With city-like, apartment-rental living back in vogue, New Jersey — from its urban centers to its suburban bedroom communities — is transitioning to more walkable, transit-focused neighborhoods. From Northern, Central and Southern Jersey’s green, well-manicured garden-apartment courtyards to the sleek Class A high-rises peppering Hudson County’s Gold Coast, multifamily living and investment are catalysts for sustained statewide economic and population growth. The groundwork for this trend — and the ensuing surge in construction expected to peak this year — was established a few years back with the emergence of a state-incentivized transit village designation program. While this movement started in 1999 as a means to revitalize transit-friendly communities through mixed-use development, municipal leaders have only begun to embrace and leverage this type of development and private investment long associated with urban centers. Today, New Jersey has 32 state-designated transit villages and a multitude of emerging transit centers. Early designees include Pleasantville (Atlantic County), Journal Square/Jersey City, Morristown, South Amboy, South Orange, Rahway, Cranford and Matawan. Most recently, they have been joined by relative newcomers like East Orange, Summit, Plainfield, Irvington, Park Ridge and Hackensack as well as budding hubs such as Harrison. One example of how multifamily investment is leveraging …
Average U.S. apartment rents saw a modest increase of 0.2 percent from March to April 2017, but rents increased in 81 percent of markets nationwide, according to a report from RENTCafé. The report uses data from the apartment listing service’s parent company, software provider Yardi. The RENTCafé research team analyzed data across the 250 largest cities in the United States for buildings containing 50 or more units. Based on the data, the average U.S. apartment saw a $2 increase in rent between March and April 2017. Rents increased in April in 203 of the 250 cities tracked by Yardi, while they decreased in 13 cities and stayed flat in 34. Year-over-year, rents went up 2 percent nationwide, which is “a significant reduction in regard to historical performance at this time of the year and is the lowest annual growth rate we’ve seen in more than three years,” according to the report’s author, Ama Otet. By comparison, average rents increased at triple that rate — 6 percent — from April 2015 to April 2016. California cities make up the bulk of the April rent-growth list, with 11 of the top 20 growth cities located in the state. Stockton, Calif., took the …
IRVINE, CALIF. AND CHICAGO — Sabra Health Care REIT (NASDAQ: SBRA) and Care Capital Properties Inc. (NYSE: CCP) are joining forces to create a healthcare REIT with a pro forma total market capitalization of roughly $7.4 billion and an equity market capitalization of roughly $4.3 billion. The all-stock transaction is expected to close during the third quarter of 2017. The new REIT will be headquartered in Irvine and include a healthcare portfolio comprised of 564 investments across 43 states and Canada. Sabra’s current executive team will manage the company, which will continue to trade under the SBRA ticker symbol. During a conference call on Monday morning, Sabra CEO and Chairman Rick Matros stated that the merger enables Sabra to achieve its goal of upgrading its credit rating. “With this structure to the stock deal, the transaction is credit-enhancing for both parties,” Matros said during the call. “Our leverage will be modest, we’ll have greater scale and diversification and greater opportunities for shareholder-friendly growth than either company had on a standalone basis.” Matros also noted during the call that the merger allows Sabra to meet one of its diversification goals: adding more skilled nursing facilities. However, that focus won’t change the …
ATLANTA — Lincoln Property Co. Southeast has executed four lease deals at 309 East Paces, a redevelopment of the former Aaron’s Inc. headquarters office building in Atlanta’s Buckhead district. The new tenants include Chicago-based Industrious, Patterson Real Estate Advisory Group, The Loudermilk Cos. and Atlanta Consulting Group Advisors. Shaun Weinstock of Weinstock Realty & Development LLC represented Industrious in the lease deal. Set to open in June, the property will span 80,000 square feet of office space atop ground-level retail space. The property is currently 60 percent preleased, but Lincoln Property Co. Southeast expects the property will be fully leased upon delivery.
NEW YORK CITY — Kimco Realty (NYSE: KIM) has signed its first round of retail leases at The Boulevard, a $180 million lifestyle center in the Staten Island borough of New York City. The project is a redevelopment of Hylan Plaza, which has been shuttering its existing retailers over the past several months. Situated on Ebbitts Street and Hylan Boulevard, The Boulevard will feature 50 stores in a 460,000-square-foot, multi-level format. The first retailers to sign onto the project include ShopRite (68,000 square feet), Alamo Drafthouse (41,000 square feet), Party City (13,000 square feet), PetSmart (23,500 square feet) and Chase Bank (5,100 square feet). Modell’s sporting goods store and Mandee will be relocating within the center, absorbing 16,000 square feet and 11,000 square feet, respectively. Construction at the redevelopment is scheduled to commence in early summer or late fall, with a grand opening scheduled for summer 2019. Existing Hylan Plaza tenants that have shuttered in anticipation of this redevelopment include United Artist movie theater, Toys “R” Us/Babies “R” Us, the Salvation Army, Kids Place and Subway. Rainbow Shops and Telco are scheduled to close by the end of this month. S9 Architecture is designing the redevelopment to feature ground-floor retail …
INDIANAPOLIS — Duke Realty Corp. (NYSE: DRE) has agreed to sell its entire portfolio of medical office properties to Healthcare Trust of America (NYSE: HTA) for roughly $2.8 billion. The transaction is expected to close in stages by year’s end. The portfolio totals approximately 6.6 million square feet of gross leasable space across 78 properties. Of those, 71 are in-service buildings, five are under construction and two are holdings of unconsolidated joint ventures in which Duke has interests. The sale also includes two parcels of land totaling 16.5 acres. Collectively, the assets were 94 percent leased at the time of sale. According to Duke CEO Jim Connor, the transaction signifies the company’s effort to focus exclusively on industrial properties. “Monetizing our medical office business is accretive to our net asset value per share and creates a more simplified business model with improved transparency,” says Connor. “This represents a long-term benefit to our stakeholders while we position the company as a leading, pure-play industrial REIT.” Proceeds of the sale will be used to pay off $1.2 billion in existing debt, fund new industrial projects and to pay dividends to shareholders. The terms of sale call for Duke to provide $50 million …
With an average occupancy rate of 96 percent at the end of 2016, coupled with a four percent growth in asking rental rates during 2016, Omaha’s apartment market continues to be a strong performer. According to apartment data research firm Reis, Omaha’s average asking rental rate has increased in every quarter for the past 23 quarters, and is expected to increase 3.6 percent in 2017. On the occupancy front, Reis expects the vacancy rate to finish 2017 slightly higher at 4.9 percent, which would still result in a projected healthy 95.1 percent occupancy rate. On a 10-year historical occupancy basis, Reis reports that the average occupancy over the past decade has been 95.3 percent. Meanwhile, the Institute of Real Estate Management (IREM) reports that the occupancy rate during the same period ranged from a low of 92 percent in 2008 to 96 percent in both 2013 and 2015. Since the beginning of 2007, the average annual increase in asking rental rates has been 2.7 percent, according to Reis. Over the past 23 quarters, the cumulative increase in asking rental rates has been 19.3 percent. Investors take notice While Omaha may not have as robust rent growth as some East …
CHARLOTTE, N.C. — Grubb Properties has unveiled the design for a 10-story office building the company is renovating on Mockingbird Lane in Charlotte’s Montford Park submarket. Known as 1515 Montford Park, the updated office building will feature a full glass façade with expansive windows, high ceilings, open floor plans, an outdoor terrace and an amenities lounge on the fifth floor featuring table games, bar top, lounge seating, big-screen TV and a stocked kitchen area. Office tenants will have access to a full-service fitness center and bike room at the adjacent 4601 Park Road building. Pfeiffer University Charlotte has pre-leased space at 1515 Montford Park. Space for lease on floors three through six will be available for near-term delivery, with a start on floors seven through 10 projected for the beginning of 2018.
Increased activity and record amounts of positive net absorption created a new commercial landscape across the Wasatch Front. The majority of 2016 leasing activity was a result of tenants occupying new space that was pre-leased during 2015. While sublease availability increased over each quarter, overall market indicators like local population growth and continued economic development will remain strong into 2017. The Salt Lake County office market grew by an additional 1.7 million square feet in 2016, primarily in the South submarket. More than 1.5 million square feet of space was under construction at the close of 2016. This product will be introduced to the market by mid-year 2017. Vacancy rates increased slightly from 8.6 percent in 2015 to 8.74 percent at the end of 2016. Notable Salt Lake office projects completed in 2016 include 111 South Main (440,000 square feet); Vista Stations 4 through 8 (655,000 square feet); The Pointe I (77,703 square feet); the Overstock Peace Coliseum (231,000 square feet); and Town Ridge Center I & II (250,000 square feet), to name a few. An additional 1.5 million square feet of space was under construction at the end of the year. Buildings like 53rd Center 1 (200,000 square feet); …
BETHESDA, MD. — RLJ Lodging Trust (NYSE: RLJ) has entered into an agreement to acquire Texas-based FelCor Lodging Trust Inc. (NYSE: FCH), creating a REIT with a pro forma equity market capitalization of $4.2 billion and an enterprise value of about $7 billion. The all-stock transaction, which will make RLJ the third largest pure-play lodging REIT, is expected to close by the end of 2017. The newly combined entity will own 160 Marriott, Hilton, Hyatt and Wyndham hotels totaling 31,467 rooms across 26 states and Washington, D.C. At 41 percent and 36 percent, respectively, Marriott- and Hilton-branded hotels comprise the majority of the rooms in the portfolio. Under the terms of the transaction, the newly formed entity will continue to trade under the “RLJ” stock symbol. The Bethesda-based firm will also assume FelCor’s debt and preferred stock upon closing, with its shareholders expected to own approximately 71 percent of the FelCor’s diluted equity. Felcor’s current shareholders are expected to retain ownership of the remaining 29 percent. In addition, each share of FelCor common stock will be converted into 0.36 shares of RLJ common stock. The acquired company’s operating units will be exchanged for limited partnership units in RLJ’s operating partnership …