Equity Office Sells Two CA Complexes for $359M

Equity Office Properties has sold two of its business complexes located in San Jose and Sunnyvale, CA to two separate institutional investors. According to a CoStar report, the portfolio totals nearly 1 million square feet of space that traded for an estimated $359 million. CBRE's Joseph Moriarty, Mark Schmidt, and Bob Steinbock in San Jose represented Equity Office Management in the two deals.

Deutsche Bank's Deutsche Asset & Wealth Management (formerly Rreef) purchased Oakmead West, a seven-building, 431,490-square-foot campus near the intersection of Highway 101 and Lawrence Expressway in Sunnyvale, according to a deed filed Wednesday. In a separate deal that closed Thursday, KBS Realty Advisors picked up the eight-building, 615,233-square-foot Corporate Technology Centre, near the intersection of Highway 237 and Zanker Road in North San Jose. The property contains seven office/R&D buildings and one Tier III data center, according to a Silicon Valley Business Journal article.

For more news and information visit Blumberg Capital Partners.

NYRR Acquires Chelsea Office Building for $112M

American Realty Capital New York Recovery REIT (NYRR) announced this week that it had closed on the acquisition of an office building in Manhattan's Chelsea neighborhood for $112 million. The property contains approximately 166,000 rentable square feet and is 84% leased to 5 tenants, including Red Bull North America Inc., SAE Institute of Technology Corp. and Microsoft Corp.

"This was an off-market, privately negotiated purchase of a great building in the Silicon Alley area of Manhattan,” said Michael Happel, CIO of NYRR. “We believe this is one of the strongest submarkets in the city and this property has high quality tenants as well as upside potential from both lease-up and rent growth opportunities."

In the REIT's 2012 annual report, NYRR disclosed that it had entered into a purchase and sale agreement in January of this year to acquire the fee simple interest in an institutional-quality office building located at 218 West 18th Street in Manhattan for a contract purchase price of the property is $112.0 million, exclusive of closing costs.

For more news and information visit Blumberg Capital Partners.

WP Carey Closes Two Sale-Leaseback Transactions

W. P. Carey Inc., a publicly traded REIT, announced that one of its publicly held non-traded REIT affiliates had acquired two properties for $26 million. CPA®:17 - Global acquired a 272,000 square foot manufacturing and office facility in Portage, Wisconsin and the 62,000 square foot House of Blues entertainment venue and restaurant facility in Dallas, Texas.

The Wisconsin property, sold for approximately $10 million, will be leased to Penda Corporation under a 20 year net lease. Gino Sabatini, managing director and co-head of global investments, said the Penda transaction is an example of enabling portfolio companies of private equity firms to pay down debt, strengthen their balance sheets and access the capital value of their real estate assets to fund operations and growth strategies.

The Dallas House of Blues property is leased to a subsidiary of Live Nation Entertainment, Inc., which also guarantees the lease. The purchase price was approximately $16 million.

For more news and information visit Blumberg Capital Partners.

$13.8M Sale-Leaseback for Industrial Properties

American Forest Products has sold a portfolio of industrial properties located in California, South Carolina and Virginia to a private equity fund for $13.8 million. Under the terms of the sale, coordinated by Stan Johnson Company's New York office, AFP agreed to a lease term of twenty-one (21) years as the single tenant within each property under an absolute net, master lease. The portfolio included 5 industrial properties, totaling roughly 575,000 square-feet.

"Every detail of the sale leaseback had to be specially managed to create a strong growth path for American Forest Products," said Camille Renshaw of Stan Johnson Company. "Ultimately, the seller was able to pay off debt and expand its credit revolvers for immediate and expansive new business growth."

The deal also provides tax advantages for AFP in leasing back the properties, she said. After five years, American Forest Products has the option to buy the land back, according to a Sacramento Business Journal article.

American Forest Products is the leading provider of third-party logistics and retail services, in conjunction with the sale of moulding and specialty millwork, into big-box retail and pro-dealer locations, such as Home Depot.

For more news and information visit Blumberg Capital Partners.

Chambers Street Acquires Interests in 17 JV Assets

Chambers Street Properties has acquired 100 percent of the interests in 17 properties held in a joint venture between Chambers Street and Duke Realty Corp., according to a Houston Chronicle report. Chambers Street Properties acquired the remaining interests for a reported $98.6 million as Duke continues to divest many of its office holdings to focus more on industrial assets. Chambers Street and Duke Realty have been joint venture partners since 2008 and the remaining interest held by the JV now comprises 20 properties in the United States. Chambers Street and Duke Realty continue to own 80 percent and 20 percent, respectively, of the remaining JV.

"This is a mutually agreeable transaction which has conveyed full ownership and control of 17 high quality commercial properties in markets where Chambers Street currently operates," Philip L. Kianka, executive vice president and COO of Chambers Street, said in a statement. "The transaction is in keeping with our fundamental investment strategy while still allowing us to continue with our successful relationship with Duke Realty on the remaining assets held by the JV."

The properties acquired consist of 16 office buildings and one warehouse/industrial building, including:

• The Landings I, The Landings II and McAuley Place, three office buildings totaling 542,000 square feet in Cincinnati, Ohio;
• Atrium I and Easton III, two office buildings totaling 451,000 square feet in Columbus, Ohio;
• Point West I, a 183,000 square foot office building in Dallas, Texas;
• Miramar I and II, two office buildings totaling 223,000 square feet in Fort Lauderdale, Fla.;
• 22535 Colonial Pkwy, a 90,000 square foot office building in Houston, Texas;
• Norman Pointe I and II, two office buildings totaling 537,000 square feet in Minneapolis, Minn.;
• Celebration Office Center and Northpoint III, two office buildings totaling 209,000 square feet in Orlando, Fla.;
• Goodyear Crossing Ind. Park II, an 820,000 square foot warehouse/distribution facility in Phoenix, Ariz.; and,
• 1400 Perimeter Park Drive, 3900 N. Paramount Parkway and 3900 S. Paramount Parkway, three office buildings totaling 265,000 square feet in Raleigh, N.C.

For more news and information visit Blumberg Capital Partners.

Maguire Secures $105M Recapitalization Loan for Water's Edge

Maguire Investments announced that it has secured a $105 million loan to recapitalize the Water's Edge office campus in Los Angeles, with financing arranged by Rob Verrone of Iron Hound Management. Maguire said that the money will be used for tenant improvements and leasing commissions for new leases on available space. The company has also retained Jones Lang LaSalle to manage leasing at the property.

"We have the team and capital to aggressively get deals done at Water's Edge," said Rob Maguire, Chief Executive Officer of Maguire Investments. "We offer a seamless and obstacle-free opportunity for companies to relocate to Los Angeles' premier campus environment featuring spectacular views and abundant amenities."

The 6.5 acre creative office campus in the Los Angeles submarket of Playa Vista was designed by Gensler. The 58,000-square-foot, green glass–sheathed Water's Edge I and the four-story, 185,000-square-foot Water's Edge II were developed in 2002 by a JV of Maguire Partners and Equity Office Partners at a total cost of $77 million, according to a Commercial Property Executive report.

For more news and information visit Blumberg Capital Partners.

AvalonBay Sells DC Area Properties

AvalonBay Communities, Inc. announced this week that it had completed the sale of two Washington, DC-area properties this month for $332 million. The Arlington-based company sold Avalon Decoverly in Rockville, Maryland for $135 and Crystal House in Arlington, Virginia for $262.5 million. Both properties were sold at a weighted average initial year market capitalization rate of 5.2%. Mack-Cali Realty Corp., a real estate investment trust, purchased Crystal House in a joint venture with a fund advised by UBS Global Asset Management. Walker & Dunlop LLC provided a $165 million mortgage loan to the JV through a Fannie Mae program, according to a CoStar report.

"The Mack Cali/Roseland team is thrilled to be entering the Metro DC market, one that offers enormous potential. When we've completed the renovation project, we are confident that we'll be able to command rents at the highest end of the market," said Mitchell Hersh, president and chief executive officer of Mack-Cali.

AvalonBay completed its acquisition of Archstone Enterprise with partner Equity Residential last month; Crystal House was acquired as part of its Archstone Enterprise deal, according to a Washington Business Journal article. AvalonBay and Equity Residential formed the joint venture partnership to buy Archstone's assets. AvalonBay got 40% of the portfolio, or 60 apartment communities, including thousands of apartments in the Washington area, while Equity Residential got the remaining 60%, or 78 properties.

For more news and information visit Blumberg Capital Partners.

Chicago's Mayor Announces $3B Planning Initiative

Mayor Rahm Emanuel announced nearly $3 billion in private and public development projects in Chicago through a new "Opportunity Planning" initiative, where seven geographic areas throughout the city were identified for opportunity-based development initiatives. The City of Chicago will be leveraging $2.9 billion – including $330 million public funding and $2.6 billion in private funding – in new economic development, housing, and quality of life improvements for residents and businesses. The neighborhoods include Englewood, Pullman, Rogers Park, Uptown, Little Village, Bronzeville, and the Eisenhower Corridor.

Mayor Rahm Emanuel also introduced a new plan last week, Farmers for Chicago, that will make up to five acres of city-owned lots available to local non-profits who will in turn cultivate the land and create a network of area farmers, according to a Huffington Post article. "These areas already have momentum. The initiative will coordinate ongoing progress with strategic investments to produce faster and more sustainable results," said Andrew J. Mooney, commissioner of the Department of Housing and Economic Development.

"Each of these areas is unique and full of potential and the City will play an important role in supporting their growth. Economic development and a neighborhood's success are reliant upon the support and strategic vision these 'Opportunity Area' plans provide," said Mayor Emanuel. "The City of Chicago in coordination with the private sector has a vital role to play to help communities showcase and support their entertainment, economic and cultural assets. Only then will Chicago be able to live up to its potential as the global city that it should be."

For more news and information visit Blumberg Capital Partners.

Brickell Bayview Centre Sold to Banyan Street Capital Affiliate

Colony Realty Partners, an investment company that acquires and manages commercial real estate with offices in Boston and Irvine, announced this week that its affiliate, CRP-W Brickell LLC, had sold Brickell Bayview Centre in Miami for $70 million. The 33-story building at at 80 S.W. Eighth Street was acquired by an affiliate of Banyan Street Capital, according to a South Florida Business Journal article. The buyer assumed the $47 million mortgage on the property that was made by ACRC Lender W LLC.

Originally constructed in 1986, Brickell Bayview Centre has about 286,000 leasable space feet on 2.4 acres in the Brickell Financial District submarket of Miami/Dade Count. The building was 89% leased at the time of sale to 47 unnamed tenants. "The continued westward shift of the submarket's amenity base, along with immediate access to the Metrorail, provides tremendous upside potential to the new ownership through future leasing," said CBRE vice chairman Christian Lee.

According to a June 2007 CoStar report, Colony Realty Partners acquired Brickell Bayview Centre from a joint venture of America's Capital Partners, State of Utah Retirement Systems, and CBRE Investors for $81.9 million, or about $286 per square foot; the 2007 selling venture acquired the property in early 2005 for $50.2 million.

For more news and information visit Blumberg Capital Partners.

LakePointe Office Park Sold for $75M

Archon Group, an affiliate of Goldman Sachs, has finalized the purchase of LakePointe Office Park in Charlotte, North Carolina, for $75 million, or $110 per square foot. The seller, TIAA-CREF, was represented in the sale by Ryan Clutter, Patrick Gildea and Will Yowell of CBRE Group Inc. Jones Lang LaSalle also announced this week that it has been named leasing agent for the seven office buildings in LakePointe Office Park. Mainstreet Capital Partners will manage the LakePointe portfolio, which totals 675,398 square feet.

"Mainstreet Capital Partners is excited to work toward re-establishing LakePointe as the preferred office park in Charlotte," said Peter Tonon, a partner with Mainstreet. "The market fundamentals seem to be improving, and with some enhancements we would like to implement to an already beautiful development, we anticipate this being a great opportunity."

LakePointe Office Park, planned and developed by Childress Klein Properties, officially opened in 1988 with the completion of Belk Stores Services Corporate headquarters. LakePointe was reportedly 87% leased at the time of sale, with major tenants including The Vanguard Group, MIDREX Enterprises Inc., SunTrust Banks Inc., T-Mobile, Titan Technology Partners, the Transportation Safety Administration and the U.S. Postal Service. The LakePointe Office Park project marked the first step in Childress Klein's development in the immediate area that consists of 2.2 million square-feet of office space situated within 175 acres of forests, hills and lakes.

For more news and information visit Blumberg Capital Partners.

JLL Gets $125M Acquisition Financing for Onterie Center

Jones Lang LaSalle announced this week that the firm's Capital Markets group secured $125 million in acquisition financing for Onterie Center in Chicago. New York Life is providing the financing for the sixty-story award-winning high rise at 441 East Erie St. JLL announced this past December that it would be buying the property from Boston-based Metropolitan Properties of America Inc. for $188 million; Metropolitan paid $143 million for the building in 2005.

"Onterie Center is backed by strong institutional sponsorship, generates solid in-place cash flow and is in the heart of one of the highest residential rent districts in the city," said JLL's managing director David Hendrickson. "It offers superior amenities, an unparalleled location near a variety of dining and shopping options, and magnificent city and lake views, all of which made this a compelling investment for New York Life."

Designed by Skidmore, Owings & Merrill, construction was completed on Onterie Center in 1986. The property features a 60-story, 583-unit residential tower with 102,616-square feet of fully leased commercial space and an 11-story tower with 32 luxury loft units. Current tenants include Northwestern University, the Rehabilitation Institute of Chicago, Northwestern Memorial Hospital, Streeterville MRI and KinderCare daycare center.

For more news and information visit Blumberg Capital Partners.

Ascent Building New $200M CH3 Data Center

Ascent announced this week that it had plans to build a new $200 million data center in downtown Chicago. The new CH3 Data Center is a multi-tenant data center development featuring build-to-suit infrastructure for companies seeking to build or lease wholesale data center space. Ascent, a leading provider of comprehensive solutions for the development, design, engineering, construction and operation of data centers, is teaming with Sterling Bay Cos. to renovate a property on South Desplaines Street.

"CH3 is incredibly flexible, unlike the standard multi-story data centers in Chicago, making it adaptable to new technology and server rack designs that some of the older constructions are unable to accommodate," said Phil Horstmann, CEO of Ascent. "Downtown Chicago is an attractive location for data center space, but previously didn't offer the options the market is now demanding. We're talking with companies about their current data center needs and developing CH3 to meet those market demands."

Ascent plans to tear down about half of the existing building and retrofit the rest, with demolition beginning within 30 days, according to a Chicago Tribune article. The CH3 Data Center at 717. S Desplaines will eventually be 212,000 to 560,000 square feet of space, depending on demand.

For more news and information visit Blumberg Capital Partners.

Singapore Firm Pays $367M for US Bank Tower in LA

Overseas Union Enterprise Limited announced this week that it would acquire the US Bank Tower and Maguire Gardens in downtown Los Angeles for $67.5 million. Beringia Central LLC, a wholly owned US subsidiary of Singapore-based Overseas Union Enterprise Limited, is purchasing the building from Library Square Associates LLC, a subsidiary of MPG Office Trust Inc. Terms of the deal and brokers involved in the transaction were not disclosed. Net proceeds from the transaction are estimated to be approximately $103 million, according to an MPG press release.

Overseas Union Enterprise Limited Executive Chairman Dr Stephen Riady commented, "After a successful 2012, OUE is seeking new avenues for growth where value can be identified and realized. We intend to bring our knowledge and network to bear in pursuing new opportunities to generate value for shareholders. US Bank Tower is a well-positioned building that we expect to appeal to a broad base of both local and international office tenants operating in California."

US Bank Tower is a Class A office property at the foot of Bunker Hill. Rising to 1,018 feet, with 72 floors of office accommodation and six levels of underground parking, it has an area of approximately 1.4 million square feet. The building was completed in 1989. US Bank Tower is about 56.3% occupied with a diverse tenant base, including Akin Gump Strauss Hauer & Feld, U.S. Bancorp, and commercial law litigation services provider Cornerstone Research Inc.

For more news and information visit Blumberg Capital Partners.

Chicago's Burnham Center Sold for $95M

Harbor Group International announced that it had sold The Burnham Center in downtown Chicago for $94.63 million to the Shidler Group. Terms of the deal for the 579,778-square-foot office tower were not disclosed.

"When Harbor Group invests in a property, we have a business plan that... will allow us to sell the property in a four- to six-year period," said T. Richard Litton Jr., the company's president. "Our goal was to improve leasing on the larger floor plate, lower floor portion of the building. We generally succeeded in our business plan on the lower floors and felt that market conditions warranted a sale at this time."

The 22-story historic building at 111 West Washington Street was originally built in 1914 and designed by Daniel H. Burnham. Major tenants include Flashpoint, Cook County and GrubHub. Harbor Group originally purchased the property in March 2007 for $79.5 million.

For more news and information visit Blumberg Capital Partners.

Rialto Building Sold for $57M

Africa Israel USA announced this week that it had closed on the sale of the Rialto Building in San Francisco, selling the property to a joint venture between Invesco Real Estate and Hines. The joint venture purchased the turn-of-the-century property for approximately $434 per square foot, or $57 million, according to a CoStar report. The sale was completed only six weeks after Africa Israel USA placed the property on the market. In total, 17 offers were submitted as part of the bidding process. Eastdil Secured represented the seller in the transaction.

"We were very pleased with the widespread interest in the building, which we feel is indicative of the Rialto's strengths, both architecturally and geographically," said Damien Stein, director of asset management at Africa Israel USA. "The demand for premier office space in the most sought-after area of San Francisco is clearly outpacing the ready supply."

"This sale proves that San Francisco is still unmatched as the nation's top-performing office market," added Tamir Kazaz, CEO of Africa Israel USA. Originally built in 1902 and designed by Meyer & O'Brien, the 135,485 square foot building at 116 New Mongtomery St. was 85% leased at the time of sale, with major tenants including Trulia, Walgreens and Chipotle.

For more news and information visit Blumberg Capital Partners.

Prudential Provides $425M in Financing for Office Towers

Prudential Mortgage Capital Company announced this week that it had provided $425 million in financing for two office towers in Chicago and Seattle. The John Buck Company received a $300 million loan for 155 North Wacker in Chicago. The 10-year fixed-rate loan is being used to refinance the 1.15 million square foot tower in the West Loop submarket. In Seattle, AEW Capital Management received a $125 million 12-year loan to refinance West 8th Street, a 498,893 square foot Class A office tower.

"Although the office sector has been slow to recover, high-quality transactions such as these have continued, particularly in major markets," said Thomas Goodsite, a managing director with Prudential Mortgage Capital Company's Atlanta office who led the transactions. "We expect to do more of these types of deals as the economy continues to recover, and this sector will play a key role in helping us achieve our 2013 originations goals."

For more news and information visit Blumberg Capital Partners.

Cole Credit Property Trust III Acquiring Cole Holdings

Cole Credit Property Trust III, Inc. (Cole REIT III) announced this week that it had executed a definitive merger agreement to acquire Cole Holdings Corporation, a full-scale real estate investment management firm. Cole Holdings has been Cole REIT III's asset manager and sponsor company, and currently manages over $12 billion of real estate assets for over 160,000 individual investors represented by more than 13,000 financial advisors. According to investment bank Robert A. Stanger & Co. Inc., Cole REIT III is the second-largest in terms of its market cap, with close to $4.8 billion in equity raised from investors since it was launched in 2009.

Cole REIT III will change its name to Cole Real Estate Investments, Inc. upon completion of the transaction and will pursue a listing on the New York Stock Exchange. According to an Investment News article, Cole REIT III will make an upfront payment to management and Chris Cole, founder and executive chairman of Cole Holdings, of $127 million in cash and stock for the transaction.

"The real estate industry has been lagging behind in terms of the creation of full-service asset managers that can provide a comprehensive suite of products and services to distribution partners," said Chris Cole. "This transaction is the result of more than 30 years of work, and I am thrilled about the substantial growth potential and income generation that this combination will offer to all Cole Real Estate Investments stockholders."

Marc Nemer, president and chief executive officer of Cole Holdings, said, "We are confident that this transaction will accelerate our progress on these initiatives, generate greater value for all Cole Real Estate Investments stockholders, recognize the value proposition of the non-listed REIT industry and create a historic opportunity to participate in the next evolution of real estate asset management."

For more news and information visit Blumberg Capital Partners.

Blumberg in the News

Business Today Egypt published a Q&A with Philip Blumberg, chairman and CEO of the Blumberg Capital Partners group of companies and chairman of the firm's investment committee. An excerpt from the March edition follows:

Q: It has been said that investors are now showing their willingness to consider opportunities in the Egyptian real estate sector. How would you describe these investors?

BLUMBERG: I'd describe those investors as leading edge, and leading-edge investors success is key to attracting the larger mainstream companies and investors. It's this increase in economic activity that gets the real estate economy going as well.

We see long-term opportunities in quality office development, retail and residential projects. In the short term we see very considerable opportunity in the industrial and warehouse sectors. There is tremendous built-up demand for warehousing at ports, free zones and in the new projects being contemplated in the economic plan known as the Nahda, or Renaissance Plan.

These are more than just words, as we are preparing now to commit to a large scale investment in Egypt in this sector and to move to expand our manufacturing business with construction of a manufacturing plant and export hub in Egypt. The Hub will employ 1,000 Egyptians and potentially increase Egyptian exports by $6 billion (LE 40.39 billion) and the country's GDP by 2.2%.

We have faith in Egypt and in our working with government leadership see a very strong and decisive effort to generate and support economic development projects like ours. As long as this continues we are optimistic about prospects for Egypt.

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

$210M 52-Story Tower Breaks Ground in Chicago

Loews Hotels & Resorts and DRW Trading Group broke ground this week on a new $210 million mixed-use project in Chicago. The 52-story tower at Illinois Street and Park Drive, developed by DRW and designed by the architectural firm Solomon Cordwell Buenz, is expected to deliver in 2015. When complete, the property will be the home to the 400-room Loews Chicago Hotel, 398 luxury residential apartments, a signature restaurant, more than 25,000 square feet of innovative meeting space, multiple outdoor terraces, a spa/fitness center and an outdoor rooftop including a pool overlooking the city.

Jonathan M. Tisch, Chairman of Loews Hotels & Resorts and President and CEO of Loews Hotels & Resorts, Paul Whetsell were joined by Donald R. Wilson, Jr., Founder and CEO of DRW Trading Group and the Honorable Mayor of Chicago Rahm Emanuel at the groundbreaking ceremony.

"Even with Chicago's hotel occupancy at a record high last year, companies continue to build more hotel stock as more and more tourists, business travelers and conventions are flocking to Chicago," said Mayor Emanuel. "I am pleased to see this hotel rise from the ground, creating hundreds of jobs, and setting up Chicago to continue its growth as one of the premiere destinations in the entire United States."

For more news and information visit Blumberg Capital Partners.