RXR Closes $1.65B Avenue of the Americas Acquisition

An affiliate of RXR Realty LLC announced the closing of the $1.65 billion acquisition of 1285 Avenue of the Americas, as well as the long-term lease renewal of more than 900,000 square feet to keep UBS's North American headquarters in the office building. The Real Deal first reported that Scott Rechler's RXR Realty was on the verge of a deal to acquire the 42-story office tower, and reports this week that it partnered on the deal with real estate investor David Werner, according to the Commercial Observer, noting that the duo financed the purchase with $1.2 billion in loans from AIG and Morgan Stanley. AXA Financial Inc. sold the property in partnership with JPMorgan Chase & Co.; AXA first put the tower on the market last fall along with 787 Seventh Avenue, which has since been sold to CalPERS; one source noted that both properties had been "institutionally owned for decades," and would likely fetch around $4 billion because they have "institutional-quality tenants [with] high credit and the in-place market rents are significantly below market."

Located between 51st and 52nd Streets and also known as the Equitable Building, 1285 Avenue of the Americas is a Class-A mixed-use tower featuring office, retail, and storage. RXR Realty plans to upgrade the building's lobby, modernize the elevator mechanical systems and make improvements to the plaza. "We are excited to close on the acquisition of 1285 Avenue of the Americas and simultaneously execute a long-term renewal with UBS," said Scott Rechler Chairman and CEO of RXR Realty. "It is only fitting that one of the city's most prestigious buildings will remain the home to some of the city's most prestigious companies for decades to come." In addition to UBS, the building is co-anchored by law firm Paul Weiss Rifkind Wharton & Garrison LLP in 550,000 square feet and Omnicom Group affiliate BBDO, a marketing and communications firm, in 325,000 square feet.

For more news and information visit Blumberg Partners.

Hines REIT Pays $140M for Utah Corporate Center

Hines Global REIT II, Inc. has agreed to pay $140 million for Cottonwood Corporate Center, a four-building, Class-A office project located in Cottonwood, Utah. The property is being sold by NOP Cottonwood Holdings, LLC, according to an SEC filing. Hines Global II expects the closing of this acquisition to occur on or about June 10, 2016, subject to a number of closing conditions.

This isn't the first time Hines has had an interest in the property; in 2005, the Salt Lake City office of Hines acquired Cottonwood Corporate Center on behalf of National Office Partners Limited Partnership (NOP), its investment partnership with the California Public Employees' Retirement System (CalPERS), from Cottonwood Partners for an undisclosed amount.

Located at 2755-2855 East Cottonwood Parkway, Cottonwood Corporate Center was originally designed by Giles Stransky Brems Smith and built between 1997 and 2000 to offer 490,030 square feet of rentable space. The CommonWealth Partners property management team began retrofitting the Cottonwood Corporate Center in 2012 to increase its already impressive ENERGY STAR® score of 94 and winning a 2015 Mid-Rise Suburban Office Park Toby Award. According to the filing, the property was 91% leased at the time of sale with major tenants including SanDisk and Extra Space Storage. The complex is in a submarket of Salt Lake City, situated at the base of Big Cottonwood and Little Cottonwood canyons, and is in close proximity to Salt Lake International Airport.

For more news and information visit Blumberg Partners.

CalPERS Closes on $1.9B NYC Office Tower

California pension fund CalPERS has completed the acquisition of a 54-story Manhattan office building for $1.9 billion, according to documents filed with the New York City Department of Finance. The building at 787 Seventh Avenue was sold by AXA Financial, which originally acquired the building for $1.1 billion in June 2009. CalPERS acquired the office tower between West 51st and West 52nd Streets in part with a $780M first mortgage extended by Deutsche Bank, according to a Biznow article. Terms of the deal and representation were not disclosed; AXA originally announced it would put the property on the market in August 2015.

According to a Sacramento Bee article, the deal represents one of the priciest real estate investments CalPERS has ever made, and one of the largest deals in New York history. "The acquisition follows our real estate strategic plan to invest in core, income generating properties," said CalPERS spokesman Joe DeAnda in an email. The deal amounts to 7 percent of CalPERS' real estate portfolio, it reported. Major tenants of the building, currently known as the AXA Equitable Center, include Sidley Austin, UBS, BNP Paribas, and a Pret A Manger location that operates out of the ground floor.

For more news and information visit Blumberg Partners.

CalPERS Picks Up Chicago Data Center for $18M

TechCore, LP, a $1 billion discretionary core real estate fund managed by San Francisco-based GI Partners on behalf of California Public Employees’ Retirement System (CalPERS), has completed the purchase of a Chicago data center for $17.8 million, according to public records. The 107,000 square-foot building was sold by Pi Data Holdings LLC, a Pennsylvania-based venture backed by private investors, which paid $10 million for the property in 2011. TechCore, formed in 2012 to acquire technology-advantaged properties, receives the property after Pi Data spent nearly $6 million renovating the two-story building. Full terms of the deal or representation in the transaction were not disclosed.

"We are pleased to own 601 W. Polk and form a long-term relationship with TierPoint," GI Principal Mike Armstrong said in a statement. "The facility's robust infrastructure, connectivity and location make it an attractive addition to the TechCore portfolio. We actively track the Chicago market, a top-tier data center market with attractive fundamentals, and are excited to complete our first acquisition in the (metro area)."

601 West Polk Street was originally developed in 1918 as a warehouse for Marshall Field's, built with 18 foot ceilings and reinforced floors to accommodate large merchandise and the horse-drawn distribution networks of the early 20th century. In more recent decades it fell vacant and served as a movie location, until Sprint moved in in the 1990s and it became a "carrier hotel". In 2011, it was purchased from bankruptcy by AlteredScale. The property is currently fully leased to TierPoint, a St. Louis-based operator of data centers and cloud computing provider that bought out AlteredScale.

For more news and information visit Blumberg Partners.

Construction Begins on 609 Main at Texas in Houston

The new skyscraper that will change the Houston skyline broke ground this week, a development of the Hines CalPERS Green Development Fund, a partnership that focuses exclusively on developing sustainable office buildings throughout the US certifiable through the USGBC Leadership in Energy and Environmental Design (LEED) Core & Shell program. The 47-story, 1,050,000-square-foot office tower under development at the corner of Main and Texas streets is expected to be ready for occupancy after 36 months of construction.

Hines President Jeff Hines said, "609 Main at Texas is a strategic follow-on to our success with BG Group Place. We are thrilled to start construction on our second major office tower on Main Street, especially with our partner, CalPERS. We saw the trend coming several years ago when we purchased two key blocks of land on Main Street, and now our strategy has been confirmed with the start of this iconic new landmark."

"We have already had significant leasing interest among all the sectors that fuel CBD development," said Hines Senior Managing Director John Mooz. "This project will be a true ‘next-generation' office building, utilizing best practices we've learned from our previous developments in Houston and around the world. While 609 Main at Texas is designed to house multiple firms, there is obviously a significant and prestigious opportunity for an anchor tenant, including options for large trading floors and outdoor space."

Hines has owned the full-block site since 2008, according to a Houston Chronicle report, but only began site work, including the demolition of an abandoned structure, last November. 609 Main at Texas is pre-registered LEED, and is expected to attain Gold or Platinum certification upon completion. Connecticut-based Pickard Chilton designed the tower, and Houston's D.E. Harvey Builders is the general contractor.

For more news and information visit Blumberg Capital Partners.

Zeller Realty Group Buys Guaranty Bank Building

Zeller Realty Group has made its first move on the Denver market with the purchase of 1331 17th Street, a 13-story office building in the LoDo submarket. The terms of the deal and exact sale price were not disclosed; the property previously sold in 2007 for $69.95 when Hines Interests LP teamed with the California Public Employees' Retirement System and bought the building under an ownership entity called the National Office Partners LP. Mary Sullivan and John Jugl, senior managing directors of Holliday Fenoglio Fowler LP, represented the seller, Common Wealth Partners LLC, in the transaction.

Los Angeles-based Common Wealth took over for Hines and the building ownership entity was named NOP 1331 17th LLC, according to a Denver Business Journal article. Also known as the Guaranty Bank Building, the 220,287 square-foot building was completed in 1983 and delivered by the a and Denver developer Bill Walters. The building was reportedly 87% leased at the time of sale, with Guaranty Bank occupying 25% of the property.

"Zeller chose the strongest market in Denver for office property ownership, so they know it will be successful," Sullivan said. "They've wanted to be in the market for quite some time and have bid on other assets. They're committed to the Denver market and want to own more assets here."

For more news and information visit Blumberg Capital Partners.

New US Property Fund Index from PREA and IPD

The Pension Real Estate Association (PREA) and Investment Property Databank (IPD) announced this month that they would co-sponsor a US Property Fund Index to measure real estate investment performance for open-end, commingled funds. According to an IPE article, the new benchmark will track the performance of open-ended US real estate funds against the underlying direct property market, highlighting any value added by active management. The PREA/IPD US Property Fund Index will become a component of the IPD Global Property Fund Index, enabling IPD clients and PREA members to evaluate their performance in a global context. The tentative target date for having the PREA/IPD US Property Fund Index up and running is mid-August, 2012.

Ted Eliopoulos, Senior Investment Officer for the California Public Employees' Retirement System (CalPERS) and Chairman of the PREA Board of Directors said that "PREA is looking forward to our co-sponsorship with IPD on the PREA/IPD US Property Fund Index. Not only will the US Property Fund Index increase transparency for the asset class in general, but our new relationship will provide significant benefits for PREA members."

For more news and information visit Blumberg Capital Partners.

CalPERS Transfers $1.9B Portfolio

The California Public Employees' Retirement System (CalPERS) has transfered its CalEast Global Logistics industrial real estate portfolio, valued at $1.9 billion, to GI Partners and RREEF according to a CoStar report. "We have confidence in GI Partners and expect excellent performance from the CalEast portfolio going forward, given their strong returns since they joined our real estate program in 2001," said Ted Eliopoulos, CalPERS Senior Investment Officer, Real Estate. "RREEF's success with CalWest and their global breadth and expertise will be valuable in managing CalEast's European assets."

CalPERS made the transition as part of a strategy to restructure its real estate and shift assets to managers. CalEast was previously managed by LaSalle Investment Management while RREEF has managed CalWest Industrial Properties for CalPERS since 1998.

For more news and information visit Blumberg Capital Partners.