LOS ANGELES — Grocery Outlet Bargain Market plans to open 14 stores throughout the Los Angeles area beginning in December and continuing through 2016. According to the company, shoppers have saved more than $1 billion on products purchased at Grocery Outlet as compared to traditional grocery stores this year alone. The company’s buyers negotiate directly with manufacturers to buy overstock and surplus products at discounts.
NEWARK, CALIF. — Rouse Properties Inc. (NYSE: RSE), a retail REIT based in New York, has closed a new $135 million first mortgage loan for NewPark Mall, a 1 million-square-foot retail property located in Newark, roughly 25 miles south of Oakland in San Francisco’s East Bay market. Rouse Properties has withdrawn $114.3 million from the financing, with approximately $65 million of proceeds used to pay off the property’s previous mortgage loan and $49.3 million used for closing costs and general corporate purposes, including paying down the company’s revolving credit facility. The remainder of the refinancing will be used for renovations and additional leasing. The new loan has a three-year term and a one-year extension option. The non-recourse mortgage carries an interest rate at Libor plus 2.1 percent, with a forward starting swap fixed at 3.26 percent effective on Jan. 1, 2016. “This new loan facility represents a $70 million increase over our previous $65 million loan,” says John Wain, chief financial officer of Rouse Properties. “This clearly demonstrates the meaningful value creation we have already achieved with our significant renovation and repositioning initiative currently underway, which is Rouse’s largest planned capital investment in our portfolio.” Rouse Properties has recently arranged …
NEW YORK — HFF (NYSE: HFF) has secured a $110 million first mortgage financing for 180 Madison Avenue, an historic, 23-story, 280,953-square-foot office tower in Manhattan. 180 Madison Avenue is located at the southwest corner of Madison Avenue and East 34th Street in Manhattan’s Midtown South office submarket. The building, formerly known as The Lingerie Building, was historically the premier building for lingerie manufacturers and wholesalers in New York. Originally built in 1926, the property is in the final stages of a comprehensive renovation that has repositioned the asset as a best-in-class office building. Improvements include a lobby renovation, elevator modernization and window replacements, as well as various electrical upgrades. Recent rollover at the building, which is currently 72 percent leased, has enabled ownership to demolish and pre-build space as tenants’ leases expire. The property has become a desirable location for firms in the technology, advertising, media and information (TAMI) sectors that are concentrated in the Midtown South market, according to HFF. Two of the top five largest tenants located in the building, The Rubicon Project and Unified Social, are indicative of growing TAMI firms relocating to Midtown South. Both tenants signed leases at the property in the last few …
Chattanooga is situated at a U-turn of the Tennessee River amidst forests and mountains, hence the community’s nickname, Scenic City. Two of Chattanooga’s largest employers are Volkswagen, which has a plant here, and Amazon, which runs a distribution center in the city. Insurance firm Unum Group, a Fortune 500 Company founded in 1848, is headquartered here and is one of the larger occupiers of downtown office space. Long-known for its natural resources and as a tourism destination, Chattanooga is experiencing a real estate boom fueled by urbanization trends and its proximity to Atlanta (2 hours south) and Nashville (1.5 hours northwest), as well as its growing recognition as one of the South’s top tourism and entertainment venues. Key to the urban renewal is the conversion of dozens of properties — mostly from office uses to residential, retail or hotel uses. The combination of the Great Recession and a 2009 move by BlueCross BlueShield into a new $229 million downtown facility has led to the relatively high vacancy rate of 17.5 percent that persisted up until early 2014. Most of the 600,000 square feet of facilities vacated by BlueCross BlueShield were not suitable for multi-tenanted office use and the spaces would …
NEW YORK — SL Green Realty Corp. (NYSE: SLG), New York City’s largest commercial property owner, has reached an agreement to sell two Fifth Avenue retail development sites to a single, undisclosed buyer for $125.4 million, or $13,690 per zoning square foot. The transaction is expected to be completed before the end of this year and is subject to customary closing conditions. The sites, located at 570 and 574 Fifth Ave., were acquired by SL Green in November 2013 for a total of $78.7 million. The publicly traded REIT subsequently vacated the tenants in the existing buildings in preparation for a comprehensive retail development. “With this transaction, SL Green will realize returns on its original investment that are consistent with our original underwriting without having incurred any development risk,” says Brett Herschenfeld, managing director of SL Green. “In addition, the sale provides a source of equity capital that can be tax efficiently redeployed into Eleven Madison on an immediately accretive basis.” These sales are part of SL Green’s disposition and reinvestment strategy to help fund its previously announced $2.6 billion acquisition of Eleven Madison Avenue. SL Green Realty Corp. is focused primarily on acquiring and managing commercial properties in Manhattan. …
Single-tenant retail sales volume remains incredibly strong, totaling more than $9.4 billion in transactions through the first half of 2015. At this rate, the sector will have no problem significantly outpacing the $15.24 billion reported last year, according to Stan Johnson’s Net Lease Outlook, which tracks the U.S. single-tenant retail market. According to the report, transaction volume was the highest in the West and Northeast, where sales for the first half of 2015 have already exceeded $2 billion in each region. The Stan Johnson report only tracks significant investment sales (assets priced at $2.5 million or greater). Retail cap rates have been trending downward for several years across the nation, but the greatest compression has occurred in the West. Average cap rates in the West currently are the lowest of all regions at 5.54 percent, representing a 1.24 percentage point drop in the last three-and-a-half years. Overall, single-tenant retail cap rates are fairly consistent across all regions, with the spread being less than one percentage point. Sales prices per square foot vary more widely from region to region. While most areas of the country are at or near the national average of $264 per square foot, the Northeast has seen …
Surging rental demand for apartments in metro Kansas City during the first six months of 2015 supported a sharp rise in real estate fundamentals following a lackluster second half of 2014. Renters absorbed 2,510 apartments during the first half of this year, surpassing the 1,810 apartments completed during the same period a year ago. With leasing activity exceeding deliveries so far this year, the overall vacancy rate fell 60 basis points to 5 percent by the end of June. The decline followed a spike in vacancy and negative absorption in the fourth quarter of 2014. The recent resurgence in leasing resulted in the vacancy rate in June matching the 5 percent rate one year ago. Supply-side pressure was most noticeable in the Class A apartment segment, which po sted an increase of 60 basis points in the vacancy rate year-over-year to reach 4.2 percent in June. Even with the increase, the vacancy rate was tightest among top-tier apartments, while Class C vacancy tightened 20 basis points during the same period to settle at 5.3 percent in June. A Landlord’s Market As a result of Kansas City’s apartment vacancy rate tightening during the first half of this year, operators were able …
WASHINGTON, D.C. — Global alternative asset manager The Carlyle Group (NASDAQ: CG) has raised $4.2 billion for its seventh U.S. real estate fund, Carlyle Realty Partners VII (CRP VII), reaching the fund’s hard cap. The CRP team of 85 investment professionals focuses on investments across all major real estate sectors and major metropolitan areas in the United States. Nationally, Carlyle has completed more than 500 real estate investments across its seven funds, seeking to identify investments that benefit from strong fundamentals across 11 sectors and 30 markets. Carlyle Realty Partners’ six prior funds have been active in both residential and commercial real estate. In residential, the group has invested in a total of 62,000 housing units, including 42,000 multifamily apartment units and more than 20,000 senior living, student housing and for-sale residential units. CRP has also invested in approximately 41 million square feet of office, industrial, data center and retail, including investments in the San Francisco Bay Area/Silicon Valley, New York City and Washington, D.C. markets. “We believe the robust interest in CRP VII is acknowledgement of our successful focus on opportunistic investments in U.S. real estate, and we look forward to continuing to create value in our portfolio,” says …
UPSTATE NEW YORK; HARTFORD, CONN.; AND PHILADELPHIA — Equity Commonwealth (NYSE: EQC), a real estate investment trust (REIT) based in Chicago, has sold 13 properties in three separate transactions totaling $261 million. In the first transaction, the company sold an 11-property portfolio of small office assets totaling 2 million square feet in upstate New York for $104.6 million. The company also sold City Place, an 868,000-square-foot office property at 185 Asylum St. in Hartford, Conn., for $113.3 million. The office is the tallest building in Hartford. As of June 30, the property was 98.7 percent leased. In the third transaction, Equity Commonwealth sold an undisclosed property at the corner of North 16th and Race streets in Philadelphia for $43 million. The 609,000-square-foot vacant property is currently vacant. The buyers in all three sales were not disclosed. Concurrent with the dispositions, Equity Commonwealth has doubled its share buyback program from $100 million to $200 million. The company has repurchased 3.4 million shares of its common stock at an average price of $25.76 per share for a total investment of $87.8 million. The company currently has $112.2 million available for share repurchases over the next 12 months. Equity Commonwealth’s stock price closed …
SEATTLE — Seattle-based Colliers International has arranged the sale of three Washington retail properties for $59.6 million. Transactions include the sale of Surprise Lake Square, a 134,795-square-foot shopping center located in Milton, to Tourmaline Capital for $19.5 Million; the sale of Everett Village Center, a 120,912-square-foot retail center located in Everett, to Stockbridge Capital Group for $22.5 million; and the sale of Coal Creek Marketplace, a 55,875-square-foot retail center located in Newcastle, to RPAI for $17.6 million.