diversified publicly traded lodging REITs. The REIT’s portfolio will contain luxury and upper-upscale assets in high-barrier-to-entry urban and convention markets, top resort destinations, select international regions and strategic airport locations. The new timeshare company will contain nearly 50 club resorts in the United States and Europe. The company will have a long-term license agreement with Hilton Worldwide to market, sell …

February 29, 2016

California Office Top Stories Western

NorthMarq Arranges $148M Refinancing of Two Office Buildings in Silicon Valley

by Christina Cannon February 26, 2016

CUPERTINO, CALIF. — NorthMarq Capital has arranged a $148 million refinancing loan for two office buildings at Cupertino City Center in Cupertino. Prometheus Real Estate Group was the borrower in the transaction. Prometheus developed and still manages the property. Cupertino City Center is a mixed-use development that consists of five office buildings, three residential projects and one hotel. The two eight-story office buildings, which total 354,770 square feet, are located at 20400 and 20450 Stevens Creek Blvd. The buildings were constructed in the late 1980s. “They remain the tallest buildings in the market and offer views and a central location no others can,” says Nathan Prouty, managing director with NorthMarq Capital’s San Francisco office. Community amenities at Cupertino City Center include a fitness facility, swimming pool and amphitheater. “This mixed-use amenity package is market-leading and rare in this location in Silicon Valley,” says Prouty. The transaction was structured with a 10-year term and 30-year amortization schedule. Allianz Real Estate of America on behalf of Allianz Life Insurance Company of North America provided the financing. Major tenants at Cupertino City Center include Apple, Seagate Technology and Morgan Stanley. “These buildings have been well occupied since they were built,” says Andrew Slaton, …

February 26, 2016

Entertainment Experience Evolution Panel, Los Angeles

Features Retail Top Stories Western

The Only Thing Constant in Retail Today is Change, Say EEE Panelists

by Jeff Shaw February 25, 2016

LOS ANGELES — The old formula for shopping center success no longer applies today, thanks to the advent of mobile technology, e-commerce competition and changing consumer tastes. This was the sentiment put forth by speakers and panelists at Shopping Center Business’s Entertainment Experience Evolution conference, held Feb. 24 and 25 at Regal Cinema House and the J.W. Marriott at L.A. Live in Los Angeles. Jerry France, chairman and CEO of France Media, set the stage during his opening remarks where he noted how far the retail industry has come — and how much potential is still in store. “We live and work in a very interesting country and are in a very exciting industry,” he said. “Having been in this industry for 50 years, I have seen a lot of change. Today we see a change in retail due to e-commerce versus bricks and mortar. We’re now seeing some e-commerce companies becoming bricks and mortar, so it goes both ways.” “I would not write retail off,” France continued. “I see tremendous growth ahead of us, with lots of new projects.” Indeed, there are many “new” projects on the horizon, though the meaning of this term has changed right alongside the retail …

February 25, 2016

California Hospitality Top Stories Western

Tutor Perini to Build $285M Resort, Casino Expansion in Southern California

by John Nelson February 25, 2016

TEMECULA, CALIF. — The Pechanga Development Corp., the economic development branch of the Pechanga Band of Luiseño Indians, has selected Tutor Perini Building Corp. to expand the Pechanga Resort & Casino in Temecula, roughly 60 miles north of San Diego. The contract is valued at $285 million. “Perini was the general contractor for the original Pechanga resort that opened in 2002. This development will complement our current offerings, enhance the resort experience for guests, and cement Pechanga Resort & Casino as the preeminent luxury gaming destination in California,” says Patrick Murphy, president of the Pechanga Development Corp. The resort expansion project involves adding a AAA Four Diamond, 568-room hotel wing; a standalone luxury two-story spa and salon with 17 treatment rooms, a fitness center and hydrotherapy pool terrace; a resort-style pool complex with eight pool areas; two new restaurants; and an additional 67,000 square feet of event space. Tutor Perini previously completed multiple phases of the Pechanga Resort & Casino over the past 13 years. Tutor Perini expects the expansion to be “substantially completed” by the end of 2017. Pechanga Resort & Casino is the largest resort/casino in California and employs roughly 4,000 team members, according to the casino’s website. …

February 25, 2016

Features Georgia Southeast Top Stories

Dhawan: China Spooks Stock Market Bull

by John Nelson February 25, 2016

ATLANTA — China’s “sloppy” attempt to manage the devaluation of its currency, the renminbi, and the declining demand for Chinese products from the United States and Europe are the main culprits behind the stock market’s woes, says economist Dr. Rajeev Dhawan of Georgia State University (GSU). “Who got to the stock market bull?” asked Dhawan during the quarterly forecast conference held at GSU on Wed., Feb 24. “Just like in old Chuck Norris movies, the chief villain is the Chinese economy.” For the second time in six months, China’s attempt to manage the devaluation of its currency sent shockwaves through global equity markets. Year-to-date through Feb. 24, the Dow Jones industrial average was down 940 points, or 5.4 percent. What would lead China to devalue its currency? Dhawan says that China could be attempting to impress the United Nation’s International Monetary Fund (IMF) with the currency manipulation. Countries try to devalue their currencies in order to combat trade imbalances, point out industry experts. A weaker currency could help a country like China to boost trade exports, shrink trade deficits and reduce sovereign debt burdens, since a “weaker currency makes debt payments effectively less expensive over time,” according to Investopedia. Whatever …

February 25, 2016

jeff-day-ceo-berkeley-point-capital-ccre

Loans Multifamily Top Stories

Berkeley Point Capital Closes $1.4B in Acquisition Loans for 25-Property Multifamily Portfolio

by Haisten Willis February 24, 2016

BETHESDA, MD. — Berkeley Point Capital has closed $1.4 billion in Freddie Mac acquisition loans for a 25-property, five-state portfolio on behalf of long-time client Starwood Capital Group. The portfolio’s properties total 8,597 units located in California, Colorado, Florida, Maryland and Virginia. The properties were built between the mid-1960s and late 2000s and include amenities such as clubhouses, fitness centers, dog parks, business centers, hot tubs, barbecue areas, saunas, playgrounds, and basketball, tennis, racquetball and volleyball courts. The 10-year, floating-rate loans include a five-year interest-only period with a 30-year amortization schedule. All loans closed on Jan. 26. “The closing of the portfolio was a huge success and was driven by the very focused and coordinated efforts of Starwood, Freddie Mac and Berkeley Point,” says Charlie Haggard, managing director of Berkeley Point Capital’s Irvine, Calif. office. “The relationships and familiarity between the various parties allowed for a smooth and timely closing.” Haggard and Kevin Mignogna led the financial effort for Berkeley Point Capital. Berkeley Point Capital is a multifamily capital provider with a portfolio of over $50 billion including 2,800 loans in 49 states. The firm offers Fannie Mae, Freddie Mac, FHA, CMBS and life company loans. Commercial real estate financing …

February 24, 2016

Multifamily Top Stories

Forest City Sells Military Housing Business to Hunt Cos. for $208.8M

by Katie Sloan February 23, 2016

CLEVELAND — Cleveland-based Forest City Realty Trust Inc. (NYSE: FCEA and FCEB) has completed the sale of its military housing business to Hunt Cos. Inc. for $208.8 million. The military housing business consists of fee-income streams from property management, asset management, and construction and development of family housing communities for the Navy, Marines and Air Force, as well as minority equity interest in the real estate at each location. The business includes 14,500 housing units comprised of single-family homes, duplexes and triplexes. Properties in the transaction include military housing installations at the Air Force Academy in Colorado Springs, Colo.; Air Force Southern Group, consisting of four Air Force bases including Arnold Air Force Base in Tennessee, Charleston and Shaw Air Force bases in South Carolina, and Keesler Air Force Base in Mississippi; Navy and Marine Corps bases in Hawaii; military housing associated with three Naval installations in the Puget Sound area of Washington; and six military housing communities at Naval Station Great Lakes in Illinois, Naval Surface Warfare Center in Crane, Ind., and Navy-Mid-South in Millington, Tenn. As part of the transaction, Hunt is extending employment offers to the majority of Forest City’s associates currently in the military housing business. …

February 23, 2016

Features Multifamily Top Stories

Ten-X Selects Orlando as Best Multifamily Market for Buyers

by John Nelson February 23, 2016

IRVINE AND SILICON VALLEY, CALIF. — Ten-X, formerly Auction.com, has released its list of the multifamily sector’s top buy and sell markets in the United States, with Orlando ranked as the No. 1 market for buyers. The list was included in the company’s Multifamily Market Outlook report, which is based on third-quarter 2015 data from Reis and forecasted fundamentals from Ten-X Research. Rounding out the top five apartment markets for buyers are Raleigh-Durham, N.C.; Fort Lauderdale, Fla.; Phoenix; and Sacramento, Calif. Ten-X ranked Orlando as the No.1 market for apartment buyers because the metro’s monthly effective rental rate per unit is expected to jump from $970 in 2015 to $1,169 in 2019, a nearly 21 percent increase during that period. The market’s vacancy rate is also expected to contract from 5.3 percent in 2015 to 4.3 percent in 2019. Ten-X expects Orlando’s multifamily supply pipeline to remain heavy in the near future. Even with the new construction, vacancies are expected to decline to the low 3-percent range and settle in at the low-4 percent range during the next few years. Orlando’s total employment is now at a record high, surpassing its 1990s peak and recently notching greater than 4.5 percent …

February 23, 2016

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