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SL Green Agrees to Sell Amazon-Anchored Office Building Under Redevelopment in Manhattan for $952.5M

by Kristin Harlow November 4, 2020

NEW YORK CITY — SL Green Realty Corp. (NYSE: SLG) and its joint venture partners have entered into a contract to sell 410 Tenth Avenue, a 20-story, 636,000-square-foot office tower near Hudson Yards on Manhattan’s west side, for $952.5 million. The transaction marks the largest commercial property sale in the U.S. since March, according to SL Green. Amazon and First Republic Bank anchor the property, which is currently undergoing a redevelopment. Amazon signed its 335,408-square-foot lease in December. The buyer was undisclosed. SL Green is the majority owner of the building, with a 70.9 percent stake. As part of the sale, the sellers will retain a 5 percent interest through completion of the redevelopment, which is slated for the third quarter of 2021. The identities of the minority owners were not disclosed. The transaction is expected to close during the fourth quarter. Brett Herschenfeld, managing director of SL Green, says that the sale is an example of acquiring an undervalued asset, redeveloping it to Class A standards and re-leasing it to high-quality tenants. “While the asset was always intended to be held as a long-term investment, the sale will allow the company to achieve extraordinary profits, substantially reduce consolidated indebtedness …

November 4, 2020

Features Multifamily

What Defines A Sound Multifamily Investment Strategy?

by Taylor Williams November 3, 2020

By Yuriy Gelfman, principal at Olive Tree Holdings Real estate investing is best viewed through the relatable lens of child rearing. An investment enters life with two parents — a limited partner (LP) and a general partner (GP). The parents really want their little investment to do well in life. The investment’s journey through life is full of obstacles and potential dangers, but through this metaphor, we can breathe life into a topic that can be dry on paper. Pre-Birth Planning An investment is born out of the good intentions of the GP. But how does the GP select the right opportunity to invest in? In the multifamily segment, there are 13 million apartments contained in large communities split among tens of thousands of properties in several hundred markets. This really is a lot of real estate. It’s important to not fall in love with any opportunity based on arbitrary or subjective reasons. We seek opportunities that are: 1) scaled 2) located in growth markets 3) acquireable at a large discount to replacement cost and 4) are underperforming immediate peers. Each acquisition takes a significant amount of time to identify, negotiate, arrange financing for, staff, asset manage, construct and ultimately …

November 3, 2020

Company News Retail Southeast Tennessee

CBL Properties Files for Chapter 11 Bankruptcy Protection

by John Nelson November 2, 2020

CHATTANOOGA, TENN. — Against headwinds brought on by the COVID-19 pandemic, CBL Properties Inc. (NYSE: CBL) filed for Chapter 11 bankruptcy protection on Sunday, Nov. 1. Chattanooga-based CBL owns and manages a portfolio of 107 properties totaling 66.7 million square feet across 26 states, including 65 enclosed, outlet and open-air retail centers and eight properties managed for third parties. The company entered into an Restructuring Support Agreement in August with a group of bondholders in hopes of restructuring its balance sheet. In its bankruptcy filing, CBL listed its estimated assets and liabilities in the range of $1 billion to $10 billion, according to reports by CNBC. “With an aggregate of approximately $1.5 billion in unsecured debt, preferred obligations eliminated and a significant increase to net cash flow, upon emergence, CBL will be in a better position to execute on our strategies and move forward as a stable and profitable business,” says the company’s CEO, Stephen Lebovitz. As of Sept. 30, CBL had approximately $258.3 million in unrestricted cash on hand and available-for-sale securities. This cash position, combined with the positive cash flow generated by ongoing operations, is expected to meet the company’s operational and restructuring needs. Weil, Gotshal & Manges …

November 2, 2020

Company News Northeast Pennsylvania Restaurant Retail

Pennsylvania Real Estate Investment Trust Files for Chapter 11 Bankruptcy

by Taylor Williams November 2, 2020

PHILADELPHIA — Pennsylvania Real Estate Investment Trust (PREIT) has filed for Chapter 11 bankruptcy as of Sunday, Nov. 1. PREIT (NYSE: PEI), which is based in Philadelphia, owns and operates 22.5 million square feet of retail space including 19 mall properties in New Jersey, Pennsylvania, Massachusetts, Maryland, Virginia, Michigan, North Carolina and South Carolina. PREIT has reached a Restructuring Support Agreement (RSA) with its bank lenders, under which an additional $150 million will be committed to recapitalize the business and extend its debt maturities. The announcement coincides with the Chapter 11 filing of Tennessee-based CBL & Associates (NYSE: CBL), which owns and manages a portfolio of 107 properties totaling 66.7 million square feet across 26 states, including 65 enclosed, outlet and open-air retail centers and eight properties managed for third parties. “Today’s announcement has no impact on our operations — our employees, tenants, vendors and the communities we serve — and we remain committed to continuing to deliver top-tier experiences and improving our portfolio,” says Joseph Coradino, CEO of PREIT. “With the overwhelming support of our lenders, we look forward to quickly emerging from this process as a financially stronger company.” DLA Piper LLP and Wachtell, Lipton, Rosen & Katz are …

November 2, 2020

Company News Georgia Massachusetts Northeast Retail Southeast Top Stories

Inspire Brands Agrees to Acquire Dunkin’ in $11.3B Transaction

by Taylor Williams November 2, 2020

ATLANTA AND CANTON, MASS. — Inspire Brands has agreed to acquire fast-food breakfast chain Dunkin’ Brands (NASDAQ: DNKN) in a transaction valued at $11.3 billion. The deal is expected to close by the end of the year. Atlanta-based Inspire Brands is the parent company of restaurant chains such as Arby’s, Jimmy John’s, Sonic Drive-In and Buffalo Wild Wings. In addition to its namesake coffee and breakfast chain, Canton, Mass.-based Dunkin’ Brands also owns ice cream parlor chain Baskin-Robbins, which respectively have about 12,500 and 8,000 locations worldwide. Dunkin’ has about 9,600 locations in the United States. The deal’s price tag equates to $106.50 per share, to be paid in cash, and includes the assumption of all Dunkin’ Brands’ debt. The share price represents a 30 percent premium over the Dunkin’ Brands 30-day weighted average price and a 20 percent premium over its closing stock price of $88.79 per share on Friday, Oct. 23. “We are excited to bring meaningful value to shareholders who have been with us on this journey and believe that Inspire Brands, a preeminent operator of franchised restaurant concepts, will continue to drive growth for our franchisees while remaining true to all that is unique and special …

November 2, 2020

Company News Washington Western

Amazon Sales Soar to $96.1B in Third Quarter on Pandemic E-Commerce Purchases

by Jeff Shaw October 30, 2020

SEATTLE — Amazon.com Inc. (NASDAQ: AMZN) announced financial results for its third quarter ending Sept. 30, posting sales of $96.1 billion, an increase of 37 percent compared with third-quarter 2019. The sales numbers exceeded even the Seattle-based e-commerce giant’s optimistic prediction of $87 billion to $93 billion in sales. Operating income nearly doubled, rising from $3.2 billion to $6.2 billion between the second and third quarter. As the COVID-19 pandemic has raged on, Amazon has reaped benefits as consumers switch from in-person to online shopping. However, that comes with a variety of increased costs as well. In the company’s guidance for the fourth quarter of 2020, it expects to incur $4 billion in COVID-related costs, such as personal protective equipment, enhanced cleaning and increased wages. As a result of the increased costs, Amazon stock actually dropped following the news, falling from $3,248.86 per share at 2:30 p.m. Thursday to $3,094.10 at 9:45 a.m. Friday. On a long-term basis, though, this is a modest fall. The stock price closed at $1,779.99 on Oct. 30, 2019.

October 30, 2020

Company News Retail Washington Western

Starbucks Beats Quarterly Expectations, Shows Signs of Quickened Recovery

by Alex Tostado October 30, 2020

SEATTLE — Starbucks Coffee (NASDAQ: SBUX) reports that global comparable-store sales fell 9 percent in the fiscal fourth quarter on a year-over-year basis, but the company’s performance still beat economists’ expectations. Total revenue for the Seattle-based coffee chain reached $6.2 billion in the fiscal fourth quarter, which ended Sept. 27. Economists had expected the total to be $6.06 billion. “I am very pleased with our strong finish to fiscal 2020, underpinned by a faster-than-expected recovery in our two lead growth markets, the U.S. and China,” says Kevin Johnson, president and CEO of Starbucks. “These results demonstrate the continued strength and relevance of our brand, the effectiveness of the actions we’ve taken to adapt to meaningful changes in consumer behavior and the extraordinary efforts of our green apron partners to serve our customers and communities in challenging circumstances.” The latest results are a big improvement from the fiscal third quarter, when global comparable sales plummeted 40 percent year-over-year due to the coronavirus shutdowns. Looking ahead, Starbucks expects same-store comparable growth of 18 to 23 percent and plans to open 2,150 new stores over the next fiscal year. As of Sept. 27, 2020, Starbucks operated 10,109 stores in the Americas. Starbucks’ stock …

October 30, 2020

Acquisitions Office Top Stories Washington Western

Brookfield Purchases Office Building Fully Leased to Facebook in Bellevue, Washington for $365M

by John Nelson October 30, 2020

BELLEVUE, WASH. — A real estate investment fund backed by Brookfield Asset Management Inc. (NYSE: BAM) has purchased Block 16, a 343,528-square-foot office building in Bellevue fully leased to Facebook. A joint venture between Wright Runstad & Co., Shorenstein Properties and institutional investors advised by J.P. Morgan Asset Management sold the recently completed property for $365 million. Block 16 is part of The Spring District, a transit-oriented mixed-use development situated on the east side of Lake Washington from Seattle. Wright Runstad and Shorenstein Properties are the master developers of the campus, which sits south of Bellevue’s central business district near SoundTransit’s future Spring District/120th light rail station. Spring District will ultimately feature 3 million square feet of creative office space, including REI’s headquarters that Facebook purchased last month for $390 million. “The Spring District has become a choice location for high-quality office tenants in Bellevue,” says Greg Johnson, CEO of Seattle-based Wright Runstad. In 2017, University of Washington’s Global Innovation Exchange building opened at Spring District, as well as over 800 residential units and several open spaces accessible to the public. Wright Runstad plans to develop another 530,000 square feet of office space across two buildings at Spring District by …

October 30, 2020

Company News Massachusetts Northeast Restaurant Retail

Dunkin’ Shares Rise as Talks Progress for $8.8B Acquisition by Inspire Brands

by Taylor Williams October 27, 2020

CANTON, MASS. — Shares of Dunkin’ Brands Group Inc. (NASDAQ: DNKN) rose by more than 15 percent yesterday as the Massachusetts-based coffee and breakfast chain moved forward with talks to be acquired by Atlanta-based Inspire Brands, the parent company of chains like Arby’s and Jimmy John’s. The New York Post reports that the deal, which would take Dunkin’ private is valued at $8.8 billion. Dunkin’s stock price closed at $89.80 per share on Friday, October 23 and peaked at $104.87 per share in yesterday’s trading before closing just below that mark. Dunkin’ opened at $101.69 per share today, up nearly 30 percent from a year ago. The New York Times reports that Inspire Brands has offered to purchase Dunkin’, which will release its latest earnings report on Thursday, at $106.50 per share.

October 27, 2020

Civic Development Multifamily New York Northeast Top Stories

Howard Hughes Plans $1.4B Multifamily Project in Manhattan’s Seaport District

by Taylor Williams October 26, 2020

NEW YORK CITY — The Howard Hughes Corp. (NYSE: HHC) has unveiled plans for a $1.4 billion multifamily project in Manhattan’s Seaport District. The proposal calls for the transformation of a full-block surface parking lot along the boundary of the South Street Seaport Historic District into a mixed-income development that would include some of the area’s first new affordable housing in decades. The development would ultimately feature 360 apartments, about 25 percent of which would be affordable, as well as 260 condominium units. In terms of the multifamily component, the centerpiece is 250 Water Street, where Dallas-based HHC plans to develop at least 100 affordable apartments that would be reserved for households earning 40 percent or less of the area median income. Only 2.5 percent of all housing in the Seaport District qualifies as affordable, and the median household income is more than $150,000. The project would also rehabilitate the historic South Street Seaport Museum, which has faced numerous obstacles over the past two decades, including a two-year closure following 9/11, flooding from Hurricane Sandy in 2012 and an existential threat to attendance from COVID-19. In addition, HHC would develop a new museum building on an adjacent vacant lot. The …

October 26, 2020

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