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Taco Bell Renews Lease for Corporate Headquarters in Southern California Through 2030

by Alex Tostado February 4, 2019

IRVINE, CALIF. — Taco Bell Corp. has renewed its corporate headquarters lease in Irvine through 2030. The five-story, 180,000-square-foot office building is located at 1 Glen Bell Way, about 42 miles south of Los Angeles. The facility houses 800 corporate and contracted employees, is LEED certified and offers amenities such as on-site child care, a dining center, salon, gym, game room, dry cleaning services and a car washing services. The Irvine property serves as one of three restaurant support centers for the Yum! Brands Inc, the parent company of Taco Bell. Specifically, the support center includes a test kitchen for new Taco Bell food innovations. Cushman & Wakefield’s Irvine office arranged the lease between Taco Bell and landlord LBA Realty. Glen Bell founded Taco Bell in 1962. The restaurant chain has been headquartered in Southern California since then, including 40 years in Irvine. Taco Bell has occupied its current headquarters since 2010. “As a brand with Southern California in our DNA, we’re excited to remain in Irvine and continue to grow where we have deep roots,” said Frank Tucker, chief people officer of Taco Bell Corp. “The unrivaled talent and culture at our Restaurant Support Center make this a great …

February 4, 2019

Features Finance Insight Midwest Multifamily Northeast Southeast Texas Western

Multifamily Sentiment Remains Strong For The Foreseeable Future

by Jaime Lackey February 2, 2019

Hilary Provinse, executive vice president and head of mortgage banking at Berkadia, highlights the trends, strategies and activity attendees should have on their radar ahead of MBA CREF 2019 in February. Coming off a strong and surprisingly consistent year in 2018, we’re feeling good about 2019. The year is off to an interesting start to say the least, and we’re keeping our eye on several factors. These include Treasury rates, the regulatory environment, tariffs and development costs that will impact our business. Even keeping these in mind, however, there are positive factors that point to the potential for continued economic strength and activity in the multifamily market. Fundamentals of the Economy Remain Very Strong Unemployment continues to fall, and jobless claims remain extraordinarily low. Despite the recent decrease in consumer confidence — volatile in its own right — it remains near the highest levels since 9/11. GDP growth also remains strong with consumption, investment and government outlays all supportive. Multifamily Demand-Supply Dynamics Remain Solid The percent of population living in multifamily units has experienced a slow, but consistent, increase since the 2008 financial crisis. Loan maturities are expected to increase in 2019 versus 2018 across several sources. Maturities are inevitable events that …

February 2, 2019

Market Reports Multifamily Texas Texas Market Reports

Survey: Multifamily Metrics Will Cool in 2019

by Taylor Williams February 1, 2019

Multifamily properties have produced strong returns for commercial developers and investors over the past few years. But the apartment supply wave appears to have crested, suggesting 2019 will bring a slower pace of rent growth. Consequently, pricing levels should come down, cap rates should creep upward and returns on investment should cool. According to a report from commercial real estate research firm Yardi Matrix, America’s multifamily market experienced 3.1 percent annual rent growth for the 12-month period ending November 2018, the latest data available at the time of this writing. The report also featured 2019 rent growth projections for America’s 30 largest multifamily markets, 19 of which are expected to see their paces of rent growth either decline or remain the same this year. Brokers who participated in Texas Real Estate Business’ annual forecast survey indicated that investment activity for multifamily assets in Texas should be more modest in 2019. This group ranked multifamily second among property types likely to experience a high velocity of sales in 2019, suggesting the new year could see more properties brought to market in anticipation of future elevation of cap rates. Numerical Context Most recently, the story on multifamily in Texas has been demand, …

February 1, 2019

Content Partner Features Lument RED Capital Group Western

RED Capital Group: The Northwest Enters 2019 with Strong Momentum, Rising Risks

by Jeff Shaw February 1, 2019

For decades, the Pacific Coast has defined the American avant garde. From the Beats and Hippies of the Fifties and Sixties to today’s coders, gamers, software engineers and social network titans, the West Coast has set the standard for contemporary cutting edge social and life-style evolution. Lately, the region has emerged as a global economic leader as well. The rise of Big Tech operations in the five Pacific Northwest metro areas we cover — the East Bay, Portland, San Francisco, San Jose and Seattle (the “Pacific 5”) — has altered their economic landscapes profoundly. From 2014 to 2017, nominal metropolitan GDP per capita increased more than three times faster than the national average, and personal income per capita — already considerably higher than the U.S. mean — increased at an 80 percent faster rate than the metropolitan norm. Wealth creation and income growth on this scale fueled commensurate demand for rental housing space, especially the luxury infill product favored by investors and developers. Total Pacific 5-occupied apartment stock increased at a 2.4 percent annual rate over the three years ended in 3Q18 (Reis) — 20 percent faster than the balance of the RED 50, RED Capital Research’s large market peer …

February 1, 2019

Acquisitions Northeast Office Pennsylvania Top Stories

Equity Commonwealth to Sell 55-Story Office Tower in Philadelphia for $451.6M

by Alex Tostado January 31, 2019

PHILADELPHIA — Equity Commonwealth (NYSE: EQC) is under contract to sell BNY Mellon Bank Center, a 55-story, 1.3 million-square-foot office building located at 1735 Market St. in downtown Philadelphia. The price is $451.6 million. The buyer was undisclosed, though multiple media outlets report that a partnership between New York-based Silverstein Properties Inc. and Philadelphia-based Arden Group is acquiring the building. Proceeds after credits for capital costs, contractual lease costs, and rent abatements are expected to be approximately $435.6 million. The sale is slated to close by March 27. The asset is the fourth-largest building in Philadelphia. Amenities include The Lounge at 1735, a 19,000-square-foot space offering a 100-person classroom-style conference facility, fireplaces, wine lockers and TVs; Pyramid Club, a lounge on the 52nd floor offering a 360-degree view of Philadelphia, a bistro bar and a sit-down restaurant; the Philadelphia Sports Club, a 25,000-square-foot, two-story fitness center offering a sauna, rowing machine, group fitness classes, and massage therapy; and covered bike parking. BNY Mellon Bank Center was built in 1990 and designed by Kohn Pedersen Fox Associates. The building is situated less than a mile from Philadelphia City Hall and Logan Square, and less than two miles from the Liberty Bell. Chicago-based …

January 31, 2019

Features Finance Insight Loans Midwest Multifamily Northeast Southeast Texas Western

Putting The Green In Green Financing

by Jaime Lackey January 30, 2019

Green bonds have been around since 2007, but they only really started to gain traction in 2014 when about $37 billion worth of bonds were issued in the U.S. That number jumped to $45.4 billion last year, according to Bloomberg New Energy Finance (BNEF). These financing vehicles, which tout environmental and social good, can be big business. Fannie Mae accounted for much of these green mortgage-backed securities (Green MBS) with $19.8 billion contributed in 2018. These loans center on assets that have achieved green certification or those that can reduce their energy and water consumption. “Multifamily had another outstanding year in 2018, thanks to our lenders,” says Rob Levin, senior vice president for multifamily customer engagement at Fannie Mae. “Together, we supported all market segments, bringing liquidity to the market while building a balanced portfolio that reflects our strategy with strong credit quality and mission-rich business.” Getting With The Program Lenders are taking advantage of the government-sponsored entities’ (GSEs) sustainability programs at an accelerated pace. Walker & Dunlop structured $392.3 million in green financing for three multifamily properties in Southern California in June 2018. Class A communities the Medici and the Orsini I in downtown Los Angeles were financed through …

January 30, 2019

Hawaii Industrial Loans Top Stories Western

Industrial Logistics Properties Trust Secures $650M Refinancing for Hawaiian Portfolio

by David Cohen January 30, 2019

OAHU, HAWAII — Industrial Logistics Properties Trust (NASDAQ: ILPT) has secured a $650 million mortgage loan secured by an industrial portfolio in Oahu. The portfolio includes 186 properties, which total approximately 9.6 million square feet. The 10-year loan applies to approximately 57 percent of ILPT’s total owned square footage in Hawaii. As of Dec. 31, 2018, the average remaining lease term for these properties was more than 14 years and the occupancy was nearly 100 percent. “We are pleased to term out our floating rate debt with attractive, long-term, fixed-rate debt and to demonstrate the tremendous value of these unique Hawaiian assets,” says John Murray, CEO of Industrial Logistics Properties Trust. “While the underlying assets had a net book value of less than $500 million at year end 2018, this loan provides us with $650 million of capital to fund value-enhancing external growth opportunities.” Terms of the non-amortizing financing included a fixed interest rate of 4.3 percent. Morgan Stanley, Citi, UBS and J.P. Morgan provided the capital. Sullivan & Worcester LLP provided legal counsel to Industrial Logistics Properties Trust in the transaction. ILPT stock closed at $20.79 per share on Tuesday, Jan. 29, down from $22.47 one year ago. — David …

January 30, 2019

District of Columbia Market Reports Office Southeast Southeast Market Reports

Amenities, Transit Push D.C.’s Central Business District to New Heights

by John Nelson January 28, 2019

Investors have renewed their interest in office properties in the Washington, D.C. central business district (CBD) based on increasing tenant demand. The market is putting a higher value on the built-in amenities that exist in the CBD, like dining and entertaining options, transportation accessibility and architecturally timeless buildings. We can always tell the center of gravity of a city by where the brokerage shops locate. In D.C., CBRE’s latest move to the CBD from the East End puts all of the agency brokerage shops within feet of each other. With a healthy stock of historically significant, well-built office properties with value-add potential, the CBD is primed to continue its office renaissance. Transportation Infrastructure While the existing public transportation infrastructure in the CBD is an important factor driving businesses back to the submarket, shaving 20 to 30 minutes from commute times — whether by car, bus or train — is decidedly attractive to today’s employers. Combined with the variety of established dining, entertainment and hospitality options in the CBD, transportation is vital to attracting high-profile employers. The city’s law firms in particular have taken note. Over 20 notable practices have relocated their offices to the CBD in the last year alone. …

January 28, 2019

Features Finance Insight Loans Midwest Northeast Southeast Texas Western

Commercial Real Estate Lending Had a Banner Year in 2018

by Jaime Lackey January 28, 2019

Records were meant to be broken. That’s a phrase commercial lenders have become fairly familiar with over the past few years. Multifamily lending, in particular, has enjoyed a good run. In the fourth quarter of 2018, the Mortgage Bankers Association released the MBA Annual Report on Multifamily Lending. According to the report, strong market conditions helped fuel a 6 percent increase in multifamily lending in 2017. Lenders provided a record high of $285 billion in new mortgages for apartment buildings with five or more units. Jamie Woodwell, vice president of commercial real estate research for MBA, cited a few reasons for this uptick in activity. “The multifamily lending market in 2017 benefited from improving fundamentals, rising property values and low interest rates,” he says. “The result was larger loan sizes and record levels of overall borrowing and lending…Demand came from borrowers and lenders of all sizes, with loan amounts ranging from thousands of dollars to hundreds of millions.” This breakneck pace continued last year as low unemployment, job growth and overall economic strength gave investors and lenders confidence in the market. Freddie Mac had its best year ever in terms of multifamily production in 2018. The government-sponsored enterprise (GSE) closed …

January 28, 2019

Acquisitions Hospitality New York Northeast Top Stories

Ashford Hospitality Trust Acquires Embassy Suites in Manhattan for $195M

by Alex Tostado January 24, 2019

NEW YORK CITY — Ashford Hospitality Trust Inc. (NYSE: AHT) has acquired the Embassy Suites by Hilton New York Midtown Manhattan for $195 million, or $629,000 per room. The 41-story, 310-room hotel is located on 37th Street between 5th and 6th avenues, near Bryant Park and Times Square. While the seller was not disclosed, The Real Deal reports that AIG Global Real Estate owned the majority stake in the property. This is Ashford’s first direct hotel investment in New York City. According to data analytics firm STR, the number of hotel rooms in Manhattan that opened in 2018 was down 32 percent from 2017. Furthermore, for the first time since 2013, demand outpaced supply in both 2017 and 2018. “The hotel is a high-quality, well-positioned asset that we expect will benefit from the positive trends occurring in the dynamic Manhattan market,” says Douglas Kessler, Ashford’s president and CEO. “Having recently opened in 2018, the property is still ramping up operations, and we believe there is significant growth and upside to occur.” Indeed, Ashford reports that there are several new development projects in Midtown that are expected to fuel growth in the area. On a trailing three-month basis ending Dec. 31, 2018, the …

January 24, 2019

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