SL Green to Acquire 304 Park Ave South for $135M

In a deal expected to close on June 1, SL Green Realty Corp. announced this week that it had entered into an agreement to acquire 304 Park Avenue South for $135 million from a partnership headed by David Berley, Chairman of Walter & Samuels Inc. The purchase price of the 215,000 square foot mixed-use office and retail building equals roughly $628 per square foot. Walter & Samuels represented the seller in the transaction, with Eastdil Secured serving as advisor.

304 Park Avenue South is located on the southwest corner of Park Avenue South and 23rd Street directly across the street from SL Green's One Madison Avenue in the Midtown South sub-district. The property is currently 95% leased to major tenants including IMG Models, H&R Block, Bath & Body Works and Time Warner Entertainment.

Andrew Mathias, President of SL Green, commented, "We've been monitoring Midtown South carefully looking for acquisition opportunities, however the consistently tightening vacancy rates and substantial lease activity in the area have driven cap rates on marketed deals below our target investment thresholds. This unique opportunity came to us because of the attractiveness of our Operating Partnership Units and our relationship with the seller."

For more news and information visit Blumberg Capital Partners.

RLJ Acquires 2 Hotels in DC and NYC for $146.5M

RLJ Lodging Trust announced this week that had acquired two hotels for a combined total of $146.5 million. RLJ acquired the Courtyard New York Manhattan/Upper East Side, a 226-room hotel, through a bankruptcy court-ordered sale for $82 million. The second property, the 187-room Residence Inn by Marriott Bethesda Hotel Downtown, was acquired in an off-market transaction for $62.5 million.

"We were able to leverage our extensive network and strong industry relationships to source and execute accretive transactions in key gateway cities," commented Thomas J. Baltimore, Jr., President and Chief Executive Officer at RLJ Lodging Trust. "We expect these two new additions to yield strong results and strengthen our overall portfolio."

For more news and information visit Blumberg Capital Partners.

Industrial 59 Oak Street Sold to Private Investor

The Hampshire Companies announced this week that it had sold 59 Oak Street in Hackensack, N.J. to a local private investor. The terms of the deal were not disclosed, but it was noted that Tom Vetter and Jeff DeMagistris of NAI James E. Hanson represented both Hampshire and the buyer in the transaction.

"The building's location within Central Bergen County with immediate access to Route 4 has made this a strategic location for small bay users in the market," said Michael Harrington, an investment manager for The Hampshire Companies. "The buyer of this property will benefit from the in place tenancy as well as the ability to utilize future available space for their various business interests."

Built in 1973, the 25,000 square foot multi-tenant industrial building was fully leased at the time of sale to five industrial users. The Hampshire Companies noted that the property's close proximity to the George Washington Bridge provides tenants with both a New Jersey and New York presence.

For more news and information visit Blumberg Capital Partners.

IRS Closing 43 Offices too Save $17M

In an attempt to cut costs, the IRS has announced that it will be closing 43 of its smaller offices over the next two years. The cost-cutting initiative is projected to save $17.2 million in annual rental costs in fiscal 2012 and $23.5 million in fiscal 2013. In addition to closing the smaller offices, the IRS will also consolidate multiple offices within the same commuting area and explore ways to "do more with existing space," like desk sharing and more telecommuting.

"Given today's tight budget environment, we have to be willing to make the tough but responsible calls to save taxpayer dollars," said IRS Commissioner Doug Shulman. "Cutting and consolidating our real estate is a responsible way we can save money. It's an important addition to our growing portfolio of cost-saving measures."

The IRS hasn't released a list of the offices to be closed but indicated that it would be those without taxpayer assistance centers and have fewer than 25 employees according to a Forbes article.

For more news and information visit Blumberg Capital Partners.

University Medical Center of Princeton at Plainsboro

The University Medical Center of Princeton opened its new medical center this week, the University Medical Center of Princeton at Plainsboro (UMCPP), completing a $447 million project. Princeton HealthCare System announced on Tuesday that 110 patients from the University Medical Center at Princeton had bee safely transferred to the new hospital via ambulance. In an open letter from Barry S. Rabner, President and CEO of Princeton HealthCare System, had this to say of the new medical center:

"During the past nine years, countless questions have been asked by thousands of people and the one question I continue to think about is 'Why did our community make this extraordinary investment?'

"The answer is critical because it tells us what is expected of us. I thought we answered the question when it was asked by the department of health, township councils, planning boards, neighbors, medical staff, employees, donors, reporters, bankers and advocacy groups representing everyone from seniors to children and the uninsured.

"Our answer always included the need to:

• Address increased demand for care from a growing and aging population
• Accommodate changes in technology
• Introduce new clinical programs and services
• Improve clinical outcomes
• Improve patient and family satisfaction with their care
• Reduce costs."

UMCPP, consisting of approximately 630,000 square feet of interior space on 50 acres, is the cornerstone of a 171-acre healthcare campus in the community of Plainsboro Township, N.J. The health campus includes a new hospital, attached medical office building, education center, skilled nursing facility, and other uses enhancing the health well-being of Central Jersey residents, such as the possibility of a pediatric services center, health and fitness center, long-term care facility, and assisted living facility. UMCPP was designed by team of world-leading architects and consultants including Hellmuth, Obata and Kassabaum (HOK) and RMJM Hillier.

For more news and information visit Blumberg Capital Partners.

Kettering Tower Sold to Dunkirk Realty

The tallest office building in downtown Dayton, Ohio was sold this week to NY-based Dunkirk Realty, with an eye on more property in the area. "We're going to buy as much as we can (in the Dayton area)," said Albert Macanian, president of Dunkirk, in a Dayton Daily News article. "With its location in the center of the United States, Ohio — and Dayton in particular — is an ideal location for investment and opportunity. Dayton is a great market for investors, not only because of its location, but for its potential as well. We have a long-term interest in Dayton."

"This is a group of investors with experience in much larger markets, and we are confident they will be very successful in downtown Dayton," said Sandy Gudorf, president of the Downtown Dayton Partnership.

Dunkirk Realty purchased the building at 40 N. Main St. under Tower Partners LLC. The 29 story Kettering Tower claims 486,121 square feet of Class A office space, and has been Dayton's tallest office tower since it was constructed in 1971. Terms of the deal were not disclosed and no immediate deed could be found through the Montgomery County auditors office, according to a Dayton Business Journal article. Major tenants of the property include JPMorgan Chase, Ernst & Young, Merrill Lynch and the Dayton Racquet Club, with recently signed tenants including Sebaly, Shillito & Dyer, Johnson Investment Council, and the Dayton Development Coalition.

For more news and information visit Blumberg Capital Partners.

Hangover Opportunity Fund Buys Tarrant Co. Office Building

The Hangover Opportunity Fund LLC, formed in 2010 by SkyWalker Property Partners, has added another property to its portfolio with the addition of 3301 W. Airport Freeway in Bedford, Texas. The 70,938-square-foot office building was acquired for an undisclosed sum, with Grubb & Ellis representing the seller, a California-based family trust.

According to a Dallas Business Journal article, SkyWalker plans to invest $100,000 to $200,000 to restore the 3.07-acre property's curbside appeal along the expanding Texas 183-121 junction, as well as common-area improvements. The building was 57% leased at the time of sale to five major tenants, with Renee Efimoff and Justin McCarthy of SCM Real Estate Services in Arlington under contract to oversee the property's leasing efforts. Shane Benner, a research analyst for SkyWalker, said that "this is a highly visible property in a submarket where we are currently invested. We firmly believe this is a good turn-around opportunity with renovation and the repositioning plan that we're putting in place."

For more news and information visit Blumberg Capital Partners.

LaSalle Hotel Properties Closes $177.5M Loan

LaSalle Hotel Properties announced this month that it had closed on a new $177.5 million term loan. The seven-year term loan matures on May 16, 2019, and was swapped to a fixed interest rate for the full seven-year term. The loan closing came days before LaSalle Hotel prepared to finish redeeming about $166.8 million of its preferred shares on May 21, according to a Law360 article.

Regions Capital Markets and BMO Capital Markets were Joint Lead Arrangers and Joint Book Running Managers. US Bank, BB&T and Raymond James Bank were also participants in the term loan.

For more news and information visit Blumberg Capital Partners.

JLL Arranges $140M Industrial JV

Jones Lang LaSalle's Capital Markets and Industrial Services experts announced this week the arrangement of a programmatic joint venture equity vehicle between Sitex Realty Group (SRG) and State Teachers Retirement System of Ohio (OSTRS). The new venture will seek to acquire more than $140 million of industrial real estate over the next 24 months, targeting the metropolitan regions of Chicago, New Jersey, and New York. The venture will be led and operated by SRG, commencing June 1.

"While programmatic joint ventures have been tough to come by in this new cycle, we were very fortunate to find the cross section of needs between a boutique industrial owner/operator focused on value-add assets, and a national pension fund system in search of an efficient way of investing in that very same product. It was a perfect match," said JLL Executive Vice President James Tramuto.

Regional Managing Director Keith Stauber added, "Both SRG and OSTRS have been long time clients and it was great to be able to introduce them to one another. This program allows SRG to expand its very successful and targeted strategy while enabling OSTRS to partner with one of the best local operators in the country."

For more news and information visit Blumberg Capital Partners.

U.S. CMBS Delinquency Rate Rise Again, REOs Reach $11B

New data from Fitch Ratings shows that the volume of real estate-owned (REO) assets for lenders reached $11 billion in April, a new market record, representing one third of all outstanding delinquencies according to Fitch Ratings. The current and prior month delinquency rates for each of the major property types are:

• Multifamily: 11.64% (12.61% in March)
• Hotel: 10.20% (10.35% in March)
• Industrial: 9.34% (10.91% in March)
• Office: 8.36% (7.99% in March)
• Retail: 7.39% (7.23% in March)

A closer look reveals stark differences in REO trends by state, according to a Costar Group report. In states where non-judicial (power-of-sale) foreclosure is allowed, the inventory of REO assets increased by 64% since the start of last year. Conversely, the inventory in judicial-only states (where the foreclosure process can be notably slower) jumped by 111%. For the current inventory of REO assets, it took an average 179 days to foreclose on properties in power-of-sale states, versus 323 days in judicial-only states. This suggests that the current REO inventory from judicial-only states represents older stock that is finally making its way through the system.

For more news and information visit Blumberg Capital Partners.

Normandy Closes $140M Loan Portfolio

Normandy Real Estate Partners announced this week that it had closed on a $140 million loan from Morgan Stanley. John Campanella, senior managing director, and Paul Spellman, associate vice president with Cassidy Turley, negotiated this transaction on behalf of Normandy. The 10-building portfolio totals 787,425 square feet and is based in Northern Virginia and suburban Maryland, with six properties concentrated in the Westfields International Corporate Center in Chantilly, VA.

"This successful transaction exhibits the strength of our vertically integrated platform as we have leased approximately 500,000 sf over the past three years, bringing occupancy to 93 percent," said Gavin Evans, Principal, Normandy Real Estate Partners. "This financing fully retires the original acquisition debt on the portfolio and allows us to further build on our vision and strategic plan for the Northern Virginia market."

"We continue to see strong lender interest in quality assets owned by well capitalized sponsors like Normandy", said John Campanella, Senior Managing Director, Cassidy Turley.

For more news and information visit Blumberg Capital Partners.

Manhattan Office Sold for $131.7M to Epic

Property Group Partners (PGP) has closed the sale of 148 Lafayette Street in Manhattan's SoHo neighborhood to Epic UK for approximately $131.7 million, according to a GlobeSt.com article. Douglas Harmon, Adam Spies and Kevin Donner of Eastdil Secured represented PGP in the transaction. PGP owned the building in partnership with Bruce Toll and members of the Louis-Dreyfus family. The terms of the deal were not disclosed.

"The sale of 148 Lafayette Street validates our original strategy with this building," said Jeffrey I. Sussman, founder and president of Property Group Partners, in a CoStar article. "With our partners, we recognized that a complete renovation and expansion would vastly improve this asset for both tenants and investors. Not only did we fully lease the building within 24 months after purchasing it, but we have now completed the successful sale of the property just a few years later."

148 Lafayette Street, acquired by PGP in 2007 for approximately $60 million, is a 150,496-square-foot 12-story building with typical floors of 11,978 square feet. Designed by McKenzie Voorhees and Gmelin Architects in 1913, it was extensively renovated in 2007 with new heating and air conditioning systems, windows, restrooms, elevators and hardwood floors. The building earned LEED Gold Certification, BOMA 360, and an Energy Star Award for energy efficiency in 2010. Major tenants include Lafayette 148, Tower Research, Utrecht Art Supplies, Dolce & Gabbana USA Distribution and Callison.

For more news and information visit Blumberg Capital Partners.

NAR's ePropertyData Sold to Xceligent

Second Century Ventures (SCV), the strategic investment arm of the National Association of Realtors (NAR), announced this week that it had sold ePropertyData to Xceligent for an undisclosed amount. With 240,000 members and growing, ePropertyData provides commercial real estate information in markets across the country and powers NAR's current national public commercial real estate search platform, which already contains more than 200,000 active lease and sales listings. Xceligent will leverage ePropertyData's commercial information exchange solution to help expand its existing coverage of fully researched commercial real estate information into the largest U.S. markets.

Doug Curry, CEO of Xceligent, said "We are pleased SCV chose Xceligent as the home for this great asset as we continue to build a strong national alternative for commercial real estate information. Combining these two extraordinary teams creates a strong foundation for the expansion of our product development team and allows us to deliver best of breed technology and information to the industry."

Allen Benson, Founder and CIO of ePropertyData, said, "Our development capabilities are the perfect match to Xceligent's research capabilities and industry presence."

For more news and information visit Blumberg Capital Partners.

10th and G Sold for $140M

Skanska USA Commercial Development Inc. announced this week that it was selling the office property at 733 10th Street NW in Washington, DC to Jamestown Properties for $140 million, or about $53 million more than what it cost to develop the property. The building, known as 10th and G, is Skanska's first completed commercial development project in the States since establishing the development business at the close of 2008. Eastdil Secured managed the sale on behalf of Skanska.

"This project demonstrates our commitment to delivering high-quality, sustainable office buildings that provide long-term value for investors and healthy, efficient space for tenants," says Mats Johansson, CEO of Skanska USA Commercial Development.

Centrally located five city blocks from the White House, the property, designed by a group of architects including Cunningham | Quill Architects PLLC, Tod Williams Billie Tsien Architects, and Gensler, consists of eight stories of office space totaling about 171,171 square feet with more than 4,000 square feet of ground-level retail space.

Prior to the sale, and with CBRE as its brokerage firm, Skanska signed leases for 83% of the building in just three months, including the National Association of Manufacturers and Cassidy & Associates, according to a Washington Business Journal article.

For more news and information visit Blumberg Capital Partners.

Hillwood and Clarion JV to Develop Amazon Fulfillment Center

Hillwood and Clarion Partners announced this week that it will partner in a joint venture to develop a 950,000 square foot facility as part of the AllianceCalifornia project that will serve as a fulfillment center for Amazon once completed later this year. The development in San Bernardino, California will be located on Central Avenue, east of Tippecanoe Avenue. Hillwood will serve as the developer for the project, while the JV will serve as the landlord for the facility, leasing space to Golden State FC LLC once the building is complete. Golden State will then operate the fulfillment center for Amazon. Meanwhile, USAA Real Estate Co. will develop a fulfillment center of about 1 million square feet in Patterson, a city along Interstate 5 in the Modesto metro area according to a CoStar report.

"We've been planning to develop this property for some time, and we're thrilled that Amazon will be moving in after the facility is completed," said John Magness, Senior Vice President, Hillwood and leader of Hillwood's Inland Empire office. "We appreciate all the support from the community, and we look forward to Amazon starting operations in San Bernardino."

"We are excited to be a part of this project and we look forward to a long and successful relationship with Amazon and the community," said Stacey Magee, Senior Vice President/Regional Manager for Clarion Partners.

"We appreciate Hillwood and Clarion's ongoing work and thank Governor Brown and state and local officials for their support, which will allow us to create more than 1,000 full time jobs with benefits in San Bernardino when the facility begins shipping to customers," said Dave Clark, Amazon vice president, global customer fulfillment.

For more news and information visit Blumberg Capital Partners.

Texas Ranked #1 in CRE Development in 2011

A NAIOP Research Foundation Study was released this month noting commercial real estate and construction rebounds in 2011. The study shows that construction spending grew more than 12% from 2010 to 2011, with 238.3 million square feet built in 2011, which is 2.5% more than was developed in 2010. These new projects provide the capacity for 610,000 jobs in the United States, with commercial real estate development and construction contributing $262 billion to the US GDP, up 13% from 2010.

"2011 was a transition year for the U.S. economy and the construction sector," said the report's author, economist Stephen S. Fuller, PhD, Dwight Schar Faculty Chair, University Professor and the Director of the Center for Regional Analysis at the George Mason University. "The U.S. economy shifted from a federal stimulus to private-sector driven growth pattern and construction spending grew accordingly."

The following states posted the highest amounts of direct spending in all three phases of development across all categories of commercial real estate (number in parenthesis refers to that state's rank in 2010):

- Texas (Previous rank: 2), $7.9 billion in spending, 150,102 jobs supported
- New York (1), $6.5 billion in spending, 83,762 jobs supported
- West Virginia (48), $5.9 billion in spending, 100,889 jobs supported
- California (3), $4.5 billion in spending, 70,817 jobs supported
- Arizona (14), $4.2 billion in spending, 74,117 jobs supported
- Utah (26), $3.6 billion in spending, 77,550 jobs supported
- Florida (4), $3.4 billion in spending, 64,970 jobs supported
- Illinois (10), $3.0 billion in spending, 50,136 jobs supported
- Massachusetts (21), $3.05 billion in spending, 41,382 jobs supported
- (tie) North Carolina (7), $3.05 billion in spending, 55,920 jobs supported

For more news and information visit Blumberg Capital Partners.

BioMed Picks Up Two Rockville Buildings for 26.2M

BioMed Realty Trust, Inc., a self-managed real estate investment trust (REIT), announced that it would purchase two Rockville laboratory and office buildings for $26.2 million. The two buildings at 9900/9901 Belward Drive in Rockville, Maryland are under contract and comprise 106,500 square feet of space. According to a press release of the company's first quarter financial results, the properties will be approximately 93% leased at the time of closing, scheduled for the second quarter and subject to customary closing conditions.

BioMed will assume loans secured by mortgages on the two buildings with an aggregate principal balance of approximately $24.1 million, a weighted-average interest rate of approximately 5.64% and maturity dates in June 2017. Located near the Shady Grove Life Sciences Center in Montgomery County, the properties are part of the Belward Office Park developed by Foulger-Pratt of Rockville.

For more news and information visit Blumberg Capital Partners.

KBS REIT III Buys McEwen Building for $40M

KBS Real Estate Investment Trust III announced this week that it had completed the purchase of The McEwen Building in Cool Springs, Tennessee from Denver-based Amstar for $40 million. The Nashville Business Journal first reported on the sale early last month, after KBS disclosed its plans to buy the 175,000-square-foot building in a filing with the Securities and Exchange Commission. Amstar was represented by Don Albright of Cushman & Wakefield/Cornerstone in Nashville, while KBS represented itself in the transaction.

"From an asset perspective, The McEwen Building 'out-leased' several competitor buildings due to its quality, superior amenities and proximity to Interstate 65," said Stephen Evans, KBS Mid-Atlantic Region senior vice president and director of acquisitions and dispositions. "From a location perspective, the area has had positive net absorption for the past 10 years, and office vacancy stands at six percent and unemployment is low at seven percent. The building and the market have all the characteristics we are seeking."

The McEwen Building is a LEED-designed six-story office building 15 miles south of downtown Nashville. Amstar, in partnership with Southern Land Company, began developing the property in 2008 on a 10.7-acre site at the intersection of West McEwen Drive and Mallory Lane. The property is currently 97% leased to credit tenants, including Renal Advantage, Mars Petcare, Raymond James, Carlisle Companies, Inc. and Cisco Systems, Inc.

For more news and information visit Blumberg Capital Partners.

Chicago Landmark Sold for $102M

Frankfurt, Germany-based SEB Asset Management A.G. sold the 41-story office building at 150 N. Michigan Avenue in downtown Chicago for $102 million, or $154 per square foot, to John Hancock Real Estate Finance Group this week. According to a CoStar report, Bruce Miller, Nooshin Felsenthal and Jim Postweiler of Jones Lang LaSalle's Capital Markets Group represented the seller. The buyer was self-represented through its own Chicago-area real estate group.

The 661,482-square foot office building was built in 1984 and earned an Energy Star label for the last three years. SEB has owned the tower since 1999, when the fund manager paid about $113.2 million for it, or about $171 per square foot. Formerly called the Stone Container Building, it's known to many Chicagoans as the "Adventures in Babysitting" building. The sloped glass roof is featured in a key scene in the 1987 movie starring Elizabeth Shue.

For more news and information visit Blumberg Capital Partners.

Mexic-Arte Museum Seeks $10M in City Funding for New Building

Mexic-Arte Museum, the official Mexican and Mexican American Fine Art Museum of Texas, is seeking $10 million in bond funds from the city of Austin to build a $30 million iconic structure downtown. The museum has proposed a 54,000 square foot, six story cylindrical shaped building, half of which would be leased as commercial office space to generate income, reported the Austin Business Journal.

"We could build a plain box, but we have the chance to build an iconic structure that will drive tourism and be a landmark for the city," said John Hogg, president of the museum board. Hogg said that the museum has already spent $40,000 on conceptual architectural plans, committing to using Mexican architect Fernando Romero alongside Austin-based architect Juan Cotera as the architect of record.

The museum currently occupies a three-story building on the southeast corner of Congress Avenue and Fifth Street. Established in 1984, Mexic-Arte Museum has already secured $5 million in city money from a 2006 voter-approved bond package according to a Stateman article. The city of Austin also gave $740,000 to Mexic-Arte in 2000 so that it could purchase its building at 419 Congress Ave., which has been altered numerous times since. In 2003, the museum secured $200,000 in federal funds to start a long-term art loan program with Mexico. And last year it netted $500,000 from the U.S. Department of Commerce to finance another building feasibility study.

For more news and information visit Blumberg Capital Partners.