LPC Closes $71.6M Charlotte Office Tower Deal

LPC Realty Advisors I, LP, an affiliate of Lincoln Property Company, in conjunction with their local affiliate Lincoln Harris, has closed on the purchase of a 32-story office building in Charlotte, North Carolina for $71.6 million on behalf of a pension fund client. Holliday Fenoglio Fowler, L.P. (HFF) marketed the property, represented the seller in the transaction, a partnership controlled by the Durham-based Dilweg Companies, and also secured a $44.1 million loan on behalf of LPC to finance the purchase. Initial proceeds of $36.1 million were used for post-close acquisition financing, while the remainder will be used for future capital costs, according to a CPE report. The Dilweg partnership originally acquired the building in 2013 for $59.6 million.

"The market aggressively pursued 121 West Trade Street as buyers realized the building’s potential to harness very strong rents in the future,” said HFF senior managing director Ryan Clutter. "We are currently experiencing the strongest demand in the market for value-add office buildings located in strong CBD’s like downtown Charlotte. 121 West Trade Street was no exception as considerable capital aggressively competed for this asset."

Built in the 1990s and formerly known as Interstate Tower, 121 West Trade Street was designed by Kohn, Pedersen and Fox, with a dramatic two-story lobby featuring upscale green, black, and white marble and brass trim. The 329,930 square foot building is in the heart of downtown Charlotte within walking distance of amenities and attractions including The EpiCentre, Spirit Square Center for the Arts, Discovery Space Center, Time Warner Cable Arena, the Levine Center for the Arts, and the new Gold Line streetcar system. The property was 74% leased at the time of sale with major tenants including Chicago Bridge & Iron, SAS Institute, Caudle & Spears and Brookwood Associates.

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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.

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SL Green Supertower Gets City Approval with Grand Central Improvements

The New York City Council approved a change to zoning law that will allow for the construction of SL Green Realty's One Vanderbilt skyscraper, with an unusual tradeoff: SL Green's added commitment to make upgrades to Grand Central Terminal that will allow for more rush-hour trains on the subway's busiest lines. The approach has been viewed by some proponents as a model for how the Metropolitan Transportation Authority can pay for some projects as it grapples with a $14 billion shortfall in the agency's $32 billion proposed capital plan, according to a New York Times report.

The council members unanimously approved the zoning change to allow the 65-story tower to rise alongside the historic landmark, with SL Green investing about $220 million in critical improvements to Grand Central, including building new subway entrances, a pedestrian plaza at street level, and a public hall in the building's lobby. "This is the first time we've seen vast private investment to improve mass-transit access," said Mitchell Moss, a professor of urban planning at New York University.

"This is the bottleneck to the subway line," Edith Hsu-Chen, director of the Manhattan office of the city's department of planning, told city council members during a hearing last month. "Improvements made to this station would affect the entire line and commuters in the whole city." SL Green will strip the columns down to the bare bones — slimming them down by about a foot each — and narrow the stairwell to create about two and a half feet of extra space on the platform. "At rush hour, people congregate around these columns. People can't get off the train," said Robert Schiffer, managing director at SL Green. "The idea is to diffuse people."

One Vanderbilt, bounded by Vanderbilt Avenue and Madison Avenue between East 42nd and East 43rd Streets, will be 1,501 feet tall and contain 1.6 million square feet of Class A commercial space. Designed by Kohn Pedersen Fox (KPF), One Vanderbilt's architecture and building materials pay homage to the landmarked Terminal and the surrounding East Midtown business district. Building features include open floor plans, efficient use of space, and the highest level of sustainable design in New York City. TD Bank has already signed to anchor approximately 200,000 square feet of space in One Vanderbilt, including a flagship retail store on the northeast corner of 42nd Street and Madison Avenue. One Vanderbilt is projected to create 5,200 construction jobs and 190 permanent union jobs.

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New York's Hudson Yards Skyscraper Breaks Ground

Mitsui Fudosan America Inc. (MFA), the U.S. operations of Japan's largest real estate company, along with Related Companies and Oxford Properties Group broke ground this week on the trophy office tower at Fifty Five Hudson Yards on Hudson Park & Boulevard. The skyscraper is the latest addition to the 28-acre Hudson Yards development, and represents a new trophy property in the expanding portfolio of global real estate leader Mitsui Fudosan Group.

"We are pleased to partner with Related Companies and Oxford Properties Group on Fifty Five Hudson Yards which we consider a new trophy property in the Mitsui Fudosan U.S. and global portfolios," said Yukio Yoshida, President and CEO of MFA. "Related and Oxford are experienced developers with a proven track record for delivering world class projects, making them ideal partners. Hudson Yards is fast becoming one of the most desirable locations for top echelon tenants, offering an unparalleled modern, mixed-use environment. We are looking forward to being a central part of the success of the Hudson Yards development."

"We are thrilled to partner with Mitsui Fudosan America and commence construction on Fifty Five Hudson Yards. Mitsui Fudosan is one of the worlds' most established real estate developers and investors and their partnership on this project further solidifies the appeal of Hudson Yards with both global capital and global companies," added Stephen Ross, Chairman and Founder of Related Companies. "Hudson Yards is already the future home of Coach, Inc., L'Oréal USA, SAP and Time Warner Inc. and we have seen incredibly strong interest in Fifty Five Hudson Yards. Featuring the best in culture, dining, shopping and more, the commercial office space, steps from transportation and lush, expansive green space, Hudson Yards sets a new standard for working in New York City."

Blake Hutcheson, CEO of Oxford Properties Group, said, "The forward momentum at Hudson Yards is evident to everyone who walks by the development. Oxford is pleased to join Related in partnering with Mitsui Fudosan and commencing construction on Fifty Five Hudson Yards. Each organization has deep experience and incredible portfolios of past developments and investments individually, and this new partnership will benefit from bringing the three together for the first time."

Designed by A. Eugene Kohn and Kohn Pedersen Fox Associates (KPF), the fully capitalized, anticipated LEED Gold, 51-story, 1.3 million gross square foot building is expected to be ready for tenant fit-out in 2017. "Simple in form, but rich in detail, the building was inspired by the historic cast iron architecture found throughout SoHo, and aims to relate to the neighborhoods of Chelsea and the Meatpacking District adjacent to Hudson Yards," said A. Eugene Kohn, Chairman of KPF and Design Architect of Fifty Five Hudson Yards. "Fifty Five Hudson Yards was designed to create an extremely workable and efficient office building which is suitable for a variety of tenants both large and small."

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