Proposed SoHo Business Improvement District

A new article from The New York Times takes a closer look at the proposed business improvement district — a public-private partnership that collects assessments to pay for local improvements like better sanitation, marketing and beautification — in SoHo, and the debate surrounding it. The SoHo business improvement district (or SoHo BID) mission states that the proposal seeks to encourage members of the District to be "good neighbors", making "mixed-use" work for everyone, and seeks to foster a unique, vibrant, mixed-use district with enhanced maintenance and public safety, effective advocacy and administration, technical and professional services for its members, and strategic capital improvements. According to the Times, this plan to bring in a business improvement district — a public-private partnership that collects assessments to pay for local improvements like better sanitation, marketing and beautification — has not received a warm welcome in the neighborhood.

"In SoHo, there's always a concern that this neighborhood built by pioneers will be further eroded," said State Senator Daniel L. Squadron, a Democrat who represents the area and opposes the plan. "I can recall few issues where there has been as much vociferous opposition as the SoHo BID," added Brad Hoylman, the chairman of the local community board, which also opposes the plan.

Brian Steinwurtzel, a member of the district plan's steering committee, explained that his group had been reaching out to residents along Broadway and indicated that the plan has slowly but steadily won broad support. "This is about sweeping the sidewalks, cleaning the intersections and crosswalks, especially when it's snowing, and it's about taking the garbage and providing more garbage cans," said Steinwurtzel. "The people who are part of 'SoHo No BID,' I would love it if they would help participate in this."

For more news and information visit Blumberg Capital Partners.

NorthMarq Capital Arranges $18M in Financing for The Park Atrium

NorthMarq Capital announced this month that it had arranged $18 million in financing for The Park Atrium in Westbury, New York to refinance an existing loan originated in 2006. Financing was based on a 5-year term and a 30-year amortization schedule and was arranged for the borrower by NorthMarq through its correspondent relationship with a National Life Insurance Company. Ernest DesRochers, Senior Vice President and Managing Director at NorthMarq, noted in a statement that the new loan facility allowed the borrower to recapture excess loan proceeds.

The Park Atrium is a 116,943 square foot office building located at 865 Merrick Avenue The Class A building was originally constructed in 1971 The building was recently renovated including upgrades to include banking, a conferencing facility, renovated atrium and Armor Traction elevators. Park View Atrium is conveniently located in Westbury, NY, only a five minute walk to the Westbury train station, with bus lines stopping in front of the building, and a hotel nearby.

For more news and information visit Blumberg Capital Partners.

NAI Global Acquired by C-III Capital Partners

C-III Capital Partners Inc. formally completed the acquisition of NAI Global, a network of independent commercial real estate firms worldwide, comprised of over 5,000 professionals in 55 countries in more than 350 offices. The terms of the deal were not disclosed, but the companies did say that NAI Global would continue to operate as a separate company under its current management.

"The completion of this transaction represents a significant step forward in our strategy to build a fully diversified commercial real estate services company," said C-III Capital Partners CEO Andrew L. Farkas, who founded and was Chairman and CEO of Insignia Financial Group, Inc. "With the NAI Global acquisition, we are gaining the world's leading commercial real estate network and a tremendous foundation for future growth. As we begin a new year, we look forward to partnering with the NAI team to provide enhanced services to the commercial and institutional real estate markets they serve as well as continuing to take advantage of other opportunities to grow and expand our platform."

"This group that acquired NAI Global is a major company that really has a lot of connections and resources worldwide, so this relationship is going to expand our ability through that purchasing group," said Edward Saig, President of NAI Global, in a Memphis Daily News article. "They've been in the business a long time in the real estate industry, and we're very pleased with this acquisition."

For more news and information visit Blumberg Capital Partners.

NorthStar REIT Closes $69M in Loans

NorthStar Real Estate Income Trust announced this month that it had originated five new real estate loans according to a National Real Estate Investor Online article. The loans, with a total value of $69 million, carry a weighted average 9.15% interest rate. NorthStar said that the proceeds from the loans were used to finance a variety of property types. The loan summary follows:

- January 18, 2012: $13.5 million first mortgage senior loan secured by a 693-unit multifamily property in Jacksonville, Florida

- January 6, 2012: $12.0 million first mortgage senior loan secured by a 69-room hotel located in Miami Beach, Florida

- December 29, 2011: $9.2 million first mortgage senior loan secured by a 111-room hotel located in Panama City, Florida

- December 16, 2011: $29.8 million in four cross-collateralized, cross-defaulted first mortgage loans secured by four hotel properties containing 500 rooms located in Virginia's greater Hampton Roads MSA

- December 9, 2011: $4.5 million mezzanine loan secured by a pledge of ownership interests in four assisted living facilities containing 390 beds located in El Paso, Texas

"These five loans are consistent with the investment objectives of NorthStar REIT," said Daniel Gilbert, President and Chief Investment Officer of NorthStar REIT. "We continue to demonstrate NorthStar REIT's ability to identify and capitalize on loans that aim to generate consistent current income while providing downside protection for investor capital."

For more news and information visit Blumberg Capital Partners.

REIT Pays $65M for MD Office Building

Wells Real Estate Funds has purchased The Franklin Center in Columbia, MD for $65 million, or about $324 per square foot, according to a CoStar article. The Georgia-based REIT bought to Class A office building from Principal Financial Group Inc., which was represented by Cassidy Turley in the transaction. Terms of the deal and the buyer's broker was not disclosed.

The Franklin Center at 6841 Benjamin Franklin Drive was originally built in 2008 with 200,573 square feet of space spread over 7 floors. The building was fully leased to SAIC Inc. at the time of sale according to CoStar information, though the terms of that occupancy are unknown.

For more news and information visit Blumberg Capital Partners.

UC Davis Buys Vacant Office Building for $7.7M

The UC Davis Health System has purchased an empty office building in Sacramento from K&H California Inc. for $7.7 million, less than half the asking price. While terms of the deal were not disclosed, it was reported that Cornish & Carey Commercial negotiated the deal on behalf of the seller. K&H initially approached UC Davis to lease the property (previously occupied by Sacramento County Office of Social Services), but the university proposed a purchase agreement instead.

The two-story, 68,000-square-foot office building at 4875 Broadway will be renovated to provide office and support space for a variety of research programs, UC Davis Health System facilities director Mike Boyd said in a Sacramento Business Journal article. "We don't have immediate plans to get in and renovate the property, but expect to do so soon," Boyd said.

For more news and information visit Blumberg Capital Partners.

Duke Realty Sells Office Buildings for $44M

The Archon Group, a real estate investment arm of Goldman Sachs, has purchased a portfolio of six office properties in the Triangle for $43.95 million from Duke Realty. According to a Triangle Business Journal article Duke listed the portfolio, which includes 427,000 square feet of office space, in August of 2011. “These were still good assets, but ... we're happy about the buyer, and we know they'll take good care of the tenants,” said Jeff Sheehan, senior vice president in charge of Duke Realty's Raleigh operations.

The portfolio, buildings all built between 1986 and 2000, was 83% leased in August when it was first put on the market. The properties include 5540 Centerview Drive, 5565 Centerview Drive, 5520 Capital Center Drive, 801 Jones Franklin Road, 1616 Millbrook Road and one property in Cary located at 6501 Weston Parkway. The sale is reportedly part of the real estate investment trust's strategy of increasing its industrial and medical office portfolio while reducing the number of office assets it owns.

For more news and information visit Blumberg Capital Partners.

$40M Wheaton, MD Redevelopment Proposal

Montgomery County Executive Isiah Leggett spoke about his proposed $40 million redevelopment project at a town hall budget meeting in Silver Spring, MD last week, saying the money would cement redevelopment that would bring new life to the community. Leggett's recommended FY 2013 budget includes this summary of the Wheaton proposal:

Significant progress has also been made in the efforts to bring more high-density, transit-oriented, development to Wheaton. Plans have been developed to build several high rise office buildings over the Wheaton bus bay facilities adjacent to the Wheaton metro station, as well as a town square. Negotiations with a private developer and the Washington Metropolitan Area Transit Authority (WMATA) are underway regarding the first phase of the project – the building of a platform for staging the high rise structures. Outreach to nearby businesses has also begun to ensure adequate time for them to plan for any construction impacts and to determine how the County can best support them during the redevelopment period. Funding included in my recommended budget represents a down payment on the rebirth of a vibrant, urban, and transit-oriented Wheaton.

According to a Washington Business Journal article, the partnership between the county, developer B.F. Saul and the WMATA will bring 600,000 square feet of office space, 40,000 square feet of retail, a 120-room hotel and a Town Square to the Wheaton Triangle by 2019, per Leggett's recommendation in his six-year capital budget.

For more news and information visit Blumberg Capital Partners.

$300M Liberty Town Square Project Plans Revealed

Steiner + Associates announced its plans to break ground next year on a $300 million retail project at the Liberty Way Interchange off Interstate 75 in Liberty Township, OH. Yaromir Steiner, CEO of Steiner, presented details of the project to more than 60 local business owners, residents, state representatives and Liberty and West Chester officials Tuesday night at the Ronald Reagan Lodge in Voice of America Park.

The Liberty Town Square project will include office space, department stores, theaters, and housing. The first phase of the development, planned for 1 million square feet, is expected to cost close to $300 million. "We improve the quality of life. The project becomes the heart and soul of the community," said Steiner, "by improving the desirability of surrounding areas and the ability to attract and retain businesses."

"This is not another shopping center. This a destination and this is a totally new concept. Hopefully, everyone in this room will get behind this project and encourage the powers to be to make sure that this happens in Butler County," said Courtney Combs, former Butler County Commissioner and State Representative in the 54th House District.

Pat Hiltman, a Liberty Twp. trustee, said the development that the township has been working on with Steiner for more than five years is a game changer. "The most unique thing about this is we've broken barriers down. We've got a ton of politicians in here — some of us are career politicians and some of us aren't, but we've broken the barriers down and we're no longer West Chester and Liberty Twp. This is Butler County. In reality, this is southwest, Ohio. This thing is a major game changer," said Hiltman.

"The more cars through I can get running through here, up and down Cincinnati-Dayton Road, it really benefits, personally, my business," said Michael McHugh, of Skip's Bagel Deli.

For more news and information visit Blumberg Capital Partners.

CCRSI Shows CRE Price Index Up, Seventh Month in a Row

CoStar released the CoStar Commercial Repeat Sale Index (CCRSI) reflecting that the CoStar National Composite Index of commercial real estate pricing rose for the seventh straight month. In November, the Index increased by 0.6%, with prices for commercial property an average 1.8% higher than compared with the same period a year ago.

Monthly CCRSI Results

CoStar's Composite Commercial Repeat Sales Index increased by 0.6% in November 2011. It is now 1.8% above the same period last year and 31.8% below its peak in August 2007.

CoStar's Investment Grade Repeat Sales Index increased by 2.2% in November 2011 and is now 6.4% above the same period last year and 29.2% below its peak in August 2007.

CoStar's General Grade Commercial Repeat Sales Index increased by 0.3% in November 2011 and is now 1.1% above the same period last year and 32.5% below its peak in August 2007.

"This modest-but-steady recovery largely reflected the impact of improving market fundamentals, which have continued to attract investors and buyers despite a lending environment for smaller properties that has remained constricted," according to the CoStar report.

The CoStar indices are constructed using a repeat sales methodology that measures the movement in the prices of commercial properties by collecting data on actual transaction prices. The CCRSI tracks sale pair transaction data through Nov. 30.

For more news and information visit Blumberg Capital Partners.

Norwalk Property Sold to JV for $11M

535 Connecticut Avenue in Norwalk, CT traded hands this month as a joint venture between KABR Real Estate and Blackpoint Partners, 535 Connecticut Avenue, LLC, purchased the office building for $11 million according to a National Real Estate Investor article. The building was previously bought by Miami Beach-based LNR Partners for more than $20 million in 2006. CB Richard Ellis negotiated the sale and will handle leasing for the 175,000-square foot building.

"The current tenants are all good tenants. The only change they will see is that we are a hands-on operator," said Adam Altman, principal of KABR. "They will receive very attentive service from us."

535 Connecticut was reportedly 37% leased at the time of sale with major tenants including University of Phoenix, Ameriprise, and DHL. The building was originally built in 1988 and has undergone $1.5 million in renovations, including a new room and renovated common areas.

For more news and information visit Blumberg Capital Partners.

CCIM Institute Marks 2012 Expectations

Kenneth Riggs, chief real estate economist for CCIM Institute and chairman and president of Real Estate Research Corp. in Chicago, published a market forecast titled 2012 Expectations and Realities. An excerpt:

Although 2012 is expected to remain lean, the commercial real estate investment market has a strong foundation to remain a leading and well-respected investment alternative for the next 10 years.

Economy: Look for a modest economic recovery versus the go-go years immediately preceding the recession. Economic growth is forecast at 2.0 percent in 2012. Consumption is forecast to grow 1.8 percent in 2012, while the National Association of Realtors forecasts government spending growth at -0.5 percent in 2012. Use the slow pace of economic growth in 2012 to build a strong foundation for slightly improved growth in 2013.
Office: With office completions remaining at roughly half the pace of absorption, expect the office sector vacancy rate to decline to approximately 16.6 percent by year-end, according to Reis. However, with job creation remaining weak, rents are not expected to increase significantly.
Industrial: Unless economic conditions deteriorate further, the national industrial property market should continue to strengthen in 2012. Net effective rents have stabilized and are increasing for large class A distribution buildings, but broad-based rent growth is unlikely to commence for at least another year.
Retail: Look for retail sales to bump along at modest levels in 2012, with retailers continuing to reposition stores to take advantage of favorable rental rates or expansion plans. Properties such as grocery-anchored centers will continue to outperform the rest of the retail sector due to consumer spending habits.

Click here to read "Shelter From the Storm," the complete 2012 commercial real estate forecast in the January/February 2012 CIRE. For more news and information visit Blumberg Capital Partners.

Westport Purchases Scottsdale Financial Center II Office Building

Westport Capital Partners LLC announced this month that it had completed the purchase of a 150,000 square foot office building in Scottsdale, Arizona. The terms of the sale and the name of the seller were not disclosed, but it was noted that Jones Lang LaSalle represented the seller in the transaction.

Scottsdale Financial Center II, known as Pinnacle Peak Business Park, is located at 4141 N. Scottsdale Road and is a three-story Class A suburban office building within the south Scottsdale market of Old Town, at the intersection of Scottsdale Road and Indian School Road. The property was reportedly 71% leased at the time of sale to Coventry Health Care, a diversified national managed healthcare company that serves more than 5 million members in 50 states.

"Westport continues to add attractive, functional assets to our national portfolio that are in strong performing markets," said Greg Geiger, principal and portfolio manager with Westport.

For more news and information visit Blumberg Capital Partners.

Mariner Real Estate Buys Stake in $101M Loan Portfolio

Mariner Real Estate Management, a real estate investment management firm based in Kansas, announced this week that it had closed on the purchase of approximately $101 million in real estate loans in partnership with the Federal Deposit Insurance Corporation (FDIC). The portfolio is the second structured purchase of commercial real estate debt the company has executed with the FDIC. The first joint acquisition was in September 2010, when it paid $52 million for a 40% stake in an FDIC loan portfolio with an unpaid balance of $762 million. That investment, according to a Kansas City Business Journal article, had a seven-year life span, and Mariner Real Estate hopes for an overall return on the investment of 15-25%.

The acquired portfolio covers the unpaid balance of 62 performing and non-performing commercial loans located in Washington, Idaho and Utah. According to Mariner, the company paid an initial 25% stake in the limited liability company formed by the partnership with approximately $13.6 million. Since 2009, Mariner has acquired 1,000 plus loans with an aggregate unpaid principal balance of $1.1 billion.

For more news and information visit Blumberg Capital Partners.

HBO Latin America Inked Largest Lease Deal in Coral Gables in 2011

HBO Latin America Group, which owns several cable networks in the region of Latin America and itself is owned by Time Warner, has signed on as the largest tenant to date at 396 Alhambra Circle, a new 273,000-square-foot, two-tower, Class-A office and retail project in downtown Coral Gables according to a Miami Herald article. The South Florida Business Journal reported that, in leasing a quarter of the office space at the two tower property, the deal was the largest lease signed in Coral Gables in 2011. Blanca Commercial Real Estate represented the landlord in the transaction while CresaPartners represented HBO Latin America. Financial terms of the deal were not disclosed.

"The building is ideal for our continual growth and development in the Latin American market, and the location is representative of our commitment to Miami-Dade County and the city of Coral Gables," said Gaston Comas, CEO for HBO Latin America, in a statement. "We are confident that 396 Alhambra will serve us well for many years to come."

"This is our biggest announcement so far, and more news is on the way as construction nears completion," said Eddie Avila, principal of 396 Alhambra LLC. "We will soon have 50% of the office space leased, and HBO Latin America's signing establishes 396 Alhambra as a premier destination address for multinational corporations, professional service firms and entrepreneurs in Coral Gables. 396 Alhambra is the perfect business address in Miami for international corporate headquarters." Major tenants of the property include Citibank, the law offices of Richman Greer, global architecture firm RTKL, Spain-based multinational Internet company Terra Networks and integrated marketing firm kabookaboo. HBO Latin America is expected to take occupancy of the new space during the third quarter of 2012.

For more news and information visit Blumberg Capital Partners.

Parkway Announces Sale of Non-Core Assets

Parkway Properties, Inc. began the year with the announcement that it is under contract to sell a portfolio of 15 non-core assets for a gross sale price of $147.5 million, along with the completion of the sale of its interest in nine assets under Parkway Properties Office Fund, L.P. The portfolio sale is expected to close during the first quarter of 2012, subject to the buyer's successful assumption of certain existing mortgage loans and customary closing conditions. The portfolio was 75.8 percent occupied as of September 30, 2011.

"Part of Parkway's new strategy, which will be outlined in its entirety during our fourth quarter earnings conference call, is to pursue an efficient exit from certain non-core markets," Parkway President and CEO James R. Heistand said in a statement. "As a result of the thorough review of all of our markets, we determined that Jackson, Memphis and Richmond were non-core markets. A portfolio sale of these assets allows us to quickly realign our overall portfolio and focus our resources and capital on building critical mass in our remaining core markets."

Upon the completion of the sale of the non-core portfolio and other announced pending sales, Parkway would have one remaining asset located in Jackson totaling 267,000 square feet, one remaining asset located in Memphis totaling 337,000 square feet, and completed its exit from Richmond. The remaining assets in Jackson and Memphis will continue to be marketed for sale.

For more news and information visit Blumberg Capital Partners.

Merchandise Mart Sells $228M Chicago Property

Merchandise Mart Properties, Inc., a subsidiary of Vornado Realty Trust, completed the sale of the Shops at the Mart for $228 million to Shorenstein Properties on behalf of its Shorenstein Realty Investors Ten LP fund. According to a CoStar report, the building park sale equals roughly $188 per square foot; Vornado previously purchased the property in 1998 for $77.6 million.

Commenting on the purchase of 350 West Mart, Shorenstein Properties' CEO Douglas Shorenstein said: "This is a well located asset with a floorplate and infrastructure that appeals to technology, creative use and financial tenants choosing to locate in major 24-hour cities such as Chicago."

The Shops at the Mart is located on two floors of the Merchandise Mart in Chicago, Illinois with high-end boutiques and lunch spots dominate the face of the mall. The Shops originally opened in September 1991, anchored by Carson Pirie Scott & Co. and The Limited. The property covers more than 1.2 million square feet of space in two adjoining 13-story towers and a long-term lease to the 521-room Holiday Inn Mart Plaza.

For more news and information visit Blumberg Capital Partners.

Moody's Forecasts Stability for US REITs

Moody's Investor Services has been releasing industry outlooks for 2012 across the markets and said that the outlook for the ratings of US real estate investment trusts (REITs) and real estate operating companies (REOCs) is currently stable across all property types. Further, Moody's notes that not only do the sectors currently have stable operating outlooks, but the REITs continue to keep their real estate portfolios well occupied and are outperforming most of the markets in which they operate.

"The REITs continue to successfully navigate through difficult capital market conditions, and they have fewer demands on their liquidity than they did during the recent recession, given that their debt maturities are staggered, development pipelines at low levels, and their bank facilities have significant capacity," says Philip Kibel, a Moody's Senior Vice President. "Further enhancing their financial flexibility is that most investment-grade-rated REITs remain committed to maintaining low dividend payout ratios, that is low dividends relative to the funds available for distribution."

Moody's added that capital markets have stabilized to a point that capital is available to REITs with strong balance sheets, citing several investment-grade REITs in the past two months that successfully tapped the unsecured debt market and issued approximately $3.8 billion in bonds. To read the full outlook report see the Industry Outlook "US REITs and REOCs" on Moodys.com.

For more news and information visit Blumberg Capital Partners.

AEW Picks Up One Exeter Plaza for $112M

AEW Capital Management announced another acquisition this week with the purchase of One Exeter Plaza in Boston's Back Bay on behalf of AEW Core Property Trust, an open-end real estate fund, for $112 million. AEW bought the 15-story office building from Ruben Companies; Cushman & Wakefield represented the seller and procured the buyer.

"One Exeter Plaza has been a jewel in our company's portfolio since we developed the building in 1984. We are pleased that the building will continue to be owned and managed by a premier owner such as AEW," said Richard Ruben, CEO of Ruben Companies.

According to a Boston Business Journal article, the 211,351-square-foot Class A office property on Boylston Street was developed by Ruben Companies in 1984 and features 192,201 square feet of first-class office space as well as 19,150 square feet of prime retail space along one of the city’s busiest shopping districts. The property was 85% leased at the time of purchase with major tenants including Cornerstone Research, Riverside Partners, International Data Group, Wells Fargo/Wachovia, Bank of America and Morton's Restaurant.

For more news and information visit Blumberg Capital Partners.

Park Central in NYC Sold for $396.2M

LaSalle Hotel Properties started the year with the announcement of the acquisition of The Park Central Hotel in New York City for $396.2 million. LaSalle picked up the 934 room full service hotel from Highgate Holdings for a sale price of about $424,000 per room. Highgate was represented by Hodges Ward Elliott, a leading hotel brokerage and investment banking firm, according to a CoStar report.

"We are pleased to have finally closed on The Park Central Hotel," said Michael D. Barnello, President and Chief Executive Officer of LaSalle Hotel Properties. "We remain excited about this well located New York City asset and our ability to acquire the hotel at an attractive purchase price."

The Park Central Hotel on Seventh Avenue, between West 55th and West 56th Streets, in midtown Manhattan, was constructed in 1928 and undergone numerous renovations over the years, with over $33 million spent on improvements since 2004. LaSalle said in a statement that they plan to implement their own renovation of the hotel, currently estimated between $33-$35 million, which is expected to begin later this year.

"We are thrilled to embark upon our LaSalle Hotel Properties relationship with such an important asset," said Mehdi Khimji, a Principal of Highgate Holdings. "The location and scale of The Park Central Hotel has historically made it an outstanding performer in our portfolio and now with the planned renovation and LaSalle's ownership, the hotel is poised to achieve its full potential."

For more news and information visit Blumberg Capital Partners.