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CHICAGO — Harrison Street Real Estate Capital (HSRE) has launched the Harrison Street Core Property Fund, the first open-end core fund dedicated exclusively to investing in the demographically driven education, healthcare and storage properties, making it the largest real estate manager focused on these sectors in the United States. “The core fund has already received subscriptions of more than $200 million from limited partnerships, which include both the Texas Municipal Retirement System and Kentucky Retirement Systems,” said Christopher Merrill, co-founder, president and CEO of Chicago-based HSRE, in a prepared statement. The core fund recently acquired the 1,527-bed Sterling Central Apartments, a student housing community located adjacent to the University of Central Florida in Orlando. The property is 98 percent occupied, and includes two 3,000-square-foot clubhouses, two fitness centers, two computer centers, four pools, tanning, a screening room and a shuttle to campus. HSRE stated that it established the fund to capitalize on the experience and knowledge it has gained as the largest owner/manager focusing on investing in these segments of the real estate market. The company believes it will benefit from the relationships it has formed with more than 30 local and regional operating partners who are the domain experts …

Bank profits will be under pressure in 2012, and the industry’s large exposure to commercial real estate isn’t helping matters. That’s the conclusion of data analytics firm Trepp LLC, which emphasizes that troubled commercial real estate loans have accounted for approximately 80 percent of all U.S. bank failures since 2007. With $1.5 trillion of commercial real estate debt still on the books of banks, regulatory concerns persist. “That’s about one-fifth of bank lending overall,” said Matt Anderson, managing director of New York-based Trepp. “And it’s a much higher proportion for smaller banks, which are much more dependent on commercial real estate lending.” Anderson’s comments came during a webinar hosted by Trepp on Thursday that offered a decidedly bearish outlook for the U.S. banking sector. The data analytics firm is forecasting that industry profits will fall 7 percent in 2012, after rising 47 percent in 2011 to an estimated $126 billion. Reduced net interest margins created by the low interest rate environment and flat yield curve will cut into earnings during the next 12 months, said Anderson. Other factors that will cause bank profits to dip include anemic loan growth and a protracted commercial real estate recovery. U.S. banks are implementing …

SKOKIE, ILL. — Skokie-based EPN Group has entered into an agreement to sell 47 shopping centers in the United States to a joint venture between Blackstone Real Estate Partners VII (NYSE: BX) and DDR Corp. (NYSE: DDR) for $1.43 billion. The agreement includes the assumed debt of $640 million and at least $305 million of new financings. Blackstone Real Estate Partners VII will own 95 percent of the common equity of the joint venture and an affiliate of DDR will own the remaining 5 percent. Additionally, DDR will invest $150 million in preferred equity in the venture with a fixed dividend rate of 10 percent, and will continue to provide leasing and management services. DDR will have the right of first offer to acquire 10 of the properties. “We are very pleased to establish a partnership with Blackstone, one of the most successful and respected real estate investors in the world,” said Daniel Hurwitz, president and CEO of DDR, in a prepared statement. “Moreover, this transaction illustrates our access to off-market opportunities while creative structuring enables risk mitigation and non-dilutive deleveraging,” Hurwitz continued. “Lastly, this transaction enables the retention of significant fee income, and enhances our current ownership and future …

NEW YORK CITY — SL Green Realty Corp. (NYSE: SLG) has entered into an agreement to acquire 10 East 53rd Street, a 388,000-square-foot class A office building located in Manhattan, from Cariplo Pension Fund for $252.5 million. The 37-story building is currently 91 percent leased to tenants including Harper Collins. Additionally, SL Green entered into a joint venture agreement with an institutional partner and will hold a 55 percent stake in the venture. The company intends to implement a significant capital improvement program along with a targeted leasing and marketing campaign to reposition and reintroduce the building in the marketplace. “The Plaza District is home to a number of Midtown’s premier trophy assets, and because of the prestige and value of these assets it is rare that an opportunity to acquire one arises,” said Andrew Mathias, president of SL Green, in a prepared statement. “When presented with the chance to add one of these assets to our core Midtown portfolio, we seized it.” “Having recently achieved notable repositioning and leasing successes at 100 Church Street and 3 Columbus Circle, we believe that when we apply our market-leading management capabilities to 10 East 53rd Street, this Midtown office tower will become …

LOS ANGELES — Canyon-Johnson Urban Fund (CJUF) has provided an undisclosed amount of preferred equity capital to launch development of the $160 million One Santa Fe, a 4-acre mixed-use development located in Los Angeles. A joint venture between The McGregor Co., Polis Builders and Goldman Sachs Urban Investment Group (UIG) is developing the project, which is slated to begin construction and site improvements this month. One Santa Fe is located between First and Fourth streets on Santa Fe Avenue in Los Angeles, situated on land owned by the Metropolitan Transportation Authority (MTA). The project is leased under a 78-year ground lease with the MTA, which is considering a potential future direct connection from the property to a new terminal station for the Red Line Subway. Local architect Michael Maltzan designed the development, which will include 438 apartments, 20 percent of which will be affordable housing units, as well as 78,620 square feet of office and retail space and 50,000 square feet of public outdoor space. The MTA expects to sublease 35,000 square feet of One Santa Fe’s commercial space, with the balance of the space leased to community-serving retail tenants. Plans call for the 6-story building to include amenities such …

Borrowers with a low cost of capital are living the dream. The yield on the 10-year U.S. Treasury note fell four basis points to close Friday at 1.96 percent, helping to keep borrowing costs at historic lows for well-qualified commercial real estate investors and underscoring the point that U.S. Treasuries remain a safe haven in an uncertain world. A slowly improving U.S. economy combined with a weak outlook for the financially troubled Euro Zone continues to draw capital to the United States, according to Sam Chandan, president of New York-based Chandan Economics and professor of real estate at the Wharton School of Business. “This was evident on Friday as the dollar improved and the 10-year yield fell following the release of the December jobs report.” The 10-year yield dipped below 2 percent for the first time ever in August 2011 and has been hovering near or below that level since. The Bureau of Labor Statistics reported Friday that nonfarm payroll employment in the U.S. grew by 200,000 in December and that the national unemployment rate fell from a revised 8.7 percent in November to 8.5 percent in December. The private sector added 212,000 jobs, while government cut 12,000 workers. But …

Apartment investors in several major metros across the country, especially Northern California, are hoping 2012 is a carbon copy of 2011. Effective rents for new leases in San Francisco increased a whopping 14.6 percent in 2011 and 12.3 percent in San Jose, according to newly released data from MPF Research. “The Bay Area is in a different stratosphere,” said Greg Willett, vice president of research and analysis at Carrollton, Texas-based MPF. Willett’s update on the vital signs of the multifamily market was the centerpiece of a webinar focusing on apartment development hosted by Dallas-based Humphreys & Partners Architects LP on Wednesday, Jan. 4. Although the annual gains in effective rents for new lesases weren't nearly as dramatic in Boston and Chicago, both markets were strong performers with increases of 8.3 percent and 5.8 percent respectively. One big reason for such a healthy bump in rents was that the occupancy rate nationally rose 1.1 percent from the fourth quarter of 2010 to the fourth quarter of 2011 to reach 94.6 percent, according to MPF. Occupancy was up nearly 3 percentage points from late 2009 when the market bottomed out. Meanwhile, the annual change in effective rents was 4.7 percent in the …

INDIANAPOLIS — Duke Realty has broken ground on the 274,000-square-foot Fifth Third Faculty Office Building, located at the planned 37-acre, $754 million Eskenazi Health campus in downtown Indianapolis. The 5-story building will house support functions for Wishard Health Services, including office space for administrative staff and Indiana University School of Medicine faculty physicians who will practice at the campus. Additionally, it will be used as workspace for research and various academic support programs. Completion of the Fifth Third building is slated for December 2013. St. Louis-based HOK Group and Indianapolis-based BSA LifeStructures are the architects for the project. Duke Realty is the construction and property manager. Along with an 11-story hospital tower and a planned ambulatory care building, the Fifth Third building will enable Eskenazi Health’s physicians and staff to be consolidated on one 1.2 million-square-foot campus. Duke Realty and Health and Hospital Corp. of Marion County (HHC), which operates the Wishard system, will jointly own the Fifth Third building and HHC will lease the property. Indianapolis-based Browning Investments also played a key role during the early stages of the Fifth Third project. Upon full completion, the new campus is expected to receive LEED Silver certification, making it the first …

NEW YORK CITY — LaSalle Hotel Properties (NYSE:LHO) has closed on the $396.2 million acquisition of the 934-room The Park Central Hotel, located on Seventh Avenue between West 55th and West 56th Streets in New York City. The company agreed to purchase the property from Highgate Holdings in June of 2011 for $405.5 million, but received a reduction in accordance with the terms of the purchase and sale agreement. “We are pleased to have finally closed on The Park Central Hotel,” said Michael D. Barnello, president and CEO of LaSalle Hotel Properties, in a statement. “We remain excited about this well-located New York City asset and our ability to acquire the hotel at an attractive purchase price.” The hotel, which was built in 1928, has undergone renovations totaling $33 million since 2004. LaSalle Hotel Properties intends to renovate the guestrooms, guest bathrooms, corridors and the hotel’s lobby, at an estimated cost of $30 million to $35 million. Construction will begin in late 2012 and completion is slated for 2013. Hotel amenities include the 88-seat Cityhouse, Bar Bella, 4,800 square feet of retail space and 14,000 square feet of meeting and function space, including an 8,500-square-foot ballroom. Atlanta-based Hodges Ward Elliott …

Glendale, Calif. — PS Business Parks (PSB) has acquired a 5.3 million-square-foot industrial portfolio of properties located in Northern California for $520 million. The seller was RREEF America REIT II Corp. and its affiliate, Northern California Industrial Portfolio Inc. Included in the portfolio are 18 multi-tenant business parks totaling 2.9 million square feet of light industrial space and 2.4 million square feet of flex space. “This portfolio acquisition significantly enhances PSB’s presence in Northern California, providing a strong concentration of parks in markets that are poised for continued recovery,” said Joseph Russell, Jr., president and CEO of Glendale-based PSB. “PSB has a deep understanding of these markets and we are confident their economic strength and stability will provide opportunities to great value from this unique opportunity.” The properties are located in the Bay Area, with concentrations in Oakland, Hayward, Fremont, Milpitas, San Jose, Santa Clara and Sunnyvale. The portfolio is approximately 82.2 percent leased to 216 tenants. Following the acquisition, PSB now owns 7.2 million square feet of multi-tenant industrial and flex space in 30 business parks in Northern California, or 26.3 percent of the company’s portfolio. In conjunction with the transaction, the company assumed a $250 million secured loan, …