Biltmore Commerce Center Sold for $58M

A joint venture between Lincoln Property Company and Oaktree Capital Management has purchased the Biltmore Commerce Center in Phoenix, Arizona for $58 million. Denver-based DPC Development Company sold the 258,348-square-foot Class A office building after purchasing it in 2013 for $42.77 million and deploying a major face-lift of the property.

"Phoenix has the lifestyle, the labor and the commercial real estate to generate upside value, drive demand and respond to tenant needs at almost any point of the real estate cycle," said Lincoln Property Company's Executive Vice President David Krumwiede, who directed the Biltmore Commerce Center investment purchase. "It's an exciting dynamic to work in, particularly when you have a team that can see potential at any given point in the cycle, and use their investment, development and management skills to build on that potential. It leads to a lot of opportunity in many venues, including this latest, great portfolio addition."

"One of the many strengths of Biltmore Commerce Center is the subterranean parking, which provides quick and direct access to all tenant floors via two separate elevator banks," added Mark Jacobs, Managing Director with Oaktree Capital Management. "Tenants can go from their car to their office in less than 60 seconds, compared to five or 10 minutes for most buildings within the submarket. In addition, the location offers great visibility while providing quick and easy access without the high traffic congestion that other projects often experience."

The Biltmore Commerce Center was constructed during the mid 1980s real estate boom at the northeast corner of 32nd Street and Camelback Road. It sits on a 7.5-acre site and includes a six-level parking garage. The property is currently 93% leased to a diversified group of established tenants including HDR Engineering, Lee & Associates, United Way, Greystar, North American Title Company and Miller Russell & Associates.

For more news and information visit Blumberg Partners.

CBRE's Investor Intentions Survey 2015

CBRE has released the results from the CBRE North America 2015 Investor Intentions Survey which reflects a confident market with half of the survey respondents indicating that they expect their purchasing activity to increase in 2015, and of those one-third said they plan to raise investment volumes by 20% or more. Investors identified increased competition and the challenge of finding appropriately priced assets as the greatest—and only—obstacle to investment in 2015.

"The strength of the economy creating real estate demand, improved property fundamentals and measured supply gains make North America extremely attractive, with investors maintaining a hungry appetite for real estate assets. As was the case in 2014, a majority of investors intend to increase their property acquisitions in 2015. A natural consequence of this appetite for real estate assets is the competitive investment environment," said Chris Ludeman, Global President, CBRE Capital Markets.

Investors remain interested primarily in industrial, office and multifamily product, with industrial leading the charge. Industrial is the preferred property type for investors in 2015, with one-third of survey respondents selecting either of the two industrial categories as their preferred sector.

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

NYL Gives $205M Loan for 757 Third Avenue

New York Life Real Estate Investors, a division of NYL Investors LLC, a wholly-owned subsidiary of New York Life Insurance Company, announced this week that it had financed 757 Third Avenue in Midtown Manhattan. The $205 million loan with a term of 15 years was generated for Canadian investment manager Bentall Kennedy; the company purchased the property from Aby Rosen's RFR Holding for $360 million in March, according to a report from The Real Deal.

"757 Third Avenue is a premier, well leased office building located in one of the strongest office markets in the nation," said Eric Becher, Senior Director of New York Life Real Estate Investors' New York Regional Office. "This financing represents an excellent addition to our commercial mortgage portfolio. We are very pleased to expand our relationship with MEPT and Bentall Kennedy in financing their acquisition of this quality asset."

Designed by noted Architects Emery Roth & Sons, the tower was completed in 1963 and renovated in 2009. The building is located within minutes of Grand Central Terminal, and has excellent access to public transportation. RFR purchased the 27-story office tower at East 47th Street in 1999 for $103 million and has invested more than $20 million in upgrades to attract a mix of tenants. Last January the tower signed two new marquee tenants: accounting firm Grant Thornton and Berkley Insurance, according to published reports.

For more news and information visit Blumberg Partners.

Agellan Sells Odenton Warehouse for $11.3M

Agellan Commercial Real Estate Investment Trust announced this week that it had sold a 70,000 square foot single-tenant industrial building located at 8271 Anderson Court in Odenton, Maryland for $11.3 million. The property is currently fully leased to Domino's Pizza, which signed a 10-year lease this past October. Agellan did not identify the buyer of the property at 8271 Anderson Court, but said it was a "third-party purchaser", according to a Baltimore Business Journal article.

"The REIT intends to redeploy the capital from this single tenant building disposition into higher yielding multi-tenant investments with upside potential," said Frank Camenzuli, the Chief Executive Officer of Agellan Commercial REIT. The sale is consistent with Agellan's strategy of recycling capital by selling assets in certain markets that are no longer aligned with its core strategies in order to fund new investment opportunities. Agellan intends to focus on multi-tenant properties that provide enhanced diversity.

For more news and information visit Blumberg Partners.

Brookfield Acquires Associated Estates Realty in $2.5B Deal

A unit of Brookfield Asset Management Inc. agreed to buy U.S. apartment landlord Associated Estates Realty Corp. in a deal valued at $2.5 billion, including debt. After trying to fend off a proxy battle with activist hedge fund and investment manager Land and Buildings, Cleveland, OH-based apartment landlord Associated Estates Realty Corp. agreed to sell itself to a real estate fund managed by Toronto-based Brookfield, according to a CoStar report.

"Today's announcement marks the beginning of a new chapter in the history of Associated Estates. The transaction will deliver compelling, immediate and certain value to all Associated Estates shareholders while also positioning our company to take advantage of exciting growth opportunities," Jeffrey Friedman, chairman & CEO of Associated Estates, wrote in a letter to employees dated April 22.

Investor Jonathan Litt's Land & Buildings Investment Management LLC said in June the trust's apartment portfolio was not best-suited for public markets and the company should sell itself to Litt's firm or another buyer. Land & Buildings owns a 2.23 percent stake in the trust, according to Thomson Reuters data. The offer of $28.75 per share is at a premium of 17.4 percent to Associated Estates' Tuesday closing price.

Completion of the transaction is contingent upon customary closing conditions. The transaction is not contingent on receipt of financing by Brookfield.
Closing is expected to occur in the second half of 2015. Associated Estates' headquarters will remain in Richmond Heights, Ohio.

For more news and information visit Blumberg Partners.

Blumberg in the News

Blumberg Grain was featured in an Ahram Online article titled Egypt will launch new wheat storage system next week. An excerpt follows:

Egypt will launch a new grain storage system next week, in the hope of reducing by a quarter the amount of wheat wasted annually, Supply Minister Khaled Hanafy announced on Tuesday.

The government signed an agreement with Blumberg Grain in December to replace 93 local wheat barns with food security technology and systems.

The new storage system will save Egypt an estimated LE1 billion annually, the US-based global food security company said.

The Army Engineering Authority, Egyptian Holding Company for Silos and Storage and the supply ministry are collaborating with Blumberg Grain to complete the project by the next harvest season in April.

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

Normandy Buys Old Town Alexandria Office Building

Normandy Real Estate Partners, the Morristown, NJ-based real estate operator and investment manager, announced this week that it had purchased 1680 Duke Street in Alexandria, VA from the National School Boards Association, which will continue to occupy approximately 25,000 square feet. The price and terms of the deal were not disclosed, but Normady did note that Donohoe Real Estate Services brokered the transaction – and will serve as the exclusive leasing agent on behalf of Normandy.

"The location of the property is fantastic, with walkable amenities and proximity to the U.S. Patent and Trademark office, as well as excellent access to transportation hubs such as the King Street Metro Station, Alexandria Amtrak Station, Reagan National Airport, the Capitol Beltway and I-95," said Patrick Keeley, Vice President of Normandy Real Estate Partners.

The five-story, corner office building is located on the western border of Historic Old Town in the City of Alexandria, VA, approximately five miles south of the District of Columbia inside the Capital Beltway. Situated two blocks from the King Street Metro Station at the corner of Holland Lane and Duke Street, the property has excellent Metro accessibility, is across the street from a Whole Foods Market and is also positioned two blocks south of King Street, the main retail corridor in Old Town leading to the waterfront.

For more news and information visit Blumberg Partners.

Dweck Makes $135M Buy in Reston

Dweck Properties, the DC based real estate business, has made another acquisition in the Greater DC area with the affiliate purchase of ICON at Dulles Station for $134.8 million. According to GlobeSt.com, the seller is JLB Partners, a developer in Irvine, Texas; the news source was unable to reach either Dweck or JLB for comment on the sale.

The transaction follows two others GlobeSt.com reported this week in which Dweck Properties was the purchaser. It acquired North Tract Lofts, a 184-unit apartment building in Arlington, VA, for $68.3 million, or $370,924 per unit. It also acquired the Gramercy at Metropolitan Park in Arlington. The 399-unit apartment building traded for $190 million, or $476,190 per unit.

For more news and information visit Blumberg Partners.

Prologis, Norges Bank Buy KTR Industrial Portfolio for $5.9B

Norges Bank Investment Management announced this week that, in a joint venture with Prologis, it had signed an agreement to acquire a 45% interest in a 60 million square feet industrial portfolio with additional development potential. Prologis will acquire the remaining 55% interest in the portfolio and will perform the asset management on behalf of the partnership. The deal is part of an existing joint venture between Prologis and Norges Bank Investment Management, manager of the NOK6.94trn (€824bn) Government Pension Fund Global, to invest in US logistics property, according to an IPE report. Prologis, with a market value of about $22 billion, said the acquisition will expand its position in Southern California, New Jersey, Chicago, South Florida, Seattle and Dallas.

"It is rare to have the opportunity to acquire a portfolio of such high asset quality, customer profile and market composition that is so consistent with our own," said Hamid Moghadam, chairman and CEO, Prologis. "I have known KTR's leadership for 15 years and have always considered them to be astute investors and one of our toughest competitors in the U.S. This transaction will deliver accretive returns to our shareholders and will enhance our important and successful partnership with NBIM, which will now exceed $11 billion on two continents."

The 60 million square foot operating portfolio consists of 322 operating properties located across 17 US states. The acquisition includes an additional 10 properties with 3.6 million square feet currently under construction and land with a build-out potential of 6.8 million square feet. The purchase price includes the assumption of $700 million in debt. As part of the transaction, Prologis said it will issue up to $230 million of its common limited partnership units to KTR. Prologis said it has obtained a commitment from Morgan Stanley Senior Funding, Inc. to provide a $1.0 billion bridge facility for the transaction.

For more news and information visit Blumberg Partners.

Medistar Buys Three Beaver Valley Road for $62M

Houston-based Medistar Corp. announced this week that it had entered the mid-Atlantic market with the purchase of 3 Beaver Valley Road in Wilmington, Delaware for $61.8 million. The property was soldy by an entity controlled by KBS Realty Advisors. Newmark Grubb Knight Frank Capital Markets represented both the buyer and seller in the transaction.

"It is no surprise that this office building attracted multiple offers from a number of capable buyers across the country, given its well-established anchor tenant and proximity to many corporate headquarters," said Newmark Grubb Knight Frank's David Dolan, a senior managing director in the Philadelphia office, who helped arrange the transaction. "3 Beaver Valley Road had been maintained by a leading institutional owner with the level of amenities associated with first-class properties and also will benefit from the quickly improving economy in the area."

The 264,000-square-foot office building was 94% occupied at the time of sale with Farmers Insurance Exchange as the anchor tenant following significant recent lease-up efforts by Newmark Grubb Knight Frank. Built in 1995, the five-story property was recently improved with a renovated lobby, repaved parking lot and a new roof. The 18-acre site sits next to Brandywine Creek State Park and is near the intersection of Routes 202 and 92, about 25 miles south of Philadelphia.

For more news and information visit Blumberg Partners.

DMB Sells Verrado Main Street for $13M

DMB, a development and investment firm based in Scottsdale, announced that it had sold the two Class A office buildings, the retail core and an additional 6.88 acres in the Main Street District of Buckeye, Arizona. HCCJ Family GP, LLC paid $13.02 million for the development and plans to hold this commercial property as an investment. Main Street Property Management will continue to work with the tenants and the Verrado community.

"The people who live and work in Verrado make it a very unique and vibrant community," highlighted the buyer. "Between the resurgence of builder activity in Verrado over the last 18 months and the launch of the new 55-plus Victory District, this project is very well positioned for the long-term, which perfectly fits our family investment philosophy. We are looking forward to accompanying local business owners and residents in the future growth of their community alongside DMB and their professional and visionary team."

The Verrado Main Street consists of two, class A office buildings and the community's Main Street retail, which includes a Bashas' Grocery, CVS Pharmacy, and a diverse group of shop tenants. The office space is fully leased and the retail space was more than 94% leased at the time of sale. The sale also included two parcels consisting of 6.88-acres that are zoned for future commercial and mixed-use development.

For more news and information visit Blumberg Partners.

Austin's Mesa Oaks Taking Off

A new 120,000 square foot office development in the southwest submarket of Austin, Texas may herald a market change in the city. The new development, which offers lease or purchase for office, professional and medical-user opportunities, will soon welcome the Texas Association of School Business Officials (TASBO) as it relocates from a building off of South Congress to occupy the entire top floor of Mesa Oak's Building 1.

"There has been little to no product developed in the immediate area in the last seven to ten years," Patrick Ley, ECR brokerage principal and office specialist, told GlobeSt.com.

Tracy Ginsburg, Executive Director of TASBO, has stated, "We selected Mesa Oaks because of its convenient location and ease of access for our members who travel to Austin from across the state. We were impressed with the quality of construction and the design of the buildings and site plan and are thrilled to call Mesa Oaks our new home." As for the space going to the Texas Association for the Gifted and Talented, Executive Director JJ Colburn has stated, "We are ecstatic to have secured a spot at the Mesa Oaks project. We look forward to operating from such a great location."

Located in South West Austin at 5920 William Cannon Drive in between MOPAC and HWY 290, the building offers a Class A, new construction opportunity for office, professional and medical users in Southwest Austin. Developed by Equitable Commercial Realty (ECR), The Mesa Oak site consists of 12 lots with individual buildings permitted ranging from 5,000 to 12,000 square feet.

For more news and information visit Blumberg Partners.

Q1 in U.S. Office Market

CoStar data shows that several of the 54 largest U.S. office markets posted negative net absorption in the first quarter, which is the one area that CRE analysts will be tracking carefully in coming months. According to the group, the first three months of 2015 provided another 'feel good' quarter for the U.S. office market as office rent growth and elevated leasing and development activity continued to reflect strong fundamentals as brisk business activity and growing confidence in the broader economy encouraged business to lease space and investors to acquire office buildings. An excerpt from their reporting follows:

"While we still expect healthy overall growth in both 2015 and 2016, we view the office market as returning to a balance between supply and demand and also between tenant and landlord strength," said Walter Page, CoStar Group, Inc. Director of U.S. Research, Office.

CoStar analysts expected a slow down in net absorption during the first quarter after the strong 33 million square feet of net absorption in fourth-quarter 2014. However, the lower-than-expected level of absorption for first-quarter 2015 is somewhat concerning, especially because the slowdown appeared to impact other property types, Page said.

Net absorption fell below the net rate of new office building completions for the first time in five years during the first quarter. The narrow spread between newly delivered supply and occupancy demand resulted in a flattened vacancy rate of roughly 11.3% in the quarter in CoStar Portfolio Strategy's national index of the 54 largest U.S. metros.

For more news and information visit Blumberg Partners.

Exeter Buys Chicago Area Industrial Portfolio

Avison Young, the Toronto-based commercial real estate services firm, has sold a 900,000-square-foot portfolio in the Chicago industrial market to Exeter Property Group for an undisclosed sum. The four-building industrial portfolio located around the perimeter of Chicago was sold by an Avison Young fund managed by J.P. Morgan Asset Management. Erik Foster and Mike Wilson of Avison Young's national industrial capital markets group handled the transaction, and Foster told GlobeSt.com that the net lease purchase is part of a larger trend.

"We've seen a lot of buyers that need higher returns making purchases in class B submarkets within core markets like Chicago," said Foster. Although each of these properties is relatively new and fully-leased to strong credit tenants, they are located in suburban Monee and Batavia, and in Portage, IN, all part of the greater Chicago market but outside the truly core submarkets like I-55.

The properties in the portfolio include:

• A 246,300-square-foot building at 25777 S. Cleveland Ave. in Monee, IL in the greater Chicago market. The tenant is Liberty Furniture, a privately owned furniture manufacturer with a national distribution base. Built in 2001, the building has 30-foot ceiling heights.
• A 239,700-square-foot facility at 25975 S. Cleveland Ave. in Monee, IL, in the greater Chicago market. DIY Group, a packaging, warehouse and distribution services company, leases 100 percent of the space, built in 2005. The building has 30-foot ceiling heights.
• A 251,465-square-foot building at 1160 Pierson Dr., in Batavia, IL, in the greater Chicago market. The space is leased by DS Containers (193,465 SF), a consumer packaging company, and Superior Health Linens (58,000 SF), a healthcare supply company. Built in 2006, the building has 30-foot ceiling heights.
• A 157,120-square-foot building at 5900 Carlson Ave. in Portage, IN, in Northwest Indiana, considered part of the greater Chicago market. The building was built in 1995, has 29-foot ceiling heights and is leased to Manufacturing Solutions. The tenant is a leading manufacturing and engineering company.

For more news and information visit Blumberg Capital Partners.

Ivanhoe, Blackstone Buy Stake in Australian Office Tower

Ivanhoé Cambridge announced this week that in partnership with Blackstone Property Partners Asia the company has acquired a 25% interest in Liberty Place, a 42-story office tower in the heart of Sydney's Midtown. According to a Bloomberg Business report, Canada’s Ivanhoe Cambridge has made its first direct investment in Australia, joining with Blackstone Group LP to buy a stake in a Sydney office complex for A$240 million ($182 million). Ivanhoé and Blackstone are buying their stake from LaSalle Investment Management on a yield of about 5.6%, according to the Australian Business Review. It is the first major office tower deal in Sydney to be struck this year without a development angle, the publication said.

"We are enthusiastic about the opportunity to invest in Australian real estate", explained Rita-Rose Gagné, Executive Vice President, Growth Markets, for Ivanhoé Cambridge. "Blackstone's strong knowledge of the Australian market and its established presence in Australia have been key to the success of this transaction. Ivanhoé Cambridge continues to explore the possibilities of increasing our investments in Australia and in other parts of the Asia-Pacific region in 2015."

Christopher Heady, Senior Managing Director and Head of Real Estate Asia at Blackstone said: "This is our first investment in Asia as part of Blackstone Property Partners' Core+ strategy. Liberty Place fits the Core+ strategy extremely well as a high quality, well-leased asset in a global gateway city. We are pleased to have partnered with Ivanhoe Cambridge on this transaction."

Completed in 2013, 161 Castlereagh Street is the Sydney headquarters of the ANZ Bank, and was 97% leased at the time of sale. Liberty Place was developed on the site behind the Sydney Hilton, spreading from Pitt Street to Castlereagh Street. It occupies 60,176 square meters of office space and 4425 square meters of retail area.

For more news and information visit Blumberg Capital Partners.

GE Selling Real Estate, Dismantling GE Capital

Fairfield, CT-based General Electric (GE) announced this week that it is selling the bulk of its GE Capital banking business in an attempt to simplify the conglomerate and concentrate on the best-performing segments. Blackstone and Wells Fargo also announced that they had signed agreements to purchase most of the assets of GE Capital Real Estate in a transaction valued at approximately $23 billion. The transaction breaks down as follows:

• Wells Fargo has agreed to purchase performing first mortgage commercial real estate loans valued at $9.0 billion in the United States, UK and Canada.
• Blackstone's latest flagship global real estate fund, BREP VIII, has agreed to purchase the US equity assets for $3.3 billion. These assets are primarily office properties in Southern California, Seattle and Chicago.
• Blackstone's European real estate fund, BREP Europe IV, has agreed to purchase the European equity real estate assets, for €1.9 billion. These consist of office, logistics and retail assets, largely in the UK, France and Spain. The logistics assets will be integrated into Blackstone's European logistics platform, Logicor, and the retail assets into its European retail platform, Multi.
• BREDS, Blackstone's real estate debt fund, has agreed to purchase performing first mortgage loans in Mexico and Australia for $4.2 billion.
• BXMT, Blackstone's publicly traded commercial mortgage REIT, has agreed to purchase a $4.6 billion portfolio of first mortgage loans primarily in the US with Wells Fargo providing the financing.

Jon Gray, Global Head of Real Estate for Blackstone, said, "We are delighted to partner with GE on another major transaction and we thank them for their confidence in us. We also thank Wells Fargo for our longstanding relationship, and for their swift execution on this investment. This transaction clearly demonstrates the unique scale and reach of our real estate platform."

Mark Myers, Head of Commercial Real Estate for Wells Fargo, said, "This is an important transaction in the commercial real estate industry and Wells Fargo is pleased to be working with our colleagues at GE Capital and Blackstone. The portfolio of performing loans we've purchased is a strong addition to our commercial real estate platform in the United States, the United Kingdom and Canada, which are all active lending markets for us."

For more news and information visit Blumberg Capital Partners.

MRP & Rockpoint Sell Buildings at Bethesda Crossing

MRP Realty and Rockpoint Group announced this week that the joint venture has sold two of the three buildings that make up Bethesda Crossing in Bethesda, Maryland for an undisclosed sum. J.P Morgan Asset Management purchased the two office towers in the office complex, formerly known as the Air Rights Center. MRP will retain ownership of the facility's office building at 4550 Montgomery Avenue and continue as the property manager at the Wisconsin Avenue building, known as the Wisconsin Towers.

"The sale of Bethesda Crossing is another step forward in our committed strategy of acquiring well- located, urban-infill assets and renovating, repositioning and rebranding them into premier office and residential properties," said MRP Managing Principal Bob Murphy in a press release. "It's a significant enhancement in the overall tenant experience for our occupants and further drives home our commitment to creating additional investment value for our investor partners."

MRP and Rockpoint bought the property in January 2013, then invested almost $30 million in renovations. "The investment we made in Bethesda Crossing allows us to take advantage of its irreplaceable location in the heart of Bethesda," Zach Wade, principal of MRP Realty, said in a press release. "Bethesda Crossing was already a strong office product, and we have added value to current and future tenants through this modernization process."

For more news and information visit Blumberg Capital Partners.

NorthMarq Completes AmeriSphere Acquisition

NorthMarq Capital announced this week that it had completed the acquisition of AmeriSphere Multifamily Finance, a Fannie Mae DUS and FHA MAP lender from its founding partner Rodrigo Lopez and the investment firm McCarthy Capital (Fulcrum). NorthMarq previous held a 40% stake in Amerisphere; with the deal finalized, Amerisphere will now operate as a wholly-owned subsidiary, NorthMarq Capital Finance. Jay Donaldson has been appointed president of the NorthMarq Capital Finance group; Scott Suttle continues as executive vice president and national production director. Both will join NorthMarq Capital's Executive Leadership Team and report to Eduardo "Ed" Padilla, CEO-NorthMarq Capital and NorthMarq Capital Finance.

"NorthMarq's acquisition is the logical culmination of a very successful decade-long relationship. Because of NorthMarq's outstanding loan producers and excellent borrower clients, the AmeriSphere team will continue growing the best performing portfolio in our industry," said Amerisphere founding partner Rodrigo Lopez.

"This acquisition strengthens our multifamily platform and leverages our existing production platform throughout the U.S.," said Padilla. "Robust Fannie Mae and HUD offerings are a great complement to our Freddie Mac platform and create the best options for our borrower clients."

For more news and information visit Blumberg Capital Partners.

Omega Acquires Aviv to Form $11B REIT

Omega Healthcare Investors, Inc., the Maryland-based REIT, announced that it had completed it's acquisition of Aviv REIT, Inc. in a stock-for-stock merger, forming a combined company with a total market capitalization of approximately $11.1 billion. According to a company press release, the combined company will be the premier publicly traded REIT focused principally on skilled nursing facilities (SNFs), with a diversified portfolio of investments including over 900 properties located in 41 states and operated by 81 different operators. Pickett will continue in his role as CEO, while Aviv's former president and chief operating officer was appointed chief corporate development officer. Aviv's former chairman, as well as two former directors, received seats on the board, according to a Baltimore Sun article.

"We believe that the combination with Aviv and the expertise and proven track records of the combined management team firmly positions Omega to continue as the leading consolidator in the large, highly fragmented SNF industry," said Taylor Pickett, Omega Healthcare Investor's Chief Executive Officer.

Craig M. Bernfield, Aviv's former Chairman and Chief Executive Officer, stated: "I am confident that our vision to substantially grow Aviv's platform of high quality properties and operators will be implemented through the combination of these two outstanding companies, and I believe that our combined industry knowledge, experience and relationships will be the key to our future success."

For more news and information visit Blumberg Capital Partners.

Hillwood Breaks Ground on 1.1M SF Industrial Build

Hillwood Investment Properties, a full service commercial real estate developer, investor and advisor created in 1998 under the Hillwood Development Company as a vehicle to develop and acquire industrial properties outside of AllianceTexas, broke ground this week on the Gateway South Building 3 in San Bernardino, CA. The 1.1-million-square-foot industrial building, scheduled for delivery by the end of the year, is an extension of the 14-million-square-foot AllianceCalifornia industrial park.

"We feel very good about getting a building of this size up. We have done several buildings of this size over the years, and have leased them," John Magness, SVP at Hillwood Investment Properties, told GlobeSt.com. "Usually about mid-way through construction we will find a tenant. This building has all of the amenities that a tenant would want, like extra truck parking, extra car parking, truck circulation around the building and a 36-foot clear, which is the trend in the larger industrial building. We just started grading last week, so we are about nine months away from end of the year delivery of the building, hopefully with a tenant, but if not, we will work on the lease-up even after construction."

Hillwood still has 60 acres left to develop at the park, but it is also busy purchasing adjacent land to continue expanding—as is the case with Gateway South Building 3. Magness thanks the city for their ability to complete these massive industrial developments. "It is hard to get buildings built in California, but this is a very pro-business city," he says. "The project is part of the success story of San Bernardino, and that is because, despite their bankruptcy, the city has continued to process buildings and get things done."

Hillwood secured a construction loan through PCCP for the development process. HFF associate directors Cullen Aderhold and Brian Torp, senior managing director Trey Morsbach and real estate analyst Carson Dennis secured the undisclosed funds on behalf of Hillwood.

For more news and information visit Blumberg Capital Partners.

Colony Combines Entities

Colony Financial, Inc. and Colony Capital, LLC have completed their combination -- the former previously being a subsidiary of the latter -- to merge and form Colony Capital, Inc., becoming an internally-managed real estate and investment management company with more than 300 employees in 14 offices around the globe. The transaction was approved by an overwhelming majority of its shareholders at the Special Meeting on March 31, 2015. The transaction included the formation of an umbrella partnership real estate investment trust (UPREIT) with a subsidiary operating partnership that holds all the assets and directly or indirectly conducts substantially all the business of Colony Capital.

"This combination allows Colony Capital to expand its unique global culture and brand by utilizing its strong balance sheet to create bespoke investment products and platforms in real assets and at opportunistic points in cycles and geographies," said Executive Chairman Thomas Barrack, Jr. in a statement.

"The transaction is seamless for Colony's employees," added Chief Executive Officer Richard Saltzman. "It is business as usual with minimal integration logistics as everyone already works together as a team, albeit previously across separate legal entities."

Morgan Stanley & Co. acted as financial advisor to the Special Committee of the Board of Directors of Colony Capital in connection with the transaction. Wachtell, Lipton, Rosen & Katz acted as legal advisor to the Special Committee of the Board of Directors in connection with the transaction. Hogan Lovells acted as legal advisor to Colony Capital in connection with the transaction. Goldman, Sachs & Co. acted as financial advisor to Colony Capital, LLC in connection with the transaction. Skadden, Arps, Slate, Meagher & Flom LLP acted as legal advisor to Colony Capital, LLC in connection with the transaction.

For more news and information visit Blumberg Capital Partners.