Top Stories

NEW YORK CITY — DiamondRock Hospitality Co. has entered into an agreement to acquired the Radisson Lexington Hotel New York for $335 million. Located in the heart of Midtown Manhattan at the intersection of Lexington Avenue and 48th Street, the hotel contains 712 guestrooms and six food and beverage outlets. The undisclosed seller has invested approximately $54 million in capital improvements to the hotel since acquiring it in 1999. Per terms of the agreement, DiamondRock has made a $33.5 million earnest deposit. The company expects the deal to close within the next 30 days. It will use cash on hand and a $100 million draw from its corporate credit facility to fund the purchase. The contractual purchase price represents a 13.5 times multiple of the property's 2012 forecasted EBITDA of $24.8 million and a 6.7 percent capitalization rate. “We are excited to acquire this significant full-service hotel located in Midtown New York at a material discount to replacement cost,” said Mark Brugger, DiamondRock CEO, in a statement. “The hotel's forecasted 2011 RevPAR is $198, which is 70 percent above our portfolio average, and it is expected to generate hotel-adjusted EBITDA margins that are 14 percentage points higher than our portfolio …

SOUTH BARRINGTON, ILL. — Following financing difficulties, Chicago-based Jaffe Cos. has remained in control of The Arboretum at South Barrington, a luxury lifestyle center located at the intersection of Higgins Road and Route 59 in the western Chicago suburb of South Barrington. Jaffe has partnered with Boston-based Fidelity Real Estate in the ownership of the property and has closed on the joint venture acquisition. Jaffe developed the company with investment partner RREEF Alternative Investments in 2008. The 427,000-square-foot center achieved 85 percent occupancy but was unable to meet its target rents in the face of the recession. Its tenant roster include LL Bean (the company's first retail location outside of the Northeast), Pinstripes, Ruth's Chris Steakhouse, Chico's, Victoria's Secret, Tom-Price and approximately 50 other retailers and restaurants. In 2010, the project's original financing matured and Jaffe was unable to work out an extension with the lender or with RREEF. This recent transaction begins a new chapter in the developer's ownership of the center. “We are very excited to remain in control and be able to realize our vision for this great center,” said Mike Jaffe, company president, in a statement. “This is a tremendous success story for our tenants, our …

ATLANTA — Porsche has announced plans to relocate its North American headquarters to the south side of Atlanta. While the company will not be moving very far — it is currently headquartered in the northern Atlanta suburb of Sandy Springs — the move has huge implications for the luxury automakers new neighborhood. Porsche plans to relocate to the site of the former Ford assembly plant, located in Hapeville near Hartsfield-Jackson International Airport — not too far away from its existing Logistics Services Center. According to local reports, the company's new build-to-suit headquarters will include a 150,000-square-foot office tower as well as a 1.6-mile test track — a layout similar to the company's Silverstone facility in England. The reports go on to say the campus will include a classic Porsche restoration shop and a fine dining restaurant. Construction on the project will begin later this year and be complete by the summer 2013. The new facility will kick off the development of Aerotropolis, locally based Jacoby Group's redevelopment of the former Ford plant, which shuttered in 2006. Jacoby purchased the 122-acre property in 2008 for $40.3 million and unveiled its plans for the sprawling development, which would contain 6.5 million square …

LA JOLLA, CALIF. — McCarthy has begun construction for a $456 million project on the La Jolla campus of Scripps Memorial Hospital. The Scripps Cardiovascular Institute will be located at 9888 Genesee Ave. and is the first of three new towers planned for the hospital campus as part of its 25-year master plan. The towers will eventually replace the existing hospital. The Scripps Institute will feature 10 levels of patient care including 60 ICU beds on two levels, 108 patient beds on three medical surgery levels, six operating rooms, four CATH/EP labs, a sterile processing department and an imaging department. A tunnel will be constructed to connect the new building's basement with the existing hospital. The new facility will feature several sustainable design elements. Large expanses of windows will increase the amount of ambient natural light. Water- and energy-saving building systems will be installed. In addition, the building will feature elements to increase patient comfort an care including decentralized nurse stations, a decentralized medication dispensing process and patient rooms with wireless Internet access, LCD televisions and pullout couches. Completion for the project is slated for January 2015, with the institute opening that April. Jacobs Engineering Group is serving as construction …

BLOOMINGTON, MINN. — A $137.5 million construction loan has been secured for a new hotel at the Mall of America in Bloomington. Minneapolis-based hospitality company Carlson Hotels will partner with the Minneapolis office of construction giant Mortenson to construct the 500-room Radisson Blu Hotel on the mall's south side. The project's complicated financing package, which was arranged by Dougherty Funding, consists of public and private sources. The City of Bloomington is providing general obligation bonds. Other bond financing includes those from the Recovery Zone Facility, tax-exempt private activity bonds created by the 2009 American Recovery and Reinvestment Act. Mortgage secured notes are being provided by trade pension funds and community banks. Other financing sources include a Mall of America skywalk contribution and developer equity. Now that construction financing has been secured, the project will break ground on May 26. The hotel will be located between Macy's and Bloomingdale's, and it will connect to the mall via skyway. Mortenson is serving as developer and general contractor. Carlson Hotels will manage the property upon its completion, which is expected in March 2013. “We are excited about this landmark Radisson Blu development, which is another key milestone for our Ambition 2015 growth plan …

RENO, NEV. — Nevada-based companies Dermody Properties and United Construction Co. have finalized an agreement with Philadelphia-based Urban Outfitters Inc. to build the retailer's new Western United States Internet Fulfillment Center. The approximately $60 million project will be located within Dermody's Silver Lake Business Park in Reno. The joint venture will construct the facility on 38.34 acres at 12055 Moya Blvd. Phase I of the project will include a 462,720-square-foot facility that will feature more than 450,000 square feet of warehouse space as well as office space and a data center. The official groundbreaking will be held June 8. The building envelope will be complete by November, and the facility will be complete by June 2012. The project has been designed to meet LEED-Silver certification. A planned second phase would expand the facility to 895,360 square feet. “The building design reflects Urban Outfitters' cutting-edge culture and features an architectural look and feel not seen locally before,” said Craig Willcut, president and CEO of United Construction, in a statement. “The unique structure of a development company and construction company partnership brings multiple layers of benefits to the customer,” added John Atwell, Dermody Properties' COO. “Because the developer and the contractor are …

SAN ANTONIO AND OAK BROOK, ILL. — San Antonio-based USAA Estate Co. has sold its Single Tenant Net Lease Retail Portfolio to Oak Brook-based The Inland Real Estate Group of Companies for an undisclosed amount. The portfolio consists of 16 properties totaling 118,046 square feet. The properties are located in 15 markets throughout the U.S. including Orlando, Pensacola, Port St. Lucie and Tampa Fla.; Atlanta; Minneapolis; St. Louis; Charlotte, N.C.; Portland, Ore.; Columbia, S.C.; Dallas, Fort Worth, Houston and San Antonio, Texas; and Milwaukee. The tenant list for the properties includes AT&T, Bank of America, Capital One Bank, CVS/pharmacy, Verizon and Walgreens. John Hammill and Ken Shulman of Dallas-based Capview Partners represented USAA in the deal. Inland did not utilize outside representation. “These assets have been outstanding investments for our company during our holding period and should represent an excellent investment for Inland,” said Pat Duncan, chairman and CEO of USAA, in a statement. — Coleman Wood