Top Stories

DENVER AND SAN FRANCISCO — Two of the largest owners of industrial properties in the United States have entered into discussions regarding a potential merger. In joint press releases, Denver-based ProLogis and San Francisco-based AMB Property Corp. explained the deal would consist of a merger of equals, in which both company's stock would be combined in an all-stock, at-market transaction based on the unaffected trading price of both stocks prior to media reports of the possible merger. Neither company would comment further on the talks. Following the news on Thursday, shares of AMB Property Corp. (NYSE: AMB)(http://www.google.com/finance?q=NYSE%3AAMB) rose to $36.01 per share, coming within pennies of its 52-week high), but ended the day at $34.01. Shares of ProLogis (NYSE:PLD)(http://www.google.com/finance?q=NYSE%3Apld) also rose, ending the day at $15.87. If completed, the merger would create a titan in the industrial sector. ProLogis currently controls a portfolio of more than 435 million square feet of industrial space located across North America, Europe and Asia. AMB controls 158.4 million square feet of industrial space in 49 markets within 15 countries. — Coleman Wood

CHICAGO AND ATLANTA — Chicago-based brokerage giant Jones Lang LaSalle (JLL) is broadening its capital markets platform with the signing of a definitive agreement that will allow it to acquire part of Atlanta-based Primary Capital Advisors. With the acquisition, JLL will become a Freddie Mac Program Plus Seller/Servicer. The deal also includes a $2 billion loan servicing platform that JLL plans to eventually expand on a national level. The acquisition is expected to close in the first quarter of this year. Faron Thompson, Primary Capital's co-founder, will lead JLL's multifamily lending business and assume an executive leadership role with the firm's real estate investment banking (REIB) team. John Bray, Primary Capital's managing director and its number one Program Plus producer last year, will join Thompson. The two will partner with President Jay Koster and the REIB leadership team of Tom Melody, Mike Melody and Tom Fish, along with Jubeen Vaghefi, managing director of JLL's national multifamily investment sales team, to drive the firm's expansion of its Americas Capital Markets business. William B. Pendleton, Primary Capital's co-founder, president and chief executive officer, will serve as senior advisor to JLL and will focus on expanding client and lender relations. According to Thompson, …

FALLS CHURCH, VA. — The Northern Virginia office market continues its January hot streak with another big office deal. ING Clarion Partners has purchased 3150 Fairview Park, a Class A property located in Falls Church. The $90 million purchase was made on behalf of a commingled fund managed by the firm. The seller was Wakefield, Mass.-based Franklin Street Properties Corp. The building contains 252,000 square feet over eight stories and is located within the Fairview Park master-planned community at the intersection of Interstate 495 and Route 50. It was constructed in 2001 as a build-to-suit for Boblis Systems, which is the building's sole tenant through January 2017. Amenities at the building include a conference center, a childcare facility and a three-level parking garage. Fairview Park also contains a 450-room Marriott hotel and conference center, the 2941 Restaurant and a 17-acre lake with 2.5 miles of walking trails. “The resilience of the local economy in Northern Virginia-Washington, D.C., submarket has been demonstrated again through the most recent downturn,” said Marc DeLuca, director of ING Clarion, in a statement. “This resilience provides strong support for the area's office market and is particularly important to outstanding properties like Fairview Park.” Last week, just …

ATLANTA — Jackson, Miss.-based Parkway Properties has purchased the office and retail portions of an Atlanta trophy tower for $167.3 million. The property is a 50-story mixed-use building located at 3344 Peachtree Road in the Buckhead submarket of Atlanta. Parkway purchased the 484,000-square-foot office and retail portions of the building along with an adjacent, 11-story parking garage. Tenants include Jones Lang LaSalle; Weinberg, Wheeler, Hudgins, Gunn & Dial; SPANX; Littler Mendelson; Fifth Third Bank; Hodges Ward Elliott; The Buckhead Club; Barclays; and Bistro Niko. The 82-unit condominium component of the tower, known as SOVEREIGN, was not included as part of the deal. Parkway made the acquisition on behalf of its Parkway Properties Office Fund II, a $750 million discretionary fund formed in 2008 for the purpose of acquiring high-quality, multi-tenant office properties. The fund, of which Parkway Properties owns a 30 percent stake, will contribute $130 million toward the purchase, with Parkway Properties itself contributing the remaining $7.3 million. The buyer expects to spend an additional $2.6 million in closing costs, capital improvements and leasing costs during the first two years of ownership. “3344 Peachtree is one of the premier office properties in Atlanta,” says Parkway President and CEO Steven …

ST. PETERSBURG, FLA. — Baypoint Commerce Center, an approximately 700,000-square-foot office campus located in St. Petersburg has traded for an undisclosed amount. The buyer was New York City-based The Feil Organization, and the seller's name was not released. The office campus consists of 15 buildings situated on 76 acres at 877 Executive Park Drive within the Gateway submarket of Pinellas County. Current tenants at the park include Sage Software, the Internal Revenue Service, Fidelity Insurance and CBS Radio. The park was formerly known as Kroger Center before undergoing a name change in 2008. In addition, a $6 million capital improvements program was undertaken by the seller. According to local reports, the last time the property traded, in 2007, a group of private investment companies paid more than $93.3 million for it. — Coleman Wood

TYSONS CORNER, VA. — Grubb & Ellis has brokered the sale of a seven-building office portfolio in Tysons Corner for $140 million. PS Business Parks Inc. acquired the 736,446-square-foot portfolio from Cityline/DLJ Real Estate Capital Partners. The properties are located along Jones Branch and Westbranch drives. They include the 151,000-square-foot Northampton Building, the 124,000-square-foot Amherst Building, the 123,000-square-foot Gloucester Building, the 123,000-square-foot Lancaster Building, the 80,000-square-foot Culpeper Building, the 77,000-square-foot Brunswick Building and the 57,000-square-foot Dickenson Building. Tenants for the properties include the U.S. General Services Administration, government contractors, law firms, and medical, technology and professional services firms. “This transaction is evidence that investors are regaining confidence in the suburban markets, said Eric Berkman, an executive vice president with Grubb & Ellis and one of the deal's brokers. “We received tremendous buyer interest in these buildings, which are well positioned to capitalize on the extension of the Metrorail Dulles Corridor Project and the implementation of Fairfax County's new comprehensive plan for Tysons Corner.” Officials are developing a plan that will redesign the city's transportation system while increasing the number of office buildings and housing units. The aim is to provide housing for 100,000 residents and 200,000 total jobs. Berkman partnered …

NEW YORK CITY — DiamondRock Hospitality Co. has signed a purchase agreement to acquire a hotel currently under construction in New York City's Times Square. The deal could be valued as high as $178 million. Highgate Holdings and an affiliate of Walton Street Capital are currently developing the hotel at the intersection of West 42nd Street and Broadway. It is under a 24- to 30-month construction timetable that would have the hotel open in 2013. Current plans call for the construction of 250 to 300 guest rooms. However, the number of guest rooms could increase to 400 if the developers are able to obtain necessary approvals. DiamondRock's purchase price for the hotel is based on the number of rooms it contains upon completion as well as the completion date. The original purchase price is based on a per-room price of $450,000, which would put the total price between $112.5 and $135 million. If 400 guest rooms are constructed, the purchase price will be $445,000 per room, which totals $178 million. DiamondRock has committed to an initial deposit of $20 million. Once certain construction milestones are reached, the company will make an additional $5 million deposit. If approvals are obtained to …

BELLEVUE, WASH. — Holliday Fenoglio Fowler (HFF) has closed on a $205 million acquisition loan for Bravern Office Commons, an approximately 750,000-square-foot, Class A office property located in Bellevue. As previously reported, Principal Global Investors purchased the property from its original developers, Investcorp and Schnitzer West, for $410 million. The loan, which was provided by Pacific Life Insurance Company, carries a 10-year term and a fixed interest rate. A HFF team that included New York City Senior Managing Director Michael Tepedino, San Francisco Senior Managing Director Bruce Ganong and Dallas Executive Managing Director Jody Thornton arranged the financing on behalf of Principal Global Investors. Investcorp and Schnitzer West developed Bravern Office Commons in 2007. It is wholly leased to Microsoft. The office component is part The Bravern, an $800 million mixed-use development. In addition to the two high-rise towers and adjacent parking lot that make up the office component, The Bravern includes two luxury residential towers containing 455 units as well as approximately 310,000 square feet of luxury retail space. Only the office component was included in the financing. — Coleman Wood

NEW YORK — Marcus & Millichap has brokered the sale of a three-property ShopRite portfolio for $37.07 million. The portfolio includes two shopping centers anchored by ShopRite and one freestanding ShopRite grocery store. All three properties are located in Upstate New York. The portfolio includes the ShopRite Plaza located on Route 94 South in Warwick, the ShopRite Plaza located in Ellenville and a freestanding ShopRite located adjacent to Fairview Plaza in Hudson. The properties traded for an average of $182 per square foot. Steven Siegel of Marcus & Millichap's National Retail Group in Manhattan represented the seller, a New York-based institutional owner, as well as the buyer, a New York-based buyer that specializes in supermarkets. “Buyers were interested in this portfolio because the properties are supermarket-anchored and management-free,” Siegel said in a statement. “SRS has a long-term master lease on the two multi-tenanted properties within the portfolio. The triple-net aspect of the product appealed to buyers throughout the Unites States — institutions, REITs, local players, shopping center owners and 1031 buyers — who were bidding against each other.” — Coleman Wood

CHICAGO — A joint venture between Red Sea Group USA and Server Farm Realty has acquired a Chicago data center from The Northern Trust Company. The eight-story building, which is currently undergoing renovations, totals 443,446 square feet over eight stories. The property, which is located on 5.23 acres at 840 South Canal St., is currently undergoing a $200 million conversion into a multi-tenant data center. The building had previously been used by Northern Trust as a technology, data and operations center. It was originally developed in the 1940s by General Electric as a manufacturing facility. When the data center conversion is complete, 840 South Canal Street will be one of the largest data centers in the Midwest. “The data center market in the Loop area has been tight for some time now due to the limited supply of qualified alternatives,”said Geoffrey Kasselman, the president of Op2mize, the brokerage firm that represented the buyer in the deal. “This property helps fill that void with its 38-megawatts of dedicated power from multiple feeds, heavy floor loads, high ceilings, redundant infrastructure, robust security, connectivity from 10 different carriers and, most of all, speed to market.” Kasselman was joined by Op2mize broker Thomas Bueltmann …