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.

GLP, Indcor Deal Closes

Global Logistic Properties (GLP) and Singapore's sovereign wealth fund completed the acquisition this week of IndCor Properties, the Chicago-based industrial landlord. Blackstone announced this past December that Blackstone Real Estate Partners VI & VII had agreed to sell IndCor Properties to affiliates of GIC, Singapore's sovereign wealth fund, for $8.1 billion. The portfolio, which spans 26 U.S. markets, including Chicago, is 91% leased, according to Global Logistic.

Ming Z. Mei, GLP's CEO, says the acquisition, which represented a significant discount to replacement cost, establishes "immediate scale in the US" for his company, along with "a strong platform for future growth. It is consistent with our strategy to operate in the best markets globally and to grow our fund management platform. Given the quality and the strong market fundamentals, we are confident that we can increase the lease ratio and capture positive leasing spreads in the near future. The strong existing US team which joins GLP further strengthens our team."

When GLP and GIC, Singapore's sovereign wealth fund, announced their acquisition this past December, Tia Miyamoto, regional head, Americas, GIC Real Estate, said the two companies bought the IndCor platform because it's "an attractive point in the recovering US industrial market cycle. As a long-term investor, we believe this investment will achieve stable income growth and will allow us to add value over the long run." GIC will maintain a 45% stake in the portfolio.

For more news and information visit Blumberg Capital Partners.

Blackstone Grabs Las Vegas' Cosmopolitan for $1.73B

Deutsche Bank has struck a deal to sell The Cosmopolitan of Las Vegas resort and casino to Blackstone Real Estate Partners VII for $1.7 billion, which will be paid in cash. Deutsche Bank invested $4 billion in the resort it acquired after picking up the foreclosed property following the previous owner's default on a construction loan in 2008. The sale represents one of the biggest losses on a single project that Las Vegas has ever seen. A Deutsche Bank spokesman declined to specify the loss from the Cosmopolitan in a Wall Street Journal article, but the bank has reported €6.9 billion ($9.5 billion) in losses from noncore assets since 2012.

"The bank is committed to reducing its non-core legacy positions in a capital-efficient manner which benefits shareholders," Pius Sprenger, head of the Frankfurt-based lender's non-core operations unit, said in a statement today. The division is selling and winding down assets that Deutsche Bank doesn't consider to be central to its business. The Cosmopolitan opened in December 2010, but made net losses of $440 million over its first four years of operation. Other bidders for the property included Crown and a joint venture of TPG Capital, Apollo Global Management and Caesars Entertainment, according to people familiar with the bidding process.

"As a significant investor in the hospitality sector, Blackstone recognizes the value and potential in The Cosmopolitan as well as Las Vegas itself," said Tyler Henritze, senior managing director of Blackstone's real estate group. "This marks the beginning of the next chapter for The Cosmopolitan of Las Vegas, and the thousands of dedicated CoStars (i.e. employees of the property) who are committed to providing a compelling guest experience."

Blackstone's acquisition of the Cosmopolitan "speaks to a historically smart real-estate buyer making a statement on the length of the Las Vegas Strip recovery," said J.P. Morgan casino analyst Joe Greff in a report Thursday.

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SF Financial District Building Gets $126M Loan via Starwood

Starwood Property Trust announced today that it had originated a $126 million first mortgage loan and mezzanine loan for 100 Montgomery in San Francisco on behalf of Blackstone Real Estate Partners VII. Blackstone Group agreed to buy a 25-story building in downtown San Francisco for $165 million last month from a joint venture of Houston-based Hines and Sterling American Property Inc., which previously purchased the tower in January 2006 for $67.5 million from Equities Office Properties Trust. Starwood has said that it will sell the first mortgage "in the near term" to increase its investment returns. The total financing will have an initial funding of $115.5 million with $10.5 million of future funding for tenant improvements and leasing commissions.

"We are excited to complete another complex financing transaction with Blackstone," said Boyd Fellows, President and Director of Starwood Property Trust. "Similar to the $61 million Glendale transaction we announced earlier this quarter, we funded the entire capital stack with a flexible structure which meets Blackstone's exact financing needs. Our ability to act as a 'one stop financing solution' for borrowers looking to finance large transitional assets is a significant strategic advantage."

As of last month, the office building was 84% occupied, with the U.S. General Services Administration as its largest tenant, according to the people. Situated on the corner of Sutter and Montgomery Streets in the Financial District, the building offers more than 420,000 square feet of space including retail storefronts. 100 Montgomery, also known as the Equitable Life Building, has undergone $54 million in capital improvements redesigned by Robert A.M. Stern Architects, including a comprehensive renovation in 2009 that added a new glass facade and lobby.

For more news and information visit Blumberg Capital Partners.

Centro US Assets Close for $9B

Centro Properties Group, which specializes in the ownership, management and development ofshopping centers, confirmed the successful closing of its U.S. assets and platform of Centro Properties Group this week. BRE Retail Holdings Inc., an affiliate of Blackstone Real Estate Partners, purchase the US assets and platform of Centro Properties Group and its managed funds for approximately $9.0 billion.

"This transaction is indicative of the strength of [Centro's] US platform, including the high quality and diversification of its asset base and operating capabilities," said Michael Carroll, CEO of Centro Properties Group US. "We are fortunate to have such a sophisticated investor as Blackstone as our partner. Together, we look forward to building a premier retail real estate company."

"We are extremely excited about this transaction, which enables us to expand our retail real estate presence with a leading platform," said A.J. Agarwal, Senior Managing Director of The Blackstone Group. "The Company is well-positioned today with an attractive portfolio comprised of strategically located assets in dense, infill markets with productive grocer anchors. We look forward to partnering with the Company's experienced management team to help them pursue the growth opportunity embedded within this portfolio."

For more news and information visit Blumberg Capital Partners.