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NEW YORK CITY — Four banks in the U.S. failed in February, down from seven failures in January, according to New York City-based Trepp LLC. The decrease follows a pattern observed in 2011: a spike in failures in the month immediately following the end of a quarter, then a drop in subsequent months. Three of the failures occurred in Midwestern states, with the fourth bank failure in the South. The largest failure was Home Savings of America, with $434.1 million in total assets, which brings Minnesota’s total failures to 19 since late 2007. Additional failures in the Midwest included Charter National Bank and Trust in Illinois and SCB Bank in Indiana. The second largest failure was the Central Bank of Georgia, with $278.9 million in total assets. Georgia ranks first for failures, with 77 since September 2007. Year-to-date, Georgia has recorded two failures. Similar to last year, commercial real estate loans were the main driver behind problem loans for banks that failed in February. Of the $122.5 million in nonperforming loans at failed banks, commercial real estate loans account for $50.1 million, or 69.8 percent. Of the $50.1 million, commercial mortgages comprised $33.1 million and construction and land loans accounted …

The delinquency rate for U.S. commercial real estate loans in CMBS fell 15 basis points in February to 9.37 percent, the lowest rate since June 2011, according to New York City-based Trepp LLC. But some of the overall improvement in the February delinquency rate can be attributed to a change in status of approximately $900 million of loans. The loans whose status changed are past their balloon date, but are current in interest payments and no longer classified as delinquent, according to Trepp. Had these loans factored into the overall delinquency rate, the rate would have been 10.57 percent, up 22 basis points for the month, concludes Trepp. “The resolution of these performing, but past maturity loans will likely determine whether the delinquency rate rises or falls over the next 12 months,” said Manus Clancy, senior managing director at Trepp, in a summary report. “The rate should remain fairly stable if they are modified or refinanced, but watch out if these loans slide into foreclosure.” This category of loans that are past their balloon date, but are current in interest payments, now accounts for 1.2 percent of loans in Trepp’s database. That figure is up from 83 basis points in …

MENLO PARK, CALIF. — Kilroy Realty Corp. (NYSE: KRC) has acquired the seven-building Menlo Corporate Center, a 374,000-square-foot office campus for $162.2 million. The property, located at 4100-4700 Bohannon Dr. in Menlo Park, is 79 percent leased to 10 tenants that include Lucile Packard Children’s Hospital at Stanford, E*Trade and Allstate Insurance Co. “Menlo Corporate Center, located in one of Silicon Valley’s most desirable and tightly supply-constrained submarkets, provides us with a great opportunity to capture additional value as we re-lease the remainder of the vacant space at rents that are well above the current in-place rates,” said Mike Sanford, senior vice president of Kilroy Realty Corp.’s northern California office, in a prepared statement. “We see strong fundamentals in the Silicon Valley and Peninsula office markets and will continue to pursue opportunities that make strategic and economic sense for the company,” added Sanford. Kilroy Realty Corp., which owns, develops, acquires and manages real estate assets, focuses primarily on Los Angeles, Orange County, San Diego, greater Seattle and the San Francisco Bay area. Since 2010, Kilroy Realty Corp. has purchased eight office properties that total 2.6 million square feet in the San Francisco Bay area, for an aggregate investment of approximately …

PHILADELPHIA — A partnership between The John Buck Co. and the INDURE Fund, a commingled real estate investment fund managed by National Real Estate Advisors, plans to begin construction today on 2116 Chestnut Street. The $100 million apartment high-rise in Philadelphia’s Center City will contain 316 units. “We are truly excited to be involved in this major apartment development in Philadelphia, a city that we have been interested in for years,” said John Buck, chairman and CEO of the John Buck Co., in a prepared statement. “We hope that 2116 Chestnut Street will mark the beginning of a long-term relationship with Philadelphia for our firm.” In addition to the apartment units, the building will include 9,150 square feet of retail space on Chestnut Street. The John Buck Co. purchased the property in October 2011. Completion is slated for the second quarter of 2013. The Commonwealth of Pennsylvania, through the support of Gov. Tom Corbett, is providing financial assistance for the project, which is expected to create more than 800 construction jobs. The John Buck Co. has completed more than $10.5 billion in real estate transactions and developed or redeveloped 40.7 million square feet of office, mixed-use, residential and hotel projects. …

NEW YORK CITY — The Federal Reserve Bank of New York has purchased 33 Maiden Lane in New York City for $207.5 million. The New York Fed is the building's major tenant. The bank has occupied about 75 percent of the office space in the 27-story building since 1998, and more than 1,000 Fed employees currently work there. The acquisition was reportedly a cheaper alternative to leasing the space on a long-term basis and will give the bank greater control of its operations. “The purchase is a cost-effective way to meet our business needs and will enable us to more easily ensure appropriate security for our operations,” said William Dudley, president of the New York Fed in a prepared statement. “We are also pleased to contribute, through our investment, to the ongoing revitalization of lower Manhattan.” Both the New York Fed's board of directors and the Board of Governors of the Federal Reserve System approved the acquisition of 33 Maiden Lane. The New York Fed is one of 12 banks in the U.S. Federal Reserve system and is where Washington monetary policy is implemented. The 600,000-square-foot 33 Maiden Lane is near the bank's headquarters, located at 33 Liberty St. Darcy …

NEW YORK CITY — SL Green Realty Corp. (NYSE: SLG) has finalized its previously announced purchase of 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 91 percent leased, and includes tenants such as Harper Collins. “We believe that the prestige and value of quality properties in the Plaza District of Midtown Manhattan is unparalleled,” said Andrew Mathias, president of SL Green, in a prepared statement. “The chance to add an additional plaza asset to our core portfolio does not come along often and upon being presented with this opportunity, we took it.” The company has entered into a joint venture agreement with Canada Pension Plan Investment Board (CPPIB), which will be a 45 percent owner. CPPIB has made an equity investment of $57.4 million. “We are delighted to acquire a significant interest in a high-quality and extremely well-located property that has the potential to be repositioned as a top boutique office property in Midtown Manhattan,” said Peter Ballon, vice president and head of real estate investments for the Americas for CPPIB, in a prepared statement. Ballon continued, “This expands our portfolio in New York …

WASHINGTON, D.C. — With a score of 50.9 for January 2012, The Architecture Billings Index (ABI) has posted positive results 3 months in a row for the first time since January to March 2011. The index is generally used to help gauge the onset of construction activity 9 to 12 months in advance, according to The American Institute of Architects (AIA), a Washington, D.C.-based association that publishes the ABI. “The ABI typicaly leads nonresidential construction spending by 9 to 12 months, meaning that if this rebound in architecture firm billings is sustained — stays above 50 — then construction spending should begin to increase by the end of the year,” says Jennifer Riskus, manager of economic research at AIA. The ABI is a monthly index based on a score of 50, with scores greater than 50 indicative of an increase in architecture billings and scores below 50 indicative of a decline. The ABI posted 5 months of 50+ scores in November 2010 to March 2011 without any dramatic construction starts in the 9 to 12 months thereafter. Kermit Baker, chief economist of AIA and Honorary AIA member (Hon. AIA), explains the difference between those results and the most recent scores. …

HOFFMAN ESTATES, ILL. — Sears Holding Corp. (NYSE: SHLD) has entered into an agreement to sell 11 Sears full-line stores to Chicago-based General Growth Properties (NYSE: GGP) for $270 million. “This portfolio represents a significant opportunity to recapture valuable real estate within our portfolio,” said Shobi Khan, chief operating officer of General Growth Properties, in a prepared statement. “This acquisition also enhances several expansion and redevelopment opportunities, including re-tenanting the anchor space and adding new in-line GLA.” Khan continues, “During the next several years we anticipate adding 319,000 square feet of new in-line space, the majority at Ala Moana Center, [in Honolulu, Hawaii] our most productive mall with sales surpassing $1,200 per square foot. In addition, we look forward to continuing to work with Sears as they represent an important anchor tenant within our portfolio.” Each of the Sears stores is part of an existing General Growth property. The stores include: – 1450 Ala Moana Blvd. in Honolulu, Hawaii (Leased) – 1481 Coral Ridge Ave. in Coralville, Iowa (Owned) – 1201 Lake Woodlands in The Woodlands, Texas (Owned) – 20 Bellis Fair Pkwy. in Bellingham, Wash. (Leased) – 1751 Madison Ave. in Council Bluffs, Iowa (Leased) – 9405 W. Colonial …

BETHESDA, MD. — The Peterson Cos. and DRI Development Services have formed a joint venture to develop the $320 million Rock Spring Centre, a 1 million-square-foot, mixed-use development in Bethesda. Upon full completion, the project will include 210,000 square feet of retail and restaurants, 550,000 square feet of Class A office space, 90,000 square feet of entertainment uses including a multi-screen movie theater, a 200-room hotel and 161 residential units. The Montgomery County Planning Board approved the site plan on Feb. 17, 2011, and ground breaking is slated to occur later this year. Completion is scheduled for spring 2014. Under the joint venture, Peterson will lead development of the retail and entertainment components of the project, and DRI will lead the office, hotel and residential developments. Brokers Bill Miller and Alex Walker of the Washington, D.C., office of Transwestern have been retained to lease the retail and restaurant portion of the project. “We partnered with The Peterson Cos. because of their track record of success in developing some of the region’s finest retail and entertainment-driven mixed-use projects,” said Christian Spitz, president of DRI Development Services, in a prepared statement. Rock Spring Centre is located on a 54-acre parcel owned by …

SANTA ANA, CALIF. — Grubb & Ellis has filed for Chapter 11 bankruptcy, the company announced Tuesday. The Santa Ana-based firm has agreed to sell substantially all its assets to BGC Partners, which recently acquired Newmark Knight Frank this past October, making it one of the nation’s largest commercial real estate service firms. The deal will take place as an asset sale under Section 363 of the U.S. Bankruptcy Code. Bankruptcy proceedings will commence in the U.S. Bankruptcy Court for the Southern District of New York. The firm listed $150 million in assets and $167 million in debt, according to BusinessWeek. The news outlet also noted that Grubb & Ellis declared it had completed 12,000 sale and lease transactions in 2011 and currently manages more than 250 million square feet. The firm anticipates that business will continue without disruption during this 363 sale process. BCG has acquired Grubb & Ellis’ outstanding secured debt and has agreed to provide the firm with “debtor-in-possession” financing to support its operations throughout this process. This loan could amount to as much as $4.8 million, BusinessWeek noted. “Following a thorough and rigorous process and the evaluation of all available options, we determined that a partnership …