Starwood Capital Buys Belmar in Lakewood, CO

Starwood Capital Group announced this week that, though a controlled affiliate, Starwood Global Opportunity Fund X purchased Belmar in Lakewood Colorado, an open-air mixed-use center just miles from Denver. Starwood did not disclose any details of the transaction, but did indicate in a press release that the property will be managed by Starwood Retail Partners, which was established in 2012 to handle the retail centers in Starwood Cap's portfolio. Sources familiar with the deal confirmed that the sale was around $300 million, which would make it the Denver area's largest real estate transaction by dollar amount in recent memory, according to a Denver Business Journal article.

"We are very pleased to be able to make an opportunistic investment in a high-quality, well-leased destination property that is at an inflection point in its lifecycle," said David Baker, Vice President at Starwood Capital Group. "We expect the immediate area to continue experiencing strong demand from younger professionals, with population growth within five miles of Belmar projected to expand by 10% over the next five years. Belmar is well-positioned to benefit from this trend, given its walkable, urban-style, amenity-rich environment, as well as its close proximity to Denver's central business district and recreation areas in the Rocky Mountains."

The 1.1 million square foot Belmar sits on the site of the former Villa Italia Mall and serves as the town center for Lakewood, providing service and office space easily accessible from all points west of Denver via Colfax and 6th Avenues. The property includes 871,000 square feet of retail space that is currently 96% leased to tenants including Whole Foods, Dick's Sporting Goods, Best Buy, Nordstrom Rack, 24-Hour Fitness and a 16-screen Century Theatre. Belmar also offers 282,000 square feet of office space, which was 100% leased at the time of sale, with an addition 171 Class A apartment units. Belmar was ranked the Denver area's 11th-largest shopping center in recent DBJ research.

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Vornado Picks Up Interest in $475M Times Square Property

Greenwich, CT-based Starwood Property Trust and Starwood Capital Group announced the sale of a 25% stake in both the first mortgage and mezzanine loan on 701 Seventh Avenue in the Times Square area of Manhattan to Vornado Realty Trust. On October 16, 2012, Starwood Property Trust and Starwood Capital Group announced the co-origination of a $475 million first mortgage and mezzanine financing for the acquisition and redevelopment of a 10-story retail building located in Times Square to build Times Square Gateway Center, a 340,000-square-foot multi-use complex. $375 million was funded at closing and $100 million will be funded upon reaching certain milestones during the transformation of the property.

STWD, Starwood Distressed Opportunity Fund IX, and VNO have now funded $210.9 million, $70.3 million and $93.8 million, respectively, and each party will fund their pro rata share of any future fundings according to a GlobeSt.com report. The lenders intend to sell the first mortgage in the near term to increase their investment returns and retain the mezzanine loan. Following the completion of the sale, the existing lenders expect that the mezzanine loan will generate an IRR in excess of 14% before attributing value to the equity participation received in the transaction which could be material.

"The Times Square Gateway Center will greatly enhance the North end of Times Square," said Ike S. Franco, Co-Managing Partner of Infinity Urban Century, LLC, of the new development. "With the combined strength of Maefield Development, New Valley, and The Witkoff Group, this project has the potential to become one of the most innovative New York City developments in decades and to further cement the image of Times Square as the most vibrant global retail and entertainment district."

For more news and information visit Blumberg Capital Partners.

Anglo Irish Bank Sells $9.5B US Loans

Wells Fargo & Co, JPMorgan Chase & Co and Lone Star Funds were the winning bidders on the $9.5 billion pool of U.S. commercial real estate loan sold by Anglo Irish Bank Corp. with debt related to some 250 properties, including marquee names ranging from the Apthorp, a landmark Manhattan residential building, to a Beverly Hills, Calif., shopping center to the Palmer House Hilton in Chicago according to a Wall Street Journal article. Other bidders included Blackstone Group LP, TPG Capital, Starwood Capital Group, Goldman Sachs Group Inc. and Deutsche Bank AG. The sale marks one of the biggest since the downturn in U.S. commercial real estate four years ago.

Anglo Irish Bank had been looking to unload the portfolio since the Irish government took control of the bank in January 2009. The bank had reported last week that it lost €101 million in the six months ended June 30th, far below the €8 billion loss it recorded for the same period last year.

According to Bloomberg, the trio will take on the portfolio of $9.65 billion in U.S. loans. It wasn't disclosed what the consortium bid for the assets, though some speculate 80 cents on the dollar would be a good price. "If you're looking at quality assets in good, strong markets, I'd say 80 cents on the dollar sounds pretty reasonable," said Tom Craig, founder of TSC Realty Partners, a commercial-property broker in Seattle who wasn't involved in the sale. "One of the barriers to entry on a big deal like this is how many people can put the capital together to buy this and close quickly."

For more news and information visit Blumberg Capital Partners.