Real Estate Alert’S Deal Database, Which 13 ESPN Campus in Conn
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JULY 31, 2013 2 Buyers Step In After FDIC Deal Goes Awry After the original winning bidder dropped out, a Starwood Capital-FDIC partner- 8 TOP INDUSTRIAL BROKERS ship has decided to break up a sprawling apartment portfolio, dividing it between Crescent Heights and Winthrop Realty. 10 TOP MULTI-FAMILY BROKERS Crescent, a Miami condo converter, has agreed to buy nine complexes for about $650 million, according to people familiar with the transaction. Boston-based High-Yield Office Play in Houston 2 Winthrop will take down the other four complexes for about $250 million. Eastdil 3 Walgreens Marketing Retail Portfolio Secured and HFF are advising the Starwood-FDIC partnership. The new agreements value the portfolio at roughly $900 million, or some $50 3 Value-Added Rental Plays in Arizona million less than the bid by original winner American Invsco. That company, led by Nicholas Gouletas, 3 Firm Lists Long-Held NY Offices Chicago condominium developer was unable to line up enough capital to complete the purchase. 4 Miami-Area Residential Play Pops Up The 3,128-unit portfolio was developed as upscale condominiums during the frothy days of the real estate boom. Lender Corus Bank assumed the properties when 4 Warehouse Available at Houston’s Port See BUYERS on Page 13 6 Hotel Available in SF Tourist District 6 Big Virginia Development Site Listed Apartment Sales Up 19%; CBRE Out in Front Sales of large multi-family properties rose by 19% in the first half, as real estate Clarion Showing Washington Offices 6 investors continued to view apartments as the safest asset class. 8 Industrial Sales Slip; CBRE Top Broker Some $18.6 billion of buildings traded from January through June, the biggest first-half total since 2007, according to Real Estate Alert’s Deal Database, which 13 ESPN Campus in Conn. on the Block tracks trades of $25 million and up. Apartment pros believe the market is even 14 Shop Eyes Value-Added Plays in Texas stronger than the six-month results suggest and forecast a robust second half. CBRE remained the nation’s most prolific apartment broker, closing $5.1 billion of 15 MARKET SPOTLIGHT deals. That gave it a 31% share of brokered trades and twice the volume of HFF, which recorded $2.5 billion of sales and captured second place. Apartment Realty Advisors was a close third at $2.2 billion. Jones Lang LaSalle more than tripled its sales to $1.5 billion and leaped into fourth place, from eighth for both the first half and all of last year. Marcus & Millichap rounded out the top five with $1.1 billion of sales — largely generated by its 3-year-old Institutional Property Advisors platform, which See APARTMENT on Page 10 THE GRAPEVINE Blackstone to Buy Hughes Center in Las Vegas Veteran Washington property broker William Kaye jumped to Colliers Interna- Continuing to unwind Crescent Real Estate’s once-massive office portfolio, a tional from CBRE in the past few weeks. Barclays partnership has agreed to sell Hughes Center in Las Vegas to Blackstone The buzz is he will lead capital-markets for nearly $350 million and has put the two remaining Crescent buildings on the efforts in the Washington area and could block. be involved in deals all along the East Meanwhile, Cousins Properties disclosed Monday that it had agreed to buy two Coast. Kaye was an executive vice presi- other properties in the portfolio. The Atlanta REIT will pay $950 million for the 4.3 dent at CBRE, where he spent the past million-square-foot Greenway Plaza in Houston and $160 million for the 955,000-sf six years, after a 10-year stint at Tram- Carter Burgess Plaza in Fort Worth, Texas. The capitalization rate is 7.6% on Greenway mell Crow. Kaye is the third longtime Plaza, which is 92% leased, and 6.2% on Carter Burgess Plaza, which is 91% leased. Washington broker to leave CBRE since Blackstone’s capitalization rate on the 1.5 million-sf Hughes Center would be last year, when Ryan Clutter and Michael 7.7%. Hughes Center is widely viewed as the premier office property in Las Vegas. Blunt relocated to that city and took It encompasses 10 office buildings, plus stores and restaurants. The complex, which charge of office sales. The others who was built between 1986 and 2007, is part of a 68-acre mixed-use development at See GRAPEVINE on Back Page See HUGHES on Page 4 July 31, 2013 Real Estate 2 ALERT High-Yield Office Play in Houston the return to 8% within two years by leasing up vacant space and raising below-market rents on a big chunk of space with matur- An Amstar partnership is pitching an office building in Hous- ing leases. Bids are expected from core-plus investors attracted to ton’s Energy Corridor to core-plus and value-added investors. the submarket, and value-added investors drawn to the upside The 286,000-square-foot Kirkwood Tower could attract bids potential. of about $55 million, or $192/sf. At that price, the buyer’s initial The building has heavy lease rollover in the next few years. annual yield would be about 6%. CBRE is representing Amstar, a Contracts on nearly a quarter of the space mature within a year Denver real estate investment manager, and its partner, Frontier and on 40% within three years. Overall, the rents average 25% less Equity of Addison, Texas. than the building’s current asking rate of $18/sf on a triple-net The marketing campaign is emphasizing the opportunity to basis, and the leases expiring within one year are 40% below that boost income generated by the 15-story property, which has an level. 87.7% occupancy rate. Investors are being told they could increase The Energy Corridor is Houston’s tightest submarket. Its Class- A office space was 99% occupied at the end of June, up 3.7 percent- age points from a year earlier and a whopping 9.5 points from two years earlier. Meanwhile, even Class-B WE SELL REAL ESTATE SOLD buildings were 92% leased at mid- year. The lack of available space has FOR MORE. PERIOD. driven up rents rapidly. Kirkwood Tower was built in • Over 150,000 assets sold since 2007 1984. While it has Class-A status, • 30+ million unique website visitors most of its peers in the Energy • Benefit from Auction.com’s $40 million annual marketing spend Corridor were constructed more recently. Asking rents at new build- • 2013 average sales price to reserve: 114% ings average $22/sf on a triple-net basis. Also, those buildings gener- ally cater to tenants needing big blocks of space. In comparison, Kirkwood Tower’s asking rents are 18% lower, and it can accommodate small and mid-size tenants, which could help a buyer lease it up. Kirkwood Tower’s tenants include Colonial Life & Accident Insurance, SOLD a Samsung subsidiary and Farmers ALBEMARLE, NORTH CAROLINA - RETAIL CENTER Insurance Exchange. No tenant leases SOLD AT 26% ABOVE THE HIGHEST TRADITIONAL SALES OFFER more than 10% of the space. Most leases have rent bumps. Square Footage: 52,230 Confidentiality Agreements Signed: 66 The Amstar partnership acquired Occupancy: 85% Total Purchase Price-to-Reserve: 144% GE Real Estate Web Hits: 2,159 Anchor Tenant: Harris Teeter the building from one year ago for $31.3 million. That price was depressed by the property’s SELL YOUR COMMERCIAL PROPERTY 74% occupancy rate at the time, as IN OUR UPCOMING AUCTION well as the requirement that a buyer assume an $18 million mortgage JOE CUOMO with an above-average 6.4% cou- Senior Vice President pon. The Amstar team renovated the E: [email protected] P: 305.503.2637 property, boosted the occupancy rate Visit Auction.com/Sell and effectively prepaid the loan by defeasing it. The Nation‘s Leading Online Real Estate Marketplace Kirkwood Tower is at 11757 Katy Auction.com, LLC. 1 Mauchly, Irvine, CA 92618, (800) 499-6199. AZ REDC RE Brkr CO586378000; CA Auction.com RE Brkr 01093886; Auction Company SB 0475258, Mark Buleziuk SB 0418863, Michael E. Carr SB Freeway, along Interstate 10 and less 0447257; NV Auction.com RE Brkr B.1000803.CORP. 03202012, NC Auction.com RE Brkr C20400; Auction Firm Auction.com 8781; Auctioneer Mark Buleziuk 8336, Michael E. Carr 8509. Subject to Auction Terms and Conditions posted for the event. Auction.com does not make any representations or warranties regarding whether a particular property will be sold or the price it will bring at auction. than two miles west of Beltway 8. It has a six-level garage with 1,100 spaces. July 31, 2013 Real Estate 3 ALERT Walgreens Marketing Retail Portfolio ters and private garages, are: • The 288-unit Camden Sierra, at 1734 North 89th Avenue Pharmacy chain Walgreens is seeking bids for a portfolio in Peoria. of 12 shopping centers anchored by its stores, which it would • The 192-unit Camden Fountain Palms, at 8820 West Bell lease back. Road in Peoria. The 707,000-square-foot portfolio, which is 77% occupied, • The 240-unit Camden Towne Center, at 17600 North 79th is expected to fetch $147 million. At that price, the buyer’s ini- Avenue in Glendale. tial annual yield would be 6.6%. Jones Lang LaSalle has the list- The Phoenix area has re-emerged as one of the country’s ing. strongest rental markets after absorbing the oversupply result- While Walgreens isn’t ruling out offers for individual prop- ing from the condominium-market collapse and the recession. erties, the company has a strong preference to sell the portfolio The average occupancy rate is 93%, and construction is limited.