ANN ARBOR, MICH. – Ann Arbor-based McKinley’s Residential Client Services team recently was appointed receiver for a 14-asset, 3,709-unit multifamily portfolio spanning six states, which not only reflects the company’s track record as but also represents McKinley’s first expansion into the Texas market. A breakdown of units by city is listed below: This appointment represents the 107th court appointment of McKinley to workout distressed real estate since the beginning of the financial crisis. As part of the assignment, McKinley has been appointed Receiver by US District Court for the Southern District of Texas. “We have extensive experience in receivership and workouts, and we’re very well known in distressed real estate circles for our ability to fix problems,” says Ken Polsinelli, chief real estate officer for McKinley. “Before the most recent recession, we staffed up because we saw it coming, and we went from 5 or 6,000 units to 15 or 20,000 quickly.” This appointment is also is one of the five largest multifamily assignments in the CMBS market in 2011. To put that in context, Polsinelli says there are hundreds of busted real estate loans and billions of dollars of distressed assets, particularly in CMBS. “For all the negative publicity …
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PLYMOUTH MEETING, PA. AND LONDON — URDANG, the real estate specialist for BNY Mellon Asset Management, released a report outlining opportunities for investors in commercial real estate based on the significant amount of maturing mortgage debt attached to properties across the industry. As such, the report notes that this debt provides an unusual opportunity for institutional investors to acquire properties on attractive terms from sellers who are overleveraged. “The ability to acquire these properties at attractive costs is possible because of the significant amount of commercial real estate debt that is scheduled to mature over the next 4 years,” said David Blum, managing director, portfolio management, at Urdang Capital Management and a co-author of the report. “Many of these properties have experienced deferred capital expenditures, which will require owners to invest additional equity or dispose of their assets.” Such acquisitions may give the acquirers the ability to offer properties to renters at lower rates and with more attractive features than comparable properties. “With banks increasingly willing to sell these properties and with commercial mortgage backed securities (CMBS) delinquencies at an all-time high, we believe there will be increasing opportunities to purchase or recapitalize over-leveraged assets at an attractive cost basis,” …
BOSTON — Avison Young has successfully repositioned and recapitalized three large commercial properties comprising 540,000 square feet, located in the greater Boston market. The institutional-grade assets, 299-301 Ballardvale St. in Wilmington/Andover, Mass., and 201-207 South St. (pictured at right) and 52-56 Roland St. in Boston (pictured on main page), were acquired between 2006 and 2007 and underwent capital improvement upgrades to reposition the properties during the initial phase of ownership. Each of the properties recently has benefited from a recovering market, new leasing activity and proactive management. “In the last 12 months we have executed new leases on more than 180,000 square feet, or approximately one-third, of the portfolio,” said John Fenton, Avison Young principal and managing director of the company's New England region. “In conjunction with the new leasing, each asset was recapitalized to provide a more competitive financial position in the marketplace.” The restructuring included new leasing activity, an infusion of fresh equity and term modifications on more than $50 million of first-mortgage loans to extend maturities and provide additional capital to fund the cost of new leasing.The portfolio benefited from an uptick in leasing activity in general, particularly in the high-tech, manufacturing and biotech sectors. Avison Young, …
NASHUA, N.H. — Nashua-based Net Lease Capital has closed on the $237 million sale of 49 CVS drugstores for an undisclosed client, providing the portfolio as replacement properties to be used in a 1031 exchange transaction. Pulling a transaction of this size together quickly can a challenge, due of the time limitations of 1031 where replacement properties must be identified within 45 days. So Net Lease went through the process to find out the particular dynamics of the situation, and worked through different options to zero in on a strategy that was both economically and practically feasible for the buyer. Net Lease analyzed different ways to solve the tax issue, and over a period of a couple weeks looked through the market for properties that fit the particular strategy. “There was a method to the madness, and the deal included two or three different criteria that we put into hierarchies,” says Carl Christensen, managing director with Net Lease Capital’s Advisory group. “At the very outset, all the properties involved needed to be investment grade because the investor wanted high certainty that whatever they purchased they wouldn’t have to rework in some period of time.” Specifically, the CVS properties located across …
NEW YORK CITY –– CB Richard Ellis’ (CBRE) Capital Markets group secured a $380 million loan in conjunction with the recapitalization of Chelsea Market, an iconic mixed-use property located at 75 Ninth Avenue in New York City on behalf of Jamestown. The property sits on 3.79 acres, encompassing an entire city block bounded by 15th and 16th Streets and 9th and 10th Avenues within the Chelsea submarket of Manhattan. “Jamestown was extremely satisfied with the debt execution, which was smooth, and the debt was a perfect match for our business plan,” said Shak Presswala, vice president and head of capital markets with Jamestown. Chelsea Market (pictured below) is a cluster of 15 former Nabisco Facility industrial buildings that were renovated and converted into a dynamic mixed-use office/retail property. The 1.18 milion-plus-square-foot development is contiguous to New York’s High Line Park, and anchored the Chelsea/Meat Packing Districts transformation. The buildings were originally constructed between 1890 and 1932 and were completely renovated between 1994 and 1997 with continuing architectural enhancements and modifications through 2011. At closing, the property was 99 percent occupied by tenants such as Major League Baseball, The Food Network, Time Warner, EMI, Google and Anthropologie. Jamestown has a 25-year …
SANTA ANA, CALIF. — Grubb & Ellis Co. has completed the sale of Daymark Realty Advisors, a joint venture entity controlled by Sovereign Capital Management Group and Infinity Urban Century. The sale marks Grubb & Ellis’ exit from the tenant-in-common business, which it entered at part of the company’s 2007 merger with NNN Realty Advisors. “Our corporate strategy is to focus on our real estate services and investment management business, specifically the non-traded REITS,” said Janice McDill, senior vice president of marketing and communications for Grubb & Ellis. “The sale of Daymark is extremely positive for our company,” said Thomas P. D’Arcy, president and CEO of Grubb & Ellis in a statement. “Daymark was noncore to our Real Estate Services and non-traded REIT businesses. This sale will allow us to focus our profitability and growth, while continuing to review our broader corporate strategic alternatives.” The sale involved the purchase of Daymark stock by the joint venture equity. FBR Capital Markets & Co. served as financial advisor to Grubb & Ellis for the transaction. Daymark is one of the largest real estate asset management companies in the country with a nationwide portfolio of commercial property totaling approximately 33 million square feet. …
ALEXANDRIA, VA. — The American Clean Skies Foundation (ACSF), a Washington D.C. nonprofit, released a $450 million plan today for transforming the waterfront site of the coal-fired Potomac River Generating Station (PRGS) in Alexandria, Va., into an environmentally friendly mixed-use community. Picture courtesy of http://potomacrivergreen.blogspot.com/ ACSF's Chief Executive Gregory C. Staple initiated the real estate development plan, dubbed “Potomac River Green.” The plan features: 89,600 square feet of office space and 114,500 square feet of retail and restaurants 467 multi-family and 96 townhouse units A 125-room boutique hotel A working Energy Museum that will demonstrate 21st century energy technologies A compressed natural gas (CNG) and fast-charge electric car refueling station for government, commercial fleet and individual vehicles Enhanced access to water taxis and mass transit to facilitate public access to the rebuilt site Recreation and open space that will tie Daingerfield Island, a nearby federal park, into the Alexandria waterfront through new recreation space and an eco-trail system “The Potomac power plant is no longer required to meet the D.C. area's electricity needs, and pollution from the plant has long posed a local health hazard,” Staple said. “But until now, no road map existed for phasing out this 60-year-old power …
WASHINGTON — The National Association of Real Estate Investment Managers (NAREIM) has named Gunnar Branson (pictured) CEO and President of the association, effective August 8, 2011. As only the third CEO in the organization’s 20-year history, Branson brings more than 20 years of commercial real estate experience from all sides of the industry ranging from design to property management, asset management, investing and finance. He joins NAREIM from Branson Powers Inc., a business development consulting firm he founded in 2003, to help clients such as Jones Lang LaSalle, Wrightwood Capital, Fidelity Investments and Wells Fargo develop new markets and new products. Prior to this, he held positions as chief marketing officer of Heller Financial, and director of global communications at GE Capital Real Estate. NAREIM is an association for companies engaged in the real estate investment management business, and its members manage investment capital on behalf of third party investors in commercial real estate assets. Investment sectors include office, retail, multi-family, industrial and hotels. Many of its members represent the largest institutional organizations in this marketplace. NAREIM members serve the investment goals of public and corporate pension funds, foundations, endowments, insurance companies and individuals-domestic and foreign. Collectively, they manage more …
BLOOMFIELD HILLS, MICH. — Taubman Centers, Inc. (NYSE: TCO) and TCBL Consulting Limited, a Beijing-based retail real estate consultancy, have entered into a definitive agreement through which Taubman Asia is acquiring a 90 percent controlling interest in TCBL. The new company, Taubman TCBL, will combine the local insights and network of TCBL with the global industry expertise and reputation of Taubman Centers. The total consideration for the transaction is $24 million, subject to final closing adjustments. Taubman Asia will pay approximately $12 million in cash for its controlling interest in TCBL and will credit the noncontrolling owners with approximately $12 million of capital in the newly formed company. Taubman Asia will fund any additional capital required by the business and will receive a preferred return on any capital contributed. The ownership agreements provide for the distribution of preferred returns on capital as well as returns of all such capital prior to the sharing of profits on relative ownership interests. The transaction has been approved by the board of directors of each company and is expected to close by October 2011, subject to government approval and necessary registration. “China is fast developing into one of the world’s leading consumer markets, with …
NEW YORK CITY — Hines, along with partner Pacolet Milliken Enterprises, Inc., is planning the development of a new-build 28-story, 450,000-rentable-square-foot trophy-class office tower on Avenue of the Americas in New York City. The building will be constructed on property that Pacolet Milliken has owned since 1954, a parcel with full-block frontage at the southwest corner of Bryant Park. “Pacolet Milliken is committed to stewardship of long-term, quality assets, so they make a great partner for Hines,” said Tommy Craig, Hines senior vice president and head of the firm’s New York/tri-state regional activities. “The project will be a singular opportunity for mid-sized tenants in the Midtown market, an urban campus where Bryant Park can be a backdrop for the identity of building tenants.” Designed by renowned architects Henry N. Cobb and Yvonne Szeto of Pei Cobb Freed & Partners, the development will be built as an as-of-right project within existing zoning guidelines. Demolition has been completed, allowing construction to start as early as 2012 and occupancy as early as 2014. The project is slated for LEED certification. In the recent past, Hines has been particularly active build-to-suit projects, including those for Morgan Stanley, Goldman Sachs, Royal Bank of Scotland, UBS …