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Independence Blue Cross Acquires Philadelphia Headquarters for $360M

by Kristin Harlow July 1, 2020

PHILADELPHIA — Independence Blue Cross has acquired 1901 Market Street, a Class A office tower in Center City Philadelphia, for $360 million. The 45-story, 800,000-square-foot building has served as the health insurance company’s headquarters since construction was completed in 1989. Atlanta-based Piedmont Office Realty Trust (NYSE: PDM) was the seller. The property has received more than $110 million in capital improvements over the last eight years. Upgrades included a new lobby, outdoor plaza and mechanical systems, as well as renovations throughout the interiors for a more modern look. The building is the eighth-tallest office tower in Philadelphia and houses nearly 2,500 Independence associates. Independence is the sole occupant of the building. In addition to 1901 Market Street, Independence’s campus includes a customer service call center and Independence LIVE, a customer experience center. Both connect to the company’s headquarters via a courtyard that is open to the public. Prior to the purchase, Independence was in a long-term lease. But the company found the purchase attractive because low interest rates enabled Independence to lower its annual cost of occupancy, according to Donna Farrell, vice president of corporate communications. Robert Fahey, Jerry Kranzel, Erin Hannan and Jack Corcoran of CBRE Capital Markets marketed …

July 1, 2020

Acquisitions Delaware Northeast Retail

Lululemon Acquires Digital Exercise Platform Mirror for $500M

by Alex Patton June 30, 2020

DOVER, DEL. — Lululemon Athletica Inc., a provider of athletic apparel that is based in Vancouver, British Columbia but incorporated in Delaware, has acquired digital exercise platform Mirror for $500 million. The startup fitness concept, which launched in 2018, sells a digital mirror with a camera, speakers and virtual metrics that allow users to participate in live fitness classes from home. Mirror will bolster Lululemon’s digital offerings and bring personalized in-home workouts to customer, according to Lululemon. Mirror instructors will also wear the company’s workout apparel. Lululemon reopened 60 percent of its stores and reported net revenue of $652 million in its fiscal first quarter, which ended May 3. That figure represents a 17 percent decline from $785 million during the same period a year ago. Lululemon’s stock price opened at $294.35 per share on Monday, June 29, up from $180.21 per share a year ago.

June 30, 2020

Acquisitions California Company News Development Mixed-Use New York Northeast Office Top Stories Western

Hudson Pacific, Blackstone Form Joint Venture to Grow Movie Studio and Office Platform in Hollywood

by John Nelson June 30, 2020

LOS ANGELES AND NEW YORK — Hudson Pacific Properties Inc. and Blackstone have formed a joint venture to expand the film and TV production platform for both publicly traded companies. Hudson Pacific is bringing on Blackstone as a partner to help capitalize a portfolio of studios and offices in Hollywood that have been used sparingly since the outbreak of COVID-19 and the subsequent stay-at-home directives in Los Angeles. As part of the deal, Blackstone (NYSE: BX) will buy a 49 percent stake in Hudson Pacific’s 2.2 million-square-foot Hollywood Media Portfolio, which spans three studios and five office buildings. Hudson Pacific (NYSE: HPP) will remain responsible for the day-to-day operations of the portfolio, which is valued at $1.65 billion. “Our latest joint venture with Blackstone unlocks a portion of the value we’ve created for our shareholders and provides us with significant capital to grow both our studio and office portfolios,” says Victor Coleman, chairman and CEO of Hudson Pacific. The portfolio includes Sunset Bronson, Sunset Gower and Sunset Las Palmas Studios (formerly Hollywood Center Studios), which comprises 35 stages and production and support spaces totaling 1.2 million square feet. The offices in the portfolio include 6040 Sunset, Icon, Cue, Epic and …

June 30, 2020

New York Northeast Retail

Macy’s Inc. to Cut 3,900 Corporate Jobs, Projects $365M Savings in Operating Costs

by Alex Patton June 25, 2020

NEW YORK CITY — Macy’s Inc. will lay off 3,900 employees in corporate and management positions, representing approximately 3 percent of its total workforce, according to a company statement issued today. Macy’s expects the reduction of staff to save approximately $365 million in operating costs for its 2020 fiscal year. Macy’s recently projected that it would show a $1.1 billion loss in operating income for its first quarter ending in early May, a result of temporary and permanent store closures, as well as significantly reduced sales amid the COVID-19 outbreak. The company will release its final first-quarter earnings results on July 1. At the close of 2019, Macy’s owned and operated a total of nearly 840 stores across its flagship and Bloomingdale’s brands. Prior to the health and economic crisis, Macy’s had announced plans to close 125 of its least productive stores over the next three years beginning in February. As part of the plan, the retailer also closed its offices in San Francisco, downtown Cincinnati and Lorain, Ohio, leaving the New York City office as its sole corporate headquarters. Macy’s stock price closed at $6.78 per share on June 24, down from $37.43 per share at the same time …

June 25, 2020

Northeast Pennsylvania Retail

Penn National Gaming Reopens 73 Percent of Casino Properties Across National Portfolio

by Alex Patton June 24, 2020

WYOMISSING, PA. — Penn National Gaming, a Pennsylvania-based casino owner and operator, has reopened 73 percent of its casino properties across its national portfolio. The company closed all 41 of its casino properties across 19 states following the COVID-19 outbreak. The company has implemented property-specific safety practices based on the various state laws, including social distancing and the requisition of masks in some venues. In February 2020, the company acquired a 36 percent interest in online sports and entertainment platform Barstool Sports for $163 million. The acquisition introduced an omni-channel approach to the business, including mobile casinos and online retail. The company’s stock price closed at $33.97 per share on June 23, compared with $18.85 per share at the same time last year.

June 24, 2020

Northeast Pennsylvania Retail Top Stories

GNC Files for Chapter 11 Bankruptcy, Plans to Close Up to 1,200 Stores

by Kristin Harlow June 24, 2020

PITTSBURGH — Global health and wellness company GNC Holdings Inc. (NYSE: GNC) has filed for Chapter 11 bankruptcy. Over the past year, the company has executed a strategy to close underperforming stores, while investing further in alternatives to in-store sales, such as e-commerce. With the Chapter 11 filing, GNC expects to accelerate the closure of 800 to 1,200 stores. Pittsburgh-based GNC expects to use the bankruptcy process “to improve its balance sheet and capital structure while continuing to advance its business strategy, right-size its corporate store portfolio and strengthen its brands to protect the long-term sustainability of its business,” according to a press release from the company. Additionally, GNC has reached an agreement with its lenders and Harbin Pharmaceutical Group Holding Co. Ltd., an affiliate of GNC’s largest shareholders, for the sale of the company’s business. The sale transaction has a $760 million purchase price and “would be executed through a court-supervised auction process at which higher and better bids may be presented.” The company expects to either complete the sale or the bankruptcy process this fall. GNC’s largest vendor and a joint venture partner, IVC, is working with the company to ensure a continued supply of products. Looking ahead, …

June 24, 2020

Northeast Pennsylvania Retail

PREIT to Reopen All Malls, Retail Centers Across Its Portfolio by July 4

by Alex Patton June 23, 2020

PHILADELPHIA — Pennsylvania Real Estate Investment Trust (PREIT) plans to open all of its malls and retail centers, including its 900,000-square-foot Fashion District Philadelphia shopping and entertainment destination, by July 4. Following temporary store closures amid the COVID-19 outbreak, PREIT has reported an average occupancy rate of 85 percent among non-anchor tenants at its reopened properties. Retailers and restaurants at PREIT’s properties have implemented expanded sanitation and social distancing procedures, including outdoor dining service and contactless pickup. Many stores also offer complimentary masks to guests on entry. PREIT owns and operates more than 22.5 million square feet of space across more than 20 malls and retail centers concentrated in the Northeast and Southeast regions. Upon reopening, PREIT’s properties will employ more than 30,000 workers. The company’s stock price closed at $1.33 per share on June 22, compared with $6.22 per share at the same time last year.

June 23, 2020

Acquisitions California Retail Western

Netflix Acquires Historic Egyptian Theatre in Hollywood

by Amy Works June 23, 2020

HOLLYWOOD, CALIF. — Netflix has acquired the Egyptian Theatre, a historic property that was originally built in 1922 in Hollywood. Netflix and the American Cinematheque, which purchased the theater in 1996, are collaborating to redevelop and continue operations at the theater. The Egyptian Theatre will remain the home of the American Cinematheque, a nonprofit, member-supported cultural organization, with its curation team continuing to autonomously program Friday, Saturday and Sunday events and showings. Netflix will invest in the property’s renovation and will use the revitalized space for special events, screenings and premieres during the week. The movie theater was originally built in during the silent film era and was the site of the first Hollywood movie premiere — Robin Hood, starring Douglas Fairbanks. In 2016, the theater was retrofitted to screen 35mm nitrate films and is now one of only four theaters in the United States capable of showing this rare, ultra-fragile and flammable film stock. Farshad Morè and Scott Sherwood of Gibson Dunn & Crutcher represented American Cinematheque in the transactions. Terms of the acquisition were not released.

June 23, 2020

Midwest Ohio Retail

Kroger Reports 92 Percent Digital Sales Growth in First Quarter

by Kristin Harlow June 19, 2020

CINCINNATI — Digital sales at the Kroger Co. (NYSE: KR) increased 92 percent in the first quarter, according to the company’s latest financial results. Total company sales were $42 billion in the first quarter, compared with $37 billion for the same period last year. Cincinnati-based Kroger does not separately break out its e-commerce sales from total sales. Excluding fuel and dispositions, sales grew 19.1 percent. Kroger’s first quarter ended on May 23. Kroger says its most urgent priority during the pandemic has been “to provide a safe environment for associates and customers with open stores, e-commerce solutions and an efficiently operating supply chain.” Kroger has invested more than $830 million to reward associates and safeguard its employees, customers and communities. The company’s stock price closed at $31.80 per share on Thursday, June 18, up from $23.64 one year ago.

June 19, 2020

Content Partner Features Multifamily Walker & Dunlop

The Impact of COVID-19 on the Multifamily Appraisal Industry

by Sarah Daniels June 19, 2020

The spread of COVID-19 is impacting all industries and markets — including the appraisal space. That said, appraisers should avoid making long-term assumptions about the impact the virus will have on real estate values. According to the Appraisal Institute, the current environment is fluid: An important part of any appraisal assignment is an analysis of market conditions. The coronavirus threat may be impacting market conditions. However, in most markets, it is not yet clear to what extent, if any, market conditions are affected. Related, complicating factors include fluctuations in the stock market and changes in mortgage interest rates. Market analysis includes observing market reactions. This analysis becomes more complicated when market participants themselves are facing uncertainty. Appraisal reports should include a discussion of market conditions and should mention the coronavirus outbreak and its possible impact. However, it is not appropriate to include a disclaimer or extraordinary assumption that suggests the appraiser is not taking responsibility for the analysis of market conditions. While it is important that multifamily appraisers do not jump to conclusions and make long-term predictions, we must understand the different ways in which COVID-19 is currently impacting the commercial real estate market. It is also important that we …

June 19, 2020

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