When Charles Dickens wrote his famous opening line, “It was the best of times, it was the worst of times,” he couldn’t have realized how apt it would be for the retail real estate market more than 150 years later. According to Jones Lang LaSalle’s U.S. Summer Retail Outlook, varying population growth and purchasing power across U.S. markets will widen the performance gap of centers creating a different outlook for owners and occupiers of these assets. “Competitive centers that are well-tenanted and ideally located are seeing vacancy rates near four percent, and we expect them to see further improvements,” says Greg Maloney, president and CEO of Jones Lang LaSalle (JLL) Retail. “However, underperforming centers that can’t sustain the needed sales volumes to remain competitive due to their surrounding demographic may continue to trend downward, and require eventual demolition, rebranding or a conversion.” During the last year, consumer confidence took a deep dive, but rallied this summer as consumers benefited from higher stock and housing values, falling gasoline prices and lower debt levels, according to JLL’s retail report. The improvement is expected to be tempered by high unemployment and slow income growth. “Consumer confidence remains volatile, as shoppers adjust to changes …
CHATTANOOGA, TENN. — CBL & Associates Properties Inc. (NYSE: CBL), a Chattanooga, Tenn.-based shopping center owner and developer, has sold three malls and related associated centers in a deal worth $176 million in cash. An offshore investor purchased the properties with an Atlanta-based partner, Hendon Properties, which will also oversee management and leasing at the malls. The properties include Georgia Square Mall and Georgia Square Plaza in Athens, Ga.; Panama City Mall and The Shoppes at Panama City in Panama City, Fla.; and Rivergate Mall and Village at Rivergate in Nashville. “We are pleased to complete the disposition of these assets, generating substantial equity and demonstrating our continued ability to effectively execute our capital plan,” says Stephen Lebovitz, president and CEO of CBL. Lebovitz says when combined with the $209 million in at-the-market proceeds generated through mid-year, as well as $44 million from the sale of office buildings completed earlier this year, CBL has raised more than $425 million in equity year-to-date. “This deliberate approach has allowed us to significantly reduce debt while minimizing dilution and strengthening our core portfolio.” Rivergate Mall and Village at Rivergate are located in Goodlettsville, Tenn., along Interstate 65 just north of Nashville. The 1.1 …
ALCOA, TENN. — Alcoa (NYSE: AA), a leading producer of fabricated and primary aluminum, has broken ground on a $275 million expansion to its Tennessee Operations, a 2,000-acre complex in the city of Alcoa, Tenn., approximately 15 miles south of Knoxville. The company states the expansion will create 200 permanent full-time jobs when completed in mid-2015. In addition, construction will create approximately 400 temporary jobs. Physical specifications of the expansion have not been disclosed, but new facilities for the production of high-strength automotive aluminum have been confirmed, as well as conversion of some existing can sheet capacity to automotive capacity. “This investment will help auto manufacturers make safe, fuel-efficient vehicles that consumers want,” says Klaus Kleinfeld, Alcoa chairman and CEO. “At the same time, we’re bringing jobs to Tennessee and growing our value-added businesses. It’s a great day all around.” Previously, the Tennessee Operations site has been devoted to the production of can sheet aluminum for beverage cans. The complex currently includes a can reclamation plant and smelter for production of ingots (large solid aluminum bars); hot rolling facilities that reduce ingots to 1/8-inch thick coil; and a continuous cold mill which reduces the aluminum to the width used for …
HONOLULU — The Hawaii Community Development Authority (HCDA) has approved The Howard Hughes Corp.’s (NYSE: HHC) plans for two mixed-use towers as part of Phase I of the master-planned Ward Village in Honolulu. Ward Village, which is located in the heart of Kaka‘ako, is a 60-acre, 9.3 million-square-foot project. The development will include more than 4,000 residential units, along with more than 1 million square feet of retail and commercial space. Phase I is scheduled for a 2016 completion. “Our vision for Ward Village is to create an urban, master-planned community, which offers an exceptional living environment while honoring the area’s rich history and culture,” says David Weinreb, chief executive officer for The Howard Hughes Corp. “Beyond being one of our most significant assets, this redevelopment is already serving as a catalyst for the revitalization of Kaka‘ako.” The two towers will be located on land blocks 2 and 3. Land block 2 will contain approximately 171 one-, two- and three-bedroom units, in addition to 10 townhomes. Land block 3 will consist of approximately 312 units ranging from one- to three-bedroom floor plans. The building will also include 82 flats and townhomes. The Howard Hughes Corp. is seeking to achieve Leadership …
STOCKBRIDGE, GA. — Franklin Street Real Estate Services has arranged the $1.9 million sale of Plaza at Eagles Landing, an 18,000-square-foot retail strip center located at 1058 Eagles Landing Parkway in Stockbridge. The property's tenant roster includes Starbucks, Randstad, Preston's Salon, Minky Bling and Sarah's Country Kitchen. Mac McCall of Franklin Street represented the seller, an Atlanta-based investment firm, in the transaction. The buyer is a private investor based in Spain. The buyer plans to continue to operate the center with retail and office tenants, while also attempting to lease up the remaining vacancies.
Jones Lang LaSalle (JLL) has closed the sale of 139 SunTrust Bank locations in the United States for $240 million on behalf of Inland American REIT. The portfolio encompasses 715,000 square feet, 100 percent net-leased, throughout the Mid-Atlantic and Southeast. The name of the buyer was not disclosed. “The sale marked a prime opportunity for the investor to acquire a large portfolio absolute net leased to one of the nation’s leading financial institutions,” says Guy Ponticiello, JLL managing director. “The secure, growing cash flow of the SunTrust portfolio enables them to provide consistent returns for investors. JLL has closed more than $500 million of single-tenant, net-leased bank properties across the country in the past 12 months. With another $500 million in bank credit offerings currently on the market, Ponticiello anticipates more of the same in the future. “This is far from the only large-scale portfolio sale of triple-net-leased properties we expect to see this year as portfolio acquisitions of this size allow investors to deploy capital quickly and efficiently, making them a formidable force in the market,” he says. What’s more, supply will be able to match the quick pace of purchase, Ponticiello predicts. “The ability for sellers and occupiers …
AUSTIN, TEXAS — W. P. Carey Inc. (NYSE: WPC), a publicly traded REIT that owns and manages an investment portfolio totaling approximately $15.4 billion, has acquired the State Farm Operation Center in Austin from State Farm Mutual Automobile Insurance Co. for $110 million, plus transaction costs. The 448,898-square-foot property is leased to State Farm for an initial term of 15 years. The property has served as the State Farm Operation Center since 1994. The facility is situated on 83.5 acres in AmberOaks Corporate Center, a 263-acre master-planned office park 10 miles northwest of Austin’s central business district. W. P. Carey purchased the property through two of its publicly held, non-traded REIT affiliates — CPA:17 – Global and CPA:18 – Global. The acquisition is the first made by CPA:18 – Global. “In addition to being a Class A office building with a prime location in one of the nation's top performing metro areas, the property is leased to State Farm, which is an AA credit rated tenant,” says Gino Sabatini, managing director and co-head of global investments at W. P. Carey. “Given these characteristics, the asset is a strong addition to the portfolios of CPA:17 – Global and CPA:18 – Global, …
ATLANTA — Highwoods Properties Inc. (NYSE: HIW) has acquired its joint venture partner’s 57 percent interest in Glenlake North and South Towers, two Class A, 10-story office buildings with structured parking in Atlanta for $45.4 million. The Raleigh, N.C.-based REIT now fully owns the properties and is planning to invest an additional $1 million in building improvements. As a result, Highwoods' total incremental investment is expected to be $46 million. Located in Atlanta's Central Perimeter submarket with access to GA 400, the properties span 505,000 square feet and are valued at $80.6 million. The total asset value equates to $159 per square foot, which is at least a 30 percent discount to estimated replacement cost. “These are solid assets in the Central Perimeter submarket, one of Atlanta's best business districts, which has absorbed over two million square feet during the past 18 months,” says Ed Fritsch, president and CEO of Highwoods. The properties are 82 percent leased and are expected to generate full-year cash and net operating income of $5.1 million and $6 million, respectively. “Owning 100 percent of these Atlanta properties will materially enhance our leasing process, fortify our position in the submarket, provide value enhancement through occupancy growth …
Over the past decade, Baltimore City has seen a gradual shift in office market activity. Demand for office space has become increasingly focused on the waterfront properties of the Pratt Street Corridor and Harbor East. Many older buildings in the traditional Central Business District (CBD) with smaller footprints have become less attractive for office use. The CBD has also experienced a surge in both population and apartment demand that has pushed the residential supply to its occupancy limit. This balance between vacant office space and demand for residential space in the CBD has created a prime opportunity for redevelopment. The CBD has struggled to recover from the economic recession, when office vacancy rates spiked to almost 23 percent. It has, however, experienced small amounts of positive absorption over the past few years. Demand for space has been focused on Class A inventory as a “flight to quality” trend has emerged in the CBD. Net absorption for Class A inventory in the CBD has increased each year since 2008 and has been a primary factor in stabilizing the overall Baltimore City vacancy rate. Mid-year 2013 numbers suggest that this trend of increasing demand for Class A office space will continue for …
NEW YORK — SL Green Realty Corp. (NYSE: SLG) has agreed to acquire The Olivia, a mixed-use property on Manhattan’s west side, for $386 million. The deal further diversifies the portfolio of the real estate investment trust, which touts itself as New York City’s largest office landlord. New York-based real estate company Stonehenge currently owns The Olivia, according to Bloomberg. “We see this acquisition as a great opportunity to expand our multifamily investment platform at a time when the New York residential market is strong,” says Andrew Mathias, president of New York-based SL Green. “The property is located in a neighborhood that is expected to absorb thousands of new jobs during the next decade. With those jobs, the local demand for luxury housing also is expected to climb sharply.” The Olivia totals 36 stories and 492,987 square feet, the residential portion of which consists of 333 rental apartments in studio, one- and two-bedroom configurations. Among the amenities are a doorman-attended lobby, valet and concierge services, top-floor health club and social lounge and rooftop sundeck. According to the property’s website, rents start at $2,850 for a studio apartment. The building’s commercial space, which takes up 270,000 square feet of the total …