Gramercy Sells NJ Office Buildings to Spear Street for $299M

Gramercy Property Trust announced that it had closed on the sale of two office buildings in Jersey City, New Jersey for $299 million, or $349 per square foot, to San Francisco-based Spear Street Capital. Commercial real estate services firm Cushman & Wakefield brokered the sale of 70 Hudson Street and 90 Hudson Street, marking the largest New Jersey office deal this year. Before closing, Gramercy prepaid the mortgage debt on 70 Hudson, and Spear Street assumed the outstanding loan of $101 million on 90 Hudson.

"These are unique, irreplaceable assets, and this transaction is clearly the most significant deal to date in 2016,"said Andrew Merin, Vice Chairman within Cushman & Wakefield of New Jersey, Inc., who notes that his team had orchestrated a previous sale of the subject properties in 2011. "This is the only office availability greater than 200,000 square feet and the largest contiguous availability along the Hudson Waterfront. The new ownership will be able to capitalize on the market's strong leasing momentum and cyclically improving rents compared to Manhattan."

70 Hudson Street is a 409,272 square foot, 12-story office building originally constructed in 2000 and is currently vacant after Barclay's recent departure; Cushman & Wakefield are handling the leasing assignment of the property. 90 Hudson Street is also 12 stories tall and covers 418,046 square feet of space; occupancy information was not disclosed. The sale of both properties is part of Gramercy Property Trust's previously announced plan to dispose of select single and multi-tenant office assets.

For more news and information visit Blumberg Partners.

Brookfield to Acquire Rouse Properties for $2.8B

Rouse Properties Inc. announced that it has agreed to be acquired by an affiliate of Brookfield Asset Management Inc. in a deal valued at approximately $2.8 billion. Rouse has entered into a definitive agreement at $18.25 per share in an all-cash transaction; Brookfield, which already owned about a third of Rouse, originally proposed to acquire the group mid-January of this year of about $2.54 billion in a deal that valued Rouse at $17.00 per share. BofA Merrill Lynch is acting as financial advisor and Sidley Austin LLP is acting as legal counsel to the Special Committee of Rouse Properties, Inc.

"The Rouse team has built a great company with a strong platform and differentiated assets," said David Kruth, chairman of the Special Committee of the board of Rouse Properties, which unanimously approved the deal. "After careful consideration, the Special Committee determined that Brookfield's increased proposal provides shareholders with compelling value as well as a high degree of execution certainty, further validating the strength of the platform that Rouse has built. We are pleased to have reached this agreement, which we believe benefits all Rouse shareholders."

Rouse Properties is among the U.S.'s largest publicly traded regional mall owners. The REIT's portfolio includes 35 malls and retail centers in 21 states encompassing approximately 24.1 million square feet.

For more news and information visit Blumberg Partners.

Tishman Buys CNN Tower from Broadreach Capital

NY-based Tishman Speyer has purchased the CNN Building at 6430 West Sunset Blvd. in Hollywood for more than $127-million, or more than $600 a square foot, from Palo Alto-based investment firm Broadreach Capital Partners. Broadreach originally acquired the property in April 2006 for $50 million. HFF's Todd Tydlaska and Andrew Harper represented Broadreach in the sale, with leasing guidance from Madison Partners' Steven Salas, Tony Ranger and Joe King. Tishman Speyer was self-represented in the acquisition.

"We're pleased to add this extremely well-located asset to our Los Angeles office portfolio," Rob Speyer, Tishman Speyer's president and chief executive officer, said in a prepared statement. "In particular, we continue to be very bullish on the Hollywood submarket as one of the key areas attracting growing companies with employees who want to live and work in a vibrant 24-hour community."

The 15-story tower was originally constructed in 1986, renovated in 2001, and awarded LEED certification by the U.S. Green Building Council in 2013. The property was 84% leased at the time of sale, with the tower now anchored by CNN's parent company Turner Broadcasting System, the movie-trailer-maker BLT & Associates, and advertising agency Oxford Road. Tishman Speyer plans on raising rent at the 204,122-square-foot Class A office property, sources tell the Real Deal; a five-story parking structure is adjacent to the tower.

For more news and information visit Blumberg Partners.

GSA Proposed Budget Seeks $1.5B for Real Estate Investments

The U.S. General Services Administration (GSA) released its 2017 Annual Budget Request, which includes $1.5 billion in investments to federal infrastructure and modernizing the federal government's most at-risk legacy IT systems. The GSA announced last month that the budget request would include $1.4 billion in Department of Justice and GSA funding for the FBI headquarters, but the newly released budget reveals more specific real estate investment plans. GSA's request includes:

— $759 million to support consolidation of FBI Headquarters function into a single, secure campus supporting the FBI's national security and law enforcement mission
— $267 million to deliver a new headquarters for the Federal Emergency Management Agency (FEMA)
— $248 million to support the second and final phase of the Calexico West Land Port of Entry modernization and improvement project
— $81 million for the renovation of the 985 Michigan Avenue Federal Office Building (aka Patrick V. McNamara Federal Building) in Detroit, MI

"The President's budget includes investments necessary to further strengthen our nation's real estate portfolio while promoting development in communities across the country," said GSA Administrator Roth. "GSA will also be able to more effectively bring federal IT systems into the 21st century. Once enacted, GSA will be positioned to better provide the services and solutions that allow the government to more effectively tackle our shared challenges."

To read the full Congressional Justification for the 2017 Annual Budget Request, click here. For more news and information visit Blumberg Partners.

Saint-Gobain HQ in PA Sold for $127M

A partnership between 90 North Real Estate Partners, a London-based real estate investment firm, and Arzan Wealth of Dubai have purchased Saint-Gobain SA's North American headquarters near Philadelphia for $127 million. The seller was a consortium including E. Kahn Development Corp and J. Loew & Associates; full terms of the deal were not disclosed. The sellers were represented by Brian Fiumara, senior vice president of CBRE in Philadelphia, and Jim Vesey, president of Vesey Capital.

"This acquisition truly reflects and embraces our definition of 'trophy' credit," said Daniel Cooper, head of 90 North's operations in North America. "We know the [market] sentiment is fragile,but investors want the income generation they can't get from other investments and they want something with capital preservation."

Saint-Gobain, which was founded 350 years ago to manufacture glass for the Hall of Mirrors at the Palace of Versailles in Paris, signed a 15-year lease for the entire 320,000-square- foot office facility on the campus, which includes a pond and walking trails. The newly-constructed headquarters facility at 20 Moores Road in Malvern, Pennsylvania was opened in October 2015 after an 18-month redevelopment by Eli Kahn of E. Kahn Development Corp., J. Loew Associates and Aegon Realty Advisors. The exterior was designed by Bernardon, an architectural firm based in Kennett Square, PA, and the interior by Jacobs, a Philadelphia architectural firm.

For more news and information visit Blumberg Partners.

NYC Sees Largest Property Values Increase Since '08

New York City's city tax assessors are on the front lines of a resounding boom in the market, with current property values marking the largest increase since the tax year ending in June 2008. Josh Barbanel from the Wall Street Journal wrote an article about the trillion-dollar city, where the total market value of taxable property rose to $1.072 trillion for the fiscal year beginning July 1, a 10.6% increase from the $969.4 billion reported this year. The most valuable office building, according to the new data, is the Bank of America Tower on West 42nd Street at Sixth Avenue valued at $1.7 billion. The most valuable mixed-use building was Time Warner Center at Columbus Circle valued at $2.02 billion.

"This year's tax roll is simply a reflection of New York City's growing real estate market," said Jacques Jiha, commissioner of the NYC Department of Finance. "We know revenues will not continue at this pace, so we must continue to maintain strong reserves to protect the City's fiscal health," added Amy Spitalnick, a spokeswoman for the city's Office of Management and Budget. For the city, the strong property values could mean hundreds of millions in additional tax collections on top of the $23.5 billion forecast for the fiscal year beginning in July in the city's November 2015 Financial Plan.

For more news and information visit Blumberg Partners.

Cluttons First Dubai Office Market Bulletin

Cluttons LLP, the Central London, UK-based real estate firm, has introduced its inaugural Dubai Office Market Bulletin for Spring 2016, which "seeks to unpick the complexities of Dubai's fragmented office market, while providing a detailed overview of the city's office landscape." The bulletin draws from the performance of 22 submarkets across the city in the first quarter of the year, which revealed that 13 markets showed no change in starting rents in 2015, while seven markets had notable increases, and two markets with lower limit rents decrease over the 12 months of 2015.

"Despite sustained demand, occupiers remain cost conscious and budget driven in the face of a softening global economic backdrop, with the key word for many being 'prudence'," said Faisal Durrani, Cluttons' head of research. "Landlords, by contrast appear to be slow to react to the cooling market, with many reluctant to move on asking prices and others demonstrating a lack of flexibility for lease terms at renewal. The emerging gulf between market reality and landlords' expectations is a concern, particularly for a market that is now starting to show signs of maturity."

According to the bulletin, with the establishment of two new free-zones in the form of Dubai Design District (D3) and Dubai World Trade District in 2015, Central Dubai has become the focus of many occupiers and developers, particularly as it has long suffered from a demand-supply imbalance in the face of rising requirement levels. D3's lower and upper limit free-zone rents have registered a 67% and 28% rise respectively since its launch, pushing them to between AED 150 psf and AED 165 psf.

To read the full report, click here. For more news and information visit Blumberg Partners.

JV Building New Seattle Office Tower

Cornerstone Real Estate Advisers has formed a joint venture with Seattle-based development company, Schnitzer West, LLC, on behalf of an unnamed institutional client to build a new 36-story office tower in Seattle's Central Business District. Simultaneously with the joint venture formation, Cornerstone and Schnitzer West closed a $225 million construction loan with Blackstone Real Estate Debt Strategies and Bank of the Ozarks, arranged by Holliday Fenoglio Fowler, L.P. The tower, dubbed Madison Centre, was designed by Seattle-based NBBJ and features a glass rotunda, which anchors an urban environment framed by the historic U.S. Federal Courthouse, a public green, and the Seattle Public Library.

"Seattle's solid economic fundamentals, strong job market and appeal from a lifestyle perspective have created an ideal environment for a thriving office market. The optimal location and sophisticated design have positioned Madison Centre to become one of the most iconic office developments in Seattle, making it a highly attractive investment for our client," said John Kennedy, western regional director of Cornerstone Real Estate Advisers. "We are excited to partner with Schnitzer, whose excellent track record and depth of local market knowledge will help us successfully bring this development to market."

"Madison Centre is a leading-edge office work and collaboration environment designed to enhance productivity and redefine tenant and employee expectations in the Seattle CBD," added Pam Hirsch, managing partner, investment and development, at Schnitzer West. "We are very pleased to align with Cornerstone on this game changing investment."

For more news and information visit Blumberg Partners.

New $250M Telemundo Global HQ in Miami

NBCUniversal Telemundo Enterprises, which encompasses NBCUniversal's Hispanic franchises and all of its Hispanic content efforts, broke ground this month on a new 450,000 square foot global headquarters in Miami. Telemundo obtained a $185 million mortgage from Wells Fargo Bank in a deal brokered by Cushman & Wakefield to begin construction of the Telemundo building, which NBCUniversal and parent company Comcast indicated would involve more than $250 million to construct.

"This is a very important step in the evolution of our company at a time when we're enjoying tremendous momentum and have just wrapped a record-breaking year," said Cesar Conde, Chairman of NBCUniversal Telemundo Enterprises and NBCUniversal International Group, in a press release. "Our new global headquarters will fold all of our division's offices and production studio spaces into one state-of-the-art facility that will help us do business in a more collaborative way. This significant investment clearly underscores once again NBCUniversal's and Comcast's long term commitment to our business and the U.S. Hispanic market."

Governor Rick Scott added, "I am excited to announce that NBCUniversal Telemundo Enterprises has chosen Miami as the best location to build their new global headquarters and create 150 new Florida jobs. By cutting $1 billion in taxes and creating the new $250 million Florida Enterprise Fund this year, we will make Florida more competitive so companies like Telemundo will continue to grow and create jobs for our families."

The build to suit facility sits on approximately 21 acres at NW 25th Street and the Florida Turnpike, and will initially house 1,100 employees, with the capacity to expand to approximately 1,300. When construction is finished in early 2018, the new global headquarters facility will house the Telemundo Network, Telemundo Studios, Telemundo International, the NBC Universo network, and all of Telemundo's digital media operations. Telemundo's sales offices will continue to operate from New York City. The building of the new headquarters is expected to create approximately 3,000 construction-related jobs and generate an estimated $400 million in sales for Florida businesses. Telemundo pledged to retain 800 jobs and create 150 jobs with average salaries of $89,000, said Larry Williams, president and CEO of the Beacon Council, which worked with the company on incentives and permitting.

For more news and information visit Blumberg Partners.

CBRE Sees Moderate Investment & Rental Growth for 2016 Global CRE Market

CBRE Group released its 2016 Global Real Estate Market Outlook this month, which anticipates that moderate economic growth with low interest rates are likely to continue in 2016, and expects a year of "volatile markets but steady economic growth." Highlights from sectors include:

Economy
Expect 2016 to be a year of volatile markets but steady economic growth. Consumers in the U.S., EU and many parts of Asia Pacific are spending gains from rising incomes, low interest rates and low oil prices, which should support GDP growth.

Capital Markets
Global commercial real estate investment markets are expected to remain active in 2016, but the pace of growth is anticipated to slow after six years of recovery and price appreciation.

Office
Most U.S. and European office markets are expected to tighten further in 2016 as demand for space is expected to outpace limited new development. However, Asia Pacific office markets will be more mixed.

Industrial
Robust demand from e-commerce and third-party logistics companies for warehouse and distribution space—including for smaller in-fill locations within major metros—will continue to reshape the industrial market.

"The current environment of variable but generally improving growth in the developed world, alongside low interest rates and low inflation, is very supportive of consumers and commercial real estate markets," said Richard Barkham, CBRE's global chief economist. "There are some risks for sure, including weakening sentiment due to volatile stock markets, rising interest rates in the U.S. and the U.K., financial stress in emerging markets and the slowdown of the Chinese economy. However, because consumers in the U.S., Europe and even China are in good shape, we think the global economy is strong enough to withstand these challenges and that the real estate and economic reality will be better than expected in most places in 2016."

To access the full CBRE report, click here. For more news and information visit Blumberg Partners.

Saudi Arabia Building World's Tallest Tower

While the Burj Khalifa in Dubai currently holds the title of world's tallest building, a new "megatall" skyscraper currently under construction in Jeddah, Saudi Arabia will claim the title by reaching over 3,200 feet in height. With a planned completion date of 2018, the $1.5 billion Jeddah Tower is being privately funded by Jeddah Economic Company, which secured funding for the project in Q4 last year. The creator and leader of the project is Saudi Arabian Prince Al-Waleed bin Talal, chairman of Kingdom Holding Company (KHC); KHC is a partner in Jeddah Economic Company (JEC), which was formed in 2009 for the development of Jeddah Tower and City.

At the moment, only three buildings qualify as megatalls, according to Popular Science: Dubai's 2,717-foot (828-meter) Burj Khalifa (completed in 2010), the 2,073-foot (632-meter) Shanghai Tower (completed in 2015), and Mecca's 1,972-foot (601-meter) Makkah Royal Clock Tower (completed in 2012). But that number is expected to more than double by 2020, as four more join the list: Shenzhen's Ping An Finance Centre, Wuhan's Greenland Center, Jakarta's Signature Tower, and the new Jeddah Tower.

"With this deal, we will reach new, as yet unheard-of highs in real estate development, and will fulfill the company's objective of creating a world-class urban center that offers an advanced lifestyle, so that Jeddah may have a new iconic landmark that attracts people from all walks of society with comprehensive services and a multitude of uses," said Mounib Hammoud, chief executive officer of JEC.

Initially known as Kingdom Tower, the Jeddah Tower was designed by Adrian Smith + Gordon Gill Architecture and will be the centerpiece and first construction phase of the $20 billion Kingdom City development in Jeddah, Saudi Arabia, near the Red Sea. Jeddah Tower will be a mixed-use building featuring a luxury hotel, office space, serviced apartments, luxury condominiums and the world's highest observatory. While the tower's final height remains a closely guarded secret, Jeddah Tower's height will be at least 173 meters (568 feet) taller than Burj Khalifa, which was designed by Adrian Smith while at Skidmore, Owings & Merrill.

For more news and information visit Blumberg Partners.

Jamestown Buys Buys 49% Stake in Manhattan Towers

Atlanta-based real estate investment & management company Jamestown LP has acquired a 49% joint venture stake in ownership of two office properties in Manhattan in two separate deals that are among the first big commercial property deals in the city of 2016. While terms of the deals were not disclosed, the transactions value the buildings at about $1.15 billion combined, or roughly $710 a square foot. George Comfort & Sons and Loeb Partners Realty together will retain a majority interest in the assets. Doug Harmon, Adam Spies, Adam Doneger and Josh King of Eastdil Secured acted as the exclusive financial advisors for the transaction.

"The strong occupancy rates of these assets is a clear indication that we are joining with a proven operator with a demonstrated track record in New York City," Michael Phillips, president of Jamestown, said in a statement. "We have immense respect for the George Comfort & Sons and Loeb Partners Realty team and look forward to our new partnership."

"Jamestown is extremely well regarded for its investment in high-quality assets and we are delighted to have them as a strategic partner," said Peter Duncan, CEO of George Comfort & Sons. "Likewise, we are pleased to continue our relationship with longtime partner Loeb Partners Realty. We look forward to this new collaboration, which will only strengthen these already successful properties."

The first office tower, 200 Madison Avenue, is a 26-story, 750,000 square foot building that is 99% leased to 20 tenants, including apparel maker PVH Corp. and Greater New York Mutual Insurance. The second building, 63 Madison Avenue, is a fully leased 15-story, 870,000 square foot building where New York Life Insurance Co. and CBS Corp. lease space.

For more news and information visit Blumberg Partners.

CoStar: REITs Will Be Big Sellers in 2016

CoStar Group has reviewed over 80 year-end and fourth quarter earnings reports, along with 2016 outlines, for publicly traded REITs and is projecting a majority of the nation’s publicly traded REITs and real estate companies expect to be big sellers of properties this year, according to a new article. With three times as many REITs projected to be net sellers compared to net buyers, the reviewed companies have disclosed an expectation to sell more than $20.7 billion in properties this year, while only anticipating $9.8 billion in acquisitions.

"Even though the year started with choppy financial markets, we continue to benefit from a very strong real estate market and we expect 2016 to be another very good year," said Bill Hankowsky, chairman, president and CEO of Liberty Property Trust, citing "strong demand from the investment buyer universe."

"Our overall disposition efforts have resulted in a significant reduction of our non-core holdings in Pennsylvania, New Jersey, Delaware, Richmond and Northern Virginia," stated Gerard Sweeney, Brandywine Realty Trust's president and CEO. "In addition, these transactions significantly increase our financial capacity, reduce debt and provide ample liquidity for our development pipeline."

"We expect to complete, including the pending investments announced today, between $750 million to $1 billion of total real estate investments in 2016, subject to favorable capital market conditions," said John Thomas, president and CEO of Physicians Realty.

For more news and information visit Blumberg Partners.

Douglas Emmett Buying 4 LA Towers for $1.34B

Santa Monica, CA-based Douglas Emmett, a fully integrated, self-administered and self-managed real estate investment trust (REIT), released its Fourth Quarter 2015 Earnings Results this week, which included the disclosure that the company has agreed to buy a four building office portfolio for $1.34 billion, or $779 per square foot. The portfolio of four Class A multi-tenant office properties in Westwood are being sold by an unnamed owner and are currently 89% leased.

"As has been our plan, these assets will be purchased by an institutional joint venture that we will manage," Douglas Emmett noted in the earnings report. "We expect the acquisition to close in the first quarter of 2016." The properties in the portfolio include:

— 10960 Wilshire Boulevard, a 24-story tower with 543,804 rentable square feet
— 10940 Wilshire Boulevard, a 24-story tower with 222,066 rentable square feet built in 1988
— 10880 Wilshire Boulevard, a 24-story Class A building offering over 580,000 square feet of office space
— 1100 Glendon Avenue , a 22-story tower with 328,514 square feet built in 1965

The deal would be one of the largest office acquisitions in Los Angeles in recent years and give Douglas Emmett a 74% market share in L.A.'s high-profile Wilshire Westwood Corridor, according to a CoStar report. For more news and information visit Blumberg Partners.

CalPERS Closes on $1.9B NYC Office Tower

California pension fund CalPERS has completed the acquisition of a 54-story Manhattan office building for $1.9 billion, according to documents filed with the New York City Department of Finance. The building at 787 Seventh Avenue was sold by AXA Financial, which originally acquired the building for $1.1 billion in June 2009. CalPERS acquired the office tower between West 51st and West 52nd Streets in part with a $780M first mortgage extended by Deutsche Bank, according to a Biznow article. Terms of the deal and representation were not disclosed; AXA originally announced it would put the property on the market in August 2015.

According to a Sacramento Bee article, the deal represents one of the priciest real estate investments CalPERS has ever made, and one of the largest deals in New York history. "The acquisition follows our real estate strategic plan to invest in core, income generating properties," said CalPERS spokesman Joe DeAnda in an email. The deal amounts to 7 percent of CalPERS' real estate portfolio, it reported. Major tenants of the building, currently known as the AXA Equitable Center, include Sidley Austin, UBS, BNP Paribas, and a Pret A Manger location that operates out of the ground floor.

For more news and information visit Blumberg Partners.

Tishman Plans $3B Tower

Rockefeller Center-based Tishman Speyer has released plans for a new $3 billion-plus office tower in the Hudson Yards district on Hudson Boulevard at the northern tip of the High Line. Designed by renowned Danish architect Bjarke Ingels of the Bjarke Ingels Group and dubbed The Spiral, the 65-story tower will feature a terraced design with an indoor workplace atrium and exterior landscaped terraces on every floor, with unobstructed views in every direction.

"This punctuates the High Line as the dot on the end of the question mark," explained Bjarke Ingels, referring to the building in relation to the curve of the transformed elevated freight line, in a Wall Street Journal article. "This linear urban garden climbs higher and higher from the High Line to the skyline, if you like."

The developer is working with Mr. Ingels on other projects in San Francisco and Frankfurt, Germany, and tapped him for the Spiral in part because he views real estate as "an organism that needs to be shaped," added Tishman Speyer Chief Executive Rob Speyer. "He understands the tectonic shifts that are happening not just in design but fundamentally in how people are interacting with one another within buildings." Tishman Speyer is looking to pre-lease about 30% of the building to obtain construction financing. The company already has secured more than $1 billion in equity from a group of international investors and has received approval for a 25-year tax abatement worth about $170 million, tapping into the incentives the city provides to developers in the district.

For more news and information visit Blumberg Partners.

CoStar: 2015 Best US Office Year Since 2007

CoStar Group has released its State of the U.S. Office Market 2015 Review and Forecast, which reflects that U.S. office net absorption topped 100 million square feet for the first time since the Great Recession. With the office vacancy rate down from 11.3% in 2014 to 10.8% at the end of 2015, CoStar cites broadening demand and constrained levels of construction contributed to tightening space availability in virtually every metro area.

"The market is overwhelmingly strong at this point in the cycle. With the momentum in the market, I’m sure the next quarter will also be strong," said Hans Nordby, managing director of CoStar Portfolio Strategy, who presented the findings along with CoStar Director of Office Research Walter Page and Vice President and Research Director Dean Violagis.

Highlights from the report include:

— Vacancies declined in 64% of the nation’s office submarkets and 56% of metro office markets during the fourth quarter of 2015. CoStar analysts expect office vacancy to continue trending lower to approximately 10% in 2017.

— Annual net absorption of office space increased to 101 million square feet in 2015, compared with 93 million square feet in 2014, while developers delivered 64 million space feet, a 41% increase over the previous year. The amount of new space under construction, which has trended downward in the last couple of quarters, stood at 126 million square feet at year end, a modest 7% increase from a year ago, and near the historical yearly average since 2000.

— 2015's 4.4% annual rent growth topped the previous year’s growth of 3.8%, with rents surging at a particularly strong rate in CBDs such as San Francisco at 19.4% and Raleigh, NC at 13.9%. Even in the urban core of Atlanta and Detroit, rents in the urban core rose at 11.2% and 10.5%, respectively.

For more news and information visit Blumberg Partners.

YouTube Buys San Bruno Office Campus for $215M

Los Angeles-based Hudson Pacific Properties announced that it has sold the Bayhill Office Center in San Bruno, California to online video giant YouTube in an all-cash, off-market transaction worth $215.0 million, or about $388 per square foot. The 554,328-square-foot Class A office campus is adjacent to YouTube's existing headquarters in San Bruno; the company has yet not announced its plans for the new space, but has been tweaking its business strategy. Hudson Pacific originally acquired the complex as part of the San Francisco Peninsula and Silicon Valley portfolio purchased in April 2015 from Blackstone Group LP.

"Our sale of Bayhill Office Center highlights continued strong demand from the world's leading technology companies for high-quality office space along the Peninsula," said Victor Coleman, Chairman and CEO of Hudson Pacific Properties in a press release. "The asset was non-core to our portfolio, and we sold it at a premium to our original purchase price allocation as part of the Blackstone portfolio acquisition."

"This deal indicates the belief that digital media and new digital content, as opposed to movie and TV studio content, is where entertainment and information is heading," said Chris Shipley, a Redwood City-based independent analyst and consultant for the innovation and media sectors.

Bayhill Office Center is currently full and existing tenants include Oracle, Walmart Labs and other, smaller companies. It is unclear if prices will go up for tenants, or whether YouTube, a unit of Alphabet Inc., wants a good portion of the space for themselves. For more news and information visit Blumberg Partners.

Microsoft Submits Plans for CA Campus Expansion

Microsoft has submitted plans to the city of Mountain View, California to modernize and enlarge the Microsoft Technology Center campus in Mountain View by about 25%. Microsoft, which currently occupies about 515,700 square feet of leased space in the five buildings on the 32-acre campus, first moved into the space in 1981 when it was developed. The company currently houses roughly 2,000 employees at the Mountain View Silicon Valley Campus, but by the end of expansion could add another 3,000 employees to the complex.

"A little more than 15 years ago, we opened our Silicon Valley Campus in Mountain View, bringing together the innovation and energy of engineers from WebTV, Hotmail and PowerPoint, to name a few," Qi Lu, an executive vice president with Washington state-based Microsoft, said in an open letter to employees. "We submitted a proposal to the City of Mountain View to acquire our Mountain View Silicon Valley Campus and build a state of the art facility to create an exceptional place to work."

"The employees are working on initiatives including Xbox, Outlook.com, Skype and Yammer," added Emily Horn, a Microsoft spokeswoman. Right now, Skype and Yammer have their own headquarters in Palo Alto and San Francisco respectively; the expansion could allow these employees to move to the expanded Mountain View campus.

"Today's announcement marks the very beginning of a longer-term process," Lu said. "There is no immediate impact to teams in the Bay Area, and we anticipate that construction will take at least three years to complete."

For more news and information visit Blumberg Partners.