Gramercy Sells NJ Office Buildings to Spear Street for $299M

Gramercy Property Trust announced that it had closed on the sale of two office buildings in Jersey City, New Jersey for $299 million, or $349 per square foot, to San Francisco-based Spear Street Capital. Commercial real estate services firm Cushman & Wakefield brokered the sale of 70 Hudson Street and 90 Hudson Street, marking the largest New Jersey office deal this year. Before closing, Gramercy prepaid the mortgage debt on 70 Hudson, and Spear Street assumed the outstanding loan of $101 million on 90 Hudson.

"These are unique, irreplaceable assets, and this transaction is clearly the most significant deal to date in 2016,"said Andrew Merin, Vice Chairman within Cushman & Wakefield of New Jersey, Inc., who notes that his team had orchestrated a previous sale of the subject properties in 2011. "This is the only office availability greater than 200,000 square feet and the largest contiguous availability along the Hudson Waterfront. The new ownership will be able to capitalize on the market's strong leasing momentum and cyclically improving rents compared to Manhattan."

70 Hudson Street is a 409,272 square foot, 12-story office building originally constructed in 2000 and is currently vacant after Barclay's recent departure; Cushman & Wakefield are handling the leasing assignment of the property. 90 Hudson Street is also 12 stories tall and covers 418,046 square feet of space; occupancy information was not disclosed. The sale of both properties is part of Gramercy Property Trust's previously announced plan to dispose of select single and multi-tenant office assets.

For more news and information visit Blumberg Partners.

Brookfield to Acquire Rouse Properties for $2.8B

Rouse Properties Inc. announced that it has agreed to be acquired by an affiliate of Brookfield Asset Management Inc. in a deal valued at approximately $2.8 billion. Rouse has entered into a definitive agreement at $18.25 per share in an all-cash transaction; Brookfield, which already owned about a third of Rouse, originally proposed to acquire the group mid-January of this year of about $2.54 billion in a deal that valued Rouse at $17.00 per share. BofA Merrill Lynch is acting as financial advisor and Sidley Austin LLP is acting as legal counsel to the Special Committee of Rouse Properties, Inc.

"The Rouse team has built a great company with a strong platform and differentiated assets," said David Kruth, chairman of the Special Committee of the board of Rouse Properties, which unanimously approved the deal. "After careful consideration, the Special Committee determined that Brookfield's increased proposal provides shareholders with compelling value as well as a high degree of execution certainty, further validating the strength of the platform that Rouse has built. We are pleased to have reached this agreement, which we believe benefits all Rouse shareholders."

Rouse Properties is among the U.S.'s largest publicly traded regional mall owners. The REIT's portfolio includes 35 malls and retail centers in 21 states encompassing approximately 24.1 million square feet.

For more news and information visit Blumberg Partners.

Tishman Buys CNN Tower from Broadreach Capital

NY-based Tishman Speyer has purchased the CNN Building at 6430 West Sunset Blvd. in Hollywood for more than $127-million, or more than $600 a square foot, from Palo Alto-based investment firm Broadreach Capital Partners. Broadreach originally acquired the property in April 2006 for $50 million. HFF's Todd Tydlaska and Andrew Harper represented Broadreach in the sale, with leasing guidance from Madison Partners' Steven Salas, Tony Ranger and Joe King. Tishman Speyer was self-represented in the acquisition.

"We're pleased to add this extremely well-located asset to our Los Angeles office portfolio," Rob Speyer, Tishman Speyer's president and chief executive officer, said in a prepared statement. "In particular, we continue to be very bullish on the Hollywood submarket as one of the key areas attracting growing companies with employees who want to live and work in a vibrant 24-hour community."

The 15-story tower was originally constructed in 1986, renovated in 2001, and awarded LEED certification by the U.S. Green Building Council in 2013. The property was 84% leased at the time of sale, with the tower now anchored by CNN's parent company Turner Broadcasting System, the movie-trailer-maker BLT & Associates, and advertising agency Oxford Road. Tishman Speyer plans on raising rent at the 204,122-square-foot Class A office property, sources tell the Real Deal; a five-story parking structure is adjacent to the tower.

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GSA Proposed Budget Seeks $1.5B for Real Estate Investments

The U.S. General Services Administration (GSA) released its 2017 Annual Budget Request, which includes $1.5 billion in investments to federal infrastructure and modernizing the federal government's most at-risk legacy IT systems. The GSA announced last month that the budget request would include $1.4 billion in Department of Justice and GSA funding for the FBI headquarters, but the newly released budget reveals more specific real estate investment plans. GSA's request includes:

— $759 million to support consolidation of FBI Headquarters function into a single, secure campus supporting the FBI's national security and law enforcement mission
— $267 million to deliver a new headquarters for the Federal Emergency Management Agency (FEMA)
— $248 million to support the second and final phase of the Calexico West Land Port of Entry modernization and improvement project
— $81 million for the renovation of the 985 Michigan Avenue Federal Office Building (aka Patrick V. McNamara Federal Building) in Detroit, MI

"The President's budget includes investments necessary to further strengthen our nation's real estate portfolio while promoting development in communities across the country," said GSA Administrator Roth. "GSA will also be able to more effectively bring federal IT systems into the 21st century. Once enacted, GSA will be positioned to better provide the services and solutions that allow the government to more effectively tackle our shared challenges."

To read the full Congressional Justification for the 2017 Annual Budget Request, click here. For more news and information visit Blumberg Partners.

Saint-Gobain HQ in PA Sold for $127M

A partnership between 90 North Real Estate Partners, a London-based real estate investment firm, and Arzan Wealth of Dubai have purchased Saint-Gobain SA's North American headquarters near Philadelphia for $127 million. The seller was a consortium including E. Kahn Development Corp and J. Loew & Associates; full terms of the deal were not disclosed. The sellers were represented by Brian Fiumara, senior vice president of CBRE in Philadelphia, and Jim Vesey, president of Vesey Capital.

"This acquisition truly reflects and embraces our definition of 'trophy' credit," said Daniel Cooper, head of 90 North's operations in North America. "We know the [market] sentiment is fragile,but investors want the income generation they can't get from other investments and they want something with capital preservation."

Saint-Gobain, which was founded 350 years ago to manufacture glass for the Hall of Mirrors at the Palace of Versailles in Paris, signed a 15-year lease for the entire 320,000-square- foot office facility on the campus, which includes a pond and walking trails. The newly-constructed headquarters facility at 20 Moores Road in Malvern, Pennsylvania was opened in October 2015 after an 18-month redevelopment by Eli Kahn of E. Kahn Development Corp., J. Loew Associates and Aegon Realty Advisors. The exterior was designed by Bernardon, an architectural firm based in Kennett Square, PA, and the interior by Jacobs, a Philadelphia architectural firm.

For more news and information visit Blumberg Partners.

NYC Sees Largest Property Values Increase Since '08

New York City's city tax assessors are on the front lines of a resounding boom in the market, with current property values marking the largest increase since the tax year ending in June 2008. Josh Barbanel from the Wall Street Journal wrote an article about the trillion-dollar city, where the total market value of taxable property rose to $1.072 trillion for the fiscal year beginning July 1, a 10.6% increase from the $969.4 billion reported this year. The most valuable office building, according to the new data, is the Bank of America Tower on West 42nd Street at Sixth Avenue valued at $1.7 billion. The most valuable mixed-use building was Time Warner Center at Columbus Circle valued at $2.02 billion.

"This year's tax roll is simply a reflection of New York City's growing real estate market," said Jacques Jiha, commissioner of the NYC Department of Finance. "We know revenues will not continue at this pace, so we must continue to maintain strong reserves to protect the City's fiscal health," added Amy Spitalnick, a spokeswoman for the city's Office of Management and Budget. For the city, the strong property values could mean hundreds of millions in additional tax collections on top of the $23.5 billion forecast for the fiscal year beginning in July in the city's November 2015 Financial Plan.

For more news and information visit Blumberg Partners.

Cluttons First Dubai Office Market Bulletin

Cluttons LLP, the Central London, UK-based real estate firm, has introduced its inaugural Dubai Office Market Bulletin for Spring 2016, which "seeks to unpick the complexities of Dubai's fragmented office market, while providing a detailed overview of the city's office landscape." The bulletin draws from the performance of 22 submarkets across the city in the first quarter of the year, which revealed that 13 markets showed no change in starting rents in 2015, while seven markets had notable increases, and two markets with lower limit rents decrease over the 12 months of 2015.

"Despite sustained demand, occupiers remain cost conscious and budget driven in the face of a softening global economic backdrop, with the key word for many being 'prudence'," said Faisal Durrani, Cluttons' head of research. "Landlords, by contrast appear to be slow to react to the cooling market, with many reluctant to move on asking prices and others demonstrating a lack of flexibility for lease terms at renewal. The emerging gulf between market reality and landlords' expectations is a concern, particularly for a market that is now starting to show signs of maturity."

According to the bulletin, with the establishment of two new free-zones in the form of Dubai Design District (D3) and Dubai World Trade District in 2015, Central Dubai has become the focus of many occupiers and developers, particularly as it has long suffered from a demand-supply imbalance in the face of rising requirement levels. D3's lower and upper limit free-zone rents have registered a 67% and 28% rise respectively since its launch, pushing them to between AED 150 psf and AED 165 psf.

To read the full report, click here. For more news and information visit Blumberg Partners.