LONG BEACH, CALIF. — Long Beach-based healthcare trust HCP has entered into agreements for two major acquisitions totaling $6.75 billion. First, the company announced plans to acquire the real estate assets of Toledo, Ohio-based HCR ManorCare for $6.1 billion. The portfolio includes 338 post-acute, skilled nursing and assisted living facilities. The properties are located in 30 states including Florida, Illinois, Michigan, Ohio and Pennsylvania. HCR ManorCare will continue to operate the properties in the portfolio under long-term, triple-net, master leases. The initial remaining terms of the leases range from 13 to 17 years. With extension options factored in, the remaining terms for the leases range from 23 to 35 years. In addition, HCP will have the option to acquire a 9.9 percent interest in HCR ManorCare for an additional purchase price of $95 million. The final part of the agreement will include Paul Ormond, chairman, president and CEO of HCR ManorCare, joining HCP's board of directors. HCP will fund the purchase, in part, with $3.528 billion in cash, some of which will be obtained through a public offering of 31 million shares of common stock. HCP has also received a commitment for a bridge loan of up to $3.3 billion. …
PHILADELPHIA — Pebblebrook Hotel Trust has acquired the Sofitel Philadelphia Hotel for $87 million. The 306-room hotel is located in the Center City area of Philadelphia. It features 15,000 square feet of meeting space, a fitness center, a brasserie that serves French-style breakfast and a bar/lounge. The building was originally constructed in 1964 as the home of the Philadelphia Stock Exchange; it was converted into a hotel in 2000. The acquisition included the assumption of a a $56.1 million, non-recourse loan set to mature in February 2012. The loan carries a floating interest rate and interest-only payments. Pebblebrook also announced it has entered into an agreement to acquire another hotel located in the San Francisco Bay area for $84 million.
NEW YORK CITY — Meridian Capital Group has secured a $50 million loan for the refinancing of a New York City multifamily portfolio. Owned by The Parkoff Organization, the portfolio contains a total 558 apartments. Two of the properties are located in Manhattan, three are located in the Bronx, one is located in Queens and one is located in Brooklyn. The loan, which was provided by a local community bank, carries a 7-year term with interest-only payments for the first 2 years and a 4.2 percent rate. Avi Weinstock of Meridian arranged the financing.
RIPON, CALIF. — Grubb & Ellis has negotiated Neenah Paper’s $9 million sale of a 332,400-square-foot industrial facility, located at 924 S. Stockton Ave. in Ripon, to Diamond Pet Food Products. Featuring two active Union Pacific Railroad spurs, the property consists of a 200,000-square-foot manufacturing building, a 100,000-square-foot distribution center and two storage sheds totaling 32,400 square feet. Grubb & Ellis’ Bryce MacDonald represented the seller in the transaction, and John McManus of Cushman & Wakefield represented the buyer.
Tony Thompson September 14, 2010 marked the 50th anniversary of real estate investment trusts, or what is more commonly referred to as REITs, in the United States. Originally signed into law in 1961 by President Dwight D. Eisenhower, REITs buy, develop, and operate commercial properties such as office buildings, hotels, medical facilities, shopping centers and apartment buildings. REITs offer investors the opportunity to invest in income-producing hard assets and are typically more accessible to a much broader range of investors as compared to traditional real estate ownership. But why should investors consider REITs and other alternative investments, given the wide range of investment products available today? Real estate and other hard assets have proven to be a valuable addition to an investment portfolio, often reducing volatility and increasing total returns. According to the NCREIF Property Index, which reflects returns on investment-grade, income-producing properties, the total average annual return from January 2000 to December 2009 was 7.3 percent. Conversely, during this same time period, the stock market was sitting in negative territory and the S&P 500 index produced an average annual return of -0.95 percent. Various studies, which have compiled data from the S&P 500, the Federal Reserve Database and NCREIF, …
H. Ronald Klasko With traditional sources of capital unavailable, the EB-5 immigrant investor program has attracted great interest among commercial real estate developers. Specifically, many real estate developers have chosen to form “regional centers” to attract tens of thousands of foreign investors willing to invest $500,000 for the opportunity to obtain green cards for them and their family members. In fact, the number of regional centers has expanded five-fold to more than 100 in just the last couple of years. This article will discuss the requirements of the EB-5 program and the advantages and disadvantages to developers of forming regional centers to attract EB-5 capital. The article will also discuss other options available to developers, such as having a development project “adopted” by an existing regional center, purchasing a dormant regional center and attracting foreign capital through a pooled investment opportunity without a regional center. Background of Regional Center EB-5 Program The EB-5 program enables foreign nationals who invest $500,000 or $1 million (depending upon the geographical area of the investment) to get green cards for themselves and their immediate family members. In order to qualify, the investment must create ten full-time jobs for U.S. workers. In 1994, Congress created …
QUANTICO, VA. — Marriottsville, Md.-based Harkins Builders has been selected to design and construct a $41.56 million student quarters and student dining facility at Marine Corps Base Quantico in Quantico. The multi-story dining facility will provide a dining area and a media center for students attending The Basic School. Additionally, the project includes a student officer quarters facility and a multi-story building to support billeting for 250 Marine officers. Completion is scheduled for August 2012. Project members include Harkins Builders; Chicago-based VOA Architects; Reston, Va.-based Stanmyre + Noel; Rockville, Md.-based Burgess + Niple; Chicago-based Nayyar & Nayyar; and Baltimore, Md.-based Siegel, Rutherford, Bradstock & Ridgeway.
DALLAS — Blockbuster has announced its plans to voluntarily enter into Chapter 11 bankruptcy as a way to clean up the struggling company's balance sheet. The recapitalization plan the company submitted to its senior noteholders aims to reduce its corporate debt from its present size of approximately $1 billion to $100 million or less. As part of the restructuring process Blockbuster has secured a $125 million commitment in new “debtor in possession” financing from its senior noteholders what will allow it to continue normal day-to-day operations. The senior noteholders comprise a group of bondholders that possess approximately 80.1 percent of the prinicple amount of Blockbuster's 11.75 percent senior secured notes. Upon its exit from bankruptcy, the company's senior secured notes will be exchanged for equity in the reorganized company. The capital drawn down from the $125 million commitment will convert to an exit loan facility, and a new $50 million exit revolving credit facility will be created. Finally, there will be no recovery from holders of Blockbuster's outstanding subordinated debt, preferred stock or common stock. The company did not disclose how it plans to reduce its debt, only stating that “the company will evaluate its U.S. store portfolio with a …
For those who were expecting some market relief by now, there is not a great deal of positive prognosis to provide. Despite the slow rise in the stock market since its fall, the market continues to suffer from mediocre progress with its continuous ups and downs. There is still much change needed in the global economy to sustain the stock market growth we need to realize a full and effective recovery of other markets, including commercial real estate. But I would like to say that we are now bouncing off the bottom with an ability to understand where market corrections have settled in terms of value, cap rates, absorption and development, which is all but non-existent. With historic high unemployment and the uncertainty of what new pothole we might hit while we are finding our way out, it may still be a rough year or more ahead of us. Much depends on how the commercial lending industry plays out the myriad transactions that still linger in their portfolios. The penalties for a defer-and-deny or an extend-and-pretend philosophy may not yet to been fully realized. On a positive note, if consumer confidence continues to eek up, while other economic indicators remain …
WHITTIER, CALIF. — Marcus & Millichap has brokered the $3.5 million sale of two commercial office buildings located at 8109 Greenleaf Ave. and 8034-8040 Comstock Ave. in Whittier. The new owner/user intends to establish a community church on site. Marcus & Millichap’s Michael Lawrence represented the private REO seller of the approximately 34,049-square-foot complex, which was built in 1990.