Kennedy Wilson Buys 3 Properties for $37.3M

International real estate investment and services firm Kennedy Wilson announced this week that it had acquired three properties in Utah, California and Idaho with its partners, including The LeFrak Organization and Kennedy Wilson Fund IV, for $37.3 million. Kennedy Wilson contributed $9.9 million of equity in the deals, with $23.1 million of debt outstanding and the balance from partner equity, and said that it plans to reposition all of the properties to capture further income potential. According to an L.A. Biz article, the company's multifamily portfolio in the U.S., Ireland and Japan totals 14,274 units.

"These retail investments provide the company with a predictable and steady income stream through credit tenants such as Burlington Coat Factory, In-N-Out Burger, Outback Steakhouse and Staples," John Prabhu, president of KW Commercial Investment Group, said in a statement.

The properties include: a 209,329 square foot multi-tenant retail center in Orem, Utah; 15,118 square feet of retail and office space in Malibu, California; and a 114,404 square foot retail center in Boise, Idaho.

For more news and information visit Blumberg Capital Partners.

Frank Gehry's New Facebook HQ Design

In a new Facebook post on Friday, Everett Katigbak, Facebook's Environmental Design Manager, revealed the plans for Facebook's new campus expansion, designed by the world-renowned architect, Frank Gehry. The Los Angeles Times reports that plans for the Silicon Valley site, which will be submitted Monday, will include a 420,000-square-foot, single-story warehouse topped with a garden that will span the entire roof. An excerpt from the post:

At every step of planning the new building, Frank has taken into account our engineering culture. It will be a large, one room building that somewhat resembles a warehouse. Just like we do now, everyone will sit out in the open with desks that can be quickly shuffled around as teams form and break apart around projects. There will be cafes and lots of micro-kitchens with snacks so that you never have to go hungry. And we'll fill the building with break-away spaces with couches and whiteboards to make getting away from your desk easy.

We've paid just as much attention to the outside as well. The exterior takes into account the local architecture so that it fits in well with its surroundings. We're planting a ton of trees on the grounds and more on the rooftop garden that spans the entire building. The raw, unfinished look of our buildings means we can construct them quickly and with a big emphasis on being eco-friendly. Of course, we'll maintain our current campus and use an underground tunnel to connect the two.

We plan to break ground on the new building in early 2013 and hope for a quick construction. When it's completed, we hope it will provide a paradise workspace for the 2,800 engineers who will one day fill it.

In May, Facebook was granted permission by city officials to hire up to 6,600 workers on the California campus according to PC Magazine. Facebook will pay the city of Menlo Park an average of $850,000 a year for 10 years, to cover the impact of additional workers on city infrastructure.

For more news and information visit Blumberg Capital Partners.

Apple Picks Up More Than 1 Million SF in Sunnyvale

Technology giant Apple has made moves in Sunnyvale, CA, picking up more than 1 million square feet of new office space that could accommodate as many as 5,000 employees. As the company continues to outgrow its space in Cupertino, Apple continues to lease new space and has, so far, agreed to lease a total of 1.2 million square feet in Sunnyvale according to city records and real estate brokers involved in the deals.

"It's a remarkable growth spurt for Apple," said Jim Beeger, senior vice president with Colliers International, a commercial realty brokerage, in a San Jose Mercury News article. "This is a 30-year-old company undergoing the type of explosive expansion that you see with a three-year-old startup."

"Cupertino is pretty much filled up because of Apple's growth, much like Mountain View is pretty much filled up because of Google," said Phil Mahoney, an executive vice president with realty firm Cornish & Carey Newmark Knight Frank. "Both Google and Apple need more room. Both of them decided to find space in Sunnyvale."

"As I look at my iPad and check my iPhone, it really strikes me how much Apple has been able to achieve and how they have remade themselves," said Reed Payne, an executive vice president with Kidder Mathews, a commercial realty firm. "The future is not only bright for Apple, but the future bodes well for all of Silicon Valley."

For more news and information visit Blumberg Capital Partners.

Avidan Sells NJ Industrial and Office Portfolio

Cohen Asset Management, Inc., a private commercial and industrial real estate investment firm, announced that an affiliate had acquired a nine building portfolio of industrial and office properties in northern New Jersey from Avidan Management. According to a CoStar report, the pricepoint of the deal was not disclosed, but that the HFF investment sales team represented Avidan in the transaction.

The portfolio, comprised of approximately 2.6 million square feet of warehouse and office space primarily in port-centric locations, represents one of the largest acquisitions of industrial properties in Northern New Jersey in many years. The purchase is part of a series of transactions that Cohen has completed on both the east and west coast over the past year and is reflective of Cohen's ability to source transactions through its longstanding operator model.

"As previously outlined, one of our top priorities is to grow our East Coast presence," commented Bradley Cohen, Cohen's President and CEO. This transaction highlights Cohen Asset Management's commitment to our target markets and our ability to establish a concentrated ownership position by assembling a critical mass of high quality, functional industrial real estate. Cohen went on to continue saying, "With this acquisition, we are making significant progress towards achieving our strategic objectives."

For more news and information visit Blumberg Capital Partners.

American Realty Capital Trust Sold to Realty Income for $3B

Realty Income announced an agreement this week to acquire all of the outstanding shares of American Realty Capital Trust in a transaction valued at approximately $3.0 billion. The Board of Directors of both companies have unanimously approved the agreement and the transaction is expected to close during the fourth quarter of 2012 or early in the first quarter of 2013. The acquisition will be financed by Realty Income directly issuing $1.9 billion of its common stock to American Realty Capital Trust shareholders, the assumption of roughly $526 million in debt, and the repayment of approximately $574 million in outstanding debt and expenses.

Approximately 75% of the rental revenue Realty Income will add in this transaction will be generated by investment-grade tenants including: FedEx, Walgreens, CVS, the GSA, Dollar General, Express Scripts, PNC Bank, and Whirlpool, reported CoStar. The addition of these tenants to Realty lncome's existing portfolio increases the company's revenue generated by investment-grade tenants from approximately 19% to 34% of pro forma total revenue.

Tom Lewis, CEO of Realty Income, said, "This acquisition comprehensively advances Realty Income's strategic objectives of increasing its revenue generated by investment grade tenants and further diversifying its portfolio outside of the retail industry." Nicholas Schorsch, Chairman of American Realty Capital Trust, said, "We are very pleased to announce this transaction between ARCT and Realty Income. Realty Income has an extraordinary record of continuous dividend payments and dividend growth together with very strong overall performance."

According to a Washington Post article, the buyout will give Realty Income 501 additional properties, giving it more than 3,250 properties owned under long-term leases to major commercial and retail tenants. Realty Income says that none of New York-based American Realty’s employees will remain with it after the transaction is complete.

For more news and information visit Blumberg Capital Partners.

Seaton Benkowski & Partners Sells Carroll Square Leasehold for $121M

Holliday Fenoglio Fowler (HFF) announced this week that it had closed the leasehold sale of Carroll Square in DC on behalf of the seller, Seaton Benkowski & Partners, for $121.4 million. GLL Partners purchased the 178,000 square foot office property and assumed an existing loan. Akridge oversees leasing and management of Carroll Square, where the tenant roster includes law firms Seyfarth Shaw, Holland & Hart, and Fitzpatrick, Cella, Harper & Scinto.

Jones Lang LaSalle research director Scott Homa told GlobeSt,com that at $121.4 million, the building's trade shows that prices are not softening here even though sales volume has fallen year-over-year. "Pricing for core, class A buildings averaged $645 per square foot during the first half of 2012, and cap rates remained well under 6% for long-term stabilized assets. Overall, with the federal election looming and little progress being made in establishing a clear fiscal policy, we expect investors to adopt a ‘wait-and-see' posture heading into November."

Carroll Square is a 10-story building at 975 F St., NW and was recognized as the "Best Urban Office Building" of the year by the Maryland/DC Chapter of the National Association of Industrial and Office Properties (NAIOP) upon its completion. Designed by SmithGroup and developed by Akridge in 2007, the trophy-class property incorporates four renovated late 19th century commercial townhouses and the facades of two others, as well as a defining architectural cupola and a distinguished new structure accented with brick and stone.

For more news and information visit Blumberg Capital Partners.

Amazon's Global HQ for Sale

Microsoft co-founder Paul Allen's Vulcan Real Estate announced last Thursday that it would be putting Amazon.com Inc.'s 11-building Seattle headquarters on the market with plans to use the proceeds for other real estate projects in the area. "We have been deeply involved in the redevelopment and revitalization of South Lake Union for over a decade, and the sale of the Amazon campus will allow us to continue to invest in the neighborhood and the community," Ada M. Healey, vice president of Vulcan's real estate unit, said in the statement.

"Vulcan's portfolio is heavily weighted in office and we need to rebalance that distribution," Lori Mason Curran, Investment Strategy Director of Real Estate at Vulcan said in a statement. "With the current low interest rate environment and high values for core assets this feels like a good time to capitalize on market conditions."

Built in the former warehouse district north of downtown, the 1.8 million square foot campus is being listed for sale through CBRE Group Inc. While no asking price was listed, industry experts expect the property to sell for more than $1 billion. According to a Reuters report, Amazon, which only recently moved into its new headquarters, declined comment on whether it would be a bidder to buy the 11 buildings on 1.8 million square feet of land which make up its headquarters. Amazon already has plans to build new offices nearby to house its growing staff.

"If they're going to take the cash and use it to do more development in South Lake Union, I see it only as a good thing," commented Jerry Dinndorf, president of the South Lake Union Community Council.

"The Amazon corporate headquarters buildings represent exactly what core capital wants today: new product featuring durable, credit income streams in great CBD locations. Markets like South Lake Union in Seattle, South of Market in San Francisco and Silicon Beach in Santa Monica, command premium rents because of huge tenant demand," said Kevin Shannon of CBRE in a CoStar Group report. "Technology and corporate tenants love state of the art campuses in amenity rich, transit oriented environments like Amazon's because these locations allow them to attract and retain the best talent in the workforce."

For more news and information visit Blumberg Capital Partners.