Building on the trends that began to emerge in the second half of 2010, the Toledo region’s industrial real estate market continues to improve. Demand for space in northwest Ohio and southeast Michigan is occurring at its typical slow, steady pace. The result has been positive net absorption of more than 400,000 square feet during the past year. The vacancy rate fell from 8.65 percent at the end of 2011 to 8.52 percent at the close of 2012. If the improvement in the vacancy rate slows during the next 12 months, it will more likely be due to the poorer quality and functionality of much of the residual stock of empty buildings than weakening demand. One can see this evidence with the spike in new construction driven by build-to-suit projects for several noteworthy users who could not find suitable space within the existing supply. Auto sector is big driver It would come as no surprise to anyone remotely familiar with Toledo’s history and economy that a considerable portion of the user activity has come from the automotive sector. Suppliers to primarily Chrysler Group and General Motors (GM) have been quite active and have accounted for several of the larger lease …
LOS ANGELES — In a blockbuster deal, Singapore-based Overseas Union Enterprise Ltd. (OUE) has agreed to acquire the U.S. Bank Tower as well as Maguire Gardens and a parking facility in downtown Los Angeles for $367 million. The sale is expected to close June 28. OUE, through its wholly owned U.S. subsidiary Beringia Central LLC, acquired the properties from Library Square Associates LLC, a subsidiary of MPG Office Trust Inc. (NYSE: MPG). OUE has made a non-refundable deposit in the amount of $7.5 million. U.S. Bank Tower is a Class A office property located at the foot of Bunker Hill, a neighborhood that separates downtown Los Angeles from the rest of the city. The 72-story, 1.4 million-square-foot office tower, includes six levels of underground parking, and was 56.3 percent leased at the time of sale. The building was completed in 1989. Net proceeds from the sale are estimated to be $103 million and will be used for general corporate purposes, including potential loan rebalancing for the refinancing of the MPG Office Trust’s upcoming 2013 debt maturities. The purchase is part of OUE’s efforts to strengthen its portfolio of commercial properties and enhance long-term shareholder value, says OUE Executive Chairman Dr. …
PHOENIX — Cole Credit Property Trust III Inc. (CCPT III) has executed a definitive merger agreement to acquire Cole Holdings Corp., a Phoenix-based real estate investment management firm that manages more than $12 billion in assets. CCPT III is a real estate investment trust focused on net-leased properties. The company’s portfolio includes approximately 1,000 retail, office and industrial properties throughout the U.S. CCPT III will change its name to Cole Real Estate Investments Inc. upon completion of the transaction. The company will also seek a listing on the New York Stock Exchange (NYSE). Following a listing, Cole Real Estate Investments will be the second largest publicly traded REIT in the net-lease sector. The transaction is expected to close in the second quarter of 2013. “Through this compelling combination, we have the opportunity to realize the vision of creating a world-class real estate platform and provide investors the benefits of owning high-quality, income-producing real estate leased long term to credit-worthy corporations,” says Christopher Cole, founder and executive chairman of Cole Holdings. The acquisition of Cole Holdings provides CCPT III with more than 350 employees, as well as a real estate investment management platform of more than 2,000 properties with over 76 …
WASHINGTON, D.C. — Hines, an international real estate developer, has increased its ownership of the $700 million, mixed-use CityCenterDC project in Washington, D.C., after buying the ownership interest of its partner Archstone. Hines announced the acquisition a day after apartment owners AvalonBay Communities Inc. (AVB) and Equity Residential (EQR) said they completed their purchase of Archstone in a cash-and-stock deal valued at $16 billion. The total deal included the assumption of approximately $9.5 billion in debt. “We have enjoyed working with Archstone and are proud to complete and manage this momentous development for D.C.,” says Jeff Hines, president of Houston-based Hines. “The project's momentum in office leasing, strong residential condominium sales and widespread interest among retailers and restaurants make CityCenterDC an excellent vehicle for further investment.” The CityCenterDC project includes a mix of condominiums, apartments, offices, public spaces, restaurants, shops and a hotel. Neil Brown, Archstone's chief development officer, adds, “Archstone and Hines have worked together hand-in-glove on this project for the last decade, and there is no better outcome for the project than for Hines to assume full oversight of this massive mixed-use development.” In addition to increasing its ownership in the mixed-use project, Hines will assume development responsibility …
ARLINGTON, VA. — AvalonBay Communities Inc. (NYSE: AVB) and Equity Residential (NYSE: EQR) have completed their $16 billion acquisition of Archstone Enterprise from Lehman Brothers Holdings Inc. The total deal includes cash and stock and the assumption of approximately $9.5 billion in debt. Equity, the largest publicly traded U.S. apartment landlord, which is controlled by real estate billionaire Sam Zell, now owns 60 percent of Archstone, or 78 apartment properties. AvalonBay, the second-biggest, owns the remaining 68 complexes. The companies have stated that the deal will help them grow quickly in coastal cities, such as New York and San Francisco, where expansion is difficult due to the scarcity and high cost of land. The properties are mostly located in Phoenix, Washington, D.C., Orlando, Southern California, Denver and Jacksonville. Equity's cash and equity portion of the transaction, which included approximately $2 billion in cash and the issuance of 34,468,085 shares, was funded by the sale of non-core assets. “By funding a portion of this acquisition with proceeds from the sale of our non-core assets, we have nearly completed the total transformation of our portfolio,” says David Neithercut, CEO and president of Chicago-based Equity Residential. “Going forward, our future earnings and shareholder …
PARAMUS, N.J. — Michael Fascitelli has resigned as Vornado Realty Trust’s president and chief executive officer, effective April 15. Fascitelli said he plans to take a break after which time he will pursue new challenges. He will continue to serve on Vornado's Board of Trustees. Fascitelli joined Vornado 16 years ago as president and trustee. In May 2009, he became chief executive officer. The board has appointed Steven Roth, the company's chairman, as the new chief executive officer. Vornado is one of the largest owners and managers of commercial real estate in the United States with a portfolio of more than 100 million square feet, primarily located in the New York and Washington, D.C. areas. The publicly traded real estate investment trust trades under the symbol VNO on the New York Stock Exchange.
By Michael Bull Depending on their circumstances, investors in commercial real estate could face noticeably higher tax burdens in 2013 and the years ahead. However, having to fork over more money to Uncle Sam isn’t likely to have a sizeable impact on transaction activity in the sector. Those were some of the points made by accounting and real estate experts in a recent episode of the “Commercial Real Estate Show,” a nationally syndicated weekly talk radio show about business and commercial real estate-related topics in the U.S. The episode provided a look at the many recent federal tax changes, such as increased income and capital gains tax rates, and provided detailed analysis of their potential effects on the commercial real estate sector. “Taxes aren’t what’s been motivating commercial real estate investors that have gotten back in the asset class in the post-recessionary period,” says Mitch Roschelle, a partner at PricewaterhouseCoopers and the leader of the firm’s U.S. Real Estate Advisory Group. “They like commercial real estate because of its durability of income over time.” “Any income-producing asset is going to have the same adverse tax consequences, and real estate is less volatile than perhaps stocks and bonds can be over …
MANTECA, CALIF. — The 3.1-million-square-footCenterPointIntermodal Facility is scheduled to break ground in Manteca within the month. Manteca is situated between Stockton and Modesto in Northern California. The $175-million project will be located just west of Airport Way between Roth Road and Lathrop Road across from the Union Pacific intermodal yards. The funds will be provided by CalPERS. The San Joaquin Partnership estimates the new facility will create 600 permanent jobs.
MANTECA, CALIF. — The 3.1-million-square-foot CenterPoint Intermodal Facility is scheduled to break ground in Manteca within the month. Manteca is situated between Stockton and Modesto in Northern California. The $175-million project will be located just west of Airport Way between Roth Road and Lathrop Road across from the Union Pacific intermodal yards. The funds will be provided by CalPERS. The San Joaquin Partnership estimates the new facility will create 600 permanent jobs.
NEW YORK CITY — Real estate investment trust SL Green Realty Corp. (NYSE: SLG) has closed on a $900 million mortgage refinancing for 1515 Broadway, a 2 million-square-foot office tower in Times Square. The new 12-year, 3.93 percent fixed-rate mortgage financing replaces the former $775 million mortgage loan. The refinancing follows the April 2012 lease renewal by Viacom of 1.6 million square feet at the tower through 2031. SL Green will recognize approximately $116 million in net proceeds from the deal. “Our ability to execute long-term, fixed-rate financing at historically low rates is a significant achievement and reflects both this property’s strength as well as the continuing positive evolution of Times Square,” says Andrew Mathias, president of SL Green. 1515 Broadway has towered above Times Square since 1972 and is the world headquarters for Viacom, which owns MTV. A $60 million renovation of the 56-story office tower was completed in 2010. The new design includes a stainless steel storefront and canopy, with new gray Pietra di Bedonia stone paving. The new lobby features a custom-glass art wall. “The long-term renewal of the Viacom lease, coupled with our redevelopment of the building’s lobby, common areas, retail space, and the introduction of …