OCTOBER 15, 2014 NY Hotel Pitched to Redevelopers, Operators A Rockpoint Group partnership is offering a Times Square hotel that can be oper- 2 Fund Shop Eyes Gain on SF Offices ated as is, expanded or torn down to make way for a mixed-use project with up to 900,000 square feet. 3 Luxury DC Rentals Up for Grabs Assigning a value to the 689-room Manhattan at Times Square is tricky because 3 Duke Deals Pack of Small Warehouses of the multiple potential investment strategies. But market pros expect bids to reach at least $500 million. The offering provides a rare opportunity for ground-up devel- 3 Och-Ziff Vehicle Hits Equity Ceiling opment at a prime Midtown Manhattan site that takes up a city block. Rockpoint, a Boston fund shop, and its partners have given the listing to Eastdil Secured. 4 Expandable Yonkers Rentals Available The property occupies the short block from West 51st to West 52nd Streets, 4 Northern Va. Apartments Offer Upside between Broadway and Seventh Avenue. Rockpoint teamed up with Highgate Hold- ings of Dallas and Goldman Sachs in October 2012 to acquire the hotel for $275 4 Downtown Chicago Offices for Sale million from Starwood Hotels & Resorts Worldwide of Stamford, Conn. A buyer could continue to operate the 22-story property as a hotel. It is being 6 US-Leased Office Portfolio Listed offered unencumbered by both brand and management contracts. Starwood gave 6 Rare Industrial Offering on Tap in DC See HOTEL on Page 9 6 First Potomac Exiting Richmond Blackstone Swoops In, Targets Hotel Portfolio 8 Industrial Bundle Rolled Out in Tampa Blackstone is negotiating to pick up another large portfolio of mostly select-ser- 8 Carr Lists Class-A Virginia Offices vice hotels from OTO Development. The 2,385-room package is valued at roughly $325 million. OTO, a builder based 10 Shopping Center Near LA on Block in Spartanburg, S.C., listed the 19 hotels with JLL, and marketing materials began to 10 Builder Offers Retail Center in Texas circulate last month. But the campaign has been put on hold, with investors being told that a buyer stepped in with a pre-emptive offer. 11 Offices in Portland, Ore., on Block If the talks with Blackstone lead to a deal, it will be the second time this year that the New York fund giant has scooped up a large portfolio from OTO. In March, 11 MARKET SPOTLIGHT the developer sold Blackstone 15 properties totaling 1,856 rooms for $337 million. At the time, market pros said Blackstone’s offer had come early in that marketing campaign, also run by JLL. THE GRAPEVINE The two companies’ relationship goes back a decade. OTO was formed in 2004 by the former leadership at Extended Stay America, shortly after that company sold its Colliers International has hired John See BLACKSTONE on Page 8 Ogburn as a senior vice president in its new investor-services group. The unit will Deutsche Team to Acquire West Loop Tower provide large investors with a single point- of-contact for the firm’s capital markets, A Deutsche Asset & Wealth Management partnership has tentatively agreed to property-management and brokerage buy a Chicago office tower from TIER REIT for just over $300 million, including the services. Ogburn starts next week as the swap of another building. group’s relationship manager. He held a Deutsche and its partner, Lincoln Property of Dallas, would reap an initial annual similar position at CBRE, where he worked yield of just below 6% on the purchase of the 1.2 million-square-foot Fifth Third for more than two decades. Colliers tapped Center, at 222 South Riverside Plaza. HFF is advising TIER, a Dallas nontraded REIT. Karen Whitt, who oversees real estate man- In a twist, the Deutsche team would fund part of the purchase price by transfer- agement services, to take on the additional ring a 196,000-sf Dallas building that it owns to TIER. Market pros estimate that role of president of investor services. property, at 5950 Sherry Lane in the Preston Center area, is worth about $325/sf, or $64 million. CBRE Global Investors has added Jake The Deutsche partnership’s offer pre-empted a marketing campaign for the West Mota to its value-added team. He Loop building, which was slated to go on the block last month. The two sides this See GRAPEVINE on Back Page See DEUTSCHE on Page 11 October 15, 2014 Real Estate 2 ALERT Fund Shop Eyes Gain on SF Offices Archon Group of Irving, Texas. Embarcadero, a value-added fund shop in Belmont, Calif., has given the listing to Eastdil Embarcadero Capital is seeking to cash out of a downtown Secured. San Francisco office building that it bought out of foreclosure Potential bidders are being told that a buyer could expect three years ago at a depressed price. to boost income by lifting rents as leases on some 70% of the The 307,000-square-foot property, at 301 Howard Street in space roll over within three years. Those rents average 28% the South Financial District, is 88% leased, but has significant below current asking rates. near-term rollover that could allow a buyer to raise rents. The tenant roster is dominated by government agencies and Bids are expected to come in at roughly $615/sf, or $189 technology firms, including the Government Accountability million. The Class-A property was valued at $73.7 million Office (30,000 sf until December 2017), Rearden Commerce when Embarcadero gained control of it in March 2011 from (25,000 sf until March 2017), DemandBase (20,000 sf until 2019), the Social Security Administration (16,000 sf until November 2017) and Skout (15,000 sf until October 2017). Ground-floor retail tenants include San Francisco Soup Co. 0 0 00

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w its debt payments. Embarcadero ie iew ViewVieVi acquired the top portion of a mezzanine loan and later fore- closed. It has since conducted renovations and recruited ten- ants, signing leases on 120,000 sf in the past 18 months. The 23-story property, which was developed in 1983, is between Beale and Fremont Streets, one block from the $4.2 billion Transbay Transit Center, WHERE REAL ESTATE IS MOVING™ a 1 million-sf public transpor- tation hub scheduled to open in 2017.  October 15, 2014 Real Estate 3 ALERT Luxury DC Rentals Up for Grabs big-box buildings, the offered properties are well-suited for the smaller tenants in the automotive, housing and medical sectors A new luxury apartment complex is on the market in one of that are driving demand in the Midwest. Washington’s up-and-coming neighborhoods. The portfolio has 147 tenants, with a weighted average The 603-unit property, at 151 Q Street NE, is 95% occu- remaining lease term of four years. Some are investment- pied. It could attract bids of about $400,000/unit, or $241 mil- grade companies, such as Cardinal Health, Chicago Title, FedEx, lion. At that price, the capitalization rate would be about 5%. Johnson Controls, Verizon, Walgreens and Xerox. The rent roll HFF is marketing the property for a partnership between Mill also includes Chrysler, Monsanto, T-Mobile and Tribune Media. Creek Residential of Hempstead, N.Y., and Berkshire Property The portfolio’s 2.5 million sf of properties in Indianapolis of Boston. are 96% leased and generate net operating income of $8.5 mil- The marketing campaign touts the complex’s location in the lion. At the other end of the spectrum, the smallest portion is neighborhood called NoMa, or north of Massachusetts Avenue. in Norfolk (466,000 sf) and is just 36% leased. The section, bounded by New Jersey Avenue and North Capitol The St. Louis component totals 888,000 sf, but 58% of that Street to the west and Q and R Streets to the east, has seen sev- is office space, as opposed to 21% for the portfolio overall. The eral billion dollars of retail, office and apartment development remaining properties are spread among Minneapolis (692,000 in recent years, spurred by the opening of a Metro station. sf), Chicago (669,000 sf) and Cincinnati (642,000 sf). But because the neighborhood is still emerging, the $2,193 A trade at the estimated value would mark Duke’s biggest average rent at the complex is roughly 30% below that of com- industrial sale in nearly a decade. Meanwhile, it continues to parable properties in more-established districts. For example, pursue larger buildings. This year, Duke paid Dallas-based rents average $3,008 in the nearby 14th and U Street corridor. Hillwood Properties about $70 million for a new 980,000-sf The Mill Creek partnership’s complex, called Trilogy NoMa, distribution facility in Pennsylvania’s Lehigh Valley that was was developed in 2012. It encompasses a cluster of six-story built for a single tenant. In 2013, it paid USAA Real Estate of buildings. The units range in size from studios to two bed- San Antonio $311 million, or $64/sf, for eight bulk-distribution rooms and have nine-foot ceilings, stainless steel appliances, centers totaling 4.8 million sf. Those recently built properties wood-plank-style floors and patios or balconies. are fully leased, predominantly to single-tenants.  The amenities include two swimming pools, lounges and a media room. There is also a private shuttle bus to the NoMa- Och-Ziff Vehicle Hits Equity Ceiling Gallaudet Metro station, a quarter-mile away.  Och-Ziff Real Estate has wrapped up equity-raising efforts Duke Deals Pack of Small Warehouses for its latest opportunity fund with $1.5 billion, the latest exam- ple of a manager exceeding its goal. Duke Realty is marketing a portfolio of industrial properties, The amount raised for the New York investment shop’s Och- mostly in the Midwest, that could attract bids of about $320 Ziff Real Estate Fund 3 matches the vehicle’s limit. The entity, million. which was rolled out at the beginning of this year, already had The 56 buildings, encompassing 5.9 million square feet, are hit its $1 billion target with an initial close about six months 91.7% occupied. The heaviest concentration of space is in the ago. Marketing efforts started at the beginning of this year, with Indianapolis area (43%), with other properties in the St. Louis, the final close coming in the past few weeks. With leverage, the Minneapolis, Chicago, Cincinnati and Norfolk, Va., markets. fund has up to $4 billion of buying power. At the estimated value of $54/sf, a buyer’s initial annual yield The Och-Ziff vehicle is among 21 funds that have raised would be 7%. Broker CBRE is pitching the properties as a pack- more equity this year than they initially targeted, according to age deal. Real Estate Alert’s Fund Database. While that number trails the The multi-tenant buildings, mostly designed for light- full-year 2013 figure of 33, it is likely to rise by yearend as more industrial use, average 104,000 sf. Duke, an Indianapolis REIT, operators conclude their marketing campaigns. is putting them on the block as it shifts its industrial invest- Och-Ziff is shooting to produce a 16%-plus return via a mix ment strategy toward large, single-tenant buildings of recent of debt and equity plays, split evenly between mainstream and vintage. Chief operating officer James Connor told analysts in niche property types. The firm kicked in $75 million of equity July that Duke planned some “selective pruning” of smaller itself. Limited partners include Goldman Sachs, New Jersey buildings. He added, “the pricing on that out there seems very State Investment and Ohio Public Employees. good right now.” The $840 million Och-Ziff Real Estate Fund 2 held its final The properties are in markets with industrial occupancy close in 2010. It is almost fully invested. The first fund in the rates in the 93-95% range, according to marketing materials. series raised $407 million in 2005. Overall, Och-Ziff Real Estate Investors are being told the portfolio is poised for rent growth, has some $42 billion under management among the three in part because the Midwest isn’t as far along in its growth cycle funds, separate accounts and other vehicles. The operation, a as top markets such as Southern California, New Jersey and unit of hedge fund operator Och-Ziff Capital, is led by president South Florida. In addition, while development is dominated by Steven Orbuch.  October 15, 2014 Real Estate 4 ALERT Expandable Yonkers Rentals Available been completed this year, is slightly ahead of the broader region with a 95.8% occupancy rate and asking rents that are close to An apartment complex that can be expanded is hitting the $1,600. Asking rents average $1,500 across Greater Washing- block in Yonkers, N.Y. ton. Hudson Park is a 560-unit luxury development along the The Strand is at 240 Yoakum Parkway, about 10 miles from Hudson River and adjacent to an Amtrak and a commuter-rail downtown Washington. It’s one of six Washington-area proper- station. It was developed in two phases, in 2003 and 2008, and ties that Ross recapitalized last month, bringing in Federal as comes with approvals for another 222 units. The occupancy an equity partner. The transaction valued the 2,044-unit port- rate is 98%. folio at $240 million. It’s unclear whether the partnership plans Bids are expected to come in at about $175 million. At that to sell any other pieces of that package.  valuation, a buyer’s initial annual yield would be about 5.5%, more than a percentage point higher than for similar proper- Downtown Chicago Offices for Sale ties in New York. HFF was given the marketing assignment by a partnership between Berkshire Property of Boston and Collins A partnership led by Joseph Chetrit is marketing two office Enterprises of Stamford, Conn. buildings totaling 1.4 million square feet in Chicago’s Central The property is divided into Hudson Park North and South. Loop. The north component contains two 14-story towers connected The 940,000-sf property at One North Dearborn Street and by a four-story section and linked to a five-story garage. Hud- the 494,000-sf tower at One North LaSalle Street are being son Park South’s two buildings each have varying heights, top- pitched to value-added investors. Pricing couldn’t be learned, ping out at nine stories, and connected garages. There are 642 but market pros estimated the valuation at anywhere from parking spaces. $150/sf to $200/sf, or up to $280 million. Broker Eastdil Secured The property has two fitness centers and two club rooms. will except bids for either property or both. Other amenities include concierge service and Zipcar access. Investors are being told that a buyer could boost returns by The property is next to Yonkers’ Esplanade Park. The rail sta- renovating, leasing up vacant space and repositioning ground- tion across the street connects to Midtown Manhattan, about level retail space to attract high-end tenants. 15 miles south.  One North Dearborn is 84% leased, with a weighted aver- age remaining lease term of 8.5 years. Tenants include a mix Northern Va. Apartments Offer Upside of government agencies and law, education and marketing firms. The 17-story building, constructed in 1917, extends for A suburban Washington apartment building is being pitched a block along West Madison Street to State Street, a popular as a value-added play. retail corridor. The ground floor, formerly home to a Sears The 396-unit Strand, in Alexandria, Va., is expected to store that closed this year, has been partly converted to office attract bids of around $200,000/unit, or close to $80 million. At space, leaving 45,000 sf of retail space, including 23,000 that price the annual yield would be about 6%. A buyer could sf that faces State Street and could be upgraded to attract a continue a program of unit upgrades to boost that return. major retail tenant. HFF is handling the offering on behalf of a partnership between One North LaSalle is 78% leased, with a weighted average Federal Capital of Chevy Chase, Md., and Ross Development of remaining lease term of less than four years. A buyer could Bethesda, Md. update the office space to draw more technology companies, The 13-story building, which was developed in 1998, has a which have been actively leasing up space downtown over the mix of one- and two-bedroom apartments with balconies and last few years. The 47-story Art Deco tower, completed in 1930, wall-to-wall carpeting. The owner has renovated 54 units, add- was designated a landmark by the city of Chicago and is listed ing stainless-steel appliances, granite countertops and maple on the National Register of Historic Places. cabinets. It’s been able to increase monthly rents by about $200 The two properties are at prime downtown locations, near on the upgraded units. In addition to renovating more apart- public transportation, shops, restaurants and hotels. They have ments, a buyer could add washer/dryers and raise rents further. undergone $30 million of renovations since 2003. Leases on The property is about 95% leased. Amenities include two fit- some 300,000 sf have been signed or renewed over the last year. ness centers, a swimming pool and a clubhouse. Asking rents range from $23/sf to $34/sf, attractive to tenants Greater Washington’s rental market is faring better this year priced out of trophy space in the submarket, which can com- than many experts predicted. Just as the region’s hiring pace mand $45/sf or more. slowed last year, a wave of completed developments began hit- The Central Loop submarket has 36 million sf of office space ting the market. More than 6,000 apartments have come on that’s 86% leased. line this year. But as of midyear, the marketwide occupancy The listed buildings were among three Chicago properties rate had dipped just slightly, to 95.7% from 96% at the start of that the Chetrit partnership acquired for $160 million in 2003. the year, according to Cassidy Turley. The third, at 360 North Michigan Avenue, was sold toOxford Northern Virginia, where nearly 2,000 apartments have Capital of Chicago in July 2013 for $53 million.  PKF Consulting USA and CBRE represent the best when it comes to lodging and THE PREMIER hospitalit\ real estate The two Àrms have come together to provide owners, DESTINATION IN operators, Ànancial institutions, developers and investors with a single global source for a fully integrated suite of world-class HOSPITALITY services and research. PKF brings unprecedented valuation, advisory and consulting capabilities and world-class REAL ESTATE research products, while CBRE brings a broad and deep real estate services platform dedicated to the lodging sector through its specialty group CBRE Hotels. Together, we are the unmatched global authority on hospitality and lodging real estate.

cbrehotels.com pkfc.com October 15, 2014 Real Estate 6 ALERT US-Leased Office Portfolio Listed 10.4 million sf in 2005. For example, there have been several private and government-sponsored initiatives to convert prop- Investors are getting a crack at a 988,000-square-foot office erties along New York Avenue NE to higher-density mixed-use portfolio fully leased to the federal government. formats encompassing retail, multi-family and office space. The 10 properties, which are being offered as a package, Investors are being told that could be a long-term exit strat- are valued at about $150 million, or $151/sf. At that price, the egy for V Street Industrial Park, which could accommodate 4.1 buyer’s initial annual yield would be in the vicinity of 7.25%. million sf of mixed-use space. Newmark Grubb is representing the owner, HPI Capital of The average occupancy of for-lease industrial space in Charlotte. Washington is 94.4%.  The subsidiary of HPI Group assembled the multi-state portfolio from 1997 to 2004. The weighted average remaining First Potomac Exiting Richmond lease term is about six years. A buyer would have to assume a $125 million interest-only First Potomac Realty is shopping its remaining office/flex mortgage, with a 5.6% rate, that matures in 2017. That equals holdings in the Richmond, Va., area. 83% of the estimated purchase price. The portfolio encompasses 19 buildings totaling 828,000 Two of the properties are in Albuquerque, N.M. The other square feet, spread across six business parks. It could attract eight are in Page, Ariz.; Fresno, Calif.; San Bernardino, Calif.; offers of $65 million, or $78/sf. The buyer’s initial annual yield Durango, Colo.; Pocatello, Idaho; Houston; Kansas City, Mo.; at that price would be 8.6%. Broker Cassidy Turley is touting and Philadelphia. Most range in size from 25,000 sf to 150,000 the potential for value-added investors to boost that figure by sf. The largest is the 328,000-sf building at 6501 Beacon Drive filling vacant space and raising rents as leases expire. in Kansas City. It serves as a regional headquarters for the U.S. Indeed, ongoing lease negotiations could lift the buildings’ Department of Agriculture. overall occupancy level to 85% from the current 79% by the HPI, led by Michael Verruto and David Givner, is among the time the package changes hands. Existing tenants include ADT, largest investment firms that lease space to the U.S. govern- Allstate, Hunton & Williams, Verizon and several county and ment.  state agencies. No single occupant takes up more than 6% of the space. Rare Industrial Offering on Tap in DC The largest concentration of properties is in Richmond, at the Park Central and Chesterfield Business Park campuses. The The largest industrial property in Washington is up for Park Central component consists of three office buildings total- grabs. ing 205,000 sf that are 93% occupied. Chesterfield Business The 820,000-square-foot V Street Industrial Park could Park accounts for eight office/flex buildings totaling 191,000 attract bids of $120 million, or $146/sf. At that price, the buy- that are 78% occupied. er’s initial annual yield would be 5.25%. Cassidy Turley is repre- The rest of the portfolio encompasses: senting the local owner, Stanley Martin Commercial. • Four office/flex buildings totaling 184,000 sf in Hanover The six-building V Street Industrial Park is 92% leased by 21 Business Center in Ashland (70% occupied). tenants, including DHL. The tenant roster also includes the U.S. • A 119,000-sf office/flex building in Virginia Center Tech- Postal Service and several other federal and city government nology Park in Glen Allen (79% occupied). agencies, many of which are required to have a presence in the • An 87,000-sf industrial building at the Pine Glen business district. center in Richmond (61% occupied). Average in-place rents are 33% below those of newer leases • Two flex buildings totaling 42,000 sf in Airport Business in the park, which Stanley Martin is pitching as an opportunity Center in Richmond (92% occupied). to boost income upon rollover. The buildings have minimum The single-story properties are clustered around Interstate 95. ceiling heights of 22 feet and high-efficiency lighting. There are Since 2007, they have undergone $14.3 million of renovations. 662 parking spaces. First Potomac is offering the buildings as part of a broader The complex is on a 28-acre site on V Street, near the inter- effort to prune its portfolio while refocusing on high-quality section of South Dakota Avenue NE and New York Avenue office buildings in Washington. The package represents what’s NE. While that places the property in Washington’s primary left of the Bethesda, Md., REIT’s Southern Virginia holdings industrial corridor, the supply of such space in the city is scant following its June 2013 sale of 23 industrial properties totaling — encompassing just 208 industrial properties totaling 9.3 4 million sf to Blackstone for $242 million. million sf. Exacerbating the tight supply is the fact that only 5 Meanwhile, First Potomac last month purchased the million sf of that space consists of for-lease industrial facilities. 156,000-sf building at 11 Dupont Circle in Washington for The rest is owner-occupied, used by non-industrial tenants or $89 million. Cassidy brokered that sale on behalf of BlackRock is undergoing redevelopment. Realty. And in April, First Potomac paid $58 million for the Indeed, redevelopment efforts have played a big role in caus- 117,000-sf building at 1401 K Street NW. Cushman & Wakefield ing Washington’s overall industrial footprint to shrink, from represented Guardian Realty Investors on that deal.  Market Reconnaissance Real Estate Alert, the weekly newsletter that gives you the freshest intelligence on the confi dential plans of leading dealmakers.

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You can also start your free trial at REAlert.com, or fax this coupon to: 201-659-4141. To order by phone, call 201-659-1700. Or mail to: Real Estate Alert, 5 Marine View Plaza, #400, Hoboken, NJ 07030 October 15, 2014 Real Estate 8 ALERT Industrial Bundle Rolled Out in Tampa Washington-based Carr is owned largely by a J.P. Morgan Asset Management fund and Israel-based Alony Hetz Properties, Investors are being shown a 1.7 million-square-foot portfo- each with a 44% stake. The remaining 12% is held by Oliver Carr lio of Tampa Bay industrial properties that could fetch just over Co., Clark Enterprises, Fred Schnider Investment and members $120 million. of the management team.  The 34 buildings, scattered across five business parks in St. Petersburg, are 83% leased. At the estimated value of $73/sf, a Blackstone ... From Page 1 buyer’s initial annual yield would be 7%. Cushman & Wakefield is showing the portfolio for a local investor. entire 475-hotel portfolio to Blackstone for more than $3 bil- The marketing campaign emphasizes the scale of the offer- lion. ing: A buyer would become one of the top five industrial own- OTO was one of the only hotel development companies ers in Greater Tampa. There’s potential to boost income by that continued its building program throughout the economic leasing vacant space, because the portfolio’s occupancy rate downturn. The result is a large portfolio of some of the newest lags the 93.3% average for the market’s 78.7 million sf of indus- select-service properties. trial space. The listed hotels are five years old on average. They carry Investors have been told the properties’ net operating brands operated by Hilton, Hyatt, Marriott and Starwood. The income should rise to $10.2 million upon stabilization within portfolio has a high average occupancy rate, which should give three years. Lease expirations are staggered, with an average of a buyer the potential to push up room rates. 15% of the space rolling over annually for five years. The 19 hotels are in Florida (eight), Virginia (five), Califor- Some 77% of the portfolio is distribution space, 9% is used for nia (three), Maryland (two) and New Jersey (one, on a ground manufacturing and 14% is office space. Tenants include Digital lease). Marketing materials say they’re in well-developed sub- Lightwave, FedEx, Jabil, Jagged Peak, L-3 Communications, markets, have stable cashflow and are projected to see net Lockheed Martin, MTS Systems and Worldpac. income grow 17% by yearend 2015. The buildings have average minimum ceiling heights of just The two largest properties in the portfolio are in Herndon, over 24 feet. The largest grouping, 539,000 sf, is in Metropointe Va.: Sheraton Herndon Dulles Airport (184 rooms) and Hyatt Commerce Park. The others are at Gateway Business Park Place Herndon Dulles East (151 rooms). (462,000 sf), Gateway Business Centre (311,000 sf), Joe’s Creek Among the others are: Industrial Park (189,000 sf) and West Bay Corporate Center • Hyatt Place Fort Lauderdale Airport & Cruise Port (149 (159,000 sf). All five properties are along Interstate 275. rooms), in Dania Beach, Fla. • Hyatt House Fort Lauderdale Airport South (143 rooms), Carr Lists Class-A Virginia Offices also in Dania Beach. • SpringHill Suites Fairfax Fair Oaks (140 rooms), in Fairfax, Carr Properties is shopping a well-leased office building in Va. Alexandria, Va. • SpringHill Suites Corona Riverside (130 rooms), in The 139,000-square-foot Atrium Building, at 277 South Corona, Calif. Washington Street in the Old Town district, has an estimated • SpringHill Suites West Palm Beach I-95 (130 rooms), in value of $51 million. At that price, the buyer’s initial annual West Palm Beach, Fla.  yield would be 7.3%. Cassidy Turley has the brokerage assign- ment. The five-story building is 90% occupied by six tenants with NEW DEALS an average remaining lease term of more than nine years. Law firmOliff is occupying 66% of the space under a lease that runs Massachusetts Office Property until 2026. There also is some ground-level retail space occu- pied in part by restaurant Society Fair. CBRE Global Investors, acting on behalf of a foreign inves- The Old Town submarket encompasses 8 million sf, with tor, paid $123.4 million two weeks ago for a Cambridge, Mass., an 88% occupancy level. There is no room for additional office office building. The 202,000-square-foot building, at 200 Cam- development in the neighborhood. bridge Discovery Park, is fully leased. The buyer’s initial annual The Class-A Atrium Building is two blocks from the King yield will be 5.7%, reflecting competitive bidding for the Street shopping corridor, and seven miles south of downtown recent-vintage, stabilized property. Eastdil Secured represented Washington. the developer, Bulfinch Cos. of Needham, Mass., and its part- ner, National Electrical Benefit Fund. The property, completed in 2011, has trophy-quality finishes and a LEED platinum Need to see the largest property sales that were completed designation. It includes a revenue-generating garage with 650 recently? Go to The Marketplace section of REAlert.com and click spaces. The six-story building is part of Cambridge Discovery on “Sales Activity.” It’s free. Park, a 27-acre campus that eventually will have a half-dozen buildings with 820,000 sf.  October 15, 2014 Real Estate 9 ALERT

chase of air rights from nearby properties, the building could Hotel ... From Page 1 be as large as 900,000 sf. The site has no height restrictions, and up its Sheraton flag in 2010 because the hotel no longer met a property could feature any combination of residential, retail, the brand’s updated standards. Some 88,000 sf at or near street hotel and office space. level could be upgraded or repositioned. Starwood flirted with redeveloping the property in 2010, Another option is to expand the property. The Rockpoint when it announced plans for a mixed-use project. The appeal partnership this year filed plans to construct a 23-story addi- is the property’s close proximity to tourist destinations in Mid- tion with 121 units, according to local reports. It wasn’t clear if town Manhattan. the units would have been hotel rooms, apartments or condo- The hotel was built in 1962 and renovated most recently last miniums. year. There is some retail space that is subject to leases with Finally, a buyer interested in redeveloping the site could tear short-term termination clauses. There is also a fitness center, a down the hotel and build a 600,000 sf structure. With the pur- business center and a garage.  CALENDAR CALENDAR

Main Events Dates Event Location Sponsor Information Nov. 5-7 REIT World Atlanta NAREIT www.reit.com Jan. 21-23, 2015 Winter Forum on Real Estate Opp. & Private Fund Inv. Laguna Beach, Calif. IMN www.imn.org Mar. 26-27 PREA Spring Conference Washington PREA www.prea.org

Events in US Dates Event Location Sponsor Information Oct. 20-23 Lodging Conference 2014 Phoenix Conference Bureau www.lodgingconference.com Oct. 21-23 ULI Fall Meeting New York ULI www.uli.org Oct. 22 Texas Data Center Summit Plano, Texas CapRate Events www.cre-events.com Oct. 27-28 CRE Investment, Finance & Development Atlanta InterFace Conference interfaceconferencegroup.com Oct. 27-29 Development ’14 Denver NAIOP www.naiop.org Oct. 30 RealShare Central Florida Orlando RealShare www.globest.com Oct. 30 New Jersey Apartment Summit Whippany, N.J. CapRate Events www.cre-events.com Nov. 2-4 Escape Ascent Miami Bisnow www.bisnow.com Nov. 4-5 RealShare Industrial Miami RealShare Conf. www.globest.com Nov. 5 Real Estate Crowdfunding New York iGlobal Forum www.iglobalforum.com Nov. 6 Multifamily Bay Area Forum San Francisco Marcus & Millichap www.mmsanfranforum.com Nov. 6 Real Estate Expo New York NYC Network Group www.nycnetworkgroup.com Nov. 6-7 Real Estate Conference Grapevine, Texas AICPA www.cpa2biz.com/real Nov. 7 NYC Hotel Forum New York RELA www.nychotelforum.com Nov. 10 Real Estate Mezzanine Financing & Subordinated Debt New York IMN www.imn.org Nov. 11-12 RealShare Net Lease West Los Angeles RealShare Conf. www.globest.com Nov. 12 Hospitality Leaders Summit New York iGlobal Forum www.iglobalforum.com Nov. 12-13 Financing, Investing & Real Estate Dev. for Data Centers Half Moon Bay, Calif. IMN www.imn.org Nov. 12-13 Multifamily Summit & Multifamily Operations Academy New York Massey Knakal www.mkmultifamilysummit.com

Events Outside US Dates Event Location Sponsor Information Nov. 3-4 European Real Estate Opp. & Private Fund Investing London IMN www.imn.org Nov. 19-21 MAPIC Cannes, France Reed MIDEM www.mapic.com Nov. 24-25 Italia GRI 2014 Milan, Italy GRI www.globalrealestate.org Nov. 24-25 Deutsche GRI 2014 Berlin GRI www.globalrealestate.org Nov. 24-26 Inwestigator 2014 Shenzhen, China MKR Group www.inwestigator.com Dec. 1-2 Real Estate Mexico Forum Mexico City Latin Markets www.latinmarkets.org Dec. 1-2 CEE GRI 2014 Warsaw GRI www.globalrealestate.org To view the complete conference calendar, visit The Marketplace section of REAlert.com

October 15, 2014 Real Estate 10 ALERT Shopping Center Near LA on Block Builder Offers Retail Center in Texas An investment firm is marketing a grocery-anchored A developer is pitching a new shopping center near Austin shopping center in suburban Los Angeles that’s valued at that’s fully leased. about $35 million. The offering encompasses 182,000 square feet at a retail The property, in Hawaiian Gardens, Calif., encompasses complex in Cedar Park, Texas, that is anchored by a separately 122,000 square feet that is 94% leased. It’s a quarter-mile owned Costco. The listed space, which was completed this year, from the Hawaiian Gardens Casino, which is undergoing is expected to fetch about $40 million, indicating an initial a $45 million expansion that is expected to substantially annual yield of 6.3%. increase foot traffic to the shopping center. At the estimated The developer, Ainbinder Co. of Houston, listed the building valuation, a buyer’s initial annual yield would be about 5.5%. with CBRE. HFF is representing the owner, HP Investors of San Diego. The marketing campaign highlights the fact that 96% of The property, called Hawaiian Gardens Town Center, is the offered space is leased until 2023. The anchor tenant is At anchored by a Wal-Mart Neighborhood Market (43,000 sf) Home (108,000 sf), a Houston-based home-decor chain for- under a triple-net lease that runs until 2028. The leases merly known as Garden Ridge. struck before Wal-Mart moved in last year carry rents that The offered space is part of Cedar Park Town Center, at are 20% below the current asking level. Wal-Mart’s arrival the corner of East Whitestone Boulevard and 183A Toll Road, triggered a wave of new leasing, with another 39,000 sf about 20 miles north of downtown Austin. Some 416,000 resi- being filled. Only 15% of the occupied space is set to roll dents with an average household income of $89,000 live within over before 2018. a 10-mile radius. The four-acre property, at 12090-12144 Carson Street, was Large retail offerings in the Austin market are relatively rare. developed in 1987 and renovated last year. There are 209,000 In the only sizable transaction so far this year, Clarion Partners people with an average household income of $94,000 living of New York paid $34 million for a 60,000-sf grocery-anchored within a three-mile radius.  shopping center in Austin. 

October 15, 2014 Real Estate 11 ALERT Offices in Portland, Ore., on Block There is a rooftop deck and a penthouse office. The building has a LEED platinum designation.  In a rare opportunity for institutional investors in Portland, Ore., a developer is shopping a fully leased office building that Deutsche ... From Page 1 was completed three years ago. The 62,000-square-foot Overton, at 1455 NW Overton Street week were working to finalize the agreement. in the city’s Pearl District, could attract bids of about $500/sf, Fifth Third Center’s occupancy rate is 86%, slightly less than or $31 million. the 88% Class-A average in the West Loop. The rents are about The local owner,WDC Properties, has given the listing to Col- 15% less than the $40.59/sf average asking rate for such space. liers International. Lead tenant Fifth Third Bank has a lease on 220,000 sf until The size of Portland’s office market pales in comparison to 2024. Other occupants include Deutsche Bank, Raymond James those of regional giants Seattle and San Francisco, so properties and Trading Technologies International. large enough to attract institutional players don’t go up for sale TIER, which was formerly called Behringer Harvard REIT often. 1, became self-managed in 2012 and adopted its current name But the market has strong fundamentals. The city’s average last year. It acquired Fifth Third Center in 2006 for $278 million occupancy rate is 94%, and the Pearl District, which has seen from fund shop Beacon Capital of Boston. steady redevelopment in recent years, boasts a 95% level. Rela- The Class-A Dallas building that TIER would assume is well- tively new Class-A properties like The Overton have traded at leased. It was constructed in 1999 and acquired by Deutsche capitalization rates of about 6% in recent years. in 2002 for $38 million. The tenants include RGT Capital About 60% of The Overton is occupied by a unit of theU.S. Management (18,000 sf) and law firmOrsinger Nelson (18,000 Department of Homeland Security under a long-term lease. sf), according to MYRETA, a property data service. The nine-story Other tenants include a technology firm and an environmental building is in Preston Center, a well-known commercial district engineering company. at the intersection of Route 12 and the Dallas North Toll Road. 

MARKET SPOTLIGHT Suburban Pennsylvania Apartment Properties  Philadelphia’s strong rental market is prompting spillover demand in nearby suburbs. Owners are responding with a raft of offerings aimed at institutional players.  Separate owners are marketing two portfolios in and around Harrisburg. While the area is a tertiary market traditionally dominated by regional investors, the early buzz is that institutional players are kicking the tires.  While occupancy rates have grown with the economic recovery, construction has not kept pace because many suburban submarkets have strict development curbs. That imbalance is fueling rent growth. On the Market Hit No. of Estimated Value Property Seller Market Apts. ($Mil.) (Per Apt.) Broker Harrisburg portfolio Multi-Properties Inc. October 1,296 $120 $93,000 HFF Harrisburg-area portfolio (Local developer) September 674 100 148,000 Cushman & Wakefield Regatta, Plymouth Meeting Cornerstone Real Estate September 338 63 186,000 CBRE Madison New Britain, Chalfont Equus Capital July 232 62 267,000 CBRE Coventry Glen Mills, Glen Mills Fortress Investment October 244 55 225,000 Cushman & Wakefield TGM Polo Run, Yardley TGM Associates August 248 45 181,000 Cushman & Wakefield TGM Halstead, Halstead TGM Associates September 198 38 192,000 HFF Yardley Crossing, Yardley Fairfield Residential July 196 33 168,000 HFF Recent Deals No. of Sales Price Property Buyer Closed Apts. ($Mil.) (Per Apt.) Broker AVE Downingtown, Downingtown (Unidentified) June 244 $50 $205,000 HFF Edge at West Chester, West Chester BET Investments August 128 35 270,000 (None) Bell Elkins Park, Elkins Park (Unidentified) (Pending) 217 32 147,000 CBRE Center Square Towers, Doylestown Zencorr Properties June 350 31 90,000 SSH Real Estate October 15, 2014 Real Estate 12 ALERT

THE GRAPEVINE with PCCP, a Los Angeles fund opera- REIT this month. He’s based in McLean, tor. Va., focusing on the Washington ... From Page 1 metropolitan area. Konrad previously Todd Vender left Chicago fund opera- was a vice president at Akridge Cos. of started at the Los Angeles investment tor Blue Vista Capital last week, and the Washington, and before that had stints shop two weeks ago as a senior buzz is he’ll launch his own operation. at FBR Capital Markets and Parkway director, working on the Strategic Vender had been a senior vice president Capital Investors. Partners U.S. fund series. Mota moved responsible for developing relationships over from Stockdale Capital of Los with operating partners and identify- Eric Aronsohn joined Stockbridge Angeles, which he joined last year to ing potential deals nationally. He spent Capital last month as an associate at help build relationships with potential nine years at Blue Vista, which recently the San Francisco fund shop’s head- investment partners. Before that, kicked off fund raising for its planned quarters. He works on mixed-used and Mota was a senior director at Tishman $400 million Blue Vista Real Estate master-planned redevelopment deals Speyer of New York. CBRE Global Partners 4. Vender was previously an in the Western U.S. Aronsohn previ- recently transferred Jeff Felder to the analyst at JLL. ously worked at Rialto Capital of Miami, value-added team as a senior director, where he was an asset manager for focused on property acquisitions. Lubert-Adler Partners vice president nearly five years. Jared Newman left last week. He’s Long-time real estate pro Greg Galusha headed to Penn National Gaming of Brickman Associates wants to hire an joined Kearny Real Estate of Los Ange- Wyomissing, Pa., as vice president of acquisitions pro to work on West Coast les last month as a partner. He works real estate development for the opera- deals, particularly in Los Angeles, San alongside founder and managing part- tor of casinos and racetracks. Newman Francisco and Seattle. The New York ner Jeffrey Dritley. Galusha is tasked worked on portfolio and asset manage- investment manager is seeking candi- with expanding the firm’s portfolio in ment at Lubert-Adler. Before joining dates with 5-8 years of experience. The Los Angeles and Orange counties. He the Philadelphia fund shop six years recruit would focus on office deals, but had a brief stint this year with Picerne ago, he worked at Marcus & Millichap. may also be involved with residential Group of San Juan Capistrano, Calif., properties or developments. The posi- and previously co-managed Arris Brandywine Realty has added a director tion would report to chief investment Investments of Los Angeles. Galusha is for development and investments. Matt officerSteve Klein. Anyone interested best known for his decade-long stint Konrad started work at the Radnor, Pa., can apply at [email protected].

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