RPW Group Buys 275 Madison Avenue

Rye Brook, NY-based RPW Group, founded by Robert Weisz, is under contract to purchase 275 Madison Avenue in Midtown from Aby Rosen and Michael Fuchs' RFR Holding. The 43-story office tower is trading hands for more than $270 million, or upwards of $800 per square foot, according to a report from The Real Deal. RFR Holding put the landmark office tower on the market in April, enlisting JLL to market the property and broker the deal, which is expected to close in August. RPW is said to be looking to line up some $160 million of mortgage financing to fund its purchase.

275 Madison Avenue, with alternate addresses of 22-26 East 40th Street and 273-277 Madison Avenue, is a 329,000-square-foot landmark skyscraper located at the southeast corner of Madison Avenue and East 40th Street. The 43-story office building was designed by Kenneth Franzheim, completed in 1931, and designated as a New York City landmark in 2009 in recognition of its classic art deco design. RFR acquired the leasehold and fee interests for the property in separate transactions in 1998 and 2004, and added value by implementing a capital improvement program that included a restoration of the original lobby, elevator modernization, a pre-built suite program and HVAC system upgrades.

The property is currently 91% leased, with major tenants including Cushman & Wakefield, formerly Massey Knakal Realty Services, 7Park Data, law firm Rosen Livingston & Cholst LLP, law firm Romer Debbas LLP, and R&S Associates. RPW Group is reportedly planning a long-term hold and renovation of the lobby and common areas, hiring Newmark Grubb Knight Frank to market vacant office space and the vacant 4,000 square foot ground floor retail space previously occupied by Food Merchants Café.

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Sears' Crescent Building Sold For $23.8M

A joint venture between Chevron Partners, a Boston-based private real estate firm, and Fulton, a Paris-based developer/operator, has purchased the Sears' Crescent building in Boston for for $23.8 million. The 50,000 square foot office and retail building was sold by Boston's Copley Investments, which purchased the property in 1996 for $4.25 million. The acquisition marks the joint venture’s third acquisition in Boston, along with the 10 Winthrop Square office building and the seven-unit Maison Vernon luxury condo building on Beacon Hill, according to a Banker & Tradesman report. Copley Investments was represented by Newmark Grubb Knight Frank in the deal; full terms were not disclosed, but Hingham Institution for Savings provided a $15.2 million mortgage for the acquisition.

Sears' Crescent at 100 City Hall Plaza (formerly 38-68 Cornhill) was first constructed in 1816 as a series of commercial rowhouses and is one of Boston's most historic office buildings. Around 1860 these were given a unified curving facade with Italianate styling. The Sears Block, built in 1848, is a rare surviving instance of granite post-and-lintel construction. Both buildings were developed by David Sears, a leading mid-19th-century developer of Boston who was responsible for the filling of Back Bay. They are the only buildings that remain on the original route of Cornhill Street, one of Boston's oldest streets.

The property was renovated in 2000 under Copley's ownership, with designs from Blackstone Block Architects, to include adding on a sixth floor to the building along with modernized HVAC and security equipment. The building was 100% leased at the time of sale with major tenants including Massachusetts Health Connector, Lubin & Meyer PC, and Communications Media Advisors, which their headquarters to 100 City Hall Plaza in 2012.

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German Investor Buys Seaport Office Building in Record Deal

In one of the largest single-asset trades in Boston real estate history, Skanska USA has sold 101 Seaport Boulevard to German real estate fund Union Investment Real Estate GmbH for $452 million. The transaction is Union Investment's third recent acquisition in Boston, and will join the portfolio of open-ended real estate fund Unilmmo: Europa. The deal doesn't include the building's ground floor, which will be home to the By Chloe restaurant by this summer. Newmark Grubb Knight Frank represented Skanska on the sale and the leasing; full terms of the deal were not disclosed. The divestment will be recorded by Skanska USA Commercial Development in the first quarter of 2016, Skanska said in a statement.

"After the acquisition of The Godfrey Hotel and the Converse Headquarters at Lovejoy Wharf, we are pleased to have strengthened our foothold in the important and economically very stable gateway market of Boston with the acquisition of this trophy building at 101 Seaport Boulevard," said New York City-based Tal Peri, Head of U.S. East Coast & Latin America at Union Investment Real Estate GmbH.

"The building, its elegance, and its environmentally conscious design, both inside and out, reflect our passion for the community, the Seaport and the City of Boston. 101 Seaport has been a catalyst for the transformation of the neighborhood and we look forward continuing to deliver the most sustainable and efficient buildings along Seaport Boulevard with the completion of Watermark Seaport and the development of 121 Seaport," added Charley Leatherbee, Executive Vice President of Skanska USA Commercial Development.

Skanska developed the 17-story, 440,000 square foot office building at the corner of Seaport Boulevard and Boston Wharf Road for $126 million, wrapping construction in early 2015; Skanska also leases 28,000 square feet on the tower's second floor. Accounting giant PricewaterhouseCoopers in October 2015 relocated its northeast headquarters from Boston's Financial District into 333,500 square feet at 101 Seaport, becoming the building's anchor tenant. 101 Seaport is the first office building in Boston to be certified Platinum under the LEED sustainability standard.

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Davis Sells Tower Point in Boston

The Davis Companies (TDC), the Boston-based real estate investment, development and management firm, announced this week that it had sold Tower Point in South Boston's Seaport District to the Rockpoint Group for $62.1 million. TDC originally acquired the property in 2013 for $43.3 million, retaining Cushman & Wakefield as the leasing agent. Prior to that, Meritage Properties, a New York-based owner and operator of office properties, bought the six-story property in 2008 for $32 million. Newmark Grubb Knight Frank represented TDC in the transaction; terms of the deal were not disclosed.

The 155,170-square-foot, Class A, brick-and-beam office building at 27–43 Wormwood St. in South Boston's Seaport District, which was built back in 1900, is recognized by its iconic smokestack. TDC invested significant capital in the property, upgrading the building with modern finishes and adding an outdoor courtyard, bringing the occupancy from 74.3% in 2013 to 95% at the time of sale. Current tenants include Rethink Robotics, Healthways, NPR, Zerto and Owner IQ.

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ARC Healthcare Trust II Buys Medical Center

American Realty Capital Healthcare Trust II Inc. has acquired a 34,047-square-foot, medical office building directly adjacent to Santa Rosa Memorial Hospital in Santa Rosa, CA. Holliday Fenoglio Fowler L.P. sold the property on behalf of Sotoyome Medical Building LLC for an undisclosed sum, according to a GlobeSt.com report. The Press Democrat reported in November 2014 that the building was part of a $30 million portfolio being put up for sale, after Newmark Grubb Knight Frank was hired to market the properties. Terms of the ARC deal were not disclosed.

"St. Joseph's outpatient center generated tremendous investment demand from a broad spectrum of capital providers including healthcare REITs, institutional funds and high net worth private investors," said HFF managing director, Evan Kovac. "The facility is highly specialized and provides critical services such as radiology, mammography and imaging. In fact, the property houses the only PET CT in the North Bay Area. The immediate proximity to Santa Rosa Memorial Hospital, which is part of the prestigious St. Joseph Health System, was viewed extremely favorably by the investment community. Additionally, the North Bay Area location and in particular, the affluent and desirable wine country region were viewed as major intrinsic benefits. As most of us know, the medical office marketplace as a whole is incredibly robust with record level pricing."

121 Sotoyome Street has 34,047 square feet of building space on 128,938 square feet of land zoned for commercial office space. It is leased to St. Joseph through 2019 and is being utilized for outpatient multi- specialty and radiology services. Originally built in 1955, the property has been consistently updated throughout the years with more than $5 million in improvements made since 2005.

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DC Office Obsolescence Creep?

A new report from GlobeSt.com suggests that whether DC landlords will admit it or not, a certain percentage of the city's buildings have become, or are becoming obsolete. "The rapid obsolescence of B and C properties, some of which cannot be cured, is surprising," said Newmark Grubb Knight Frank's Senior Managing Director of Research Greg Leisch. "In my 45-year career I have never seen such rapid obsolescence." Obsolete, in current vernacular, indicates that a property lacks robust amenities or an urban location, are not convenient to mass transit, or have smaller floor plates or an extensive glass line.

NGKF are still preparing their findings for a full report and, according to GlobeSt.com, will reveal them in an upcoming white paper. An excerpt from the report follows:

"There has always been a difference between best-in-class office product and the rest of the market," Leisch tells GlobeSt.com. "Now, though, the differences have become more profound."

One telling statistic, Paul says, is that the share of office leasing by Class A offices has really taken off since the recession.

According to the report, "Since the start of 2008, Class A office properties in the Washington metro area have totaled 18.6 million square feet of net absorption, while Class B and C properties have experienced negative 13.8 million square feet of absorption, with each year reflecting positive net new demand for Class A space and a loss of occupancy in the balance of the market."

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Medistar Buys Three Beaver Valley Road for $62M

Houston-based Medistar Corp. announced this week that it had entered the mid-Atlantic market with the purchase of 3 Beaver Valley Road in Wilmington, Delaware for $61.8 million. The property was soldy by an entity controlled by KBS Realty Advisors. Newmark Grubb Knight Frank Capital Markets represented both the buyer and seller in the transaction.

"It is no surprise that this office building attracted multiple offers from a number of capable buyers across the country, given its well-established anchor tenant and proximity to many corporate headquarters," said Newmark Grubb Knight Frank's David Dolan, a senior managing director in the Philadelphia office, who helped arrange the transaction. "3 Beaver Valley Road had been maintained by a leading institutional owner with the level of amenities associated with first-class properties and also will benefit from the quickly improving economy in the area."

The 264,000-square-foot office building was 94% occupied at the time of sale with Farmers Insurance Exchange as the anchor tenant following significant recent lease-up efforts by Newmark Grubb Knight Frank. Built in 1995, the five-story property was recently improved with a renovated lobby, repaved parking lot and a new roof. The 18-acre site sits next to Brandywine Creek State Park and is near the intersection of Routes 202 and 92, about 25 miles south of Philadelphia.

For more news and information visit Blumberg Partners.

JV to Build Mixed Use Complex on 58 Acres Near Denver

United Properties, in a joint venture with Principal Real Estate Investors, announced that it had recently acquired 58 acres of land near Denver to develop Dry Creek Corporate Center, a mixed-use office, industrial, hotel and residential campus located just east of Interstate 25 and East Dry Creek Road in Centennial. United Properties plans to develop approximately 650,000 square feet of single and multi-tenant office and industrial buildings, with the residential and hospitality portions of the campus to be sold to outside developers.

"This is one of the largest fully-entitled parcels of land in the heart of the southeast suburban market," said Kevin Kelley, vice president, United Properties. "With improving market conditions and low supply, we’re excited to bring this new Class A product to the market."

United Properties purchased the land for Dry Creek Corporate Center in a joint venture with Principal Real Estate Investors. David Lee, Jason Addlesperger and Mike Wafer of Newmark Grubb Knight Frank will lease the property on behalf of the ownership. Powers Brown Architecture is the lead architect for the vertical development.

For more news and information visit Blumberg Capital Partners.

Savanna Buys Manhattan Office Building for $261M

Savanna, in a joint venture with KBS Capital Advisors, announced this week that it had purchased 110 William Street from Swig Equities and the Dubai Investment Group for $261 million, or $281 per square foot. Terms of the deal were not disclosed, but press releases did indicate that Savanna was represented by Laurie Grasso and Susan Saslow of Hunton & Williams in the acquisition and Carl Schwartz of Hunton & Williams in the joint venture with KBS Capital Advisors.

"Our acquisition of 110 will accelerate the positive transformation of William Street that is occurring as institutional firms continue to buy and upgrade many of the adjacent properties," said Nicholas Bienstock, a managing partner at Savanna, in a statement. "By investing in and improving the building, we expect to attract the same diverse group of tenants that we have been able to attract to our other Downtown properties."

The 32-story, 928,000 square foot Financial District tower is located in the heart of Lower Manhattan, with direct entry from its lobby to the subway and the future Fulton Center, a new major transit hub scheduled for completion late next month. Savanna said it plans to undertake a comprehensive capital improvement plan at the building, with Newmark Grubb Knight Frank leading leasing efforts, and Swig Equities providing property management services.

"It's an exciting time to be investing in Downtown Manhattan as the long transformation has arrived, with over $30 billion in capital invested in Downtown from both the public and private sector over the last ten years," said Adam Spies of Eastdil Secured, which served as exclusive advisors for the transaction. "As Downtown has become the epicenter of the region's vast pool of high-value, knowledge workers, the demand for office space continues to increase, evidenced by 22 percent year over year increase in rental rates as of first quarter 2014."

For more news and information visit Blumberg Capital Partners.

BGC Buying Cornish & Carey Commercial

BGC Partners, Inc. announced this week that it had entered into an agreement to acquire Cornish & Carey Commercial, one of the last regional independent real estate firms and a major player in Northern California commercial real estate. Cornish has been an affiliate of Newmark Grubb Knight Frank (NGKF), the real estate firm under BGC Partners acquired in 2011, since 2010, and will now join the company operating in Northern California as Newmark Cornish & Carey. Financial terms of the transaction were not disclosed, but Cornish's leadership — including all of its partners — will remain on board for the foreseeable future, according to a Sacramento Business Journal article.

"Our partnership with Cornish & Carey has been tremendously successful. We now have an even greater ability to provide clients in the important Northern California marketplace the complete array of NGKF's services including site selection, leasing advisory, facilities management, property management, project management, investment sales, global corporate services, and valuation among others," said NGKF CEO Barry Gosin in a statement. "A primary driver of NGKF's growth is acquiring spectacular talent in key markets. Cornish & Carey's commitment to serving clients, and its culture and performance, align perfectly with NGKF's client-centric service and growth model."

Formed in 1935 in Palo Alto, CA, Cornish & Carey employs more than 275 brokers and generated $135 million in revenue in 2012, according to a CoStar report. The two firms have operated under a business referral agreement since 2010. Cornish & Carey has offices in Emeryville, Hayward, Marin, Palo Alto, Pleasanton, Roseville, Sacramento, San Francisco, San Mateo, Santa Clara, Santa Rosa and Walnut Creek.

For more news and information visit Blumberg Capital Partners.

The Brill Building Sold for $185.5M

Real estate investor Eric Hadar of Allied Partners, along with the private equity firm Brickman, have taken ownership of the iconic Brill Building in New York at a purchase price of $185.5 million, or about $1,100 per square foot. Barry Sternlicht's Starwood Property Trust provided a $158.5 million first mortgage to help finance the transaction, while Square Mile Capital Management provided $40 million of financing. Adam Spies and Doug Harmon of Eastdil Secured brokered the sale.

"We are excited to be involved in a project that will help modernize one of Times Square's most famous and storied buildings," said Boyd Fellows, President and Director of Starwood Property Trust. "This transaction is a prime example of our unique ability to act as a one-stop-shop to provide large, highly specialized loans that meet the needs of high-quality sponsors like Allied Partners and Brickman."

The Brill Building was 27% occupied at the time of sale, but the new owners have plans to begin extensive renovations expected to retain the landmark building's heritage and aesthetic while modernizing infrastructure. The new space, opening in 2014 will house the Songwriters Hall of Fame among other tenants including fashion, arts, media, entertainment and other creative office users, according to a CoStar report. Moving forward, retail leasing will be managed by Jeffrey Roseman of Newmark Grubb Knight Frank with commercial leasing run by Paul Kotcher of Brickman.

For more news and information visit Blumberg Capital Partners.

Warehouse Demand Off to Strongest Start Since 2008

A new article from CoStar titled Don't Look Now But Warehouse Demand Off to Strongest Start Since 2008 has been released, noting the strong start of the warehouse market in 2013 as the growing pace of construction remains in check with a demand for growth. A survey of transaction data by CoStar's Property & Portfolio Research shows warehouse supply and demand at its strongest levels in at least five years. An excerpt from the article follows:

"Speculative new construction is still not a threat to the ongoing recovery as it is still heavily concentrated in markets that also have strong demand, such as the Inland Empire, Phoenix, and more recently Memphis," said Rene Circ, director of U.S. research/industrial Property & Portfolio Research (PPR), a CoStar company.

"The industrial market is enjoying a recovery in line with historic trends," said Robert Bach, national director of market analytics for Newmark Grubb Knight Frank. "The leasing market is performing better than the investment market, only because it’s harder for investors to source industrial product to match their appetites."

"Housing has emerged from its recessionary slump and is once again driving demand for both warehouse and flex product," said Jason W. Tolliver, vice president of research, Cassidy Turley. "The manufacturing sector continued to expand in the first quarter, although the pace of growth seems to be slowing. Despite this, factory hiring has continued and this bodes well for future CRE demand."

For more news and information visit Blumberg Capital Partners.

BGC Finalizes Grubb & Ellis Purchase, Forms Newmark Grubb Knight Frank

BGC Partners, Inc. announced on Friday that it had closed the acquisition of Grubb & Ellis assets after receiving approval from the U.S. Bankruptcy Court for the Southern District of New York. At the same time, BGC is rapidly integrating Newmark Knight Frank, which it acquired in October 2011, with Grubb & Ellis, forming Newmark Grubb Knight Frank, its new full-service commercial real estate platform.

Michael Lehrman, Global Head of Real Estate at BGC, said, "With more than 100 offices in North America, 250 million square feet in Property and Facilities Management, and an outstanding national Appraisal business, the creation of Newmark Grubb Knight Frank is a game-changing moment in the real estate industry. Newmark Knight Frank and Grubb & Ellis each have consistently ranked among the leading companies in the real estate industry, and now these two great brands have come together as an even more impressive competitive presence in the real estate marketplace."

Barry Gosin, CEO of the combined Newmark Grubb Knight Frank, added, "Our value proposition embraces a portfolio of management services, capital markets, corporate services, investment sales, leasing, tenant and landlord representation, property and facilities management, industrial engineering, appraisal and valuation services. In short, it's a fresh and comprehensive way of identifying creative, fully integrated solutions to meet clients' complex real estate objectives by applying BGC's capital, management, and technology as we enlarge the scale of our real estate services platform and expand into new markets."

For more news and information visit Blumberg Capital Partners.