$16.2B Essex-BRE Merger Complete

Essex Property Trust announced the completion of the company's merger with BRE Properties, a transaction that forms a combined company with equity market capitalization of approximately $11 billion and a total market capitalization of approximately $16 billion. UBS Investment Bank served as lead financial advisor to Essex with Citigroup serving as financial advisor. Wells Fargo Securities acted as exclusive financial advisor and Latham & Watkins LLP acted as legal advisor to BRE. Essex Property Trust has ownership interests in 233 multifamily properties with an additional 15 properties in various stages of development, according to a REIT.com article.

"We are excited to consummate the merger and move forward to combine these two great organizations to form the leading West Coast multifamily REIT," said Michael Schall, President and Chief Executive Officer of Essex. "The integration effort is proceeding as planned, which we believe will result in a stronger platform for sustainable growth, superior service for our residents, and expanded career opportunities for our employees. I want to thank the employees of both companies for their hard work, dedication and support."

"We are pleased that our stockholders have expressed overwhelming support and approval for this merger," said Constance B. Moore, Chief Executive Officer of BRE. "The combined portfolio of Essex and BRE will provide substantial value for our stockholders through enhanced operations, improvements in the costs of capital and synergistic opportunities. On behalf of BRE’s Board and management, I want to thank our stockholders for their invaluable support throughout this process."

For more news and information visit Blumberg Capital Partners.

CMBS Research Shows Rebound to Pre-Recession Levels

A new report from the CoStar Group examines the trends and latest information yielded from the April CMBS bondholder remittance reports to evaluate the state of CMBS loans, which now see to be rebounding to pre-recession levels. Data shows that net operating incomes on almost all yearly vintanges of CMBS loans are now near or above underwritten financial levels. An excerpt follows:

Based on the loans that have reported year-end 2012 financials, NOI growth was strong in 2012 rising 4.5% on average. For the 2010 and 2011 vintages about 30% of the loans reporting year-end 2012 financials are showing lower NOI than was underwritten. The 2012 vintage is showing a higher percentage, with around 40% of the loans having lower NOI compared to the underwritten amount.

While they plan to revisit the topic again in a few months once the majority of the loans have reported, based on the early look at NOI (net operating income) trends among loans that have reported year-end 2012 financials, Jan de Beur said NOI growth was strong in 2012, rising 4.5% on average.

"While preliminary, the 2012 NOI growth rate is noticeably higher than the 3% increase in NOI experienced in 2011 on average," said Marielle Jan de Beur, managing director and head of Structured Products Research CMBS and Real Estate Research for Wells Fargo Securities.

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.