SAN FRANCISCO — A partnership between Blatteis & Schnur and Morgan Stanley Real Estate Investing has acquired the 250,000-square-foot Macy’s Men’s Store located on Union Square in San Francisco for $250 million. The joint venture will redevelop the eight-story property, located at 120 Stockton St., into a mixed-use, retail-driven center. Anticipated uses for the development include flagship retail, art galleries, artisanal food, upscale restaurants and creative office space. A rooftop amenity is also being considered for the project, scheduled to open in 2021. Macy’s Men’s Store will remain as a tenant while the design, renovation and leasing of the new development progresses. Eastdil Secured acted as advisor to Macy’s Inc. in the transaction.
NEW YORK CITY — A joint venture between GIC and Paramount Group has acquired a 1.6 million-square-foot office tower in New York City for $1 billion. The 47-story tower is located at 60 Wall St. in the Financial District of downtown Manhattan. The property is fully leased. It serves as the U.S. headquarters of Deutsche Bank. GIC, a sovereign wealth fund based in Singapore, has a 95 percent stake in the joint venture, while Paramount Group holds the remaining 5 percent. Paramount managed and owned about 5 percent of the property through its ownership in certain private equity funds prior to the acquisition. The joint venture also received $575 million in financing for the property in relation to the acquisition. “This investment reflects our long-term confidence in downtown Manhattan, which is benefitting from over $30 billion of recent public and private investments in infrastructure and new construction,” says Adam Gallistel, GIC’s regional head of Americas. “We believe 60 Wall St. is one of the top buildings in downtown and is poised to benefit from the ongoing downtown renaissance.” Deutsche Bank announced plans to renovate the office space in late 2016. It purchased the asset from J.P. Morgan & Co. in …
SAN FRANCISCO — Mesa West Capital has provided $16 million in financing for a 12,281-square-foot Disney Store in San Francisco. The two-story building is located at 39 Stockton St., one and a half blocks south of Union Square. John Churchward of HFF placed the floating-rate loan on behalf of the borrower, Vanbarton Group.
TORONTO AND GREENWICH, CONN. — Milestone Apartments Real Estate Investment Trust (TSX: MST.UN), a Toronto-based multifamily REIT, has entered into an agreement with an affiliate of Starwood Capital Group whereby Starwood will acquire all of Milestone’s subsidiaries and assets. The transaction, which is expected to close in the second quarter of this year, is valued at $2.85 billion (USD). Milestone’s board of trustees has unanimously approved the acquisition and recommends that its shareholders vote in favor of the transaction. Milestone’s shareholders will receive $16.15 per share in cash upon closing, and the REIT expects to continue paying its monthly distributions in the normal course through closing. Milestone REIT’s portfolio consists of 78 garden-style apartment properties comprising 24,061 apartment units that are located in 16 major metropolitan markets throughout the Southeast and Southwest. Nearly half of the REIT’s holdings are in Texas. The transaction’s average price per apartment unit of approximately $120,000 compares favorably to Milestone’s current book value of approximately $109,500 per apartment unit. Starwood’s acquisition of Milestone’s portfolio of multifamily properties and operating platform of more than 1,200 employees will allow the firm to grow its multifamily footprint, especially in the Sunbelt region, where Starwood owns more than 67,000 …
ORLANDO, FLA. — KPMG LLP, a global tax advisory services firm and one of the Big Four auditing corporations, plans to develop a 55-acre, 800,000-square-foot training and conference complex within Tavistock Group’s Lake Nona, a 14-square-mile master-planned development in Orlando. KPMG didn’t disclose the estimated costs for the new complex, but the Orlando Sentinel reports that the campus will cost roughly $430 million to develop. The facility will feature an “Innovation Center,” as well as 800 guest rooms, fitness and outdoor recreational facilities and multiple food and beverage venues. The facility is expected to serve 50,000 KPMG employees annually, according to the Orlando Sentinel. KPMG expects to create at least 80 positions to work at the facility and that an additional 250 third-party contract operator positions will be created. New York-based Gensler is designing the campus to achieve LEED standards. Construction is expected to kick off this spring and wrap up in late 2019.
To understand the state of retail in Atlanta in 2005, you first looked at where and what developers were building, then to where retailers were locating and lastly to how consumers were shopping. Simply put, if a developer built it and a retailer occupied it, the consumer was sure to shop there, but that’s no longer the case. To understand the state of retail in Atlanta today, you need to start with the Atlanta consumer. Go Big or Go Home From 2000 to 2010, the Atlanta Regional Commission reports metro Atlanta added over 1 million residents with an additional 2.5 million people projected to be added between 2015 and 2040. Further, according to a study by the University of Georgia, half the state’s population growth is concentrated in just three Atlanta metro counties — Fulton, Gwinnett and Forsyth. A big driver for the growth is jobs, especially those in high-paying sectors like information, professional services, science and technology. EMSI reports that two of the counties making up Atlanta’s metropolitan area, Forsyth and Coweta, are in the top eight of large counties for skilled job growth. Additionally, Forbes claims Atlanta is now growing its business service sector faster than New York, …
CINCINNATI AND HOFFMAN ESTATES, ILL. — Macy’s Inc. (NYSE: M) and Sears Holdings Corp. (NASDAQ: SHLD) both announced on Wednesday plans to close a large number of department stores in an effort to improve their long-term operating performance. Macy’s will close 68 stores and Sears will close 150 non-profitable stores comprising 109 Kmart and 41 Sears locations. “We are taking strong, decisive actions today to stabilize the company and improve our financial flexibility in what remains a challenging retail environment,” says Edward Lampert, chairman and CEO of Sears Holdings. “We are committed to improving short-term operating performance in order to achieve our long-term transformation.” Jeff Green, president of Jeff Green Partners, a retail consultancy based in Phoenix that works with retailers and shopping center owners, suspects that the footprint of these department stores has contributed to the recent woes of Macy’s and Sears. “Department stores, by sheer definition, are oversized for this changing retail environment and may be a critical factor, though only one factor, in deciding which stores to close,” says Green. “It is interesting to see just how large some of the older stores on the Macy’s store closure list are. For example, two suburban stores to be …
PLANO, TEXAS — J.C. Penney (NYSE: JCP) has sold its home office campus and 45 surrounding acres of land in Plano to Dreien Opportunity Partners for $353 million. The 1.8 million-square-foot asset is known as Campus at Legacy West. J.C. Penney plans to lease back approximately 65 percent, or 1.1 million square feet, of the campus, with the remaining space available for new tenants. The building lease expense would be offset by a reduction in maintenance costs, property taxes and interest expense as a result of paying down debt with proceeds from the transaction, according to the apparel and home furnishings retailer. “Since we began exploring the sale of our home office, we have been quite pleased by the level of interest in the building,” says Marvin Ellison, J.C. Penney’s chairman and CEO. “This transaction also represents a significant financial milestone for the company, as proceeds from the sale give us the opportunity to reduce outstanding debt and make improvements to our workspace, creating a modern and efficient environment.” Eight office wings that span 56.8 acres flank the three-story office building. The Class A campus is situated near the intersection of Dallas North Tollway and State Highway 121 within the …
NEW YORK CITY — Colony Capital Inc., NorthStar Asset Management Group and NorthStar Realty Finance Corp. have received approval from shareholders for the previously announced merger of the three companies. Named Colony NorthStar Inc. (NYSE: CLNS), the combined company will have assets under management in excess of $58 billion, managing capital on behalf of its stockholders, institutional and retail investors in private funds and non-traded and traded real estate investment trusts and 1940 Act companies. Upon closing of the transaction, Thomas Barrack Jr. will be executive chairman of the board of directors, David Hamamoto will be executive vice chairman and Richard Saltzman will be chief executive officer of the new company. The companies expect to complete the merger in January 2017.
DEERFIELD, ILL. AND CAMP HILL, PA. — Walgreens Boots Alliance (NASDAQ: WBA) and Rite Aid Corp. (NYSE: RAD) have agreed to sell 865 Rite Aid stores and some assets related to store operations to Fred’s (NASDAQ: FRED) for $950 million in an all-cash transaction. The agreement came about due to concerns by the Federal Trade Commission (FTC) in its review of Walgreens Boots Alliance’s proposed acquisition of Rite Aid, which was announced in October 2015. That transaction is scheduled to close in early 2017. The 865-store sale would make Fred’s one of the largest drugstore chains in the United States, with a significant presence in the South and on the East and West coasts. If the sale is approved, Fred’s will continue to employ all store associates and certain field and regional associates related to the operations. The stores will also continue to operate under the Rite Aid banner. Fred’s has also agreed to purchase additional Rite Aid stores if the FTC mandates additional divestments for the proposed merger. BofA Merrill Lynch acted as Walgreens Boots Alliance’s financial adviser. Sidley Austin LLP acted as legal counsel on transaction legal matters and Weil, Gotshal & Manges LLP acted as its legal …