NEW YORK CITY — Washington Mutual has been seized by the U.S. government and sold to JPMorgan Chase & Co. for $1.9 billion. Marking the largest U.S. bank failure in history, the move was a huge step by the U.S. government to clean up a banking industry littered with toxic mortgage debt. Washington Mutual was one of the hardest hit lenders in the nation’s housing bust and credit crisis. Washington Mutual was shut down by the federal Office of Thrift Supervision (OTS) and the Federal Deposit Insurance Corp. (FDIC) was named receiver. According to the OTS, this followed $16.7 billion of deposit outflows at the Seattle-based thrift since Sept. 15. “With insufficient liquidity to meet its obligations, WaMu was in an unsafe and unsound condition to transact business,” the OTS said. The FDIC noted that customers should expect business as usual today, and all depositors are fully protected. As a result of the acquisition, JPMorgan will now have 5,410 branches in 23 U.S. states.
CALIFORNIA, WASHINGTON, FLORIDA, TEXAS AND GEORGIA — First Industrial Realty Trust has acquired an industrial portfolio from ADESA for $82 million. The transaction covers eight car auction sites totaling more than 800 acres. The locations include four sites in California (Tracy, Otay Mesa, Mira Loma and Sacramento); Fairburn, Ga.; Houston; Auburn, Wash.; and Bradenton, Fla. All of the sites have been acquired except the Fairburn, Ga., location, which is expected to close shortly. ADESA, a subsidiary of KAR Holdings, will lease back the sites under 20-year lease agreements with 20-year renewal options. First Industrial will provide ADESA $12.5 million for construction of physical improvements on the east half of the Otay Mesa, Calif., site. According to Grubb & Ellis’ second quarter 2008 industrial report, U.S. vacancy rate climbed to its highest level in 3 years to 8.2 percent. The lowest rate in the country was supply-constrained Los Angeles at 1.9 percent and the highest was property-concentrated Raleigh, N.C., at 16.1 percent.
With financial news taking center stage these days, it’s easy to see why some people are hoarding their money under mattresses. With news of the Freddie Mac/Fannie Mae takeover, Lehman’s bankruptcy woes, and the proposed $700 billion rescue of the residential mortgage industry by the federal government, an honest projection of where the retail sector is headed is a question on the minds of both tenants and landlords. Marcus & Millichap’s National Retail Group recently presented a webinar shedding some light on the retail market, and detailing the present and future of the sector. Hessam Nadji, managing director, research services for Marcus & Millichap, says the first ‘domino’ of what has started the cyclical downturn the economy is currently experiencing was the housing market. “There are markets, such as Seattle and San Francisco, that had a healthy appreciation and continue to show price increase,” says Nadji. “Middle America, Florida, and parts of Texas, did not have much of an appreciation, and unfortunately, are seeing a major price correction. So the question becomes ‘how much of an impact is there from home price corrections of these local economies?’ That question is a profound driver of how deep these local markets will …
NEW YORK, LOS ANGELES AND CHICAGO — An affiliate of Arcapita has agreed to sell 29 senior-housing properties to Toledo, Ohio-based Health Care REIT for $643.5 million. The properties, located mainly in the New York, Los Angeles and Chicago metropolitan areas, will be managed by McLean, Va.-based Sunrise Senior Living. “These 29 Sunrise communities are in deep and attractive markets,” says Paul Klaassen, chief executive officer with Sunrise Senior Living. “Developing this strategic relationship with Health Care REIT will allow us to continue to operate these communities and create value for both companies.” As of June, the properties had a total of 2,082 units and an average resident occupancy of 94 percent. The properties were built between 1993 and 2005, and include assisted living, Alzheimer’s care and independent living care. Health Care REIT’s acquisition will be financed with approximately $365.4 million in cash, plus a 90 percent interest in the $309 million of existing debt held by the venture. Sunrise Senior Living will retain a 10 percent interest in the venture. The transaction is expected to close fourth quarter 2008.
COLUMBIA, S.C. — Parkway Properties has sold Capitol Center in Columbia to an undisclosed buyer for $47.5 million. Parkway Properties acquired the 460,000-square-foot office property 10 years ago. At the time of sale, it was 97.5 percent occupied. “The asset (Capitol Center) has performed well for us, but we are exiting a few markets, of which Columbia is one,” says Jim Ingram, executive vice president and chief investment officer with Parkway Properties. “We’re deploying the proceeds of those dollars into other markets, such as Phoenix, Houston and Florida.” In recent months, Parkway Properties has disposed of two other assets: Town Point Center, a 131,000-square-foot office property in Norfolk, Va.; and Wachovia Plaza, a 186,000-square-foot office property in St. Petersburg, Fla. Ingram says the company is also active in raising discretionary office funds. “We completed the investment of a $500 million discretionary fund on behalf of the Ohio Public Employees Retirement System in February,” says Ingram. “Since that time, we raised a second discretionary office fund with Teacher’s Retirement System of Texas. Teacher’s committed $262.5 million in equity, Parkway Properties committed $112.5 million in equity, and out of that $375 million, we will acquire $750 million worth of properties across the …
PHILADELPHIA — AMC Delancey Group has formed Delancey Senior Living for the purpose of pursuing development and investment opportunities in the senior housing sector. The newly-formed company will be seeking land within 100 miles of Philadelphia to develop independent senior living communities. Plans to partner with service-focused operators or opportunities to self-manage the communities are also in the works. Michael Wachs, the newly promoted president and chief operating officer of Delancey Senior Living, will be responsible for executing the vision of the new company, as well as day-to-day management of AMC Delancey Group’s other investments and strategies. “As we developed our Delancey Senior Living strategy, we were able to take advantage of our long history as an investor, developer and operator of diverse property types to address the unfulfilled needs of aging seniors,” says Wachs. “Our new business combines our expertise and understanding of real estate development with our sensitivity to how properties should be operated.” Delancey Senior Living will focus on building new independent senior living rental apartments with services, in addition to acquisition opportunities in assisted living, memory care, continuing care retirement communities and active-adult communities. “It has never been just about the building or real estate for …
MELBOURNE, AUSTRALIA — Centro Properties Group has failed to close a $714 million deal to sell 29 U.S. malls, just two weeks ahead of a refinancing deadline. The deal had been for 29 of the 31 U.S. shopping malls in the Centro America Fund and was subject to due diligence by the unnamed buyer. “Centro now advises that the due diligence period has expired and the purchaser has elected to terminate the agreement,” Centro Properties said in a statement. It also stated that talks with the purchaser were continuing, but there was no assurance the talks would lead to a future agreement. Centro owns 665 U.S. shopping malls, making it the third-largest mall manager in the country. Its affiliates have approximately $6.1 billion of debt to refinance by the end of the year, a portion of which expires September 30.
BEAVERCREEK, OHIO — Von Maur has opened a 140,000-square-foot department store at The Greene in Beavercreek. The Greene, located between Dayton and Columbus, is a 72-acre lifestyle center that includes 85 retail, entertainment and dining tenants, as well as 120,000 square feet of office space and 200 residential units. Barry Rosenberg, president of Steiner + Associates, says Von Maur’s decision to open its second store in the state at The Greene, instead of in a larger city such as Cleveland or Cincinnati, says a lot about the retailer’s confidence in the project. “Von Maur will raise the bar for fashion in the Miami Valley region when it comes to The Greene,” says Rosenberg. “The level of service at Von Maur is remarkable. Quite honestly, Von Maur’s decision is a vote of confidence for Dayton as a whole.” Phase I of the project opened in August 2006. The Davenport, Iowa-based department store will anchor Phase II, and recently announced tenants include Forever 21, S&K Menswear, Bethany’s Bridal and Sephora. Upon completion, The Greene will be a $200 million project, featuring 1.1 million square feet of space. “Dayton is an underserved retail market,” says Rosenberg. “With a metropolitan population that has grown …
NEW YORK CITY — Bank of America Corp. has agreed to buy Merrill Lynch & Co., the world’s largest retail brokerage, for $50 billion. In addition, Lehman Brothers Holdings has announced it will file for Chapter 11 bankruptcy protection. Bank of America has agreed to pay 0.8595 shares of Bank of American common stock for each Merrill Lynch share. The price is 1.8 times stated tangible book value. The bank is buying about $44 billion of Merrill’s common shares, as well as $6 billion of options, convertibles, and restricted stock units. James Ellman, portfolio manager at hedge fund Seacliff Capital, says the move gives Bank of America strength in areas where they were weak. “Now Bank of America has one of the best and largest retail brokerages in the country, one of the top investment banks in the world, and a large stake in one of the best investment managers in the world,” says Ellman. The deal has been approved by the directors of both companies. Three Merrill directors will join the Bank of America board. The transaction is expected to close first quarter 2009.
MESA, ARIZ. — DMB Associates and Gaylord Entertainment have agreed to develop a destination resort and convention center in Mesa. The project will be the launch site for a mixed-use project that will include retail, Class A office space, residential units and a Tom Fazio-designed 18-hole, par 72 golf course. The project will be developed on the Mesa Proving Grounds, a 3,200-acre portion of land currently used by General Motors as its desert testing facility. DMB is also in talks with Westcor regarding future retail planning. Precise details of the size, theme and character of the resort have not been finalized. Drew Brown, chief executive officer of DMB, says the convention center will attract millions of visitors, resulting in steady revenues for the city of Mesa, the Southeast Valley, Maricopa County and the state of Arizona. “The infusion of private capital and, more importantly, capital from outside the state, will allow Mesa Proving Grounds to evolve into an important hub for economic development in the Southeast Valley, and in the process will help secure the City of Mesa’s economic security,” says Brown. The hotel will likely be the largest in the state of Arizona. “The importance of these announcements to …