Mack-Cali Sells New Jersey Office Building for $72.3M

Mack-Cali Realty Corporation announced this week that is had sold 55 Corporate Drive in Bridgewater, New Jersey in an all cash deal for $72.3 million. The four-story, 205,439-square-foot class A property was sold to a subsidiary of Cole Corporate Income Trust, Inc., an entity managed by Cole Real Estate Investments. Adam Spies, Kevin Donner and Neill Wessell with Eastdil Secured in New York represented the seller.

Mack-Cali developed the building in 2011 as a build-to-suit for Sanofi-Aventis. Building IV sits on 154 acres in the Route 78 East submarket of Somerset County, and is fully occupied by the diversified global healthcare leader.

"What appealed to us is a combination of investment-rate credit, it's a long-term lease (still 13 years), a strategically important asset—part of their U.S. headquarters, and it's a good-quality location," Robert Micera, Cole's chief investment officer for office and industrial, told Commercial Property Executive. "It's in good proximity to the major highways in New Jersey and in good proximity to New York. All of these things combined make this fit right in with our parameters of seeking long-term lease transactions that have great creditworthy tenants and good rent growth."

Mitchell E. Hersh, president and chief executive officer of Mack-Cali, commented, "The sale of this property continues our strategy of monetizing non-core assets." Mack-Cali Realty owns or has interests in 278 assets, including 269 office and office/flex properties totaling 31.1 million square feet and nine multi-family rental properties containing more than 3,300 residential units, all located in the Northeast.

For more news and information visit Blumberg Capital Partners.

Cousins Properties Pays $102.4M for Austin Office Tower

Cousins Properties, an Atlanta-based diversified real estate company, picked up 816 Congress Avenue in downtown Austin, Texas this month for $102.4 million, or $236 per square foot. According to a company press release the acquisition was funded with cash proceeds from Cousins’ recent follow-on stock offering. Cousins Properties also has plans to build an office tower at Colorado and Third streets. Previous Austin projects include the Frost Bank Tower and Palisades West.

"This represents another attractive acquisition for Cousins as we continue to target quality urban office assets in the best southeastern submarkets at valuations below replacement cost," said Larry Gellerstedt, President and Chief Executive Officer of Cousins. "We have a long, successful history in Austin and are very excited about the opportunity to create value at 816 Congress Avenue."

The 434,000-square foot Class A office building was 78% leased at the time of sale, with major tenants including Teachers Retirement System of Texas, Lloyd Gosselink, and AT&T Services. Originally completed in 1983 and designed by Holt, Fatter, Scott, previous owners Lehman Brothers Holdings Inc. invested $3 million into the office building last summer to build an outdoor terrace and lounge on the 15th floor, according to an Austin Business Journal article.

For more news and information visit Blumberg Capital Partners.

Fowler Building in Charlotte Sold to Adolfson & Peterson

Adolfson & Peterson Construction (A&P), a Minneapolis-based general contractor offering construction management services, has purchased the Fowler Building for $2.5 million. A&P purchased the property from Boulevard at 1447 South Tryon Street, a limited liability company managed by Chris Branch, that previously acquired the building for $1.5 million in 2003. Josh Beaver of The Nichols Co. represented A&P, and Greg Pappanastos of Argos Real Estate Advisors represented the seller.

A&P moved its Charlotte operations into the building last year, leasing roughly 8,300 square feet of office space in the 18,000 square foot building. "We moved into the building a year ago and since then we have continued to hire team members and really needed the additional space," said John LaPenta, who heads the local office, in a release. "We hope that by purchasing the building, we show our commitment to the city and to being a North Carolina contractor."

According to a Charlotte Business Journal article, The firm is expanding to about 15,000 square feet and will take the vacant section of the third and basement levels in the building for additional space. IT consulting firm Systemtec will continue to lease about 3,000 square feet on the third floor.

For more news and information visit Blumberg Capital Partners.

MPG Office Trust To Be Acquired By Brookfield

In a deal that will make Brookfield Office Properties the biggest office owner in downtown Los Angeles, MPG Office Trust has agreed to be acquired. The deal is valued at more than $2.2 billion, including debt and after cash proceeds from the planned sale of MPG's U.S. Bank Tower, said Wilkes Graham, a senior vice president at Compass Point Research & Trading LLC. Brookfield and its partners agreed to pay $3.15 a share for MPG Office Trust Inc.'s common stock, a 21% premium to Wednesday's closing price, and will take control of four skyscrapers totaling five million square feet. Taken with a purchase of preferred stock, the Brookfield-led group would pay more than $425 million in cash for the company, which has about $1.9 billion in debt, according to a Wall Street Journal report.

"We have found a strategic buyer who has the capital and the market presence to appreciate the potential long-term value of our assets," MPG Chief Executive Officer David Weinstein said in the company's statement. "This transaction potentially offers both our common and preferred shareholders a liquidity event that would remain uncertain if the company were to continue on as an independent entity."

"It's the best outcome for downtown L.A. because we now have a well-capitalized ownership, which can at least reinvest in the buildings and in the community," said Carl Muhlstein, a managing director at brokerage Jones Lang LaSalle Inc. "Whereas a nearly insolvent MPG never had enough money to even take care of day-to-day stuff."

"Brookfield buying the rest of MPG's portfolio is like putting together Chrysler, Ford and General Motors. It's that impactful," said John Cushman, the Los Angeles-based chairman of real estate brokerage Cushman & Wakefield. "They will totally control the high end of the market."

For more news and information visit Blumberg Capital Partners.

FSP Picks Up Denver Office Tower for $183M

Pearlmark Broadreach 1999 LLC has entered into a definitive agreement to sell a 43-story office building in the central business district of Denver, Colorado for $183 million. FSP 1999 Broadway LLC, a wholly-owned subsidiary of Franklin Street Properties, will take ownership of the property in a sale expected to close on July 1, according to SEC filings. A joint venture led by Broadreach Capital Partners and Transwestern previously acquired the property in November 2005.

The sale includes the 680,277-square foot office building at 1999 Broadway and a nine-story, 177,472-square foot garage at 2099 Welton Street. The property is currently 95% leased with major tenants including the Internal Revenue Service, Berry Petroleum Co. and Mercy Housing. Built in 1984 and 1985, the office tower is Energy Star rated and LEED Silver certified.

For more news and information visit Blumberg Capital Partners.

Rexford Industrial Buys Glendale Industrial Complex for $56M

Rexford Industrial, a Los Angeles-based industrial real estate investment firm, has purchased a 473,345-square-foot institutional quality industrial complex in Glendale, California for $56.2 million. Rexford purchased the property from Australian real estate company Dexus Property Group, which has offices in Newport Beach, according to a San Fernando Valley Business Journal report. Stephen Silk, Jay Borzi and Adam Pastor of Eastdil Secured LLC represented both the buyer and the seller. The sale means that Dexus no longer holds any properties in the US.

"This is one of the best industrial parks serving the high demand Glendale/Burbank market area and has consistently demonstrated strong occupancy,"said Howard Schwimmer, co-founder and Senior Managing Partner of Rexford Industrial. "The project contains tenant spaces ranging from 3,000 to 50,000 SF offering high ceiling clearance and dock-high loading; both are a rare commodity in this market."

Located at 3550 Tyburn Street & 3332-3424 North San Fernando Road, the property includes both single and multi-tenant buildings as well as two retail frontage buildings. According to press releases regarding the sale, the 7-building complex was 100% leased at the time of sale to 27 tenants, including Staples, Anderson Printing, Nordstrom and Pep Boys.

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.