Hines & Cousins Ready to Break Ground on Victory Center in Dallas

In a partnership that was first revealed in 2014, Hines and Cousins Properties have teamed to develop a 23-story office tower in Dallas' Victory Park project, and this week said they would be moving forward to break ground on the project. Hines and Cousins previously partnered on the development of One Ninety One Peachtree Tower in Atlanta, a 1.2 million-square-foot, 50-story office tower that was completed in 1990. The new tower, designed by Duda|Paine Architects, is expected to take 23 months to construct.

"Together with our partner, Cousins, we own the land and we have fully designed the building," Rob Witte, a senior managing director for Hines' southwest region, told the Dallas Business Journal."We are out in the marketplace with our brokers working to secure tenants and we have several strong prospects."

"Victory Center will be an excellent addition to the thriving Uptown Dallas office market, and we couldn't be more excited to be a part of the transformation occurring at Victory Park," Larry Gellerstedt, president and chief executive officer of Cousins Properties, said in a statement.

The 466,000-square-foot office and retail tower, known as Victory Center, will be located just north of Hines' One Victory Park, which was completed in 2008 and sold last month to New York-based Clarion Partners in a deal estimated at more than $170 million. Thad Ellis, a senior vice president and market leader for Hines in Dallas, previously said the company would like to land a large tenant — one in the 150,000-square-foot to 200,000-square-foot range — before breaking ground on the tower. Cushman & Wakefield are leasing the building on behalf of Hines and Cousins, with HFF acting as financial advisor on the project.

For more news and information visit Blumberg Partners.

Hines Sells Wilshire Office Tower for $225M

Douglas Emmett, Inc., a California based REIT, in partnership with Qatar Investment Authority (QIA) announced the acquisition of a Class A office building in Los Angeles for $225 million, or $616 per square foot. The 19-story building was sold by a fund managed by Hines; Hines acquired the property from Deutsche Asset & Wealth Management for the same amount in 2007 on behalf of its U.S. Office Value Added Fund II, L.P. Douglas Emmett will manage the joint venture and expects to retain a 20% to 30% equity interest, with the remainder held by institutional partners. Eastdil Secured handled the transaction.

Designed by Tracy Price Associates, 12100 Wilshire Boulevard was completed in 1985 and is located at the intersection of Wilshire Boulevard and Bundy Drive in the Brentwood submarket of West Los Angeles. The building features ocean views starting from the second floor, outdoor balconies on the top two floors and an above-market parking ratio. Including known move-outs, the property will be 77% leased at the time of closing, with major tenants including Baum Hedlund Aristei & Goldman, Akana (formerly SOA Software Inc.) and Regus.

For more news and information visit Blumberg Partners.

100 Montgomery Sold for $285M

Blackstone Group’s wholly owned subsidiary Equity Office has sold 100 Montgomery Street, a 429,000-square-foot office tower in San Francisco's Financial District, for $285 million. The property was acquired by Vanbarton Group LLC and a U. S. pension fund partner, according to a San Francisco Business Times article. Terms of the deal were not disclosed, though Vanbarton did announce that Cushman & Wakefield will handle exclusive leasing for the property. Equity acquired the property four years ago for $165 million, a deal that more than doubled the $67.5 million Hines and Sterling American Properties paid for the office tower in 2006.

"Situated in an unparalleled location with immediate access to public transportation and premier amenities, the building provides the features that tenants are seeking today," said William Bond, a managing director with Vanbarton Group, in a press release.

100 Montgomery was originally designed by Wilbur D. Peugh and developed by Equitable Life Insurance as their headquarters in 1955, and is considered a historically significant structure in downtown San Francisco. In 2006, Hines and Sterling began a 36-month, $30 million redevelopment plan for the building, with redesign services by Robert A.M. Stern Architects. The 25 story office building with ground floor retail appeals to both traditional office users as well as technology and media companies, with major tenants including City National Bank, the U.S. General Services Administration, Segal Co., Enovity, Trucker Huss and Wells Fargo Bank.

For more news and information visit Blumberg Partners.

F4 Transbay Locks Down Last Super-Tall Building Site

F4 Transbay Partners LLC announced this week that it has closed on the acquisition of Transbay Parcel F from the Transbay Joint Powers Authority (TJPA), securing the last remaining site available for development of a super-tall building in downtown San Francisco. F4 Transbay Partners, a joint venture between Hines, Urban Pacific Development, Broad Street Principal Investments and Goldman Sachs, paid $175 million for the site on Howard Street, between First and Second streets, where it plans to build a 60-story, 750-foot-tall, mixed-use tower containing office space, a luxury hotel and residential units.

"With the sale of Parcel F, we will have sold more than $660 million worth of land to fund construction of the Transit Center," said Maria Ayerdi-Kaplan, executive director of the Transbay Joint Powers Authority. "The land sold for private development will also generate more than $1 billion in tax increment to fund the Transit Center." With the Parcel F sale, TJPA has the funding for Phase 1 of the Transbay project, having sold more than $660 million worth of land to fund construction of the Transit Center; according to a report from The Registry, private development will also generate more than $1 billion in property tax increment for the project.

F4 Transbay Partners also received an extra $15 million for the site because it was able to acquire a contiguous piece of privately owned land at 540 Howard Street, referred to as Block 4. "Our vision for Parcel F and Block 4 will create core located transit-oriented Class A office space, hotel rooms, and a substantial supply of affordable housing in the most dense and dynamic neighborhood in San Francisco. The success of our proposal would not have been possible without the combined efforts of F4, the TJPA, the OCII and the City,” Hines Senior Managing Director Cameron Falconer said in a press release.

"We are pleased to have this opportunity to develop one of the key buildings in the dynamic Transbay Project area,” added Mike Kriozere, Principal of Urban Pacific. "What we create will be an asset to this vibrant neighborhood, and we look forward to enhancing San Francisco and its skyline with our plans for a mixed-use tower on Parcel F."

F4 Transbay Partners has announced the project will be designed by Pelli Clarke Pelli Architects in partnership with the local office of HKS Architects, Inc., who will act as architect of record.

For more news and information visit Bluberg Partners.

Hines, Gemdale Partner to Redevelop Boston's South Station

Global real estate firm Hines announced that it has partnered with Gemdale Properties, one of the largest builders in China, to redevelop Boston's South Station with a 677-foot condo and office building at the city's busiest train station. Hines originally secured approval for the development of a three-phase, 1.8 million-square-foot mixed-use air-rights project at South Station in 2006, but the project was delayed after the market fell and its partner, Tufts University, exited the project in 2009. Hines has been meeting with MassDOT and the Boston Redevelopment Authority in recent weeks to hash out details of the new partnership plan, as a new equity partner requires approval from the city because the air rights above South Station are jointly owned by the city and state, and a financial analysis is required for any city-owned development site, according to the BRA.

"Boston is experiencing a remarkable economic and physical transformation," said Hines Founder and Chairman Gerald Hines. "Hines and Gemdale PI will make a significant investment in upgrading and expanding Boston's transportation infrastructure at the regional transit hub. The project will also result in the creation of a world-class, architecturally significant, mixed-use community. We are thrilled and honored to participate in this critical public/private partnership with the MBTA to complete the redevelopment of the Dukakis Transportation Center."

The redevelopment of the South Station Transportation Center, now known as the Michael S. Dukakis Transportation Center, includes a 26-floor tower starting nine stories above the ground, 530 parking spaces, and the expansion of the South Station bus terminal. The building will feature state-of-the-art commercial office space with the top 16 floors reserved for residential condominium units with panoramic views of the city and Boston Harbor.

Hines Senior Managing Director and longtime head of the firm's Boston office David Perry said, "The visibility of this corner location and the scale and dramatic styling of the tower, combined with the dignity of the station façade at its base, will serve to establish the project's identity as the most prominent building in downtown Boston and reinforce the site's strategic location at the intersection of Boston's Seaport and Financial Districts."

"Gemdale Corporation, a PRC company listed on the Shanghai Stock Exchange and the controlling shareholder of Gemdale PI, brings outstanding real estate development experience and community service to our joint venture in Boston. Together with Hines, and various governmental bodies with interests in South Station, we are committed to develop an outstanding project that Gemdale, Hines and the City of Boston will all be very proud of," added Jason Zhu, Chairman and CEO of Gemdale USA Corporation.

For more news and information visit Blumberg Partners.

San Diego's Procopio Tower Sold for $122M

LaSalle Investment Management, an independent subsidiary of Jones Lang LaSalle, has purchased the Procopio Tower in San Diego's B Street Corridor for $122 million from a venture of Hines US Core Office Fund and Sumitomo Life. Formerly known as Golden Eagle Plaza or the Union Bank Building, Hines acquired the 449,184-square foot, 22-story Class A office building and attached six-story garage in 2005 on behalf of its U.S. Office Core Fund for $116.3 million. Full terms and representation for this month's deal have not yet been disclosed; it was marketed for sale by October of 2015.

Hines Vice President Paul Twardowski has said of the Class A office building in the heart of downtown San Diego, “The business story this building tells is a compelling one for tenants, owners and investors alike: older buildings can be rehabilitated to Class A quality by applying best engineering practices and through modest investment in more sustainable building infrastructure.”

Designed by Langdon and Wilson, 525 B Street was originally constructed in 1969 and renovated in 1998 (designed and developed by Mark Krukiel in collaboration with RTKL Los Angeles) and again in 2007. The property underwent numerous sustainability measures and capital improvements spearheaded by Hines, including a new cooling tower, new efficient transformers, and upgraded building control systems, earning the property a Gold LEED rating. While vacancy rates were not released, the building only show three office spaces currently available, with major tenants include Procopio, Elsevier Inc., and Barrister Executive Suites.

For more news and information visit Blumberg Partners.

Tysons Corner Gannett HQ Sold for $270M to London Buyer

London-based Tamares Group, partnered with the Ilmarinen Mutual Pension Insurance Company of Finland, has closed on the purchase of Gannett's headquarters complex in Tysons Corner, VA for $270 million. The property was sold by TEGNA, a broadcast and digital media company that spun off from Gannett Co., parent company of USA Today, over the summer. Under terms of the deal, Gannett will remain in the building under a 12-year contract, while TEGNA secured an 18-month deal for 166,000 square feet of space, or 20% of the building. Full terms of the deal were not disclosed, but CBRE, who brokered the transaction, has also been tapped to provide leasing services while Tamares repositions the property from single to multi-tenant use.

"Tamares has been active in Washington, D.C, area real estate for over 30 years and is proud to add 7950 Jones Branch Drive to our portfolio," said Poju Zabludowicz, Chairman of Tamares. "This state-of-the-art-facility is one of the keystone properties in Northern Virginia and greater Washington, D.C. We look forward to enhancing the property and applying our local experience to attract new tenants to make 7950 Jones Branch Drive some of the most sought after first-class commercial office space in the area. And we are delighted to expand our cooperation with Ilmarinen."

Designed by Kohn Pedersen Fox Associates and project managed by Hines, 7950 Jones Branch Drive in Tysons Corner was completed in 2001 and includes a nine-story, 300,000-square-foot North Tower and the adjacent 11-story, 530,000-square-foot South Tower. The property also offers tenants a 20,000 square foot fitness center, a 1-mile jogging track, tennis courts, and basketball courts.

For more news and information visit Blumberg Partners.

Hines Buys Quintana Office Campus

Holliday Fenoglio Fowler, L.P. (HFF) announced that it had closed the sale of the Quintana Office Campus in Irvine, California and arranged financing for the buyer, Hines. While the sale price for the 430,000 square foot Class A office complex was not disclosed, reports show that Hines received $100 million in financing arranged by New York Life Real Estate Investors. The floating-rate debt package will finance the acquisition, redevelopment and re-tenanting of the Class A property, according to an REBusiness Online report. HFF’s capital markets team led marketing of the asset, and was assisted by Cushman & Wakefield, on behalf of Menlo Equities.

The Quintana Office Campus at 17875 and 17877 Von Karman Ave. and 17838 and 17872 Gillette Ave. is located on approximately 15 acres in the Irvine Business District. Hines said it has planned an extensive $15 million capital improvement program, which will transform the asset into the most unique and differentiated campus environment in the Airport submarket.  At just 13 percent leased at the time of sale, the property represents a significant value-add play for tenants seeking large blocks of contiguous space, according to Hines.

For more news and information visit Blumberg Partners.

Von Karman Office Building Sold

CBRE announced this week that it had arranged the sale of 17885 Von Karman in Irvine, CA on behalf of funds managed by Oaktree Capital Management, L.P. & Hines. According to a report from the OC Register, the property is part of the Irvine office complex known to many as the Washington Mutual campus. Terms of the deal were not disclosed. Designed by Callison Architecture, Inc., the building was constructed in 2007 and includes striking features such as a modern exterior, first-class interior finishes and virtually column-free floor plates.

"Orange County continues to be an attractive basis market compared to West Los Angeles, Seattle and the San Francisco Bay Area. This sale is still below peak pricing and replacement cost for Orange County unlike core deals in those other coastal gateway markets," said CBRE vice chairman Kevin Shannon, who represented the sellers in the transaction. "The leasing momentum in Orange County Airport submarket has continued to the point where new speculative office space is warranted similar to those other coastal markets as well. Southern California in general has experienced a slower market recovery but is definitely starting to catch up in this cycle to the San Francisco Bay Area and Seattle."

For more news and information visit Blumberg Partners.

7 Bryant Park Sold for $600M

The Bank of China has closed on the purchase of 7 Bryant Park, the new 470,000-square-foot steel and glass tower which was substantially completed at the end of April. Hines, along with partners Pacolet Milliken Enterprises, Inc. and institutional investors advised by J.P. Morgan Asset Management, announced the sale for $600 million. Hines has assumed on-site property management responsibilities, and CBRE has been selected as the exclusive leasing agent for the property.

"We are very proud of the project and know it will be not only a great new home for future tenants, but a great investment for the new owner," said Hines Senior Managing Director Tommy Craig. "We are pleased to stay involved with the property and look forward to working with CBRE to fill the remaining prime office space with top-quality, discerning tenants."

Designed by renowned architects Henry N. Cobb and Yvonne Szeto of Pei Cobb Freed & Partners, 7 Bryant Park is ready for tenant interior build outs, with floors 15-27, and the first-floor retail space fronting West 40th Street, available for lease at the time of sale. The building provides direct access to the B, D, F, M and 7 Subway lines, and is located within a five-minute walk to New York City’s major transit hubs — Grand Central, Penn Station and Port Authority.

For more news and information visit Blumberg Partners.

Hines JV Buys 4000 MacArthur

Hines, the international real estate firm, announced this week that along with a subsidiary of a fund managed by Oaktree Capital Management it had purchased 4000 MacArthur in Newport Beach, California. The sale price or terms of the deal for the two ten-story buildings were not disclosed, but it is known that a previous owner, Tishman Speyer Properties, was marketing the property in 2007 and expecting to fetch around $170 million; Tishman paid KBS about $134 million, or $365 per square foot, for the two office towers in 2006. In 2011 Emmes reportedly bought a $40 million junior portion of a $100 million mortgage tied to the property for 80 cents on the dollar and moved to foreclose on the property from Tishman, according to an Idea Hall article.

Hines Managing Director Ray Lawler, who leads the firm's Orange County development and investment office, said, "4000 MacArthur's location, access, visibility, quality improvements, and credit tenancy make this a particularly attractive acquisition for Hines and Oaktree. We expect the exceptional top floor vacancy, creative speculative suites, and prominent building top and monument signage will draw additional premier tenants to our project."

Oaktree Managing Director Ambrose Fisher added, "4000 MacArthur is our eleventh project with the Hines Orange County team. We now own 2.8 million square feet in Orange County that we have taken from 65 percent leased at acquisition to nearly 90 percent leased today. Globally, we have purchased 21 office deals in the US and the United Kingdom with Hines, totaling 8.2 million square feet. With the addition of 4000 MacArthur to our portfolio, we look forward to owning two of the best buildings in Orange County."

The property was roughly 91% leased at the time of sale to twelve tenants, including: Hyundai Capital America, M/A-COM Technology Solutions Holdings, Lifescript, and Premiere Business Centers. Hines has assumed on-site property management responsibilities on behalf of the joint venture.

For more news and information visit Blumberg Capital Partners.

Elevation Chandler No More, Beginning of Chandler Viridian

Hines announced that it had razed the Elevation Chandler property in Phoenix, Arizona this month, making way for a new mixed-use development dubbed Chandler Viridian. During an event called “Elevating Chandler’s Economic Future" Chandler Mayor Jay Tibshraeny and Chris Anderson, managing director and local city leader for Hines, oversaw the demolition of the unfinished structure. GlobeSt.com chronicled the recent history of the property as such:

Cassidy Turley was awarded the listing for the property in 2010, and originally had it under contract in 2011, but due to the litigation that was the result of a flawed trustee sale that contract was canceled. Over the past four years the property has overcome numerous legal obstacles, including a fight that eventually led to an Arizona Supreme Court Ruling regarding ownership and the right to sell. Cassidy Turley put the property back on the market and through a bid process; Hines was selected and put the property under contract in November 2012.

"After following through with our commitment to remove the unfinished Elevation Chandler structure, Hines is thrilled to move forward with Chandler Viridian, an exciting mixed-used development that promotes walkability with a pedestrian promenade to the Chandler Fashion Center," Anderson said.

Chandler Viridian, a mixed-used development, will include a luxury multifamily complex, a six-story modern brand hotel, a central plaza with 250,000 square feet of Class A office space, and retail options along with a pedestrian promenade to the Chandler Fashion Center. Chandler Viridian is located in the heart of the Chandler retail entertainment district and is the last available site adjacent to the Chandler Fashion Center.

For more news and information visit Blumberg Capital Partners.

Hines Joins MG on $3B NYC Project

MG Properties, the real estate investment and development arm of McCourt Global, has entered into an equity and development partnership with Hines on the development of 360 Tenth Avenue in New York City. The $3 billion, 733,000-square-foot mixed-use project on the Far West Side will be designed by SHoP Architects, which was recently named the world's most innovative architecture firm by Fast Company. According to a Real Deal report, Frank McCourt's MG Properties made his New York real estate debut with the acquisition of the site last year for $167 million, more than three times what seller Sherwood Equities and Long Wharf Real Estate Partners paid in 2011.

"We are very pleased to have the world class team at Hines join us on 360 Tenth," said Drew McCourt, president of MG Properties. "The addition of SHoP's creativity and innovation is a significant enhancement to the project as we look to blend the residential, retail, and commercial elements into an architecturally-significant addition to the North Chelsea/Hudson Yards neighborhood."

"We are excited to partner with the McCourt team on 360 Tenth and welcome the opportunity to expand our development work into the heart of Manhattan's fastest growing new neighborhood," added Tommy Craig, Hines' senior managing director for the New York office.

For more news and information visit Blumberg Capital Partners.

JV Buys Santa Ana Office Building

A joint venture between Hines, the international real estate firm, and Oaktree Capital Management announced this week that it had purchased 1750 East Fourth Street in Santa Ana, California for an undisclosed price. The JV acquired the property in a sale and lease back deal with State Compensation Insurance Fund, California's largest provider of workers' compensation insurance. The seller was represented in the transaction by Rob Bickel, Patrick Inglis and Thomas Maloney of JLL.

Hines Managing Director Ray Lawler, who leads the firm's Orange County development and investment office, said, "Orange County is projected to be among the highest rent-growth markets in the U.S. over the next five years. This property provides us the opportunity to add significant value through leasing and the continuing improvement of Orange County's market fundamentals."

Oaktree Capital Management Managing Director Ambrose Fisher added, "We are happy to begin a long-term relationship with State Compensation Insurance Fund, and we look forward to adding 1750 East Fourth Street to our Orange County real estate holdings. This is our 10th project with Hines in Orange County and our 18th with Hines globally."

The 229,989-square-foot, eight story Class A office building was originally developed in 1994 on 2.8 acres, with immediate access to the 5 and 55 Freeways. Under the terms of the deal, State Compensation Insurance Fund will lease back roughly 50% of the square footage via a long term lease, with the remaining 50% available for lease. Hines has assumed on-site property management responsibilities on behalf of the joint venture, according to a Commercial Property Executive article.

For more news and information visit Blumberg Capital 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.

Invesco Buys San Francisco Office Tower from Hines

Invesco Real Estate closed this week on the purchase of 101 Second Street in San Francisco, a 26-story office tower at Second and Mission streets, from a subsidiary of the Hines U.S. Core Office Fund LP. While financial terms of the deal or a definitive sales price were not disclosed, a source familiar with the deal told Bloomberg that the building traded hands for $291 million, which, at $750 a square foot, would make it San Francisco's most expensive deal for a stabilized office property in the past year. The sales price is nearly 10% higher than the price tag that the seller was targeting, according to market sources.

"It was a very competitive process but an asset we think makes a lot of sense to own long-term as this location and quality is rarely found in San Francisco," Greg Kraus, a managing director at Atlanta-based Invesco, said in an e-mail. He declined to comment on the price. 101 Second Street is roughly 90% leased, with major tenants including Reed Smith LLP, Ziff Davis Media Inc., Nexant Inc. and wealth management firm Aspiriant.

Hines, in partnership with Sumitomo Real Estate of Japan, originally acquired the property along with its companion building at 55 Second Street for $282 million from a Cousins Properties partnership in 2004. According to a San Francisco Business Times article, the two buildings were developed together, and are two of the strongest assets in a portfolio that is being recapitalized. While Hines has retained Eastdil Secured to market 55 Second Street, some speculate that the strength of the 101 Second Street transaction may allow Hines to hold on to the second property.

"I would be very careful of buying anything above what it costs to build," said Ken Rosen of the the Fisher Center for Real Estate and Urban Economics at UC Berkeley, who suggested that area pricing had become a bit inflated. "It makes me uncomfortable that we are seeing that again in San Francisco. It's a mistake. You can't rely on interest rates staying low forever. There is no question in my mind that by 2017 we will have moved back to a 4 or 5 percent treasury bond. Maybe it won't happen as quickly as I think, maybe it will happen sooner. So if you are buying something based on 2.6 treasury, it's a mistake. You have to look at replacement costs."

For more news and information visit Blumberg Capital Partners.

Rialto Building Sold for $57M

Africa Israel USA announced this week that it had closed on the sale of the Rialto Building in San Francisco, selling the property to a joint venture between Invesco Real Estate and Hines. The joint venture purchased the turn-of-the-century property for approximately $434 per square foot, or $57 million, according to a CoStar report. The sale was completed only six weeks after Africa Israel USA placed the property on the market. In total, 17 offers were submitted as part of the bidding process. Eastdil Secured represented the seller in the transaction.

"We were very pleased with the widespread interest in the building, which we feel is indicative of the Rialto's strengths, both architecturally and geographically," said Damien Stein, director of asset management at Africa Israel USA. "The demand for premier office space in the most sought-after area of San Francisco is clearly outpacing the ready supply."

"This sale proves that San Francisco is still unmatched as the nation's top-performing office market," added Tamir Kazaz, CEO of Africa Israel USA. Originally built in 1902 and designed by Meyer & O'Brien, the 135,485 square foot building at 116 New Mongtomery St. was 85% leased at the time of sale, with major tenants including Trulia, Walgreens and Chipotle.

For more news and information visit Blumberg Capital Partners.

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.

Hines, Boston Properties Form JV for Transbay Tower Project

The San Francisco Planning Commission gave final approval this month for the Transbay Tower, a, 1070-foot skyscraper slated to become not only the highest point on the San Francisco skyline, but the tallest building on the entire West Coast, according to a Huffington Post article. Hines and Boston Properties have entered a 50/50 joint venture on the land for Transbay Tower; a spokeswoman for Hines confirms that it's the first JV between the two owner/developers, who will pay approximately $190 million to acquire the land from the Transbay Joint Powers Authority.

The proposed Transbay Tower at First and Mission streets will be part of a 145-acre Transit Center District that will include commercial high-rises, residential towers, hotels and retail space, all wrapped around a planned Transit Center that will be the hub for local and regional bus lines, as well as the underground terminus for the proposed Caltrain extension and the statewide high-speed rail line. Designed by Pelli Clarke Pelli Architects, the 1.4 million-square-foot, 61-story tower should begin construction as early as next summer with building delivery in late 2015.

"We think the tower will be a beautiful addition to San Francisco's beloved skyline as well as an extremely desirable and sustainable workplace next to one of the state's busiest transit hubs," Hines chairman Gerald D. Hines said in a statement.

For more news and information visit Blumberg Capital Partners.

Chicago's Three First National Plaza Sold for $348M

Hines announced this week that its U.S. Core Office Fund sold the 57-story Three First National Plaza in Chicago for $349.3 million to a joint venture according to a GlobeSt.com article. The joint venture of the Korean Teachers Credit Union, the Korean Federation of Community Credit Cooperatives and Hong Kong-based Gaw Capital Partners has engaged Hines to continue as the property and leasing manager for the tower. Wells Fargo Securities Asia represented the buyer in the transaction, while Eastdil Secured represented Hines. Financials on the deal were not disclosed.

"Ongoing upgrades and enhancements to the property have enabled Three First National Plaza to continue to perform in the upper tier of Chicago buildings," said Hines Senior Vice President Tom Danilek. "We look forward to our new alliance with Downtown Properties as we continue our commitment to superior tenant service at the building."

"Three First National Plaza has been an excellent performer for our Hines U.S. Core Office Fund investors," said Charles Hazen, president of the fund. "We are pleased with this sale as we balance our portfolio holdings to meet future objectives."

Designed by Skidmore, Owings & Merrill, Three First National Plaza at 70 West Madison Street was developed by Hines in 1981. In 2005 Hines sold the building for $245.3 million to its office fund, a partnership with Osaka, Japan-based Sumitomo Life. The 1.4 million square foot sawtooth tower is currently 92% leased with major tenants including Madison Dearborn Partners, K&L Gates, Kaye Scholer, The PrivateBank and Fitch Ratings.

For more news and information visit Blumberg Capital Partners.