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.

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.

For more news and information visit Blumberg Capital Partners.

Bixby Sells Silicon Valley Office Campus to AEW Capital

3111-3141 Coronado Drive Associates, LLC, a joint venture between Bixby Land Company and JP Morgan, announced this week that it had sold an office campus in Santa Clara, California to AEW Capital Management at an undisclosed price. Terms of the deal were not disclosed, though AEW did indicate that both buyer and seller were self-represented in the transaction. AEW acquired the two building campus on behalf of one of its institutional clients.

"This is an opportune time to realize our investment objective following the successful renovation and leasing of the project, said Bill Halford, president and CEO of Bixby Land Company, in a statement. "We set out to create a compelling work environment with the image and high quality amenities sought by today’s companies."

The campus at 3111-3141 Coronado Drive was renovated in 2012, a contemporary redesign that garnered the 2012 Structures Award as Best Reuse/Rehab Project in Silicon Valley by Silicon Valley Business Journal. The 127,000 square-foot campus is 100% leased to Santa Clara-based Infoblox, an eight-year, $25 million deal signed last June.

For more news and information visit Blumberg Capital Partners.

Palmer House Secures $365M in Refinancing Loans

Jones Lang LaSalle and Jones Lang LaSalle Hotels secured a $365 million financing package on behalf of Thor Equities for the Palmer House Hilton in Chicago. JP Morgan provided the floating-rate financing. "This refinancing with allow Thor Equities to continue and augment its ongoing efforts to maintain the Palmer House's status as a crown jewel of Chicago," said Joe Sitt, CEO of Thor Equities.

Thor Equities, a global leader in urban real estate development, leasing and management, acquired the Palmer House Hilton in August 2005 after more than 60 years of owner operations by Hilton Hotels Corp., according to a REJournals.com article. The 24-story main building is comprised of the 1,639-room hotel sitting atop a 57,000-square-foot, street-level retail arcade, a 177-space underground valet parking garage and a full basement. In October 2008, Thor completed a $131 million renovation that resulted in numerous infrastructure improvements, refurbished guestrooms, public spaces and meeting spaces and a number of food-and-beverage operations.

For more news and information visit Blumberg Capital Partners.

Is the CMBS Recovery Faltering?

The Wall Street Journal thinks so. A new article from Al Yoon at the Journal observed that the recovery in the commercial mortage-backed securities market has stalled out even though before the summer all indicators showed a favorable return on the horizon post-recession. An excerpt from the article:

Investment banks have sold four issues of the bonds, valued at about $6 billion, since the market hit the brakes this past summer because of investor skittishness about the souring economy and an 11th-hour decision by rating firm Standard & Poor's to pull its rating from a deal.

But to sell these issues banks had to structure them differently, providing buyers of the safest bonds more protection than usual. Now, weak investor demand is hampering the sale of the riskier parts of the new issues.

For example, J.P. Morgan Chase & Co. has been trying to sell a quarter of its $1 billion issue for two weeks as investors have been balking at yields on lower-rated classes, according to two investors familiar with the deal. Sales have been slow even as J.P. Morgan raised the risk premiums—or the amount of yield above their interest-rate benchmark—at least twice for these riskier bonds, the investors said.

Meantime, the bank easily sold the senior, safest bonds within days of the deal's announcement. A spokesman for the bank declined to comment. Investors say J.P. Morgan has sold most of the high-risk bonds but took much longer than usual.

The difficulty means that banks may have to go even further to make commercial mortgage securities attractive to investors. "Everyone wants to be in a safe haven, but once you go down in the capital structure, it's not looking so good," said Julia Tcherkassova, a strategist at Barclays Capital in New York.

For more news and information visit Blumberg Capital Partners.

Freddie Mac's New CMBS K-Deal Offering

Freddie Mac announced this week that it would be offering new Structured Pass-Through Certificates ("K Certificates") multifamily mortgage-backed securities. The K-010 Certificates will be offered to the market by a network of dealers led by J.P. Morgan Securities LLC and Wells Fargo Securities LLC as Co-Lead Managers and Joint Bookrunners for the transaction. Barclays Capital Inc., Citigroup Global Markets Inc., Credit Suisse Securities (USA) LLC, Deutsche Bank Securities Inc., Goldman, Sachs & Co., Jefferies & Company, Inc., and Merrill Lynch, Pierce, Fenner & Smith Incorporated have been named as Co-Managers for the transaction. The company expects to offer approximately $1 billion in K Certificates ("K-010 Certificates"), which are expected to settle on or about February 10, 2011.

"We are very pleased to announce our first K-Deal for 2011, which represents the first of many deals we expect to issue this year as our securitization activity grows," said David Brickman, vice president of Multifamily CMBS Capital Markets for Freddie Mac. "This offering also includes a new feature – this is the first K-deal in which two rating agencies were engaged to provide conventional public ratings."

For more news and information visit Blumberg Capital Partners.

JP Morgan Purchases Lehman HQ in London for £495M

J.P. Morgan announced today that it had acquired 25 Bank Street in Canary Wharf for £495M according to a Guardian article. The building, home of Lehman's European arm until 2008, will become the new European headquarters of J.P. Morgan's Investment Bank in 2012. In addition to this property, Morgan has also agreen to purchase 60 Victoria Embankment in London, a building that the firm has leased since 1991 and houses its Treasury and Security Services Division. The City minister, Mark Hoban, described JP Morgan's decision as "excellent news". Morgan purchased the Bank Street building from Canary Wharf Group and has said it will continue to work with the group to develop the Riverside South site at Canary Wharf for future use.

"These buildings ensure that our employees will have the necessary technology, infrastructure and amenities to take our businesses forward. Even during the recession, we have continued to invest and grow our businesses internationally," said Jamie Dimon, Chairman and CEO of J.P. Morgan. "These properties are long-term investments and represent our continued commitment to London as one of the world's most important financial centres."

For more news and information visit Blumberg Capital Partners.