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SAN DIEGO — Sunstone Hotel Investors has acquired a controlling interest in the Hilton San Diego Bayfront hotel for $475 million. The Aliso Viejo, Calif.-based REIT will own 75 percent of the hotel, with Hilton Worldwide controlling the other 25 percent. The Hilton San Diego Bayfront opened in 2008 along a prime spot along the city's waterfront. It is adjacent to the San Diego Convention Center and across the street from Petco Park, the home of the San Diego Padres. The 30-story hotel contains 1,190 rooms, 165,000 square feet of indoor meeting space, 4.3 acres of outdoor meeting space along the waterfront and an 894-space parking garage. To fund the acquisition, Sunstone has taken out a $240 million mortgage. The loan carries a 5-year term and a floating interest rate price 325 basis points above LIBOR. Hotel brokerage firm Hodges Ward Elliott represented Hilton in the transaction. This latest deal comes just a week after Sunstone announced the completion of its sale of the Royal Palm Miami Beach to KSL Capital Partners for $130 million. Constructed in 1939 in the city's affluent South Beach submarket, the hotel contains two swimming pools, a beachfront restaurant, a poolside bar, a lobby lounge, …

PITTSBURGH — The U.S. Steel Tower, Pittsburgh's tallest skyscraper, has been sold to an investment group led by New York investor Mark Karasick for a reported $250 million. The seller was an investment group led by AREA Property Partners. The story was reported in the Pittsburgh Tribune-Review. The investment group procured a $220 million conduit loan to help fund the transaction. The financing carries a 10-year term and was provided by Swiss bank UBS. The team of Rael Gervis and Ralph Herzka of Meridian Capital Group arranged the loan. According to local reports, the seller will use the proceeds from the deal to pay off the mortgage on the property it owes to Bank of America. AREA put the tower up for sale following its failure to negotiate a debt restructuring with the lender last fall. The U.S. Steel Tower is a 64-story building located at 600 Grant St. in downtown Pittsburgh. It contains a total of 2.9 million square feet of office space as well as a 700-space, three-level underground parking garage and street-level retail space. The University of Pittsburgh Medical Center anchors the building. It currently occupies approximately 513,000 square feet of space currently and recently signed a …

CHARLOTTE, N.C. — Boston-based New Boston Fund has acquired the three office buildings comprising Charlotte's Harris Corners Corporate Park for an undisclosed amount. The seller was local company Beacon Partners. While the acquisition price was not disclosed, local reports are claiming the sale price to be approximately $50 million. The building include One, Two and Three Harris Corners, which were constructed in 2000, 2001 and 2006, respectively. One Harris Corners is a four-story, 97,628-square-foot building. Two and Three Harris Corners are both five stories and contain 130,187 and 133,329 square feet, respectively. The three properties had a combined occupancy of 88 percent at the time of closing. Major tenants at the buildings include Polymer Group, Diagnostic Devices, Bank of America, Carrier Corp., Nestle and Husqvarna, which relocated its North American headquarters to the park last year. CB Richard Ellis' Charlotte office represented Beacon Partners in the deal. The brokerage team consisted of Ryan Clutter, Adam Basch and Patrick Gildea. The transaction marks New Boston's first office acquisition in the Charlotte market. It currently has multifamily holdings in the market but is in the process of divesting of those assets. “We're really excited to be in the city in a big …

JERSEY CITY, N.J. — CB Richard Ellis Investors has acquired an 827,318-square-foot office property in Jersey City from Hartz Mountain Industries for $310 million. According to Cushman & Wakefield, which orchestrated the sale, the deal is the highest price-per-square-foot investment sale in state history. The property consists of twin 12-story office towers located at 70 and 90 Hudson St. Completed in 1999 and 2000, the buildings are tenanted by companies such as Barclays, National Union Fire Insurance Co., and Lord Abbett & Co. The buildings are a part of the Colgate Center master-planned community, which also includes residential space, five additional commercial buildings, a 4-acre public park and a waterfront esplanade. Cushman & Wakefield's Metropolitan Area Capital Markets Group arranged the transaction. Brokers involved include Andrew Merin, David Bernhaut, Gary Gabriel and Brian Whitmer. “These are irreplaceable, truly unique assets,” Merin said in a statement. “They are flagships of Hartz Mountain's development capabilities, occupy unparalleled location, and are fully leased to blue-chip tenants with limited near-term rent roll. It did not take long to fund a suitor for this exceptional opportunity. Cushman & Wakefield also asserted that the deal is the third-largest office transaction in state history. — Coleman Wood

ORLANDO — Thought to be a permanent victim of the recession, Orlando's Mills Park project may finally begin development. The project's original developer, Heathrow, Fla.-based Pelloni Development Corp., has sold most of the pre-approved site to a joint venture between Tampa, Fla.-based companies DeBartolo Development and Forge Capital Partners for an undisclosed amount. Mills Park will be constructed on an approximately 14.5-acre site at the intersection of Mills Avenue and Virginia Drive — in between Downtown Orlando and Winter Park. The project's original groundbreaking was set for the summer of 2008, but a poor economy delayed construction. Now, the DeBartolo-Forge partnership, known as Community Reinvestment Partners II, plans to move forward with the development of Mills Park. The partnership will construct retail, multifamily and office space at the site. Pelloni will remain involved with the project and develop a medical component as well as additional office space. While efforts to reach DeBartolo and Pelloni to find out the new scope of the project were unsuccessful, original plans for Mills Park called for 425 residential units, 140,000 square feet of professional office space, 130,000 square feet of medical office space and 78,000 square feet of retail and restaurant space. “The commercial …

CHICAGO — An affiliate of Israeli company IDB Group has purchased the Barney's of New York building located in Chicago for $117 million. The 94,600-square-foot building sold for a whopping $1200 per square foot. The six-story retail property is located at 1-15 E. Oak St. in Chicago's Gold Coast/North Michigan Avenue neighborhood. It was constructed in 2009 as a build-to-suit for Barneys. Citibank also leases space within the building. The Jones Lang LaSalle team of Guy Ponticiello, Bruce Miller and Dave Hendrickson arranged the deal. “We were able to capture a price that was well above what the bank valued the property at — just $100 million,” said Ponticiello in a statement. “This is a win-win for all parties, and it is a huge save for two of Chicago's key developers, for the bank that recovered more than its original investment, and for the Gold Coast retail community.” The retail property was developed by a two local firms in 2009 and was later foreclosed on by the lender, Anglo Irish Bank. At the time, the balance of the loan was $93 million. The transaction marks the second major acquisition for the Tel Aviv-based IDB Group, which is controlled by Property …

JACKSON, MISS., AND ORLANDO — Jackson-based Parkway Properties has entered into a definitive agreement to merge with Orlando-based Eola Capital. Parkway will acquire a 2.5 million-square-foot office portfolio as well as Eola's property management business for approximately $462 million. The portfolio comprises six properties. They include Two Ravinia Drive in Atlanta; 245 Riverside in Jacksonville, Fla.; Bank of America Center in Orlando; Two Liberty Place in Philadelphia; and two Tampa properties: Cypress Center I, II and III as well as International Plaza Four. The portfolio's combined occupancy was 85.4 percent at the time of the closing. The property purchase will be completed for $380 million, equating to a 7.4 percent capitalization rate. The portfolio will be contributed to Parkway Properties Office Fund II, which will be 75 percent committed once the acquisitions are completed. Two of the properties, International Plaza Four and 245 Riverside, have already closed. The remainder of the portfolio is expected to close when the rest of the transaction is completed by the end of the second quarter. “We see a combination as an attractive alternative to pursuing an IPO,” says James Heistand, the current chairman of Eola Capital. In addition to acquiring Eola's property management business …

NEW YORK CITY — The U.S. Bankruptcy Court for the Southern District of New York has approved the sale of Saint Vincent's Catholic Medical Center's Manhattan campus. A joint venture between the Rudin family and North Shore-Long Island Jewish (LIJ) Health System acquired the campus for $260 million. The joint venture plans to redevelop and reopen the Greenwich Village hospital, which closed following the healthcare provider's April 2010 bankruptcy. The planned opening for the new medical center will be fall 2013. In addition to the campus, St. Vincent's is contributing the O'Toole Building, formerly the healthcare provider's primary care clinic, to the deal. The six-story, 160,000-square-foot building will be redeveloped into the North Shore-LIJ Center for Comprehensive Care. The $110 million project will contain a full-service imaging center as well as a ambulatory surgery center. North Shore-LIJ will be the primary developer for the property, with the Rudin family contributing $10 million to help offset the development costs. The Rudin family is seeking to redevelop the surrounding area, too. Four of the buildings that are part of the St. Vincent's campus will be adaptively reused for multifamily housing and retail. Plans released last month mentioned 590,000 square feet of new …

MINNEAPOLIS — Canadian company Artis Real Estate Investment Trust has completed two acquisitions in the greater Twin Cities area totaling $117.2 million. The deals include the acquisition of an office park and the closing of part of a previously announced industrial portfolio purchase. In the first transaction, Artis purchased Stinson Office Park, a five-building, 307,405-square-foot office complex, for $44 million. The properties are located at 323, 400, 500 and 601 Stinson Blvd. as well as 400 Roosevelt St. in Minneapolis. The campus also includes a 1,703-space parking structure. The property is 97 percent occupied by two tenants with leases expiring 2017 or later. Artis took out a $28.6 million loan to fund the purchase. It includes a 5-year term with a floating interest rate currently set at 3.25 percent. In addition, Artis closed on the second tranche of a previously announced portfolio acquisition. The $73.2 million transaction includes 9 properties totaling 1.5 million square feet of office, flex, warehouse and light manufacturing space. Occupancy is currently 88.5 percent. Artis is funding the purchase with cash on hand and through a $49.6 million mortgage that carries a 5-year term and a floating interest rate currently set at 2.5 percent. The portfolio …