Citigroup Buying Back HQ from SL Green for $2B

In its fourth quarter investor calls, SL Green Realty Corp. disclosed that Citigroup, Inc. has exercised their option to purchase 388-390 Greenwich Street for $2.0 billion. The closing is scheduled for December 2017. On Thursday, SL Green executives on a quarterly conference call with analysts said the deal would be profitable for the company. "It allows us to close out a very profitable position, investment position, we took in the asset," said Marc Holliday, SL Green's chief executive. He also noted the transaction "will result in a reduction of indebtedness."

Citigroup previously sold the two-building, 2.6 million-square-foot Tribeca complex to SL Green and Ivanhoe Cambridge, a unit of the Société immobilière Trans-Québec (SITQ), for $ 1.58 billion in 2007. Citigroup continued to lease space after the sale through a 15-year leaseback arrangement, and occupies the complex as the headquarters for Citigroup's divisions of Global Wealth Management and Global Trading. 388 Greenwich Street, originally called the Shearson Lehman Plaza, and more recently the Travelers Building, is a 496-foot, 38-story postmodern office building completed in 1988 and designed by Kohn Pedersen Fox. 90 Greenwich Street comprises 10 story building covering a total area of over 2.6 million square feet.

For more news and information visit Blumberg Partners.

GIC Buys Blackstone AZ Portfolio for $140M

GIC Private Limited, formerly known as Government of Singapore Investment Corporation, a sovereign wealth fund established by the Government of Singapore, has purchased 14 commercial and industrial properties in Phoenix, Tempe and the West Valley for more than $140 million. GIC, which also owns the Arizona Biltmore Resort & Spa, bought the 14 Valley properties as part of its acquistion of Blackstone Group's IndCor Properties 117 milion-square-foot portfolio, according to a Phoenix Business Journal article. Eastdil Secured (a wholly-owned subsidiary of Wells Fargo & Company), Citigroup, Barclays and RBC Capital Markets acted as advisors to Blackstone.

IndCor's assets are principally located in desirable in-fill industrial markets, which benefit from proximity to key domestic and global transportation hubs, major logistics and warehouse/distribution networks, as well as large population concentrations.

Tim Beaudin, IndCor CEO, said: "We built IndCor through 18 acquisitions to be one of the largest industrial real estate companies in the United States. We are excited about the company's future prospects under new long-term ownership with GIC."

Blackstone announced that funds affiliated with Blackstone Real Estate Partners VI & VII have agreed to sell their wholly-owned U.S. industrial platform, IndCor Properties, to affiliates of GIC, Singapore's sovereign wealth fund, for $8.1 billion.

For more news and information visit Blumberg Capital Partners.

GLP, GIC Make $8.1B IndCor Purchase

Blackstone announced this week that Blackstone Real Estate Partners VI & VII agreed to sell IndCor Properties to affiliates of GIC, Singapore's sovereign wealth fund, for $8.1 billion. GIC's partner in the acquisition is Global Logistic Properties Ltd., one of the largest owners of warehouses and other industrial property in Asia, according to a Wall Street Journal article. GIC is estimated by the Sovereign Wealth Fund Institute to manage around $320 billion in assets; real estate accounted for 7% of its portfolio in the financial year to April 1, according to its annual report. Closing is expected to occur in the first quarter of 2015. Eastdil Secured, Citigroup, Barclays and RBC Capital Markets acted as advisors to Blackstone in the transaction.

Tim Beaudin, IndCor CEO, said: "We built IndCor through 18 acquisitions to be one of the largest industrial real estate companies in the United States. We are excited about the company's future prospects under new long-term ownership with GIC." As a result of this transaction, IndCor will no longer be pursuing an IPO. The sale is the latest in a string by Blackstone's real estate unit, which has returned more than $16 billion to fund investors since the end of the third quarter of 2013. This year the firm has sold five Boston office buildings totaling 3.3 million square feet, along with shares of hotel operator Extended Stay America Inc., shopping-center owner Brixmor Property Group Inc. and Hilton Worldwide Holdings Inc., according to a Bloomberg report.

For more news and information visit Blumberg Capital Partners.

Citigroup Buys $700M Hong Kong HQ

In what's been reported as the largest single-block office purchase in Hong Kong, Citigroup has committed to pay HK$5.425 billion (or $700 million US) for a twenty-one story building to be completed next year. Wheelock Properties developed and sold One Bay East at 83 Hoi Bun Road, Kowloon East to Citi; full terms of the deal have not yet been disclosed. CBRE Group Inc. acted as adviser on the sale. The purchase price marks a 20% appreciation as compared to the price of the property's twin West Tower, adjacent to the East Tower, which was sold for HK$4.5 billion to Canada-based insurer Manulife last April, according to a report from The Standard.

"We are delighted that two leading global financial corporations have chosen One Bay East as the strategic base for their business operations. The significant and long term investments by top class multinationals show their continual deep confidence in Hong Kong," said Steward Leung, Chairman of Wheelock Properties.

"Our decision to purchase the East Tower of One Bay East underlines our belief and confidence in Hong Kong's continued growth as a leading global financial center and hub for some of our core regional businesses," Stephen Bird, chief executive officer for Citi in Asia Pacific said in a statement.

The 512,000 square foot tower will serve as the Asian headquarters building for Citi in the Asian financial hub. The building is about 40 minutes via public transportation from the main business district in Kowloon, Hong Kong, known as Central, where Citibank Plaza and many of the bank's executives are now located.

For more news and information visit Blumberg Capital Partners.

$16.2B Essex-BRE Merger Complete

Essex Property Trust announced the completion of the company's merger with BRE Properties, a transaction that forms a combined company with equity market capitalization of approximately $11 billion and a total market capitalization of approximately $16 billion. UBS Investment Bank served as lead financial advisor to Essex with Citigroup serving as financial advisor. Wells Fargo Securities acted as exclusive financial advisor and Latham & Watkins LLP acted as legal advisor to BRE. Essex Property Trust has ownership interests in 233 multifamily properties with an additional 15 properties in various stages of development, according to a REIT.com article.

"We are excited to consummate the merger and move forward to combine these two great organizations to form the leading West Coast multifamily REIT," said Michael Schall, President and Chief Executive Officer of Essex. "The integration effort is proceeding as planned, which we believe will result in a stronger platform for sustainable growth, superior service for our residents, and expanded career opportunities for our employees. I want to thank the employees of both companies for their hard work, dedication and support."

"We are pleased that our stockholders have expressed overwhelming support and approval for this merger," said Constance B. Moore, Chief Executive Officer of BRE. "The combined portfolio of Essex and BRE will provide substantial value for our stockholders through enhanced operations, improvements in the costs of capital and synergistic opportunities. On behalf of BRE’s Board and management, I want to thank our stockholders for their invaluable support throughout this process."

For more news and information visit Blumberg Capital Partners.

Kimco Sells InTown Suites Portfolio for $735M

Kimco Realty Corp., the largest U.S. owner of community shopping centers, announced this week that it had closed on the sale of the InTown Suites company and real estate assets for $735 million, including $609 million of existing mortgage debt. An affiliate of Connecticut private equity firm Starwood Capital Group bought 100% of the common stock of InTown Hospitality Corp. with representation from a team of Paul Hastings attorneys led by Rick Kirkbride, Tom Kruger, and David Viklund. The portfolio includes 138 extended stay properties with approximately 18,000 rooms across 21 states. Citigroup served as the financial adviser to InTown Hospitality Investors on the sale.

Rick Kirkbride said the trend is that, during a very busy first half of the year, people are cautiously predicting a busy second half. "So much of that will depend upon the volatility in the interest rate environment as many more increases will cause buyers to have to reprice their acquisitions and sellers may or may not have adjusted their own expectations of what the market should bear," Kirkbride said. "If sellers do so, then activity should continue somewhat unabated or there may be a significant slowdown in activity."

For more news and information visit Blumberg Capital Partners.

Singapore Rising from the Sea

A new Wall Street Journal article titled Singapore Undergoes a Glitzy Makeover examines current developments as Singapore's central business district undergoes its biggest makeover in a generation. New megadevelopments, mixing business and entertainment, are bolstered by government support that has helped lure investments from big-name developers, including Hong Kong's Cheung Kong (Holdings) Ltd., Hongkong Land Ltd., Singapore's Keppel Land Ltd. and MGPA, a private-equity real-estate company.

An excerpt from the article:

Google Inc. established its new Southeast Asia headquarters in Marina Bay's Asia Square earlier this year, and Citigroup Inc. is investing 85 million Singapore dollars (US$69 million) to make the same complex home to its new Singapore office and its largest trading floor by head count in the Asian-Pacific region. In 2011, London-based Standard Chartered PLC opened its largest office in the world in the district.

"As part of Singapore's new skyline, we believe that we are sending the right message to our customers," said Rohinton Mehta, a senior real-estate executive at Standard Chartered.

To be sure, most of Marina Bay's success has come during Asia's remarkable growth spurt and has yet to be tested by a sustained downturn. That is becoming more of a concern as Singapore cools along with the rest of the Asian economy.

For more news and information visit Blumberg Capital Partners.

SL Green Sells One Court Square for $476M

SL Green Realty Corp. announced this month that it and its joint venture partner reached an agreement to sell One Court Square in Long Island city for $476 million, or roughly $340 per square foot, to a consortium of private investors. According to SL Green, which expects to realize $42.8 million in net proceeds from the sale, the transaction includes $315 million of existing debt to be assumed by the purchaser.

The 50 story skyscraper is fully leased to Citigroup Inc. and was originally acquired in part by SL Green in conjunction with its 2007 acquisition of Reckson Associates Realty Corp. The building was completed in 1989 and designed by Skidmore, Owings & Merrill.

SL Green also recently formed a joint venture with owner Joseph Moinian to refinance debt on the AIG Headquarters in lower Manhattan, purchasing a a 49.9% stake in 180 Maiden Lane according to a Businessweek article.

For more news and information visit Blumberg Capital Partners.

Citi Property Investors Sold to Apollo

Apollo Global Real Estate Management, an affiliate of Apollo Global Management LLC, has finalized a deal to purchase Citi Property Investors (CPI), the real estate investment management group of Citigroup Inc. While the terms of the deal were not disclosed, CPI had assets under management of over $3 billion as of June 30 of this year according to a BusinessWeek article. As part of the transaction, a majority of CPI's employees will join Apollo Global Real Estate Management, which will take over the management of a number of CPI's funds, including its flagship funds, CPI Capital Partners Asia Pacific, L.P., CPI Capital Partners Europe, L.P., and CPI Capital Partners North America LP.

The Citigroup bank is on track to have less than $400 billion of unwanted assets, or 20 percent of total assets, by the end of 2010 as reported by Reuters, and is still 12% owned by the U.S. government, which originally planned to finish selling off the stake by mid-December.

For more news and information visit Blumberg Capital Partners.