NYC REIT Buys 1140 Avenue of the Americas

American Realty Capital's New York City REIT, Inc. (NYCR), a public non-traded real estate investment trust that debuted on the NYSE in April 2014, has entered into an agreement to acquire 1140 Avenue of the Americas in Midtown Manhattan for $180 million. BPGL Holdings LLC, an affiliate of Blackstone Real Estate Partners VI L.P., is selling the 22-story Class A office property in a transaction expected to close during the second quarter. Full terms of the deal and representation were not disclosed.

"We are pleased to announce the acquisition of 1140 Avenue of the Americas, which enjoys a prime central Midtown Manhattan location with diverse and high quality tenants, as well as a recent $85 million capital investment from Blackstone," said Michael Happel, Chief Executive Officer of NYCR, in a press release. "The property features boutique floor plates, recently upgraded elevators and common areas, with a number of leases below market. This acquisition is consistent with our strategy to acquire institutional quality real estate in prime Manhattan locations."

Built in 1962, 1140 Avenue of the Americas is located between West 44th and West 45th streets and features three penthouse floors with 5,000 square feet of usable terraces enhanced by Central Park and Bryant Park views. Blackstone originally acquired the tower in 2011 when it bought a non-performing note on the asset for just $98.25 million, at which time the property was nearly 75% vacant. Blackstone repositioned the office tower after purchasing it, adding a new glass façade, new lobby, new elevators, and redesigned mechanicals and infrastructure. The tower is currently 91% leased, with major tenants including City National Bank, Upsilon Ventures, and Aristeia Capital.

For more news and information visit Blumberg Partners.

ARC Buys R&D Building for $23M

American Realty Capital announced this week that it had purchased a research and development building in Webster Groves, MO from Missouri-based Owen Ridge Associates, an LLC with a registered agent of Michael Barry of Owen Development. Colliers International closed the $22.8 million sale, negotiating the sale terms; according to their research, the total transaction dollar amount is the largest St. Louis has seen year-to-date for a single tenant, NNN leased office property sale. The Kase Group, an affiliate of Sperry Van Ness based in Northern California, represented American Realty Capital in the transaction.

The 90,000-square-foot research and development facility at 381-385 Marshall Avenue is part of the Owen Ridge Business Park, a well-positioned, infill development catering to office, technology and services tenants, situated on approximately 32 acres in St. Louis, Missouri. According to the St. Louis Better Business Bureau, Covidien is listed as a tenant at the facility.

For more news and information visit Blumberg Capital Partners.

American Realty Selling Cole Capital for $700M

American Realty Capital announced this week that it is selling Cole Capital, the private capital business of American Realty Capital Properties (ARCP), to RCS Capital Corp. (RCAP) for at least $700 million. As part of the agreement, American Realty will act as an adviser to Cole Capital’s non-traded real estate investment trust, sharing fees with RCS Capital, according to a Bloomberg report. As part of the transaction, ARCP will also be entitled to an earn-out of up to an additional $130 million based upon Cole Capital's 2015 EBITDA. The companies have also entered into a strategic arrangement by which ARCP will act as sub-advisor to Cole Capital's non-traded real estate investment trusts and acquire and property manage net lease real estate assets.

"The acquisition of Cole Capital is strategically and financially important to RCAP," said Michael Weil, RCAP's Chief Executive Officer. "We believe the combination of the two companies will achieve several significant strategic objectives in a single transaction, including growing our outstanding wholesale team's management and field ranks and materially expanding our investment management business segment by nearly 400%. "

"We are also excited about the exclusive relationship with ARC Global II where we will utilize our core strength of sourcing, underwriting and acquiring net lease real estate for the U.S. portion of the fund," added David Kay, Chief Executive Officer of ARCP. "We are now able to stay true to our pure play net lease strategy while we continue our competitive advantage utilizing non-traded REITs as a source of capital and scale. We are extremely excited to partner with RCAP and ARC Global II and look forward to a long-standing relationship in the net lease space."

For more news and information visit Blumberg Capital Partners.

ARCP Picks Up Gateway Center Complex in KY for $82.6M

In what's being called one of the largest-ever commercial real estate sales in Northern Kentucky, ARCP Acquisitions LLC, a subsidiary of the New York-based real estate investment trust American Realty Capital, announced that they had purchased the Gateway Center and Gateway Center West in downtown Covington, Kentucky for $82.6 million. ARCP bought the property from Scott Street Land Co., a Wessels Construction affiliate, which originally developed the complex at 333 Scott Blvd. and 300 Madison Ave. in mid-1992. As a result of the sale, Fort Wright-based Wessels will diversify its real estate portfolio to include more multifamily and commercial office areas, according to a Cincinnati Business Courier article. Meanwhile, its affiliate, Guardian Management Co., will continue to provide property management services for the Gateway Complex under an agreement with the new owners.

"With over two decades of work on the part of our company…we felt the time was right to see what the value of the project was on the open market," said Rick Wessels, a spokesman for Wessels Construction. "It generated quite a bit of interest on the part of institutional buyers, and we feel we received maximum value in the end."

For more news and information visit Blumberg Capital Partners.

REISA Panel on Non-Traded REIT Industry

REISA's Spring Symposium met this month with nearly 600 in attendance, featuring an opening session panel, "Liquidity in Non-Traded REITs: Insights from Industry Leaders," with industry leaders American Realty Capital, Cole Real Estate Investments, Inland Real Estate Corporation, and CNL Financial Group. The main message, as noted by CoStar, was that "non-traded REITs need to continue to implement best practices to reduce fees, improve transparency and bring more investors to the industry. Job one will be unlocking shareholder by making good on the $39 billion in liquidity events being considered by companies in the non-traded REIT space." The panel featured Nicholas Schorsch, chairman and CEO of American Realty Capital, Marc Nemer, president and CEO of Cole, Andrew Hyltin, group president, fund management of CNL, and Daniel Goodwin, chairman and CEO of Inland.

"The non-traded REIT industry has generated a tremendous number of headlines in recent months on a number of fronts, particularly as several offerings have or are pursuing liquidity events," said REISA Executive Director John Harrison. "Non-traded REITs are increasingly popular investment vehicles and account for more than $80 billion in assets under management – as these offerings transition from illiquid to liquid investments, they are shaking up the investment real estate world. These industry giants will share their insights on this increasingly important issue to investors and their financial advisors."

"The public markets believe in non-traded REITs. Tomorrow's public companies are coming from this room," said ARCP's Schorsch. “We sit here together on this panel with close to $30 billion of assets that are going to look for liquidity. The bigger the market, the more efficient the transactions."

The Real Estate and Investment Securities Association is a national trade association serving alternative investment and securities industry professionals since 2003, with over 1,200 members who are key decision makers that represent over 30,000 professionals throughout the nation.

For more news and information visit Blumberg Capital Partners.

ARC Healthcare Trust Acquires $60.9M Portfolio

American Realty Capital Healthcare Trust, a public REIT of American Realty Capital, has purchased a three building portfolio of medical office properties in Nevada and Arizona for $60.9 million according to a GlobeSt.com article. The portfolio was purchased from The Cirrus Group LLC for roughly $788 per square foot.

The properties include: one multi-specialty medical campus located in Carson City, Nevada, at a purchase price of approximately $29.0 million; one medical office building located in Las Vegas, Nevada, at a purchase price of approximately $22.9 million; and one inpatient rehabilitation facility located in Phoenix, Arizona, for approximately $9.0 million. The acquisitions total approximately 241,000 square feet, and are approximately 92% leased to 19 tenants. Approximately 11.5% of the tenants, based upon property revenues, have leases expiring prior to December 31, 2016. Nearly 32% of the tenants have lease terms beyond ten years from the closing date.

"It's hard to get zero leases expiring in a ten year period, so for us if only 10 percent of the leases expire over a ten year period we're quite happy with that," said Todd Jensen, chief investment officer at ARC Healthcare Trust."In this case, it's about 10% that expire over the next five years but more than 30% have lease terms beyond 10 years. Typically our lease term is going to be a little bit longer than what you see in this piece of the portfolio but this is still very acceptable to us."

For more news and information visit Blumberg Capital Partners.