MCLEAN, VA. — Freddie Mac has issued a new offering of structured pass-through certificates (K Certificates) worth approximately $538 million. This particular offering of multifamily mortgage-backed securities are backed by 19 multifamily properties owned by Apartment Investment & Management Company (NYSE: AIV) affiliates. The K-AIV Certificates are expected to price this week and settle on or about June 9, 2011. This K deal is particularly unique because it is the first K Certificate backed by multiple loans from a single borrower. The first single loan K Certificate from a single borrower was the March 2010 K-SCT transaction, backed by the Starrett City property in Brooklyn, New York City. “We expect to periodically issue these types of deals and others with loans from a single property and/or single borrower,” said David Brickman, national head of Multifamily and CMBS Capital Markets for Freddie Mac, in a statement. “It's the continuing evolution of K deals, which include loans on conventional, student, senior and targeted affordable multifamily properties.” Multifamily K Certificates are structured pass-through securities backed by multifamily mortgage loans. K Certificates provide Freddie Mac with an efficient vehicle to securitize multifamily loans, subsequently providing investors with structured guaranteed securities that have both structured …
NEW YORK CITY — Savanna, a New York-based real estate private equity and asset management firm, has taken title to 100 Wall Street, a 29-story, 504,000-square-foot Class A office building in Manhattan’s Financial District. In March 2011, an affiliate of Prudential had purchased the mezzanine loan — which was in default — and subsequently sold it to Savanna for $7.5 million. After acquiring the mezzanine loan, Savanna initiated a UCC foreclosure, which was completed in May 2011. Savanna then took 100 percent fee ownership and assumed the $117 million first mortgage loan. “In the past 10 months, Savanna has acquired a number of terrific office buildings in Manhattan, including 386 Park Avenue South, 104 West 40th Street, 5 Hanover Square, 1375 Broadway and the debt secured by 80 Broad Street,” says Nicholas Bienstock, a co-managing partner of Savanna, which pursues real estate equity and debt asset invesetments throughout the Northeast, focusing on directly owning and operating properties in New York City and the Washington, D.C. metro area. “Most of these acquisitions involved the purchase of defaulted debt as an initial entry point into the deal, and 100 Wall Street is another example of Savanna stepping into the fee ownership of …
CHICAGO — Strategic Hotels & Resorts, Inc. (NYSE: BEE) has signed a letter agreement to acquire the 49 percent interest in the InterContinental Chicago hotel currently owned by its joint venture partner, an affiliate of The Government of Singapore Investment Corporation (GIC). The ownership interest will change hands in exchange for approximately 10.8 million shares of common stock at an agreed upon issuance price of $6.50 per share and $11.8 million of cash consideration plus closing adjustments for working capital. According to the company, the transaction values the hotel at $288.3 million, or $364,000 per key. Strategic Hotels & Resorts, Inc. CEO Laurence Geller said in a statement that the impetus to acquire this ownership interest is based on upside potential for the property, which is located at 505 N. Michigan Ave. at the heart of the Magnificent Mile. Because of what he called “virtually zero growth among its competitive set,” Geller said the InterContinental Chicago “is poised to meet and possibly surpass previous peak performance levels.” “The InterContinental Chicago is a core asset in our portfolio,” added Gellar. “With this transaction, we are able to preserve our ownership on attractive terms, while singularly benefiting from the tremendous upside inherent …
CLAYTON, MO., AND SAN ANTONIO — Clayton-based The DESCO Group, a retail development company owned by the same people as the Schnucks grocery store chain, has found a partner for a portfolio of 28 Schnucks-anchored retail centers. San Antonio-based USAA Real Estsate Co.will invest in the portfolio with DESCO, which will remain the managing partner. The portfolio contains a total of 2.3 million square feet of space. Schnucks is the anchor for all of the centers. The properties are located throughout Illinois, Indiana, Missouri and Tennessee. Australian REIT Charter Hall and Jacksonville, Fla.-based REIT Regency Centers Corp. previously owned a stake in the portfolio with DESCO. However, reports indicate that Charter Hall has decided to sell its U.S. assets, and Regency exited the partnership this month in exchange for an ownership stake in four St. Louis-area shopping centers. Eastdil Secured served as investment banker of record for the deal, and Iron Tree Capital provided advisory services. DESCO currently controls a portfolio of 174 retail, office and industrial properties totaling approximately 12 million square feet. USAA has approximately $7 billion in assets under management. — Coleman Wood
SANTA ANA, CALIF. — Santa Ana-based Grubb & Ellis Healthcare REIT II has acquired the Dixie-Lobo Medical Office Building Portfolio from Seavest Inc. for an undisclosed amount. The portfolio comprises eight properties totaling 156,000 square feet. The properties are located on the campuses of hospitals affiliated with Community Health Systems, Christus Spohn Health System and Signature Hospital Corporation. All of the properties are master-leased to the hospitals with terms expiring between November 2015 and August 2017. The leases all have four 5-year renewal options. The eight properties include: • A single-story, 9,000-square-foot building located on the campus of Medical Park Hospital at 302 Bill Clinton Drive in Hope, Ark.; • A single-story, 15,000-square-foot building located on the campus of Women & Children's Hospital at 1920 W. Sale Road in Lake Charles, La.; • A two-story, 24,000-square-foot building located on the campus of Carlsbad Medical Center at 2420 W. Pierre St. in Carlsbad, N.M.; • A single-story, 15,000-square-foot building located on the campus of Lea Regional Medical Center at 5419 N. Lovington Highway in Hobbs, N.M.; • Two single-story buildings totaling 25,000 square feet that are located on the campus of Christus Spohn Hospital Alice at 2420 and 2510 E. Main …
NEW YORK CITY — Equity partners Broadway Partners and Investcorp have recapitalized 280 Park Avenue, a 1.23 million-square-foot, Class A office building located in Midtown Manhattan. The joint venture reached an agreement with the property's mezzanine debt holders, SL Green Realty Corp. and Vornado Realty Trust, that will help fund a $150 million repositioning and re-tenanting program. Prior to the recapitalization, Vornado and SL Green formed a 50/50 joint venture for the lenders' combined $400 million debt position in the property. The venture now owns a majority equity stake in it. Broadway retains an ownership interest in 280 Park Avenue and will remain its co-manager. The repositioning of the office tower will include upgrades to the public areas as well as the installation of state-of-the-art infrastructure. The property currently has a large block of contiguous space that will be marketed for lease. “Many great office properties were impacted adversely by the most recent market downturn but now offer great upside potential to investors who have the resources to take advantage,” said SL Green CEO Marc Holliday in a statement. “We see 280 Park as one of those opportunities and we look forward to working with our partners to realize the …
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 …
PENNSYLVANIA AND VIRGINIA — Liberty Property Trust has disposed of two portfolios for a total of $221 million. The portfolios contain a combined 46 office and flex industrial properties totaling approximately 2.3 million square feet. In the first transaction, Liberty sold 32 properties located in Pennsylvania's Lehigh Valley for $124 million to an undisclosed party. The properties range in size from 18,983 to 95,000 square feet. They are located within Allentown's Lehigh Valley Industrial Park III and William Penn Business Center; Bethlehem's Lehigh Valley Corporate Center and Lehigh Valley Industrial Park I and IV; and Center Valley's Stabler Corporate Center. The portfolio was approximately 90 percent leased at the time of closing. In a press release Liberty explained that the sale was part of its plan to divest of older properties in the Lehigh Valley International Airport submarket in order to focus on growth in other areas of the market including the west side of Lehigh Valley. Despite the sale, Liberty remains the largest landlord in the region with a ownership and management portfolio of approximately 16 million square feet. In the second transaction, Liberty sold a 14-property portfolio located in the Richmond area to Lingerfelt Development for $97 million. …
CHICAGO — Jackson, Miss.-based Parkway Properties has closed on the sale of 233 North Michigan, a 1.1 million-square-foot office tower located in Chicago's central business district, for $162.2 million. The property traded at a 6.9 percent capitalization rate. Occupancy for the building was 83.8 percent at the time of closing. According to reports, the buyer in the deal was Newton, Mass.-based CommonWealth REIT. Parkway plans to use the proceeds of the sale to pay down existing debt. The company will repay the $84.6 million first mortgage for the property, which would have matured in July. The company also plans to use the net proceeds following this repayment — approximately $74 million — to pay down its revolving credit facility. “The sale of 233 North Michigan is a strategic decision by Parkway to reduce our exposure in one city block of the Chicago CBD while also using the expected significant proceeds to improve our balance sheet,” said Steven Rogers, president and CEO of Parkway, in a statement. “We like the Chicago market and will continue to manage and own assets in the area, but the sale of this particular asset enables us to accelerate the achievement of the capital allocation objectives …