Q2 National Office Sector Report from Savills Studley

Savills Studley Research has released its National Office Sector Report for the second quarter of the year, which found that the national overall office availability rate ticked down to 16.4% after three consecutive quarters at 16.5%. While availability inches lower, Savills Studley found that the US national overall rental rate rose for the 15th consecutive quarter, rising by 1.2% from the prior quarter.

"Availability has barely budged so far in 2015 as new construction expands in more markets and leasing slows. Deal volume in the first half of 2015 has fallen by more than 15% compared to the first half of 2014 in most major markets, with very sharp decreases in Boston, Manhattan, Atlanta and Dallas." said Keith DeCoster, Savills Studley Research.

An excerpt from the report follows:

Slow Start to 2015
Weaker demand in markets such as Houston and Washington, DC is to be expected considering the pullback in the oil and gas industry and constrained government spending. More surprising is the decreased demand in markets that registered strong leasing in 2014, such as Atlanta, Boston, Chicago and Dallas/Fort Worth. Some drop-off in the fastest-growing markets like Dallas/ Fort Worth was inevitable – there are only so many 500,000-sf tenants looking for space, after all. Despite very strong demand from the biopharmaceutical sector in Cambridge, tenants in the Boston region leased only 21.8 msf in the last four quarters, down by 17.6% from a year ago. As of midyear 2015, deal volume in Downtown Chicago and Manhattan was down by 24.0% and 31.7%, respectively, compared to the first six months of 2014. In contrast to these markets, leasing in Denver, Phoenix, Los Angeles and San Francisco and Silicon Valley shows little sign of cooling.

Multiple Factors Impacting Leasing
Slower leasing so far in 2015 in many markets (a decline of more than 15% in two-thirds of major markets) can be attributed to several factors. For one, the breakneck pace of job creation in high-growth markets such as Atlanta and Dallas/Forth Worth has decelerated just a bit – from 4.0%-5.0% to 3.0%-4.0% (still well above the national average). Also, the surge in 2006 and 2007 leasing created a cyclical peak in 2016 and 2017 rollovers, which was boosted by companies signing early renewals. The very largest of the tenants in this cohort have satisfied their space needs. Additionally, during 2013 and 2014 many of the very best bargains were spoken for. In Lower Manhattan, for example, the sub-$45 Class A space that was still out there a few quarters ago has been snared. As traditional tenants in more markets a bit of a standoff is emerging particularly between landlords and traditional space users unwilling to ante up. Biotech companies in Cambridge may be willing to pay 70 or even $80 but banks and law firms are not. It remains to be seen whether this slowdown in leasing is just a lull, or if the concern expressed by some analysts – that the recovery is getting long in the tooth – is becoming a reality. Of note, Boston, Chicago, Los Angeles and Manhattan (in contrast to San Francisco and Silicon Valley) still depend on traditional space users for most of their leasing. Banks and law firms remain firmly rooted in the reality that their profit margins and revenues are still below pre-recession norms. Consequently, resistance to rental rate escalation in Boston’s Back Bay, Downtown Chicago and Midtown Manhattan still prevails.

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

Allianz and Aareal Cooperate in €630M Syndication

Allianz Real Estate, the Munich-based property investment and asset managers, announced this week that it participated in a high-volume financing of a pan-European office property portfolio arranged and underwritten by Aareal Bank. According to a press release, the share of Allianz Real Estate in this senior financing (totaling €630 million) amounts to €365 million.

"Investing into this high-volume, Pan-European facility is in line with the growth and diversification strategy of European Allianz companies in the property sector," said Roland Fuchs, Head of European Real Estate at Allianz Real Estate GmbH. "Our cooperation with Aareal Bank has been successful, in particular with regard to structuring and documentation requirements specific to the insurance industry."

"This syndication is another milestone in Aareal Bank's cooperation with leading insurance companies such as Allianz. At the same time, it reflects our aim to win over institutional investors as syndicate partners, alongside banks," added Christian Schmid, Managing Director, Business and Syndication Management at Aareal Bank.

The portfolio with a gross leasable area of around 186,000 square meters is comprised of eleven office buildings in major cities of seven European countries, namely in Brussels, Hamburg, Paris, London, Milan, Amsterdam, Rotterdam and Gothenburg. The borrower is NorthStar Realty Finance Corp. who acquired the portfolio with a total value of €1.1 billion.

For more news and information visit Blumberg Partners.

McGraw Hill Buys SNL Financial in $2.2B Deal

McGraw Hill Financial, Inc., which is the parent company of Standard & Poor's Ratings Services, S&P Capital IQ, Platts, J.D. Power and Associates, and is the majority owner of the S&P Dow Jones Indices joint venture, announced this week that it had executed an agreement to acquire SNL Financial for approximately $2.225 billion in cash. Founded in 1987, Charlottesville, VA-based SNL Financial is privately held by an affiliate of New Mountain Capital LLC with approximately 3,000 employees based in 10 countries. According to a New York Times article, New Mountain Capital took a majority stake in the firm in 2011 in a deal that it said valued the company at about $450 million at the time.

"We are enthusiastic about SNL because it is a fast-growing, highly complementary subscription-based business that will enable us to accelerate our strategy to be the leading provider of transparent and independent benchmarks, analytics, data and research across the global capital, commodity and corporate markets," said Douglas Peterson, President and CEO of McGraw Hill Financial in a press release. "This transaction provides unique opportunities to provide our customers with end-to-end data solutions and to develop exciting new services, enhance existing offerings and expand into attractive adjacent markets. Adding SNL to our portfolio creates a high-growth market data and analytics business that will leverage the power of the S&P Capital IQ and Platts global platforms to realize the full potential of SNL's financial and commodities products."

"This is an exciting day for our clients, employees and shareholders and a true milestone event in our 28 year history," added Mike Chinn, President and CEO of SNL Financial, who will report to Mr. Peterson following the closing of the transaction. "New Mountain Capital has been a tremendous partner for us over the last four years. The team there provided excellent guidance and supported numerous growth initiatives that enabled us to double our revenues over that period. We believe McGraw Hill Financial, Doug Peterson and his leadership team are ideal partners as we relentlessly pursue our mission of providing the highest quality sector-specific data, news and analytics to our clients. We're thrilled to continue this journey with the McGraw Hill Financial team and join their portfolio of market-leading brands."

For more news and information visit Blumberg Partners.

Beacon Starts Building Charlotte Office Building

Charlotte, NC-based Beacon Development broke ground this week on a new seven-story office building with ground-floor retail at 500 East Morehead in Charlotte. The company, also known as Beacon Partners, first announced plans for the development in February, which required demolition of the existing 44,000-square-foot building on the lot next door to the Dowd YMCA. The demolition process will be followed by vertical construction of the building, which will total 180,000 square feet and will feature 15,000 square feet of retail space. Beacon bought the property in 2012 for $5.25 million, and is planning to finish the building in the fourth quarter of 2016.

Beacon is moving forward with 500 East Morehead on a speculative basis, meaning it has no tenants signed prior to construction, but Mike Harrell, a partner with Beacon, says interest in the development among office users has been strong. "We think the timing is right for new product at this location," said Harrell. "There's lots of interest."

Charlie Swanson and Kristy Venning with Beacon are handling leasing for 500 East Morehead. Balfour Beatty is the general contractor, and BB+M is the architect.

For more news and information visit Blumberg Partners.

Miller Global Buys Ocean Ridge Office Building

Miller Global Properties, a Denver-based real estate investment company, has purchased Ocean Ridge, a 75,000-square-foot office building in Carlsbad, CA for an undisclosed price. Louay Alsadek, Larry Cambra, Roger Carlson and Hunter Rowe of CBRE represented the seller, an unnamed institutional pension fund advisor, as well as Miller Global Properties. CBRE announced the sale, noting that the property was 77% leased at the time of sale.

"Ocean Ridge is the only LEED Gold multi-tenant office building in Carlsbad with subterranean parking," CBRE's Louay Alsadek said in a press release. "Combined with a credit tenant roster, an ideal location in proximity to I-5 and retail amenities along with expansive ocean views, Ocean Ridge is the foremost office investment in the entire submarket.

Located at 5796 Armada Drive, Ocean Ridge the three-story Class A property features ocean views adjacent to the Carlsbad Flower Fields and less than one mile from the ocean. Developed in the premier Carlsbad Ranch office district with direct access to I-5 from Palomar Airport Road, major tenants include Morgan Stanley, Charles Schwab, West Development and Meketa Investment Group.

For more news and information visit Blumberg Partners.

Ares Management Buying Kayne Anderson for $2.55B

Ares Management L.P., a leading global alternative asset manager, announced this week that it has agreed to buy Kayne Anderson Capital Advisors L.P. for $2.55 billion, creating one of the nation's largest and most diversified alternative asset managers with a combined $113 billion of assets under management. The two firms, which are headquartered one block from each other in Los Angeles, will operate as Ares Kayne Management, L.P. with Kayne Anderson Chairman and Founder Richard Kayne and Ares Management Chairman and CEO Ressler serving together as Co-Chairmen. The transaction is expected to close on or around January 1, 2016, subject to customary regulatory approvals, investor consents and other closing conditions.

"We have long known and admired Kayne Anderson as an industry leader in energy, energy infrastructure, real estate and other asset classes, and this merger will make us a differentiated investment manager with five market-leading businesses. We expect the combination will make us better investors by greatly enhancing our expertise in these compelling sectors and will create new opportunities as we leverage each other's complementary investor bases to expand our distribution," said Tony Ressler, Ares Chairman and CEO in a press release. "In addition, Kayne Anderson adds long-lived capital and significantly increases our fee-related earnings, which we expect will make this merger meaningfully accretive to Ares' unit holders."

Ares will pay $2.55 billion to Kayne Anderson's owners, consisting of $500 million to $750 million in cash and 94.7 million to 107.9 million partnership stock units, according to a regulatory filing Friday. According to a Bloomberg Business report, employees of Ares will own about half of the new company and Kayne Anderson employees approximately 30%, Tony Ressler said on a conference call Friday. As a condition of the merger, Kayne Anderson employees will be restricted from transferring equity from the transaction until May 2016 and will be subject to a lockup on sales through 2021, reported GlobeSt. Ares employee unit holders will be subject to similar restrictions.

For more news and information visit Blumberg Partners.

Gladstone Inks Atlanta Sale-Leaseback Deal

Gladstone Commercial Corporation, the McClean,VA-based REIT, announced this week that it had purchased an office building in Atlanta, GA for $13 million and, as part of a sale-leaseback deal, the property was leased back to the Delta Community Credit Union, the 23rd largest credit union in the U.S. The 78,151 square foot building is the credit union's flagship retail branch and also serves as an office location. The property address, representation and full terms of the deal were not disclosed.

"This acquisition demonstrates Gladstone Commercial's continued focus on partnering with strong tenants to acquire properties in growing markets," said Gladstone Commercial's Senior Managing Director Buzz Cooper in a press release. "This acquisition brings our Atlanta MSA portfolio to nine properties. We look forward to expanding our relationship with Delta Community Credit Union in the future."

"The fundamental strategies for sale-leasebacks remain unchanged despite the ups and downs in the real estate markets in the recent past," Ankur Gupta, a partner in the Chicago offices of McDermott Will & Emery’s Corporate Advisory Group, told GlobeSt.com in comments about the transaction. "But savvy players are fine-tuning those strategies in the current recovery to gain an edge over the competition to help them offer the most attractive terms for a given transaction."

For more news and information visit Blumberg Partners.

LeSaint Grabs OH Industrial Property for $29M

LeSaint Venture LLC, an affiliate of industrial and commercial real estate investment firm Cohen Asset Management Inc., announced this week that it had purchased 8910 Le Saint Drive in Fairfield, OH for $29 million. The name of the seller or terms of the deal were not disclosed.

The industrial building sits in the Westchester submarket of Cincinnati, Ohio on 36 acres of land with over 700,000 square feet of space. The property was 100% leased at the time of sale to KAO USA Inc., operating out of the location for roughly 15 years, and Dawson Group Inc. Dawson Group extended its lease of 50,400 square feet of space in the building earlier this year, according to a Cincinnati Business Courier article. It is a nationwide transportation company that specializes in pharmaceutical, industrial and turnkey fulfillment solutions. Jeff Bender, executive managing director with DTZ in Cincinnati, represented the landlord in that deal.

"We are excited to maintain and expand our industrial footprint in Cincinnati with this acquisition, and we will continue to aggressively seek opportunities to acquire properties that possess superior locations and functionality for the markets they serve," said Brandon Delf, Executive Vice President and CIO of Cohen Asset Management in a statement.

For more news and information visit Blumberg Partners.

Vulcan Sells Westlake Office Building for $251M

American Realty Advisors announced this week that it had acquired 2201 Westlake, a 12-story office building in the heart of South Lake Union in Seattle, from Vulcan Real Estate. The building, which is home to Amazon and international health nonprofit PATH, traded hands for about $251 million, according to a Seattle Times article. At just over $791 a square foot, the sale sets a record for the highest price paid for a Seattle-area office building, brokers said, topping the $745-a-square-foot paid in 2013 by Munich-based GLL Real Estate Partners for 202 Westlake. CBRE handled the transaction with a team led by Kevin Shannon and supported by the local CBRE office. Vulcan said in a press release that it intends to invest the funds from the property sale toward its continued development efforts, as well as new land and value-add investment opportunities throughout the region.

"We were very pleased by the broad interest we received from institutional investors," said Ada M. Healey, Vice President of Real Estate for Vulcan Inc. "The pricing reflects both the exceptional quality of the asset and the highly-desirable characteristics of the Seattle office market."

"Opportunities to acquire a newly-constructed building with high-quality tenants at a 'Main and Main' location are rare," added Drew Hess, Senior Director, Investment Group for American Realty Advisors. "This purchase secures a fully-leased Class A asset at an ideal location and still offers strong rental growth opportunities beyond an attractive risk-adjusted return."

Developed by Vulcan in 2009, 2201 Westlake is an all-concrete 12-story structure with large office floorplates ranging from 22,000 to 39,000 square feet, expansive window lines, 14 foot floor-to-floor heights throughout the building, 336 parking stalls in a five-level subterranean garage, raised- floor HVAC distribution, and 23,400 square feet of high-quality retail space directly across the street from Whole Foods. In addition to office space, the ground floor of the building takes advantage of the location with high-value retail space, currently occupied by Bang & Olufsen, West Elm, Einstein Bagels, and Ann Sacks Tile & Stone. American is acquiring all of the office and retail components of the mixed-use building that also includes 135 residential units known as the Enso condominiums.

For more news and information visit Blumberg Partners.

General Motors Picks Up Austin Office Building

General Motors is adding to its Austin footprint with the purchase of a 302,604-square-foot office building located just down the street from their Austin IT Innovation Center in North Austin. Los Angeles-based Karlin Real Estate announced that it sold the property at 13201 McCallen Pass for an undisclosed sum with representation from CBRE Group Inc., noting in a release that GM (which was represented by JLL in the deal) acquired the building to complement its existing center, which opened in 2012.

According to a KXAN report, the facility is located within Sector 6, the first phase of the 400-acre master planned technology and office park being developed by Los Angeles-based Karlin and Dallas-based Trammell Crow Company. Sector 6 was previously occupied by Dell Inc. A year ago, Karlin announced its partnership with Trammell Crow to develop the rest of the land as Parmer, a mixed-use, master-planned commercial and residential community that would be built over multiple years.

For more news and information visit Blumberg Partners.

Montana Avenue Sells The Station for $31M

Montana Avenue Capital Partners, the Santa Monica-based real estate company, has sold The Station in El Segundo for $31 million -- or $580 per square foot -- only a year after purchasing the office property for $11.3 million. Montana Avenue spent that time repositioning the 53,778-square-foot building at 2201 E. El Segundo Boulevard with several outdoor workspaces, in addition to having a Metro station at the creative office building, prompting the property rebrand to The Station. The building was sold to AGI Properties, which was looking for an exchange buy after selling a Costco in Torrance; JLL represented Montana Avenue Capital Partners in the transaction.

"This is highest price per square foot for an investment building that is over 25,000 square feet," Steve Solomon, managing director at JLL, told GlobeSt.com. "This passes the last highest comp in the market by about 80%." Solomon went on to tell Bisnow that AGI Properties was attracted to the building for its stable tenant: L'Oréal, which recently signed an 11-year lease for the entire building with move-in expected in Q4. "Timing is always key in all real estate deals," Solomon said. "Certain parts of El Segundo are actually as in much demand as Manhattan Beach."

For more news and information visit Blumberg Partners.

BLDG Secures $254M Loan

BLDG Management Co., the privately held NYC-based real estate company, has secured a $254 million, 10-year construction-to-permanent loan in a deal brokered by The Greystone Bassuk Group. Bank of China provided the loan for the development of an 80/20 property at 222 East 44th Street, according to a Commercial Observer article. Under the 80/20 Housing Program, will contain 342 residential units at market-rate rent and 87 affordable units for households earning 60 percent of the New York City area median income or under.

"While Bank of China is a relatively new player in the "80/20" space, their long-term orientation and emphasis on sponsorship made them an ideal partner for BLDG and allowed them to deliver a superior execution," said Greystone's Drew Fletcher, EVP.

Greystone CEO Richard Bassuk added, "BLDG's project is timed perfectly to satisfy the growing need for full-service luxury rental product in a highly convenient, yet underserved submarket of Midtown East."

The project is on a through-block site extending from 43rd Street to 44th Street between 2nd Avenue and 3rd Avenue in a centrally located and underserved residential submarket of Midtown East. The project will consist of a 43-story high-rise multifamily residential apartment tower with ground floor retail and a multi-level parking garage.

For more news and information visit Blumberg Partners.

Savanna Completes Sale of 100 Wall Street for $275M

Savanna closed on the sale of 100 Wall Street to Cornerstone Real Estate Advisers this week in a deal worth $275 million. Savanna originally acquired the 29-story office tower between Front and Water Streets in the Financial District in 2011 for about $120 million, adding about $25 million in capital improvements. Eastdil Secured's Douglas Harmon and Adam Spies brokered the sale on behalf of Savanna; terms of the deal were not disclosed.

"We are proud of the transformational change we achieved at 100 Wall Street," said Kevin Hoo, Managing Director at Savanna. "The incremental capital investment has significantly added to the property's future resiliency and repositioned it as a premier destination for a wide range of global, institutional quality tenants." In the past two years, Savanna leased over 355,000 square feet of space to several prominent businesses, raising the building's occupancy from 78% shortly after acquisition to 97% today. Major tenants include Lester Schwab Katz and Dwyer, Loeb Holding Corporation, Crenshaw Associates, and PCubed.

For more news and information visit Blumberg Partners.

Skanska Plans Another Spec Office Project

Skanska USA Commercial Development made another big announcement this month with plans for a spec office development in Washington, DC with estimated total development costs of $116 million. The 11-story, 234,000-square foot building on the Riverfront at 99 M Street SE is being designed by Gensler to Gold LEED standards and will include 11,000 square feet of retail, plus an extensive green roof which allows for filtration and storage of storm water. Skanska expects the building to be delivered Q1 2017.

Skanska Executive Vice President Rob Ward said he is bullish on demand for office space in the Navy Yard area and believes 99 M will have plenty of selling points for both potential office and retail tenants. "We think it's a great time to build this building, actually, and there's a handful of things that come to mind that tell me it's a great time to go ahead," Ward said. "We have a great location. We're at the corner of First and M, I would argue that's the corner of Main and Main in this market."

For more news and information visit Blumberg Partners.

SF Park Tower Project Gets City Approval

The San Francisco Planning Commission has approved another office tower around the upcoming Transbay Transit Center as the Park Tower project prepares to move forward with construction at the corner of Beale and Howard Streets. Developed by Chicago-based John Buck Co. and Golub Real Estate Development and designed by Goettsch Partners, the new 43-floor building is expected to deliver in 2018, and add to the nearly 1.1 million square feet of office space that already exists on three blocks around the upcoming Transbay Transit Center.

According to Chris Roeder, International Director at brokerage JLL and Park Tower's main leasing scout, construction of the Tower can ideally commence this November. "The way San Francisco leasing is going, it's just going to happen," he said. "(Companies) are going to pick their building and cut their deal – that's what LinkedIn, Dropbox, Salesforce did. They don't want their competitors to know what they're doing. When it happens, it happens." Roeder said he and his group have already pitched to several business about their potentially leasing office space in Park Tower.

Park Tower tenants will enjoy Bay views from 70% of the floors—the tower will be closer to the bay than any other ground-up office development in San Francisco. The building features over 751,500 square feet of Class A++ office space and high-end retail space, and 50,000 Square feet of outdoor & open space, including 14 sky decks and a ground level park. The other two buildings in the Transbay Transit Center, Salesforce and 181 Fremont Towers, will open in the next couple years.

For more news and information visit Blumberg Partners.

Gateway Business Park Construction Kicks Off in Union Township

New York-based Clarion Partners, a real estate investment manager, together with Baltimore-based MRP Industrial, an affiliate of MRP Realty, began construction this week on a new development in Jonestown, PA. The project sits on the site of the former I-81/I-78 Logistics Park in Union Township; last October, Clarion and MRP purchased a 129-acre parcel with plans to develop two buildings within the three building, 1.9M-square-foot Gateway Logistics Park. This week they broke ground on Building B, a 500,000 square foot structure at 545 Old Forge Road.

The development includes pad-in-place development parcels for both a 1,002,000-square-foot distribution center at 575 Old Forge Road and Building B. MRP Realty said it is talking to prospective lease and build-to-suit prospects, and that the buildings would be ideal for northeast region distribution and e-fulfillment retail operations.

The third building in the development is being planned by Pennsylvania real estate company Vision Group Ventures, according to corporate spokesperson. That building will be approximately 400,000 square feet.

For more news and information visit Blumberg Partners.

Avison Young Sells Landmark Building

Avison Young, the Toronto-based real estate firm, has completed the sale of the Landmark Building at 2100 Main Street in Irvine, CA for $27.41 million. A partnership between 2100 Main L.P. and Bethel Holdings, LLC sold the Class A office building to Property Investment Co., which was represented by North American Commercial and Industrial Properties, Inc. in the transaction. Terms of the deal were not disclosed.

"This transaction was completed off-market," Avison Young Principal Alan Pekarcik told GlobeSt in an exclusive interview. "The buyer plans to occupy approximately 10,000 sf to 15,000 sf of the building." According to the report, the property was approximately 60% occupied by nine tenants at the close of escrow.

The Landmark Building is a four-story, 89,041-square-foot building off of MacArthur/Von Karman, within minutes of the John Wayne Airport. The building is located on the manicured grounds of Irvine Concourse Business Center with a large covered parking structure adjacent to the property. Originally built in 1985, it recently underwent upgrades to include a renovated lobby with floor to ceiling windows and modern, open office floor plans.

For more news and information visit Blumberg Partners.

Skanska Breaks Ground on Seaport Office Tower

Construction began this week on a new 17-story Class A office building in Boston's vibrant Seaport District, part of Skanska's $281 office and retail complex. Skanska USA Building is the construction manager for the project and will add a contract value of $150 million in order bookings for the third quarter of 2015. Skanska is building the tower on a speculative basis, with no tenants signed; construction is expected to be finished in early 2018.

Designed by Boston architectural firm CBT, the elliptical-shaped glass office building features two floors of retail and two below grade parking levels, with total leasable space of approximately 400,000 square feet. The curved shape of the tower will create work spaces that are better suited for collaboration because there will no corner offices, said David Nagahiro, principal at CBT Architects. The highly sustainable building is targeting LEED Platinum certification.

"121 Seaport is not your typical office building," said Shawn Hurley, executive vice president of Skanska USA Commercial Development in Boston. "We believe that 121 Seaport is pushing that design level in the city."

"As the district gets a little bit filled out, developers are going to have to be strategic about differentiating themselves from other buildings," added architect Tim Love, principal at Utile Inc. and president of the Boston Society of Architects. "The developer obviously made the decision that it's worth spending more on a building like that to attract tenants because it's kind of a marquee address."

"I want to congratulate Skanska and CBT as they break ground on this unique office building on Boston's waterfront," said Mayor Walsh at the groundbreaking ceremony. "The development team has clearly put a lot of thought into making 121 Seaport a place where people get excited about going to work. Put that atmosphere together with the building's sustainable features, and you get a truly unique development in one of the fastest growing areas of our city."

For more news and information visit Blumberg Partners.

BLT Buys Former Pitney Bowes' HQ

Harbor Point developer Building and Land Technology (BLT) announced this week that it had purchased the former Pitney Bowes headquarters building at One Elmcroft Road in the South End of Stamford, CT for $38.5 million. The vacant 550,000-square-foot Class A office building was sold by Pitney Bowes, which moved its operations to a different Stamford location. According to a CTNOW report, BLT did not disclose a timeline for leasing the complex, which was built in 1986 and designed by noted architectural firm I.M. Pei & Partners.

"We remain bullish on Stamford and are delighted to make this new investment in the office market here,” said Carl Kuehner, III, CEO of BLT, of the deal. "This is a spectacular opportunity to own and redevelop an outstanding asset that will meet the needs of today's companies. ... Stamford is a bright spot for the Connecticut economy, and we are proud to have secured long-term commitments from tenants like Deloitte, Starwood, and XL Reinsurance by offering high quality space, excellent access to transportation, and the lifestyle amenities that help these companies grow and attract top talent."

The property is a 550,000-square-foot Class A office complex adjacent to Harbor Point, the transformative mixed-use waterfront development in Stamford. Situated at the tip of the South End peninsula, the complex offers stunning views of Kosciuszko Park, Stamford Harbor, and Long Island Sound. The sale price of $70 a square foot for the building is considered a bargain, considering what it would cost to construct the building today.

"To build that building brand new, it would be well in excess of five times that cost," said James Fagan, senior managing director at the Stamford office of commercial real estate service firm Cushman & Wakefield. Cushman & Wakefield represented Pitney Bowes in the sale.

For more news and information visit Blumberg Partners.

JV Developing New Brooklyn Navy Yard Workspace

Boston Properties, Inc., Rudin Development and WeWork, in conjunction with the Brooklyn Navy Yard Development Corporation, announced this week that, under a joint initiative, the companies will be developing a new 675,000-square-foot building at the Brooklyn Navy Yard to cater to the rapidly emerging technology and creative industries in Brooklyn. The new building, dubbed Dock 72 at The Brooklyn Navy Yard, is a $380 million project scheduled to begin in late 2015 with an anticipated tenant delivery in late 2017. The building design created by S9 Architecture, an affiliate of Perkins Eastman, is designed to drive innovation and collaboration between tenants. According to the agreement between the development team and BNYDC, all tenants in the building will pay a living wage to their employees, making it the first new development in Brooklyn with such a commitment.

"From start-ups to expanding firms, this new workspace is going to put thousands of New Yorkers to work and help launch the next great wave of home-grown innovation. We are growing the Navy Yard's capacity for manufacturing, tech and the maker economy faster than any time in its modern history. We are thrilled to work with Boston Properties, Rudin Development and WeWork to bring this new space online and keep building on the Navy Yard's incredible success story," said NYC Deputy Mayor for Housing and Economic Development Alicia Glen.

"The tenants that occupy this new building will contribute to the modern industrial ecosystem of the Yard—where technology, design and manufacturing converge. The shared work space will nurture hundreds of small businesses and spark the next generation of large-scale employers in the Yard," added BNYDC President and CEO David Ehrenberg. "Furthermore, this type of large, private-sector investment signals a watershed moment in the growth of the Brooklyn Navy Yard. Thanks to this vote of confidence from respected investors and developers and this partnership with WeWork, BNYDC will be able to attract additional top creative and industrial firms that will create thousands of jobs for local residents."

For more news and information visit Blumberg Partners.

ARC Healthcare Trust II Buys Medical Center

American Realty Capital Healthcare Trust II Inc. has acquired a 34,047-square-foot, medical office building directly adjacent to Santa Rosa Memorial Hospital in Santa Rosa, CA. Holliday Fenoglio Fowler L.P. sold the property on behalf of Sotoyome Medical Building LLC for an undisclosed sum, according to a GlobeSt.com report. The Press Democrat reported in November 2014 that the building was part of a $30 million portfolio being put up for sale, after Newmark Grubb Knight Frank was hired to market the properties. Terms of the ARC deal were not disclosed.

"St. Joseph's outpatient center generated tremendous investment demand from a broad spectrum of capital providers including healthcare REITs, institutional funds and high net worth private investors," said HFF managing director, Evan Kovac. "The facility is highly specialized and provides critical services such as radiology, mammography and imaging. In fact, the property houses the only PET CT in the North Bay Area. The immediate proximity to Santa Rosa Memorial Hospital, which is part of the prestigious St. Joseph Health System, was viewed extremely favorably by the investment community. Additionally, the North Bay Area location and in particular, the affluent and desirable wine country region were viewed as major intrinsic benefits. As most of us know, the medical office marketplace as a whole is incredibly robust with record level pricing."

121 Sotoyome Street has 34,047 square feet of building space on 128,938 square feet of land zoned for commercial office space. It is leased to St. Joseph through 2019 and is being utilized for outpatient multi- specialty and radiology services. Originally built in 1955, the property has been consistently updated throughout the years with more than $5 million in improvements made since 2005.

For more news and information visit Blumberg Partners.

Tier REIT Sells DC Buildings to Westbrook

TIER REIT, a Dallas-based real estate investment trust focused on commercial office real estate formerly operating as Behringer Harvard REIT I Inc., has sold two buildings in Washington, DC to Westbrook Partners in a package deal worth more than $200 million. The sale of the properties exits TIER REIT from the Washington market as these were their only two portfolio properties in the District.

Behringer Harvard acquired the 127,000-square-foot Colorado Building in August 2004 for $44 million, according to a Washington Business Journal article. In October 2005, it bought the 306,000-square-foot 1325 G for $135.5 million. At the time, CoStar quoted Behringer Harvard Chairman Robert Behringer as saying "we have a potential opportunity to enhance the value of these assets by ultimately selling them as a portfolio."

The first property at 1341 G Street, known as the Colorado Building, is one of the few category III landmark office buildings in the District of Columbia. The building was originally constructed in 1903, then renovated 1989 and 2002 with more than 127,000 square feet of rentable space. The second property is on the same block close to the White House at 1325 G Street, with 306,563 square feet of space in a building that was awarded BOMA 360 designation in 2011.

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Sun Life to Acquire Prime Advisors

Sun Life Financial, the Canadian financial services company, announced today that it will acquire Redmond, WA-based investment manager Prime Advisors Inc. in a deal that's expected to close in Q3. While they haven't yet disclosed terms, the deal is expected to add US$13 billion in assets to the Toronto-based firm’s investment-management unit, bringing the total it oversees for third parties to $50 billion, according to a Financial Post article. The acquisition is part of Sun Life's strategy to broaden its asset management pillar by expanding and diversifying the capabilities of Sun Life Investment Management. Following completion of the transaction, Prime Advisors will operate as a standalone unit of Sun Life Investment Management.

"With its customized approach to liability-based investing for insurance companies, Prime Advisors is a natural fit as we continue to build our Sun Life Investment Management organization," said Steve Peacher, President, Sun Life Investment Management, and Chief Investment Officer, Sun Life Financial. "Prime has a strong team with extensive experience in managing assets and providing investment-related services to institutional investors. The addition of Prime together with our recently announced acquisition of Bentall Kennedy and completed acquisition of Ryan Labs Asset Management will grow Sun Life Investment Management's third-party assets under management to a combined C$50 billion in just over a year, and give us an excellent platform for serving institutional clients and expanding our business in the U.S."

"We are very pleased to join Sun Life Financial and to continue providing our clients with the same high level service and investment focus we have committed to since our founding. Sun Life shares our understanding of the unique needs of insurance companies and fixed income investors. We look forward to offering our clients additional asset management resources and the added benefits of a global, highly respected financial organization," added Don McDonald, President and Chief Executive Officer of Prime Advisors. "This is an important next step for our firm as we continue developing our business and serving our clients."

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