Blackstone's Equity Office Buys Vegas' Hughes Center for $347M

An affiliate of the Blackstone Group, Equity Office Properties, announced the acquisition of the Hughes Center complex in Las Vegas, Nevada for $347 million. The property was sold by Crescent Real Estate Holdings LLC, a joint venture of Barclays Plc's Barclays Capital unit and Goff Capital Partners LP, based in Fort Worth, Texas. According to a CoStar report, Blackstone acquired the prominent property for $347 million through its global fund, Blackstone Real Estate Partners VII. HFF, led by the team of Executive Managing Director Mark Gibson, Executive Managing Director Scott Galloway and Senior Managing Director Dan Cashdan, represented the seller. Blackstone was self-represented, according to a Commercial Property Executive article.

"We see this as a tremendous opportunity to add value, both from a market entry standpoint and with our commitment to operate these buildings at the same high level as the balance of the Equity Office portfolio," said Frank Campbell, Managing Director, Southern California for Equity Office. "This acquisition is supported by the financial strength of Blackstone which will position the real estate to perform well as the market improves."

The Hughes Center covers roughly 1.5 million square feet and includes office space, a hotel, restaurants and corporate residential facilities, as well as three undeveloped parcels, according to the Equity Office website. Located along Howard Hughes Parkway between Flamingo Road and Sands Avenue, major tenants at the time of sale included Gordon Silver, Ameristar, Wells Fargo Bank, Venetian, Boyd Gaming, Snell & Wilmer, and Lewis and Roca L.L.P. Restaurants include restaurants Del Frisco's, Lawry's Prime Rib, Fogo de Chao, Bahama Breeze, Gordon Biersch Brewery and McCormick & Schmick.

For more news and information visit Blumberg Capital Partners.

MRC Provides $31M for Brooklyn Office Building

Madison Realty Capital, a CRE investment firm founded in 2004, announced this week that it had provided $21 million in acquisition financing and a conditional commitment for $10 million in construction financing for an eight-story warehouse building, a one-story industrial building and a parking lot separating the two properties. Alan Shmaruk and Michael Sherman of the Soho-based Manhattes Group represented both the seller, 29 Ryerson Street LLC, and the purchaser 11-45 Ryerson Holdings LLC, in the transaction, according to a Real Estate Weekly article. The property had been owned for decades by 29 Ryerson Street LLC, an entity whose principal also controls the sole occupant of the building, a storage outfit called Total Records, according to a Crains report. The Manhattes Group will handle the leasing of the property.

"It is extremely rare a property of this size becomes available within striking distance of Manhattan. It presents an excellent opportunity for conversion to an office building, where the current demand for is greater than the supply. Due to multiple parties bidding on the property, we were pleased to achieve a price over asking," said Shmaruk, a principal at Manhattes Group.

The approximately 214,710 square-foot property, which was built in 1951, is currently being utilized as a storage warehouse. The borrower intends to renovate the building into Class A office space and pursue a leasing strategy focusing on tenants seeking attractive office space at more affordable rates than neighboring locations such as DUMBO. In addition to the office space, the property contains approximately 70 feet of frontage on Flushing Avenue. The space will be able to capitalize on the growing retail demand on Flushing Avenue due to the high foot traffic driven by the nearby office and residential buildings.

For more news and information visit Blumberg Capital Partners.

SF's Ghirardelli Square Sold to Jamestown

The retail portion of San Francisco's Ghirardelli Square was sold this week as Jamestown, an Atlanta-based investment firm, picked up the property for a reported $54 million. The 12-building, 101,258-square-foot retail center in the Fisherman's Wharf District of San Francisco generated more than 30 offers when it came to market. Holliday Fenoglio Fowler's San Francisco office represented the seller, Ghirardelli Acquisition Co., in the transaction; Jamestown's representation was undisclosed, but press releases note that they purchased the complex free and clear of existing financing. The property, which was once the home of Ghirardelli chocolate company's production facilities, was 55% occupied at the time of sale.

Jamestown, which owns Chelsea Market in Manhattan and Ponce City Market in Atlanta, announced that it plans to invest $15 million to revive the property. "Ghirardelli Square is an American icon," Jamestown COO Michael Phillips said in an interview. The firm is hoping for a restaurant-leasing revival mirroring the square's 1990s heyday, when it attracted diners including football stars Joe Montana and Jerry Rice, Phillips said. "Food focus is part of our company culture."

"The world-renowned brand identity coupled with the irreplaceable location and remarkable demand drivers, including up to 16,000 people walking through the square every day, are just a few reasons that make this retail center so unique and special. Consequently, the competition was nothing short of fierce - we had over 200 interested parties and conducted more than 60 tours. Needless to say, this asset has incredible upside potential. I have no doubt Jamestown will turn this already special project into something even more spectacular over the next few years," said HFF's Nicholas Bicardo.

For more news and information visit Blumberg Capital Partners.

New Leasing Opportunities at One World Trade Center

The Durst Organization, a joint venture partner with the Port Authority of New York and New Jersey overseeing construction, leasing, and management of One World Trade Center, announced this week that it will lease 94,000 square feet of the 3-million-square-foot tower for smaller office tenants. Two floors of the iconic tower — located on the 45th and 46th floors — are being set aside as part of a prebuilt/build-to-suit program that offers spaces subdivided into smaller increments ranging between 2,000 and 20,000 square feet each.

"There is demand, from across the globe, from large multinational companies to establish a presence at One World Trade Center," said Eric Engelhardt, Vice President, Director of Leasing at One WTC for The Durst Organization, in a press release. "These potential users need a New York flagship at a building with a globally recognized address that speaks to their international reach and prestige."

The build-to-suit initiative offers customized construction and finishes to meet specific tenant configurations. Ownership will begin construction of the prebuilt spaces in early 2014. The spaces will be available for occupancy January 1, 2015. Cushman & Wakefield, in conjunction with The Durst Organization, is conducting the global marketing campaign in support of the building. The Cushman & Wakefield team is led by executive vice chairman Tara Stacom.

One World Trade Center is currently around 55% leased, with major tenants including Condé Nast, Beijing Vantone Real Estate and the U.S. General Services Administration. Legends Hospitality Group will operate the building's public observation deck, set to open in 2015.

For more news and information visit Blumberg Capital Partners.

One Liberty Picks Up Four Properties for $54.1M

One Liberty Properties, a New York-based real estate investment trust, announced this week that it had completed the acquisition of four new properties for a total of $54.1 million. In order to close the acquisitions, One Liberty borrowed $23.5 million from its credit facility, which reportedly represents the current balance outstanding under its $75 million facility. The properties include:

- An approximately 700,000 square foot industrial facility located in Fort Mill, South Carolina, purchased for $39.2 million. The building serves as a principal distribution center for Northern Tool & Equipment Company, which has a lease on the property through April 2029.

- A 125,600 square foot distribution facility in Indianapolis, Indiana for approximately $9.7 million. The building is leased to FedEx until February 2023.

- Two restaurants: one in Ann Arbor, Michigan for $2.98 million, and another in Myrtle Beach, South Carolina for $2.64 million. The Ann Arbor property is leased until March 2027 and the Myrtle Beach location expires in February 2023.

One Liberty estimates that the rental income in 2014 from these four properties will be approximately $4.08 million. Patrick J. Callan, Jr., President and Chief Executive Officer of One Liberty, stated, "The closings of these transactions further exemplifies the continued execution of our strategy to selectively identify and add valuable assets to our portfolio. With approximately $101.3 million of successful acquisitions since the beginning of 2013, One Liberty is building on the initiatives we implemented to drive rental income, cash flow and to increase stockholder value in the years to come."

For more news and information visit Blumberg Capital Partners.

Google Buys Mountain View Offices for $235M

In another big commercial real estate play, Google has made its largest purchase so far this year with the acquisition of a six-building portfolio in Mountain View, California for $235 million. Symantec, the popular software security firm, is currently leasing two of the buildings, where they will remain until their lease expires with Google serving as landlord. Google purchased the buildings from Equity Office, which acquired the properties when its parent, the Blackstone Group, acquired CarrAmerica Realty Corp. in 2006. As reported by the Silicon Valley Business Journal, the properties include:

- Mountain View Technology Center a 131,500-square-foot, two-building project at 313 and 323 Fairchild Drive, for which Google paid $82.2 million, or $625 per square foot.

- Gateway Center, a 236,400-square-foot project at 401 Ellis St. and 500 E. Middlefield Drive. Google paid $138.8 million, or $587 per square foot.

- 485 and 495 Clyde Ave., a pair of R&D buildings totaling 64,800 square feet. Google paid $15 million, or $230 per square foot.

"We haven't seen this kind of growth in a Bay Area tech company before," said Tom Foremski, editor of Silicon Valley Watch, an online site that tracks technology trends in the Bay Area.

"Google is in very-high-growth mode, obviously," said Phil Mahoney, a Cornish & Carey executive vice president who has handled several major leasing deals on behalf of property owners that were leasing offices to Google in Santa Clara County. "They have to put their employees somewhere."

"Google's growth is unique," said Tim Bajarin, principal analyst with Campbell-based Creative Strategies, a market research firm. "The Google search-engine business that's tied to their ads is growing exponentially. Their mobile is growing fast. They need much more staff to code, market and manage what they are doing in advertising, and more offices for those employees."

For more news and information visit Blumberg Capital Partners.

$126M Sale of The Heights at Del Mar

The Heights at Del Mar, a two-building Class A office park in Del Mar Heights, California, was purchased this week by Kilroy Realty Corporation for approximately $126 million. Los Angeles-based Kilroy acquired the campus from Prudential Real Estate, according to brokerage company Cassidy Turley, which represented both the buyer and seller. The Heights at Del Mar is anchored by Neurocrine Biosciences and Knobbe Martens, both of which have long-term commitments in place and combined occupy 94% of the campus.

"The Heights encompasses all the characteristics we seek in an acquisition," said John Kilroy, Jr., Kilroy Realty's Chairman, President and Chief Executive Officer. "It has a strong initial cash return in the mid 6% range, high-quality tenants, strong submarket fundamentals, adjacency to transportation as well as a wide range of retail amenities and the upside potential of additional development. Together, both The Heights and One Paseo will complete our vision of developing a remarkable, urban, mixed-use, live, work and play environment in one of the best and consistently highest demand coastal submarkets of San Diego."

The knowledge-based office and life science campus at 12770-12790 El Camino Real covers 13.8 acres with a total of approximately 219,000 square feet of office space and a subterranean parking structure. The campus also includes a land site that is fully entitled for a state-of-the-art 90,000-square-foot office building to be LEED certified. Cassidy Turley broker Rick Reeder said the next phase of new speculative development in the high-demand Del Mar Heights neighborhood is not expected for three to four years, and the acquisition likely gives Kilroy "a strategic window of opportunity" to meet upcoming demand as the economy continues to improve, according to a San Diego Business Journal article.

For more news and information visit Blumberg Capital Partners.