Lodging Enterprises Sold to AHIP for $127M

Kansas-based Lodging Enterprises has been sold to American Hotel Income Properties REIT LP (AHIP), led by Canadian hotel veteran Rob O’Neill of Vancouver, B.C., for $127 million. Jones Lang LaSalle’s Hotels & Hospitality Group arranged the sale, led by managing directors Al Calhoun and Mark Fair. Terms of the deal were not disclosed, but AHIP did note that Lodging Enterprises will continue to manage the hotels.

American Hotel Income Properties REIT, launched its initial public offering last month raising nearly $86 million. The offering was underwritten by a syndicate of underwriters co-led by Canaccord Genuity Corp. and National Bank Financial Inc., and included TD Securities Inc., BMO Nesbitt Burns Inc., CIBC World Markets Inc., Scotia Capital Inc., Dundee Securities Ltd., GMP Securities L.P., Macquarie Capital Markets Canada Ltd., Burgeonvest Bick Securities Limited and Haywood Securities Inc.

Robert O'Neill, Chief Executive Officer of AHIP, commented that, "We are excited about the initial public offering of American Hotel Income Properties REIT LP. The initial portfolio of hotel properties represents a unique and stable platform upon which we intend to further develop AHIP's considerable potential."

Lodging Enterprises owns and operates 32 proprietary branded hotels in 19 states and 24 proprietary branded diners. The sale also includes a large development pipeline of hotels under construction and long-term guaranteed room night contracts with three of the largest Class I U.S. freight railroad companies, according to a Hotels Magazine report. The hotel properties have agreements with several of the largest U.S. railroad operators, Union Pacific Corp., Burlington Northern Santa Fe LLC and CSX Corp., as well as Canadian Pacific Railway Limited, to provide lodging accommodations for railroad employees under contracts stipulating guaranteed minimum occupancies, which provide the REIT with recurring revenue, according to a CoStar report.

For more news and information visit Blumberg Capital Partners.

Colonial Place Buildings in Tampa Sold for $56M

Raleigh, North Carolina-based Highwoods Properties, a publicly traded real estate investment trust (REIT), announced this week that it had purchased Colonial Place I and II in Tampa, Florida for $56 million. While the seller's information was not disclosed, CBRE is known to have marketed Colonial Place I and II for lease.

Ed Fritsch, President and CEO of Highwoods Properties, said, "This acquisition further enhances the strength of our position in the highly desirable Westshore submarket where the majority of our Tampa assets are concentrated. It also creates the opportunity for value-creation through growing occupancy. We are also excited about "Highwoodtizing" and repositioning these assets, as we did with 4200 Cypress where we spent $2.4 million in building improvements, and rebranding this entire block in Westshore with our approximately 1,300 linear feet of frontage on I-275. This transaction is immediately accretive to FFO and reflects the synergies that will be achieved among these three properties through the sharing of staffing, procurement and parking resources."

The Class A office properties were 87% leased at the time of sale and include 371,726 rentable square feet of space with an adjacent covered parking garage. Highwoods noted that it will rebrand the two Colonial Place assets, along with 4200 Cypress, as Meridian One, Two and Three. According to a Triangle Business Journal article, Highwoods assumed no new debt in connection with the deal. It is funding the acquisition with proceeds from its ATM program, proceeds from its recent sale of other buildings, and borrowings under its revolving credit facility.

For more news and information visit Blumberg Capital Partners.

TPG Acquires ALC for $275M

Assisted Living Concepts (ALC),which operates 210 seniors living communities in 20 states, has entered into a definitive agreement to be acquired by TPG, a private investment firm. The total purchase price is about $275 million, according to a Wall Street Journal report. Under the terms of the agreement, ALC stockholders will receive $12.00 in cash for each share of Class A common stock. Citigroup Global Markets were Assisted Living's financial advisors while Goldman Sachs & Co advised TPG.

"We are very pleased with the transaction," Mel Rhinelander, chairman of the special committee set up by ALC's board, said in a statement. "The acquisition represents a significant premium for our shareholders, and we also believe that TPG will help continue ALC's focus on high quality service and care for our residents."

ALC's occupancy rates average around 62%, compared with a national average of about 90%, according to people familiar with the company. Tripp Levy PLLC, a national law firm that specializes in mergers & acquisitions, announced this week that it has been retained to represent shareholders of Assisted Living Concepts in an investigation concerning whether the board of directors of ALC engaged in a full and fair auction for the company obtaining the highest price possible for shareholders while not obtaining personal benefits for themselves in selling to this investment firm at this price. ALC is controlled by Thornridge Holdings, a private Canadian company.

For more news and information visit Blumberg Capital Partners.

Hartz Sells Secaucus Industrial Property for $18.4M

Hartz Mountain Real Estate has closed the sale of 2 Emerson Lane in Secaucus, New Jersey with CoreSite Realty Corporation taking the leasehold interest in the industrial facility for $18.4 million. HFF's investment sales team, led by managing director Michael Nachamkin, represented Hartz in the transaction.

CoreSite Realty Corporation is the data center service provider chosen by more than 750 of the world's leading carriers and mobile operators, content and cloud providers, media and entertainment companies, and global enterprises to run their performance-sensitive applications and to connect and do business. CoreSite announced last month that it was under contract to acquire the 283,215 square-foot facility and would develop a new data center campus at the location, expecting to offer up to 18 critical megawatts of capacity. The currently-vacant two-story industrial property has office and showroom space plus a six-story, 634-space parking garage.

"CoreSite's entry into Secaucus is an important step in the execution of our strategy to extend our U.S. platform supporting latency-sensitive customer applications in network-dense, cloud-enabled data center campuses," said Tom Ray, President and Chief Executive Officer, CoreSite. "Our New York campus is designed to meet performance-sensitive customer requirements supported by our location at the nexus of robust, protected, low-latency network rings serving Manhattan as well as global cable routes to Chicago, Frankfurt, London, and Brazil. Additionally, customers are able to directly connect to service nodes for Amazon Web Services Direct Connect."

For more news and information visit Blumberg Capital Partners.

Eastern Union Funding Arranges $70M Financing in Brooklyn

Eastern Union Funding, a full service commercial real estate company, announced that it had arranged approximately $70 million in financing for commercial real estate properties in Brooklyn, New York. For almost every property type, there's a bank today," said Ira Zlotowitz, president of Eastern Union Funding.

Select transactions include:

• $20 million to refinance a mixed-use property in Brooklyn, on a seven-year term at 3.75% and 30-year amortization.

• $19 million to refinance a four-building multifamily portfolio in Brooklyn on a 5+5-year term, starting at 3.25%, and 30-year amortization.

• $6.3 million to refinance a 24-unit multi-family property on Goodwin Street in Brooklyn, on a 10-year term at 4% and 30-year amortization.

"Pre-2008 we were doing a lot of condos, and land prices were elevated and the cost of construction to build them was high," said Abraham Bergman, a managing partner and co-founder at Eastern Union Funding, in a New York Times article. "But when you look at a new project today, the land has been recently purchased and it is being viewed in today's dollars so it makes a lot more sense."

For more news and information visit Blumberg Capital Partners.

City Center Picks Up Downtown Minneapolis Office

City Center Realty Partners, in a partnership with investment advisor Angelo, Gordon & Co., announced this week that it had acquired a 320,000 square foot office building in downtown Minneapolis. Carlson Real Estate sold the Plaza Seven office building at 45 Seventh St. S. for an undisclosed sum, and the terms of the deal are unknown. The Minneapolis/St. Paul Business Journal noted that the deal for Plaza Seven is somewhat unusual because it involved"condo-ing" the office portion of the building separately from the Radisson Hotel that occupies the lower 16-stories of the tower.

"City Center Realty Partners is thrilled to add this prime property to our growing portfolio of assets throughout the country," said Sigurd Anderson, Founding Partner with CCRP. Brent Robertson and Jon Dahl, brokers at Jones Lang LaSalle, were handling leasing for Carlson at the tower and are expected to retain that work after the sale. JLL's Minneapolis office is in Plaza Seven.

For more news and information visit Blumberg Capital Partners.

Midwest Distribution Portfolio Sold for $99.5M

Welsh Property Trust has purchased a five-building distribution portfolio from KTR Capital Partners, a real estate private equity fund manager and operating company headquartered in New York, for $99.5 million. Jones Lang LaSalle represented KTR in the transaction. Terms of the deal were not disclosed.

"This offering represented a rare opportunity for Welsh Property Trust to acquire five debt-free, newer built industrial facilities in one transaction – one that will allow them to complement their existing portfolio and provide an immediate presence in primary distribution markets," said Jones Lang LaSalle's International Director John Huguenard. "The portfolio has been extremely well maintained by committed institutional ownership and requires minimal capital improvement in the near term. Coupled with below-market rental rates, upside potential is significant."

The five buildings, constructed between 2006 and 2007, were 94% leased at the time of sale to six tenants. The buildings are located at:

• 535 Shingle Oak Drive, West Chicago, IL — 150,000-square-foot, fully leased to McCollister’s Transportation System, Inc.
• 1105 East Northfield Drive, Brownsburg, IN — 526,200-square-foot, fully leased to Krunchers Kettle Cooked Potato Chips and LifeScience Logistics.
• 40 Logistics Boulevard, Walton, KY — 543,512-square-foot, fully leased to GSI Commerce Solutions.
• 6766 Pontius Road, Groveport, OH — 754,000-square-foot, 78.8% leased to Honeywell International.
• 3051 Creekside Parkway, Obetz, OH — 737,471-square-foot, fully leased to Zulily, Inc.

For more news and information visit Blumberg Capital Partners.