MONTVALE, N.J. — The Great Atlantic & Pacific Tea Company (A&P) has filed for Chapter 11 bankruptcy and agreed to sell about 120 of its stores for $600 million. The company operates 296 supermarket and liquor stores under the brand names of A&P, Best Cellars, Food Basics, the Food Emporium, Pathmark, Superfresh and Waldbaum’s. The stores are situated throughout the East Coast, including New York, New Jersey, Pennsylvania, Delaware, Massachusetts, Maryland and Connecticut. A&P will operate as business as usual throughout the court-supervised sale process. The company will soon close 25 stores, however, due to ongoing operating losses. “After careful consideration of all alternatives, we have concluded that a sale process implemented through Chapter 11 is the best way for A&P to preserve as many jobs as possible, and maximize value for all stakeholders,” says Paul Hertz, A&P’s president and CEO. “While the decision to close some stores is always difficult, these actions will enable the company to refocus its efforts to ensure the vast majority of A&P stores continue operating under new owners as a result of the court-supervised process.” The Great Atlantic & Pacific Tea Company was founded in Montvale in 1859. It was initially a small chain …
NEW YORK CITY — NorthStar Healthcare Income Inc. (NorthStar Healthcare) — through a joint venture with Formation Capital LLC and Safanad Management Ltd. — has closed the acquisition of the U.S.-based operations of Extendicare International Inc., including a portfolio of 158 seniors housing and care facilities for a total cost of approximately $1.1 billion. New York-based NorthStar Healthcare, a public, non-traded real estate investment trust, acquired a 36.67 percent interest in the portfolio, while affiliates of Safanad and Formation collectively acquired the remaining 63.33 percent interest. In connection with the acquisition, NorthStar Healthcare also originated a $75 million mezzanine loan to partially finance the transaction, which bears interest at a fixed rate of 10 percent per year and has a term of 67 months. Among highlights of the acquisition: The portfolio consists of 152 skilled nursing facilities and six assisted living facilities with over 15,000 beds located across 12 states, with the largest concentrations in Indiana, Kentucky, Ohio, Michigan and Wisconsin. The facilities are leased to five third-party operators pursuant to long-term net leases. The overall resident occupancy was approximately 83 percent as of March 31. In addition to the mezzanine loan, the joint venture financed the acquisition with a …
Two compelling trends have emerged on the commercial real estate lending and investment front during the first half of 2015. First, commercial real estate buyers with an abundance of funds and a yearning for yield have poured more capital into the Midwest amid heady prices in major coastal markets. Second, the increase in spending has transpired in an environment marked by two potential market-disrupting forces: interest rate volatility and temporary anxiety over the role Fannie Mae and Freddie Mac will play in the apartment financing market. Investment sales of office, industrial, retail, apartment and hotel properties through the first five months of 2015 in the Midwest totaled $19.6 billion, according to New York-based Real Capital Analytics (RCA), which tracks property and portfolio sales of $2.5 million and above. That $19.6 billion sum has already surpassed the volume of property and portfolio sales in the 10-state region during the first half of 2014 by $3 billion, and it represents 10 percent of national dollar volume year-to-date through May, according to RCA. Over the past 17 months, capitalization rates in the Midwest have generally remained flat or declined by approximately 30 basis points, reports RCA. The cap rates across the region are …
ATLANTA — Cousins Properties Inc. (NYSE: CUZ) has signed a 15-year build-to-suit lease with tech firm NCR Corp. (NYSE: NCR) to develop NCR’s $200 million world headquarters in Midtown Atlanta. Formerly based in the Atlanta suburb of Duluth in Gwinnett County, NCR’s new headquarters will be located within Tech Square, a multi-block campus of office buildings and retailers located on Spring Street near Georgia Tech. “We are thrilled to be working with NCR to build their world headquarters in Midtown Atlanta,” says Larry Gellerstedt, president and CEO of Cousins Properties. “This is an exceptional opportunity for Cousins to develop and own a cutting-edge, skyline-enhancing trophy tower in Atlanta’s leading technology district.” NCR has pre-leased 100 percent of the planned 485,000-square-foot office building. Cousins recently closed on the acquisition of the land at Centergy North, an office campus within Tech Square. “I have stated very publicly that NCR’s bold, ambitious move to establish a state-of-the-art world headquarters campus in Midtown is a critical first step in a larger goal to create a ‘Silicon Valley of the East’ right here in Atlanta,” says Bill Nuti, chairman and CEO of NCR. “We are currently advocating for other tech leaders and innovative companies to …
KEY WEST, FLA. — DiamondRock Hospitality Co. (NYSE: DRH) has acquired the fee simple interest in the 184-suite Sheraton Suites Key West hotel in Key West for $94 million, or $511,000 per guestroom. “We are very excited about our acquisition of this all-suites hotel, which represents our second acquisition in the highest RevPAR market in the United States,” says Mark Brugger, president and CEO of DiamondRock. “With 480-square-foot guestrooms, the hotel features some of the largest rooms in the market. The hotel is in excellent condition and features direct access to Smathers Beach, the largest and most popular beach in Key West.” DiamondRock is finalizing its plans to reposition and re-launch the hotel as an independent lifestyle resort. As part of the repositioning plan, the company is developing a $5 million capital plan to improve the arrival experience, lobby, pool and guestrooms. Renovations are expected to be minimally disruptive. The conversion to an independent hotel is expected to take place in late 2016 after initial upgrades are completed. Upon stabilization, the company expects to improve the hotel’s profit margins by approximately 500 basis points. By comparison, the Sheraton’s profit margins are currently almost 1,000 basis points lower than DiamondRock’s other …
Technological innovation is radically changing how and where people choose to work, live and play, essentially forcing us to rethink the built environment — and our place in it. Elie Finegold, senior vice president of global innovation and business intelligence at CBRE, recently discussed three trends that are reshaping the way people will use real estate in the future with Blueprint, CBRE’s online magazine. According to Finegold, from broad access to WiFi and smartphones to ever-lighter laptops and more powerful tablet devices, technology has created an inextricably connected world. With the virtual barrier between work and home all but gone, the way people think about real estate is fundamentally changing. “This industrial-era concept that there is a separation between work and home is becoming increasingly less relevant,” says Finegold. “Because you can work from anywhere, space has become more fungible.” Finegold believes there are three emerging trends reshaping the way people will use real estate in the future. 1. Radical Mobility The ability of people and machines to work from anywhere is transforming the utilization of traditional spaces. “If you conduct a survey and ask people, ‘Have you worked in a living room, a bedroom, a plane, an office, an …
BOSTON — HFF has secured $345 million in first mortgage and mezzanine financing for Charles River Plaza North, a 354,594-square-foot medical office/research building adjacent to and long-term leased by Massachusetts General Hospital (MGH) in Boston. HFF worked on behalf of the borrowers, The Davis Cos. and Marcus Partners Inc. — developers and owners of the property — to secure a $245 million, fixed-rate loan with UBS and a $100 million mezzanine loan with TIAA-CREF. Loan proceeds will be used to refinance an existing loan HFF arranged for the borrower in 2007. “[HFF is] extremely proud to be involved with such a world-class project that represents Boston’s strong presence in the field of medical research,” says HFF Senior Managing Director Riaz Cassum, who led the debt placement team representing the borrower. Charles River Plaza North is located at 185 Cambridge St. within the larger 630,000-square-foot Charles River Plaza mixed-use development adjacent to the MGH campus in Boston’s Beacon Hill neighborhood. The location is across the Charles River from the Massachusetts Institute of Technology and Harvard University, and an MBTA red line station is located approximately three blocks away. Completed by the current ownership in 2005, Charles River Plaza North is leased …
NEW YORK — SL Green Realty Corp. (NYSE: SLG) has divested two New York-based properties for a total of $642.8 million, which will be used to partially fund the pending acquisition of the 11 Madison Ave. office building. The company sold Tower 45, a 440,000-square-foot office building at 120 W. 45th St., for $365 million. SL Green also agreed to sell 80 percent of its ownership interest in a 73,000-square-foot, mixed-use asset located at 131-137 Spring St. in SoHo to Invesco Real Estate. SL Green will retain a 20 percent ownership interest in the SoHo property and will continue to manage and lease the asset. The transaction is valued at $277.8 million. SL Green will acquire the 11 Madison Ave. office building for a reported $2.6 billion. The Art Deco-style building serves as the U.S. headquarters for Sony and Credit Suisse AG. “As illustrated by these transactions, the demand for high-quality commercial assets in the Manhattan market continues to be very strong, even as interest rates have risen in recent months,” says Andrew Mathias, the company’s president. “After repositioning both of these assets to unlock additional value, we will realize in excess of $400 million of net cash proceeds from …
YOUNTVILLE, CALIF. — Ashford Hospitality Prime Inc. (NYSE: AHP) has closed on the acquisition of the leasehold interest in the Bardessono Hotel and Spa in Yountville, located 60 miles north of San Francisco, for $85 million. Ashford Prime completed the deal through a stock offering, cash, and $2 million in key money. Remington Lodging will manage the luxury property, which includes 62 rooms and suites. The purchase price represents an estimated 12-month capitalization rate of 5.2 percent on net operating income and an estimated forward 12-month EBITDA multiple of 16.5x. On a trailing 12-month basis as of May 31, the Bardessono Hotel and Spa achieved revenue per available room (RevPAR) of $554.01, with 81.9 percent occupancy and an average daily rate of $676.12, according to unaudited financial data provided by the undisclosed sellers. Yountville Investors LLC developed the property on land owned by the Bardessono family, according to The Press Democrat, a local newspaper based in Santa Rosa, Calif. “We are extremely excited to add this trophy asset to our portfolio,” says Monty Bennett, chairman and CEO of Ashford Hospitality Prime. “The award-winning Bardessono Hotel and Spa provides us with a foothold in Napa Valley, one of the strongest and …
BOSTON — Skanska USA has broken ground on a new 17-story office tower located at 121 Seaport Blvd. in Boston’s Seaport district. The New York-based developer and construction firm will invest $281 million of its own capital in the project. The Class A tower will feature two floors of retail space and two below-grade parking levels. Skanska USA is targeting LEED Platinum certification for the project, which will span roughly 400,000 square feet. The office building will be situated across the street from Seaport Square Green, a neighborhood park. Upon completion, tenants of the tower will have direct access to the Massachusetts Bay Transportation Authority (MBTA) Silver Line, a bus rapid transit system. Skanska expects to complete the office building in the first quarter of 2018. Skanska USA Building is the construction manager for the project. The construction firm indicates it will add a value of $150 million in order bookings for the third quarter of 2015. Skanska USA comprises four business units: Skanska USA Building, which specializes in building construction; Skanska USA Civil, specialized in civil infrastructure; Skanska Infrastructure Development North America, which develops public-private partnerships; and Skanska USA Commercial Development, which develops commercial projects in select U.S. markets. …