SAN FRANCISCO AND DENVER — First reported last week as the two parties entered discussions, industrial REITs ProLogis and AMB Property Corp. have reached a definitive agreement to merge, creating one of the world's largest industrial real estate owners. The new company is expected to have a pro forma equity market capitalization of approximately $14 billion, a total market capitalization in excess of $24 billion and gross assets owned of approximately $46 billion. The combined company is anticipated to save $80 million in G&A costs. Under terms of the agreement, each ProLogis common share will be converted into 0.4464 units of a newly issued AMB common share, and the combined company will operate as an UPREIT. Upon completion of the merger, anticipated in second quarter 2011, the company will operate under the name ProLogis and will trade under the ticker symbol “PLD” on the New York Stock Exchange. “We have the opportunity to build a pre-eminent industrial real estate company on a global scale,” said AMB Chairman and CEO Hamid Moghadam in a video on the company’s web site about the merger. “We can service our customers better, provide better products for our investors, and create a great deal of …
DENVER AND SAN FRANCISCO — Two of the largest owners of industrial properties in the United States have entered into discussions regarding a potential merger. In joint press releases, Denver-based ProLogis and San Francisco-based AMB Property Corp. explained the deal would consist of a merger of equals, in which both company's stock would be combined in an all-stock, at-market transaction based on the unaffected trading price of both stocks prior to media reports of the possible merger. Neither company would comment further on the talks. Following the news on Thursday, shares of AMB Property Corp. (NYSE: AMB)(http://www.google.com/finance?q=NYSE%3AAMB) rose to $36.01 per share, coming within pennies of its 52-week high), but ended the day at $34.01. Shares of ProLogis (NYSE:PLD)(http://www.google.com/finance?q=NYSE%3Apld) also rose, ending the day at $15.87. If completed, the merger would create a titan in the industrial sector. ProLogis currently controls a portfolio of more than 435 million square feet of industrial space located across North America, Europe and Asia. AMB controls 158.4 million square feet of industrial space in 49 markets within 15 countries. — Coleman Wood
NEW YORK CITY — Bethesda, Md.-based multifamily lender Walker & Dunlop is getting a jump on what it sees as the imminent turnaround of the commercial real estate industry by completing its plan to go public. The company began trading on the New York Stock Exchange December 15 under the ticker symbol “WD”. Walker & Dunlop priced 10 million shares of common stock at a price of $10 per share. For the lender, going public provides it with the high brand recognition its publicly traded competitors already have. As of last year, Walker & Dunlop was the ninth largest commercial real estate lender in the country and the 5th largest originator of Fannie Mae loans. It also provides the company with greater access to capital than it had as a private company. There are other benefits as well. “[Going public] opens up a whole new realm of opportunities for partnerships and growth, and attracting talented individuals to our platform,” says William Walker, chairman, president and CEO of Walker & Dunlop. The company will need the clout to help it achieve its long-term goals. Walker sees the next few years will see a much increased demand for commercial real estate loans …
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.