NEW YORK CITY — A joint venture, in conjunction with institutional investors advised by J.P. Morgan Asset Management, has acquired 650 Madison Avenue, a 27-story, 594,000 square foot Class A office tower located on the full western blockfront of Madison Avenue between 59th and 60th streets in New York City. The purchase price for the property is approximately $1.3 billion, which was financed with a new $800 million, 4.4 percent interest-only loan with a seven-year term. The joint venture is led by Oxford Properties, Vornado Realty Trust (NYSE:VNO), Crown Acquisitions and Highgate Holdings. 650 Madison Avenue contains 523,000 square feet of office space and 71,000 square feet of retail space. The office space is the world headquarters for Polo Ralph Lauren, which occupies 274,000 square feet. The retail space is primarily leased to Crate & Barrel for its flagship Manhattan store (61,400 square feet) and to Tod’s, a shoe and leather goods specialty store (7,900 square feet). The greater New York City office market had nearly $8 billion in deals either under contract or which closed in the second quarter, according to Jones Lang LaSalle. A new record was established in the second quarter with the average Class A office …
MENLO PARK, CALIF. — St. Anton Partners and Facebook have teamed up to build Anton Menlo, a 394-unit, $120 million multifamily community in Menlo Park, a city within the San Francisco Bay Area. Facebook will fund 15 low-income units in the upscale apartment complex, which is located near the social media giant's headquarters at Bayfront Expressway and Willow Road. St. Anton Partners has included an additional 38 low-income units so the residences can be rented at affordable rates. In doing so, St. Anton Partners was able to increase the project's density under the city's density bonus law. Anton Menlo is the city's first significant new apartment building in more than 20 years. “It is a strategic collaboration,” says Ardie Zahedani, vice president of development at St. Anton Partners. “Facebook is getting involved because it is within walking distance to its campuses and there is a major housing shortage.” Facebook is paying Sacramento, Calif.-based developer St. Anton Partners to provide the below-market-rate apartments. Menlo Park requires commercial developers to contribute to its affordable housing stock because the low-income developments create jobs and a demand for housing, according to the San Jose Mercury News. The units will be income restricted for 55 …
ROCKVILLE, MD. — Washington Real Estate Investment Trust (WRIT) (NYSE: WRE) has entered into four separate contacts with a single buyer to sell a 100 percent interest in its medical office portfolio and two office assets for nearly $501 million. The purchase price for the portfolio, which contains approximately 1.5 million square feet, equates to $329 per square foot. “Over the past decade, we have methodically grown our medical office portfolio into becoming one of the largest landlords of institutional-quality medical office properties in the Washington, D.C., metro area,” says George “Skip” McKenzie, president and CEO of Rockville-based WRIT. “With the completion of the medical office portfolio sale, we will be successfully exiting this business line, which has been extremely profitable for us over the past decade.” The portfolio includes 17 medical office buildings and two suburban office properties, 6565 Arlington Blvd. and Woodholme Center. Also included is a parcel in Alexandria, Va., which is being used as off-site/overflow parking for one of the medical office assets in the portfolio. In January, WRIT announced the proposed sale of the portfolio as a strategic opportunity to streamline the company’s business operations. With the disposition of the medical office portfolio, WRIT will …
PHILADELPHIA — Hersha Hospitality Trust (NYSE: HT), a hospitality REIT and owner of upscale hotels in urban gateway markets, has entered into a definitive agreement to sell 16 hotels to an affiliate of Blackstone Real Estate Advisors for $217 million, or approximately $125,000 per room. Hersha’s disposition of assets marks the company’s exit from Long Island, suburban Philadelphia, Connecticut and Rhode Island. “The anticipated sale of these non-core portfolio hotels completes our transformation into a pure play, urban transient portfolio with exposure to some of the highest demand gateway markets in the United States,” says Jay Shah, CEO of Hersha. The 16 hotels include: the 133-room Holiday Inn Express in Hauppauge, N.Y. the 161-room Hampton Inn in Brookhaven, N.Y. the 98-room Hampton Inn in West Haven, Conn. the 101-room Hampton Inn in Smithfield, R.I. the 118-room Courtyard by Marriot in Langhorne, Pa. the 100-room Residence Inn in Langhorne, Pa. the 88-room Holiday Inn Express in Langhorne, Pa. the 155-room Holiday Inn Express & Suites in King of Prussia, Pa. the 130-room Courtyard by Marriot in Ewing, N.J. the 128-room Hyatt House in Bridgewater, N.J. the 78-room Courtyard by Marriot in Wilmington, Del. the 71-room Inn at Wilmington in Wilmington, Del. …
CALABASAS, CALIF. — Marcus & Millichap Inc. (M&M) has filed a registration statement with the U.S. Securities and Exchange Commission for a proposed initial public offering of common stock as the commercial real estate brokerage looks to expand. The company has not determined the number of shares and the price range for the offering. M&M is looking to raise up to $103.5 million in its initial public offering. The Calabasas, Calif.-based brokerage firm intends to use the proceeds of the offering for general corporate purposes, including buying real estate businesses or companies, capital expenditures and working capital to expand its markets and services. The move comes amid signs of a rebound in the commercial real estate market. Total sales of commercial real estate properties priced at $1 million and above jumped to more than $340 billion in 2012, an increase of 41 percent over 2011, according to research by CoStar and Real Capital Analytics. The total value of U.S. commercial real estate assets was estimated to be $12 trillion at the end of 2012. M&M is a national brokerage firm focusing primarily on the private client segment, consisting of transactions with prices under $10 million. The company has more than …
PHOENIX— Cole Corporate Income Trust (CCIT) Inc. has acquired 12 single-tenant office and industrial properties for approximately $386.1 million, including corporate facilities in North Carolina, Tennessee, Virginia, Texas, New Jersey, Nevada, Arizona, California and Colorado. The assets include “mission-critical” facilities leased to corporate tenants. CCIT, a non-traded real estate investment trust (REIT), invests primarily in single-tenant, income-producing, corporate properties leased to creditworthy tenants under long-term net leases. Cole Corporate Income Advisors LLC, a subsidiary of Cole Real Estate Investments Inc. (NYSE: COLE), serves as external advisor to CCIT. “The diversified industries, geographic locations, remaining lease terms and strategic importance of the properties for the tenants made these solid acquisition targets,” says Thomas Roberts, executive vice president and head of real estate investments at Phoenix-based Cole Real Estate Investments. “We continue to identify opportunities that meet our stringent acquisitions criteria and satisfy our rigorous underwriting processes, while building a high-quality portfolio of net-leased office and industrial assets for CCIT,” adds Roberts. The 12 office and industrial properties CCIT acquired include: • two Amazon distribution warehouses totaling more than 2 million square feet combined in Murfreesboro, Tenn., and Chester, Va. The build-to-suit properties serve as regional distribution centers for the world's largest …
WOODSTOCK, GA. — Duke Realty has completed the development of Northside Hospital's new 100,797-square-foot, four-story medical office building (MOB), located at 900 Towne Lake Parkway in Woodstock, about 25 miles north of Atlanta. Northside-Cherokee Towne Lake Medical Office Building is fully leased to Northside Hospital and features a variety of outpatient health services and physician practices. Duke Realty Towne Lake Development LLC owns the new facility, which has been submitted for consideration of LEED certification. The MOB's design team includes architect Lyman Davidson Dooley Inc. and general contractor Brasfield & Gorrie.
AUSTIN, TEXAS — Brandywine Realty Trust (NYSE: BDN) and DRA Advisors LLC have formed a joint venture to acquire Brandywine’s portfolio of office properties in the Southwest submarket of Austin. The venture will pay $330 million for the assets, which total nearly 1.4 million square feet. The deal is expected to generate $271.6 million in proceeds for Brandywine, which plans to use the funds to fuel its growth and deleveraging strategy. Brandywine and DRA previously partnered on a similar transaction in 2007 involving a suburban Philadelphia office portfolio. The two companies will each own a 50 percent interest in the new joint venture. “Through our existing joint venture, we enjoy an excellent relationship with DRA Advisors and are excited to expand that platform into the Austin market,” says Gerald Sweeney, president and CEO of Brandywine. “The going forward equity commitment by both parties positions us well to continue growing our position as one of Austin’s leading landlords.” To date, the joint venture has secured $230.6 million of non-recourse debt through three mortgages, which have a weighted average maturity of five years and an expected weighted average interest rate of 3.75 percent. The properties to be acquired include the four-building Barton …
Population and employment growth are providing a substantial boost to the Austin apartment market. Metro-wide vacancy is hovering in the mid-4 percent range and is 150 basis points below the average historical rate. Rents also increased measurably. In addition to rising job and resident totals, limited new apartment product in recent years supported an average quarterly rent growth of 1.2 percent, compared to three-month gains of roughly 1 percent in the year prior to the recession. The most notable economic news in the metro is Apple Inc.’s substantial expansion. Over the next eight years, the company will construct and staff a 1 million-square-foot, 39-acre development in Austin’s Far Northwest submarket. Day-to-day operations will yield more than 3,600 new hires, doubling the metro’s number of Apple employees. In the near-term, LegalZoom Inc. plans to add 600 new employees before the end of the year. Additionally, Accenture and General Motors hired a combined 700 workers during the first half of 2013. Beyond the large job announcements, both small and large businesses are hiring, attracting new residents and fueling apartment demand. In the 12-month period ending in the second quarter of this year, total nonfarm employment in Austin increased by 28,900 positions, a …
LOS ANGELES AND ORLANDO, FLA. — Parkway Properties (NYSE: PKY) and Thomas Properties Group Inc. (NYSE: TPGI) have signed a definitive merger agreement whereby Thomas Properties will merge into Parkway in a stock-for-stock transaction valued at $1.2 billion. The board of directors of each company unanimously approved the merger, which is expected to close by the end of the fourth quarter. Upon completion of the transaction, Parkway will assume Thomas Properties’ ownership interest in two office properties in Houston and five office properties in Austin. In addition, Parkway may take ownership of three assets in Northern Virginia that secure debt. “Parkway will be adding a portfolio of seven, high-quality assets totaling 4.9 million square feet, each located in one of Parkway’s targeted submarkets. This transaction will significantly expand and upgrade our presence in Houston and simultaneously will allow us to fulfill our stated strategy of expanding into the Austin market,” says James Heistand, president and CEO of Orlando-based Parkway. “We continue to believe that our markets are in the early stages of recovery, and this transaction will give us an attractive basis with potential opportunity to create additional value through occupancy gains and rental rate growth.” Upon consummation of the …