CA Selects Buyer for State Buildings at $2.3B

According to an Associated Press article the Department of General Services in California has selected California First LLC, a partnership led by Hines and Antarctica Capital Real Estate, as the buyer for 11 state office properties that went up for bid earlier this year with a winning offer of $2.33 billion. The sale will result in more than $1.2 billion for California's state general fund and $1.09 billion to pay off bonds on the properties. Over the next 20 years, the state will reportedly lease the offices back from the new owner at predetermined rates, and will no longer maintain, operate, or repair the buildings. All the leases with California First allow the state to buy back any or all of the buildings at anytime during the 20-year term. The offices included in the portfolio are:
  • Attorney General Building, Sacramento
  • California Emergency Management Agency Building, Sacramento
  • Capitol Area East End Complex, Sacramento
  • Elihu M. Harris Building, Oakland
  • Franchise Tax Board Complex, Sacramento
  • San Francisco Civic Center, San Francisco
  • Junipero Serra State Building, Los Angeles
  • Department of Justice Building, Sacramento
  • Public Utilities Commission Building, San Francisco
  • Judge Joseph A. Rattigan Building, Santa Rosa
  • Ronald Reagan State Building, Los Angeles

"Far from a fire sale, this was a stiff, multiple-offer competition that generated favorable pricing for the state," Kevin Shannon, vice chairman of CB Richard Ellis, which brokered the sale, said in a written statement. Rich Mayo, one of the chief investors, said California, despite its financial problems, is a reliable investment. The state is not a tenant prone to "run out on leases or anything," he said in a Sacramento Bee article.

For more news and information visit Blumberg Capital Partners.

South Florida Medical Office Buildings Bought for $47.1M

Tenet Healthcare Corporation, a health care services company, has sold nine of their South Florida medical office buildings to AW Property Company in a $47.1 million cash deal according to The Palm Beach Post. AW Property completed the deal through its joint venture with Behringer Harvard, a purchase that totaled 630,000 square feet. “This medical office portfolio provides an attractive value-added investment opportunity,” AW Property Managing Director Brian Waxman said in a news release.

The buildings sold in the portfolio include:

The Victor Farris Building, at 1411 N. Flagler Drive in West Palm Beach. The 148,000-square-foot medical office, next to Good Samaritan Medical Center, will get extensive upgrades.

The eight-story Palmetto Medical Plaza, a 130,000-square-foot building at 7100 W. 20th Ave., in Hialeah near Palmetto General Hospital.

Hialeah Medical Plaza, a 72,000-square-foot office building at 777 E. 25th St., near Hialeah Hospital.

The 56,000-square-foot North Shore Medical Arts building, at 1190 N.W. 95th St. in Miami, near North Shore Medical Center.

Four medical office buildings for a combined 207,000 square feet near Florida Medical Center in Fort Lauderdale.

The 20,000-square-foot St. Mary’s Professional Center, at 5035 Greenwood Ave. in West Palm Beach, near St. Mary’s Medical Center.

For more news and information visit Blumberg Capital Partners.

Philip Blumberg on CNBC Europe - Time to Invest in Dubai?

"I think places like Dubai still have a few years to go before they can wash out enough inventories so it makes sense from an investor perspective," Philip Blumberg, chairman and CEO at Blumberg Capital Partners told CNBC on real-estate prices in the Middle East.

A&B Sells Distribution Center for $43M

A&B Properties, Inc., the real estate subsidiary of Alexander & Baldwin, Inc.,has announced the sale of the Ontario Distribution Center for $43 million according to a BusinessWeek article. The 898,400 square-foot, three-building industrial park sits on a 38 acre plot in Ontanrio, California and was originally purchased by A&B for $27 million in 2000. Major tenants include Home Depot, Best Furniture, Quill Corp., and Crothall Laundry Service.

Norbert Buelsing, president of A&B Properties said, "We achieved an exceptional 97 percent average occupancy during our 10-year ownership and realized favorable pricing for the property. Consistent with our real estate investment strategy, we anticipate reinvesting the proceeds from this sale, through a tax-advantaged 1031 transaction, into other commercial real estate investments with good growth prospects."

For more news and information visit Blumberg Capital Partners.

One and Two Potomac Yard Sold for Nearly $250M

US Government Building Fund, LLC, a fund sponsored by USAA Real Estate Company, has purchase One and Two Potomac Yard in Crystal City, Virginia for almost $250 million according to a National Real Estate Investor article. The seller, Potomac Yard Holding Company, LLC, is owned by JP Morgan Strategic Properties Fund. "We are home to the federal government and have a strong regional economy, which is experiencing real job growth. Every investor should own here,” stated Bill Prutting Jr., senior vice president in CBRE’s capital markets institutional group, which arranged the sale, in an Oct. 1 press release announcing the sale of Potomac Yard.

The 621,774-square-foot, two-building office complex is located just miles from Washington, DC and is currently 90% leased to Federal Government agencies including the U.S. Army Corps of Engineers and the U.S. Agency for International Development, along with private sector tenant Thales, an international aerospace, defense and security contractor. One and Two Potomac began construction in 2004, completed in 2006, and was the first project to achieve LEED New Construction Gold recognition in the state of Virginia and remains the only LEED Gold certified and Energy Star rated property in Crystal City today.

For more news and information visit Blumberg Capital Partners.

Boston's John Hancock Tower Sold for $930M

Boston Properties Inc. announced today that it would purchase the John Hancock Tower and Garage in Boston in a deal valued at $930 million according to the Associated Press. The purchase price reportedly consists of $289.5 million of cash plus the assumption of roughly $640.5 million in debt. The debt being assumed from the seller, a joint venture between an affiliate of Normandy Real Estate Partners and an affiliate of Five Mile Capital Partners, is a securitized senior mortgage loan that bears interest at a fixed rate of 5.68% per annum and matures in January 2017.

"The bidding was as fierce as anything I've ever handled during my 30 years in this business," said Robert Griffin, who brokered the sale for Cushman & Wakefield, a real estate services firm.

The John Hancock Tower is an iconic 62-story, approximately 1,700,000 rentable square foot office tower located in the heart of Boston's Back Bay neighborhood and is New England's tallest building. The garage is an eight-level, 2,013 space parking facility. As New England's tallest building, the John Hancock Tower features a 360-degree panoramic view of the Back Bay, Charles River, Cambridge, the Public Gardens, Boston Harbor and Financial District.

For more news and information visit Blumberg Capital Partners.

Market Center Office Complex in SF Sold for $265M

Manulife Financial, a Canadian-based financial services group, has entered into the Bay Area real estate market with the purchase of Market Center in San Francisco for $265 million, or $344 per square foot according to CoStar. Manulife acquired the 770,044-square-foot, two-tower office complex from RREEF America, which previously bought the complex in a joint venture with Page Mill Properties from Tishman Speyer for $79.5 million in October 2003. Page Mill sold its interest to RREEF for $127.5 million in May 2006.

Connected by a large landscaped courtyard, Market Center consists of two office towers: 555 Market Street, a 21-story, 283,000 square-foot building completed in 1965; and 575 Market Street, a 40-story, 487,000 square-foot building added in 1975. The buildings have been extensively renovated and modernized with state-of-the-art systems in the last few years and are in the process of being LEED certified for environmental sustainability. "We identified San Francisco as one of several potential growth areas for our real estate business and we are optimistic about the possibilities in this and other key markets as we continue to look for core office and industrial investment opportunities to complement our portfolio across the United States, Canada and Asia," Kevin Adolphe, COO of Manulife's Investment Division, said in a statement.

For more news and information visit Blumberg Capital Partners.