PHOENIX — Phoenix-based Alliance Residential Company has development plans to commence construction on approximately 5,000 residential units in the second half of 2011. Since 2001, the company has invested $2.7 billion in the development of more than 20,000 units and $1.4 billion in the acquisition of more than 13,000 units, and currently has eight properties underway (*see below). Alliance manages all its developed properties and brands each underneath the Broadstone community name, in addition to providing third-party management services for a variety of assets nationwide. REBusinessOnline (REBO) had a chance to catch up with Jay Hiemenz, Alliance Residential’s CFO, to find out a little more of what the company is seeing in today’s multifamily market and where Alliance is taking advantage of opportunities. REBO: For what reasons is multifamily development attractive right now in a generally slow construction market? Hiemenz: Development is attractive right now given that land costs are still below peak and construction costs, although increasing, are still far below peak as well. Those facts, coupled with good demand, result in our ability to deliver development at attractive returns relative to acquisitions in many of the markets we are in. REBO: What is the impetus to develop in …
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DENVER — UDR (NYSE:UDR), a Denver-based multifamily REIT, recently acquired three primary-market multifamily properties totaling 1,101 units for $687 million, and simultaneously announced its $375 million planned investment in the development of four additional multifamily communities with an aggregate of 1,306 units. The acquisitions include Rivergate and 21 Chelsea in New York City, as well as View 14 in Washington D.C. Rivergate, a 35-story, 706-unit property located in Murray Hill, sold for $443 million, and UDR plans $40 to $60 million worth of investment into the property over the next three years to achieve rents 35 percent higher than the current monthly income per occupied home of $3,262. The second purchased property, 21 Chelsea, is a 14-story, 210-unit building located on 21st Street between Sixth and Seventh avenues. Purchased for $138 million, UDR will invest $6 to $8 million in redevelopment to improve the current $3,226 monthly income per household by 20 percent. Finally, View 14 in Washington (pictured on home page) is a nine-story, 185-home community situated in the U Street Corridor section of Northwest Washington. UDR acquired the property for $106 million. “The acquisition of these three communities continues our portfolio transformation and strategy of owning apartment homes …
ENCINO, CALIF. — 2011 is already half gone, nearly two years since the recession officially ended. While it is true that the economy has been in recovery since late 2009, the after effects of the commercial real estate collapse are still very much a part of daily business in the industry. Rising energy prices and continued unemployment continue to keep consumer confidence at bay, and a double-dip in the single-family housing market likely won’t see sustainable recovery for at least 12 to 24 months. With all of that said, the situation for retail real estate is nowhere near dire, and Marcus & Millichap hosted a webcast Tuesday afternoon to outline its analysis of the retail market in particular, pointing to what is the firm refers to as a “soft patch” in the recovery, rather than a double dip. How the Macro Economy is Affecting National Retail Marcus & Millichap Managing Director Hessam Nadji outlined the economic factors surrounding the current state of the commercial market. While GDP was healthy in the third and fourth quarters of 2010, it appeared to stall in early 2011. Part of the reason for this, he said, is the transition off government programs that were …
ATLANTA — Jamestown Properties and the City of Atlanta held a press conference to mark the official closing on City Hall East, a 2 million-square-foot property located in the Midtown neighborhood of Atlanta at 675 Ponce de Leon Ave., N.E. The City sold the development for $27 million, which included $15.5 million provided by Jamestown at closing. The property is situated at the nexus of four of the city’s most established neighborhoods and adjacent to the Atlanta BeltLine network already underway, a 22-mile rail and walking corridor that will connect more than 45 neighborhoods of Atlanta. As of today, the project is officially dubbed “Ponce City Market,” and the first phase of the adaptive re-use is set to deliver in first quarter 2014. Ponce City Market is a partnership between Jamestown and its sustainable development subsidiary, Green Street Properties. The partnership has plans for a $180 million, 1 million-square-foot redevelopment of the property with build-out expected to total approximately 300,000 square feet of retail space, 350,000 to 500,000 square feet of loft office space, and residential units as the market dictates. The structure’s current parking deck will be removed, exposing the original retail façade, and some of the building’s interior …
NEW YORK CITY — Cushman & Wakefield reported from its mid-year 2011 statistics that the second quarter marked the largest quarterly decline in the overall average vacancy rate since 2007 for the U.S. Central Business District (CBD) office market nationwide. The overall average vacancy rate for U.S. CBDs fell to 13.9 percent at mid-year 2011, down 0.7 percentage points from 14.6 percent at the end of the first quarter of this year. This markets its lowest level since mid-year 2009, when vacancy measured 13.7 percent. Vacancy rates declined in 71 percent of the markets tracked by Cushman & Wakefield, with the strongest drops in markets including Miami, Midtown South Manhattan and Washington, D.C. LOWEST NATIONAL VACANCY RATES Source: Cushman & Wakefield * Indicates change in “percentage points” from prior quarter (not percent) “Though the recovery is muted especially with respect to employment growth, there is pent up demand,” says Maria Sicola, executive managing director and head of Americas Research for Cushman & Wakefield. “With corporate profits going up especially in the technology sector, activity is picking up in anticipation of continued growth.” The trigger for the significant decline in vacancy was a notable increase in new leasing activity in U.S. …
TYSONS CORNER, VA. — Lerner Enterprises of Rockville, Md., plans to break ground this week on construction of 1775 Tysons Boulevard, an 18-story, 476,000 square-foot Class A office tower located in The Corporate Office Centre at Tysons II in Tysons Corner. The building will be Lerner‘s fifth office property within the mixed-use development, situated footsteps from the new Tysons I & II Metro Station scheduled to open in 2013. Occupancy is projected for the first quarter of 2014. “The Corporate Office Centre at Tysons II is the most prestigious address in the Washington, D.C. Metro region and is home to some of the most successful businesses in America,” said Mark D. Lerner, a principal of Lerner Enterprises. “With our nearly 50 years of experience in Tysons Corner and overall confidence in the area‘s new comprehensive plan, 1775 Tysons Boulevard is being developed as a spec building, as was the case with our other four successful office buildings at Tysons II.” Within 1775 Tysons Boulevard, typical office floors will be approximately 30,000 square feet of highly efficient space featuring exceptional views. Retail opportunities include a fine dining restaurant up to 7,000 square feet, a 2,100 square foot café, and approximately 6,000 …
ATLANTA — Czarnowski Display Service Inc. has completed lease negotiations to take the entire 569,674-square-foot Hartman V distribution building at 7545 Hartman Industrial Way in Austell, Ga., located at the Hartman Business Center in the I-20 West submarket of Atlanta (pictured below). Jones Lang LaSalle represented the landlord, Founders Properties, in the deal. The lease will allow Czarnowski to consolidate its existing Atlanta area office, distribution and light production space into Hartman V. The company provides clients tradeshow exhibit and marketing services including design and fabrication, exhibit installation, dismantling, transportation, and rental services. Czarnowski also provides integrated marketing and consulting services, assisting its customers with brand development, tracking and management. Czarnowski will take occupancy of Hartman V in phases beginning in mid-September to early-October, and its build out of the property will include 34,900 square feet of office space and 78,600 square feet of production space. Warehouse space will total 456,174 square feet. Duane Wood of RDW Companies Inc. provided leasing and construction management services on behalf of the building ownership. RDW Construction Co. LLC will serve as the general contractor for the tenant improvements. Chris Tomasulo and Steve Grable, senior vice presidents at Jones Lang LaSalle, represented Founders, while …
HOUSTON — Camden Property Trust (NYSE: CPT) has acquired a portfolio of eight apartment communities for approximately $261 million, located in the Houston, Dallas, Austin and San Antonio, Texas metropolitan areas. The properties collectively consist of 2,957 apartment homes, and the communities average 95 percent occupancy. The acquisition was made through Camden’s discretionary investment funds (the “Fund”). The eight properties acquired in the portfolio included: Camden Cypress Creek – Houston – 310 units (pictured below) Camden Lakemont – Houston – 312 units Camden Northpoint – Houston – 384 units Camden Brushy Creek – Austin – 272 units Camden Shadow Brook – Austin – 496 units Camden Panther Creek – Dallas – 295 units Camden Riverwalk – Dallas – 600 units Camden Westover Hills – San Antonio – 288 units “This was a very attractive portfolio of assets for our Fund. The communities are newly constructed with an average age of 3 years, well-occupied and complement Camden’s existing portfolio of apartment homes,” says Laurie Baker, Camden’s vice president of fund and asset management. “The Texas markets of Houston, Dallas, Austin and San Antonio are among the top metro areas in the nation for future expected job growth and population growth, which …
WASHINGTON — Bruce Levin and Andrew McAllister of MAC Realty Advisors have facilitated the $104 million, $600 per residential square foot sale of View 14, a mixed-use, 185-unit luxury apartment project located at 2303 14th St., NW in Washington, D.C. Levin and McAllister, along with Cushman & Wakefield, represented the sellers, Level 2 Development and Centrum Properties. United Dominion Realty Trust (UDR) acquired the property. View 14 was completed in 2009 and commands the highest rents in the U Street sub-market. The residential component encompasses 154,339 rentable square feet within the building, which also contains a 32,000-square-foot retail component leased to the Beta Marshall Arts Academy and the YWCA. “This sale establishes a new per square foot price level for a stabilized luxury Class A apartment buildings in the Washington, D.C. market,” says McAllister. “This is one of the highest per residential square foot sales in the history of the District and of this year. It’s one of the signs that the recovery in the real estate market, particularly in D.C., has bounced back from the 2009 crisis.” McAllister, executive director of MAC, also arranged $92 million of senior debt, mezzanine, and equity financing for the acquisition and construction of …
GAINESVILLE AND TALLAHASSEE, FLA. — The Collier Companies and Madison International Realty have formed a joint venture to acquire a two-property portfolio of student housing developments in Florida valued at roughly $125 million. Jones Lang LaSalle’s Capital Markets arranged the joint venture partnership, led by Executive Vice President James Tramuto, and Managing Directors Jubeen Vaghefi and Denny St. Romain.. “This joint venture is a great real-time example of a trend that we have been seeing in the student housing market for quite some time, which is new institutional capital coming into the space with an appetite for quality product and quality sponsors,” Tramuto said. “This is Madison’s first investment in the student housing space, and while the returns and asset quality were certainly attractive selling points, the overwhelming drivers for the company’s investment in a new asset class were the strength of the sponsor and the ‘student housing story.’” The Enclave, which is located adjacent to the University of Florida campus and just 10 minutes from Santa Fe College in Gainesville, is a Class A, 531,360-square-foot property featuring 412 units (pictured at right). The development comprises 13 buildings with 1,076 beds. As of fall 2010, The Enclave was 97 percent …