AEW Capital Becomes Major Stakeholder at Heritage Plaza

Brookfield Office Properties Inc. announced this week that it had sold a 90% interest in Heritage Plaza, the 5th tallest building in Houston with 1,150,000 square feet of leasable space, to AEW Capital Management. AEW acquired a 41% stake in the building from Brookfield for $118 million, with the remaining 49% coming from an affiliate, according to a GlobalPost article. Brookfield acquired Heritage Plaza in December 2010 in a deal that valued the building at $286 per leasable square foot.

"This transaction aligns with Brookfield's strategy of creating value in an asset through proactive leasing and asset management and then extracting proceeds for use in other endeavors, such as our various development and redevelopment initiatives," said Dennis Friedrich, chief executive officer of Brookfield Office Properties.

"Led by the energy sector, Houston has consistently been one of the fastest growing metro areas in the nation," said Dan Bradley, portfolio manager for the AEW Core Property Trust. "Rapid job growth and expanding business activity have supported very strong demand for office space and we believe this investment capitalizes on these trends."

Heritage Plaza at 1111 Bagby Street is a Class AA office complex that is currently 98.4% leased, up from 84% leased when Brookfield took control of the building. Situated on the western perimeter of downtown Houston, tenant amenities include ample on-site parking and a fitness center.

For more news and information visit Blumberg Capital Partners.

MPG Office Trust To Be Acquired By Brookfield

In a deal that will make Brookfield Office Properties the biggest office owner in downtown Los Angeles, MPG Office Trust has agreed to be acquired. The deal is valued at more than $2.2 billion, including debt and after cash proceeds from the planned sale of MPG's U.S. Bank Tower, said Wilkes Graham, a senior vice president at Compass Point Research & Trading LLC. Brookfield and its partners agreed to pay $3.15 a share for MPG Office Trust Inc.'s common stock, a 21% premium to Wednesday's closing price, and will take control of four skyscrapers totaling five million square feet. Taken with a purchase of preferred stock, the Brookfield-led group would pay more than $425 million in cash for the company, which has about $1.9 billion in debt, according to a Wall Street Journal report.

"We have found a strategic buyer who has the capital and the market presence to appreciate the potential long-term value of our assets," MPG Chief Executive Officer David Weinstein said in the company's statement. "This transaction potentially offers both our common and preferred shareholders a liquidity event that would remain uncertain if the company were to continue on as an independent entity."

"It's the best outcome for downtown L.A. because we now have a well-capitalized ownership, which can at least reinvest in the buildings and in the community," said Carl Muhlstein, a managing director at brokerage Jones Lang LaSalle Inc. "Whereas a nearly insolvent MPG never had enough money to even take care of day-to-day stuff."

"Brookfield buying the rest of MPG's portfolio is like putting together Chrysler, Ford and General Motors. It's that impactful," said John Cushman, the Los Angeles-based chairman of real estate brokerage Cushman & Wakefield. "They will totally control the high end of the market."

For more news and information visit Blumberg Capital Partners.

KBS REIT III Purchases RBC Plaza for $118M

KBS Real Estate Investment Trust III announced this week that it had acquired RBC Plaza, a 40-story building that contains 609,368 square feet of office space and 68,677 square feet of retail and amenity space above an underground parking structure. The full contract price for the sale was reported at $126.5 million, according to a CoStar report. Tom O'Brien and Terry Kingston with Cushman & Wakefield / NorthMarq, along with Mike Winn and Tim Richey with Cushman & Wakefield / Denver, represented the seller, Brookfield Office Properties. KBS Realty Advisors handled the acquisition in-house.

"Brookfield, the seller, has done a wonderful job of running the asset, however the pending closing of one of the anchor retailers provides an exciting opportunity to rethink the four-story retail section of this project," said Rodney Richerson, KBS regional president. "We believe we have a great opportunity to convert some of the upper-level retail floors into creative office space, along with creating a primary entrance off of Nicollet Mall and improving the overall retail mix. In addition to these improvements, we anticipate adding stronger office amenities, conference rooms, a fitness facility and some lobby renovations that will cost approximately $3 million dollars."

RBC Plaza is a 678,045-square-foot mixed-use property in downtown Minneapolis located at 60 South 6th Street. The building is strategically located in Minneapolis' financial district along Nicollet Mall, downtown's most popular and well-known shopping district. Built in 1991, the building was 83% leased to 34 tenants who pay a total of about $8.6 million in rent annually, as of January 1. Tenants include RBC Wealth Management, Marquette Financial Companies, and Fish & Richardson. KBS plans to invest approximately $26.6 million in renovations over the next four years, which will include converting about 32,000 square feet of retail space into office space, KBS said in its SEC filing.

For more news and information visit Blumberg Capital Partners.

KBR Tower in Houston Sold for $174.6M

Downtown Houston's KBR Tower has a new owner this week as Brookfield Office Properties, along with joint venture partner KBR Inc., sold the office building to Corporate Property Associates 17-Global, a public non-traded REIT affiliate of W. P. Carey Inc. for $174.6 million. Brookfield originally acquired its stake in the tower as part of the Trizec portfolio in 2006. A team led by Richard Rudd and Kent Peters of Allied Advisors represented Brookfield on the building sale, according to a Houston Chronicle article. The company also represented the buyer in negotiating and structuring acquisition financing with UBS Real Estate Securities.

"These dispositions continue our active capital recycling program over the past two years in which we have sold seven mature or non-strategic assets and reinvested proceeds into higher-yielding strategic opportunities," said Dennis Friedrich, chief executive officer of Brookfield Office Properties.

"Houston's Central Business District's major office towers are a very much sought-after investment for all types of investors," said Richard Rudd, president of Allied Advisors. "KBR Tower represents investment maturity. Investors want quality, stability and security of cash flow. The fact that the building is located in Houston is a very good thing right now."

Located at 601 Jefferson Street, KBR Tower boasts over one million square feet of headquarter and office space, with KBR occupying about 900,000 square feet in the tower, along with an adjacent 1,500-space parking garage. At the time of the sale, which closed Nov. 16, the property was 99.8% leased to seven tenants, according to a Houston Business Journal article.

For more news and information visit Blumberg Capital Partners.

Brookfield Acquires 799 9th Street NW in DC for $106M

Brookfield Office Properties announced this week that it had purchased 799 9th Street, NW on the corner of 9th and H Streets in Washington, DC for $106 million from A-799 9th Street Holdings, LLC. The 10-story class A office building previously traded hands in November 2006 when Cushman & Wakefield negotiated the sale from Blue Capital Investments for $127.5 million. Brookfield said it is funding the acquisition through new property-level financing of $71.5 million and the balance from available cash resources.

Built in 2001, 799 9th Street holds 203,000 rentable square feet and is currently 96% occupied with all leases expiring in December 2012 and January 2013. The property has 156 parking spaces and several street-level eateries, including OYA Restaurant. Brookfield has said that it has planned improvements for the property, including a full lobby and building entry renovation, a tenant fitness center with showers and lockers, and a new roof terrace with views of the DC monuments.

"The East End submarket is thriving, with low office vacancy, new amenities coming online, and an overall 24-7 neighborhood feel," said Dennis Friedrich, president and global chief investment officer at Brookfield Office Properties. "Our investments in several of the premier office buildings in this submarket are consistent with our strategy of owning high-quality assets in the best-located areas of our core U.S. markets."

For more news and information visit Blumberg Capital Partners.

Hammerson London Office Portfolio Sold for £518M

Hammerson PLC announced this week that it had sold the majority of its office portfolio totaling 884,000 square feet to Brookfield Office Properties for aggregate cash proceeds of £518 million, or $812 million. Brookfield Office Properties is funding the acquisitions through the assumption of $106 million of debt, additional property-level debt expected to be put in place prior to close and from available cash resources. Earlier this year Hammerson announced a revised strategy to become a specialist retail property company, and the intention to sell its London office assets.

The portfolio includes:

-125 Old Broad Street: 26 floors and 98% leased
- 99 Bishopsgate: 26 floors and 62% leased
- Leadenhall Court: 6 floors and 100% leased
- 1 Puddle Dock: 7 floors and 100% leased
- Principal Place, a development property planned for a 599,000-square-foot office tower

Brookfield will look at other buying opportunities “across all of the central London marketplaces,” Martin Jepson, senior vice president for development and investment, told Bloomberg. "This transaction is a unique opportunity for Brookfield Office Properties to acquire a portfolio of top-quality office assets and a well-located development site in the London market," said Dennis Friedrich, president and global chief investment officer of Brookfield Office Properties. "This acquisition aligns with our strategy of providing front-office accommodations to the world's most prestigious tenants by owning and operating premier properties that are well-located within the most dynamic global markets."

For more news or information visit Blumberg Capital Partners.

Newport Tower Sold for Landmark $377.5M Pricetag

Brookfield Office Properties announced that it had successfully sold the Newport Tower office building in Jersey City, New Jersey for $377.5 million, making it the largest single office asset transaction in New Jersey history. Multi-Employer Property Trust (MEPT) bought the 36-story, 1.1-million-square-foot office building with advisement from Bentall Kennedy; CB Richard Ellis represented Brookfield in the transaction.

"This was the optimal time to monetize this mature asset, having achieved opportunistic returns for us and our fund partners," said Dennis Friedrich, president and global chief investment officer of Brookfield Office Properties. "During our six-year period of ownership and management, we were able to successfully lease-up, stabilize, and incorporate sustainable strategies in the building to significantly increase value."

Brookfield originally acquired the building as part of a $7.6 billion purchase of Trizec in 2006. The building was reportedly 89% leased at the time of sale with major tenants including BNP Paribas and AXA Equitable.

For more news and information visit Blumberg Capital Partners.

Chevron Picks Up Four Allen Center for $340M

Four Allen Center, the former headquarters for Enron in Houston, was purchased by Chevron Corp. for $340 million this week as Brookfield Office Properties unloaded the property from its portfolio. According to the Wall Street Journal, Brookfield bought the property, which sat vacant for three years before Chevron leased the building. for $120 million in 2006 from Towanda Development I Ltd. The building at 1400 Smith Street stands 50 stories tall with 1.3 million square feet of space.

"We have created significant value through the sale of this stabilized asset concurrent with Chevron's sizeable lease extension at our adjacent property," said Dennis Friedrich, president and global chief investment officer of Brookfield. "Chevron represents the type of top-flight corporate tenant we seek to partner with in our global energy-sector markets."

The sale price is a "coup" for Brookfield, said Dan Fasulo, managing director at Real Capital Analytics Inc. in a Bloomberg article. "It's a win-win for both parties," Fasulo said. "For Chevron, obviously they're a cash-rich corporation. They have the money to buy their own property."

For more news and information visit Blumberg Capital Partners.

Brookfield Takes Majority Interest in Manhattan Tower

The Wall Street Journal reported today that Brookfield Office Properties is taking a majority interest in 450 W. 33rd Street, a 1.6 million square foot Class A office building ,in a joint venture with Broadway Partners. The terms of the deal have not been disclosed, it is known that Broadway purchased the property in 2007 for $664 million. The Carlton Group acted as financial advisor to Broadway.

An excerpt from the article:

Control of the property will be shared. Brookfield isn't investing a significant amount of money up front for a majority stake in the building. But it will be on the hook when the 1.6-million-square-foot property's $517 million in debt comes due in the middle of next year, the people say. Broadway Partners, an active buyer during the boom years, has been struggling to hold on to a slew of top-of-the-market skyscraper purchases. Teaming up with publicly traded Brookfield gives Broadway a deep-pocketed partner that will allow Broadway Partners to retain a stake in the building rather than to lose it outright in a foreclosure.

For more news and information visit Blumberg Capital Partners.

Commerzbank Signs 15 Year Lease at Two World Financial Center

Commerzbank AG signed a 15 year lease this week for 173,000 square feet at 2 World Financial Center. Commerzbank has maintained its US headquarters at Brookfield Office Properties' World Financial Center since the 1990s. Brookfield said that the Commerzbank lease, when coupled with OppenheimerFunds' decision in February to stay at 2 WFC after its sublease from Bank of America Merrill Lynch expires, represents more than 400,000 square feet of Merrill sublease space that has been converted to direct at the 2.3-million-square-foot office property.

"We are pleased that these two respected financial services institutions have chosen to extend their tenancy at the World Financial Center and remain committed to Lower Manhattan," said Ric Clark, president and chief executive officer of Brookfield Office Properties.

2 World Financial Center is one of four office towers of the 8-million-square-foot commercial complex on the west side of Lower Manhattan overlooking the Hudson River.

For more news and information visit Blumberg Capital Partners.