MARCH 18, 2015 Trinity Church Weighing Bids on NY Portfolio Trinity Church quietly took initial bids last week on the leasehold interests in four 2 Office Fund Lines Up $300 Million Manhattan office buildings valued at more than $1 billion. The properties, in the Hudson Square submarket, encompass 2 million square 2 Upgraded Dallas Offices on the Market feet that are 98% occupied. CBRE is marketing them as a package. 2 High-End Apartments Offered in Austin Market pros think the portfolio could sell for up to $1.25 billion, or $625/sf. Based on estimated net operating income of roughly $45 million, the buyer’s initial 3 Grocery-Center Bundle Up for Grabs annual yield at that valuation would be 3.5%, in line with that of other well-leased office properties in Manhattan. 4 Listed Complex Could Be Expanded The in-place rents are well below the average market asking rent. That means a 6 Lab Building on the Block buyer should be able to boost its return as leases roll over. Average asking rents in Hudson Square climbed $13.37/sf last year, to $71.45/sf, according to CBRE. 8 Senior Pros Eyeing Later Retirement Buyers of leasehold interests in Manhattan typically pay monthly rent on the underlying land over a 99-year lease. But one source said Trinity is seeking 8 Single-Family Rentals Offered in Fla. See TRINITY on Page 12 8 Equity Needed for NY Rental Project 10 Offices Near Boston Shopped High-Yield Funds Thriving Amid Bull Market 10 Apartment Fund Holds Final Close Many key metrics are on the rise for high-yield real estate funds. Real Estate Alert’s annual review of the fund sector found increases in the number 12 NEW DEALS of active commingled vehicles (up 4% from a year ago, to 440), the projected average fund size (up 6%, to $643 million), the number of individual fund operators (up 2%, 15 MARKET SPOTLIGHT to 368) and the aggregate amount of equity being solicited (up 10%, to $279 billion). “There’s a lot of capital out there chasing real estate today,” saidTimothy Kessler, principal of FPL Consulting of , which tracks public pension commitments THE GRAPEVINE to real estate vehicles. The biggest operators continue to dominate capital-raising, with just 15 manag- Joseph Szabo is returning to Tishman ers accounting for more than one-third of all commitments. But the buoyant mar- Speyer after spending less than a year at ket is also providing opportunities for smaller shops. another firm,Fisher Brothers, The fund review is in a 40-page supplement to this issue. It includes a master list as managing director of global operations. of funds, a breakdown of vehicles by type, and lists of canceled or postponed funds He left Tishman last May to oversee prop- and funds that fell short of their equity target.  erty management for Fisher’s commercial portfolio in , including capital proj- Value-Added Pennsylvania Portfolio on Block ects and staffing. It’s unclear what Szabo’s new title and responsibilities will be at A DRA Advisors partnership is giving value-added investors another crack at a Tishman. He previously was a managing 1.6 million-square-foot portfolio of suburban office properties in Pennsylvania. director of operations, overseeing assets in The 29 Class-A buildings are valued at up to $200 million, or $125/sf. At that Brazil and China and day-to-day opera- price, a buyer of the entire package would have an initial annual yield of 9%. But tions at the complex in investors also have the option of bidding on any of four clusters of properties. Manhattan. He’ll report to Tom Madden, DRA, a New York fund shop, and its partner, Brandywine Realty of Radnor, a senior managing director appointed Pa., listed the portfolio last summer with CBRE, but no deal was struck. This time in January as global head of property around, they have tapped Cushman & Wakefield as their advisor. Bids are expected management for Tishman’s 99 million to be due in late April. square-foot portfolio. The portfolio is being pitched as a leasing play. The occupancy rate is 86%, with most of the vacancies concentrated in a handful of buildings. The net operating Meanwhile, Tishman Speyer’s previous income is just under $18 million. global head of property management, The buildings, which were constructed between 1970 and 2003, are either in See GRAPEVINE on Back Page See PENNSYLVANIA on Page 10 March 18, 2015 Real Estate 2 ALERT Office Fund Lines Up $300 Million 2011, when the downtown area was lagging behind the recov- ery of other major office markets in the city and the nation. HFF HighBrook Investment, which invests in office properties, has advised the seller on that deal, a partnership led by Blackstone, completed raising $300 million of equity for its second fund. which had acquired its stake via its 2007 takeover of Chicago- HighBrook Income Property Fund 2 will shoot for a 15% based Equity Office Properties. return via acquisitions, mostly in secondary markets. Targeted The Invesco team spent $11.5 million on renovations that areas include Atlanta, Charlotte, Dallas, Denver, Phoenix and were completed last year. They included a makeover of the Southern California. property’s 15-story central atrium, which previously had an The fund also can buy distressed debt with an eye toward ice-skating rink surrounded by retail space that included fast- taking over the underlying collateral. With leverage, it has food outlets. The rink was replaced with an indoor urban gar- some $750 million of investment power. den with fountains, tables and seating, providing more appeal New York-based HighBrook began marketing the vehicle for office tenants, and the retail space was upgraded to include early last year and lined up $145 million of initial equity a few gourmet coffee and food shops. months later. The final close was held this month. Prices have appreciated in the central business district as The investment shop was founded in 2010 byBrian Carr and Dallas’ economic recovery has accelerated — and as proper- David O’Connor. Carr, who is executive chairman and manag- ties have been spruced up. Many buildings had grown out- ing partner, previously worked on Morgan Stanley’s property dated as upgrades were deferred. Institutional investors, such funds. O’Connor, who is nonexecutive chairman, had co- as Invesco, that snatched up buildings at discounts during the founded High Rise Capital, a now-defunct hedge fund operator downturn have increasingly invested in improvements that that focused on real estate securities. local pros say are helping to revive the downtown area. Robert Giusti, who joined the firm in 2012 as vice president and Plaza of the Americas is at 600-700 North Pearl Street, at was recently promoted to partner, oversees acquisitions nation- San Jacinto Street. It’s adjacent to a DART station and within ally. Ed Gargiulo is principal and director of asset management. the Dallas arts district, a focal point of the city’s downtown The company raised its first fund in 2012 and has fully revitalization effort. invested its $230 million of equity. HighBrook’s overall portfolio encompasses 6.5 million High-End Apartments Offered in Austin square feet of commercial space. Office space accounts for all but one of its holdings.  A developer is shopping an amenity-rich luxury apartment complex in Austin. Upgraded Dallas Offices on the Market The 302-unit RiverView was completed in 2013 and is 92% occupied. Bids are expected to come in around $76 million, or After picking up a downtown Dallas office complex during just over $250,000/unit. That would translate to a capitalization the slump and renovating it, an Invesco Real Estate partnership rate of about 5%. HFF is representing the owner, CDK Realty of is marketing the property to value-added investors. Dallas. The 1.2 million-square-foot Plaza of the Americas is expected The four-building complex, at 13000 East Riverside Drive, to fetch about $150 million. A buyer would work to lift its 74% is alongside a new boardwalk on the shore of Lady Bird Lake. occupancy rate. The pitch is that with the recent upgrades, the Two five-story buildings stand closest to the lake, with towers property is well-positioned to benefit from improving condi- of nine and 11 stories rising behind them. tions in the city’s central business district. The units have 1-3 bedrooms and condominium-style fin- At the estimated value of $123/sf, the initial annual yield ishes: granite countertops, wood flooring, walk-in closets and would be about 7%. CBRE is the broker. solar window shades that dim as the day gets brighter. Most Investors are being told that several big tenants have units have balconies with views of the lake. significant time left on their leases, providing stability while a The property’s numerous amenities are aimed at the young buyer works to fill the vacant space. Major tenants includeJ . P. professionals driving Austin’s high-end rental market. The resort- Morgan (89,000 sf until 2022), law firmThompson Coe (71,000 style pool has cabanas and towel service. There’s a fitness center sf until 2021) and Continental Casualty (45,000 sf until 2023). offering classes and personal trainers. A courtyard has a waterfall, The marketing campaign also highlights the opportunity to lounge seating, an outdoor television, barbecues and fire pits. raise rents, as 20% of the leased space rolls over within three The developer incorporated several “green” features, includ- years. In-place rents on that space are 21% below the level of ing a rainwater capture system, energy-efficient windows and recently signed leases at the building. Energy Star-rated appliances. The listing encompasses two 25-story office towers and a Austin’s rental market is among the strongest in the country, 143,000-sf retail pavilion. A separately owned Marriott hotel, with an occupancy rate of 95.6%. That rate slipped only 20 bp last renovated in 2012, is part of the complex but isn’t included in year, despite the delivery of a record 14,500 apartments. This year the offering. 8,500 units will be completed, yet Marcus & Millichap predicts the Dallas-based Invesco and its partner, M-M Properties of occupancy rate will tick up slightly. Rents grew 6.9% last year, and Houston, bought the property for $94.1 million, or $77/sf, in market pros expect a 4-5% increase this year.  March 18, 2015 Real Estate 3 ALERT Grocery-Center Bundle Up for Grabs North Port. The other two properties are Riverwood Town Center, An investment firm is marketing eight grocery-anchored anchored by Publix, at 5151 Washington Road in Evans, Ga.; shopping centers in the Southeast that could be worth a com- and Baltic Avenue Harris Teeter in Virginia Beach, Va. bined $120 million. Pacolet Milliken, led by Rick Webel, was founded in 2007 The 547,000-square-foot portfolio is 97% occupied. Five by the family that controls textile giant Milliken & Co. Former centers are anchored by Harris Teeter and the others by Pub- Jamestown executive Clay Adams joined the firm as president lix. Berkeley Capital is representing the owner, Pacolet Milliken of the real estate division last year. Pacolet Milliken’s real estate Enterprises of Spartanburg, S.C. investments include the ongoing development of the office The properties are being offered as a package, but investors building at Seven Bryant Park in Manhattan, in partnership may bid on them separately. At the estimated value, a buyer of with Hines and J.P. Morgan.  the entire portfolio would expect an initial annual yield of just under 6%. Four of the centers are in North Carolina, two in Florida and one each in Georgia and Virginia. All were built or reno- 1515 Market Street vated since 2007. They range in 3KLODGHOSKLD3$ size from 47,000 sf to 105,000 sf, 2I¿FHVDOH according to CoStar. VI The four North Carolina prop-  erties, all anchored by Harris SLFWXUHG Teeter, are: • Beau Rivage, at 5920 Caro- lina Beach Road in Wilm- ington. • Kill Devil Hills Harris Teeter, at 2012 South Croatan High- way in Kill Devil Hills. • Shoppes at Highland Creek, at 5806-5814 Prosperity Church Road in Charlotte. • Village At Byers Creek, at 106-130 Argus Lane in Austin Self Storage Aventura at Providence Portfolio Nashville, TN Mooresville. Austin, TX Multifamily sale and The Florida centers, both 6HOIVWRUDJHVDOH ¿QDQFLQJ anchored by Publix, are: 1,919 units 334 units • Partin Village, at 2310-2370 7HUPVFRQ¿GHQWLDO Sale: $48,000,000 East Irlo Bronson Memorial )LQDQFLQJ Highway in Kissimmee. • Shoppes at Price Crossing, at Toledo Blade Boulevard in We drive value %DFNHGE\WKHPRVWFXUUHQWJOREDOPDUNHWLQWHOOLJHQFHZHRIIHUFOLHQWVUHDOWLPH RSSRUWXQLWLHVDQGIRUZDUGWKLQNLQJSHUVSHFWLYHV2XUSURIHVVLRQDOVRSHUDWHWKURXJK DQLQWHJUDWHGQHWZRUNLQFRXQWULHVDQGXQGHUVWDQGWKHJOREDOQDWXUHRIFDSLWDO DQGKRZLW¶VLQYHVWHG1RPDWWHUZKHUH\RXDUHLQWKHLQYHVWPHQWF\FOH\RX FDQFRXQWRQXVWROHYHUDJHRXULQGXVWU\NQRZOHGJHWUXVWHGUHODWLRQVKLSVDQG H[WHQVLYHQHWZRUNWRPD[LPL]HUHWXUQVRQ\RXULQYHVWPHQW Need to see the largest property sales that were completed recently? Go to 1HZV!,QVLJKWV!2SSRUWXQLWLHV The Marketplace section of ZZZMOOFRPLQYHVWRU REAlert.com and click on “Sales Activity.” It’s free. +1 212 812 6040 lZZZXVMOOFRPFDSLWDOPDUNHWV ‹-RQHV/DQJ/D6DOOH,3,QF$OOULJKWVUHVHUYHG March 18, 2015 Real Estate 4 ALERT Listed Complex Could Be Exanded rents averaging $17.61/sf. About half the space, occupied by some 60 tenants, has leases expiring within two years, creating A newly offered Dallas office complex with significant the potential to raise rents. potential for expansion could fetch $37 million. One likely scenario would be for an office investor to pur- The eight-acre property has 270,000 square feet in two chase the property and then spin off a piece of the land to a buildings, at 6060 and 6080 North Central Expressway. The multi-family developer. The land most suitable for apartments land could support development of another 1 million sf of is along the Katy Trail, a 3.5-mile walking, jogging, skating and office, multi-family, retail or medical space. Local firmPrescott bicycle path. That would result in some loss of surface park- Realty, which has owned the property since 1998, has given the ing, but an existing garage could accommodate two additional listing to JLL. floors. The office space is 90% leased, mainly to small tenants, at The seller is highlighting the property’s proximity to South- ern Methodist University, just across the Central Expressway. The complex is connected to a DART transit stop and within Online Commercial Auction - March 17th-19th walking distance of stores, res- taurants, hotels and entertain- ment sites. The neighborhood is targeted for public improve- ments to enhance walkability. The 225,000-sf building at 6060 North Central Expressway is 88% leased. The eight-story structure was developed in 1972 $ and renovated most recently in 35,000,000 in Commercial 2010. The other building, with Properties & Loans For Sale 46,000 sf on four floors, was built in 2005 and is fully occupied. Commercial Properties The garage and surface parking lots have about 900 spaces.  TYPE SIZE LOCATION STARTING BID Multi-Family 403 Units Romeo, MI $2,000,000 Retail 133,631 sq ft Cincinnati, OH $1,500,000 2IÀFH 86,436 sq ft Lockport, NY $1,500,000 Retail 124,991 sq ft Pinellas Park, FL $1,250,000 Industrial 192,384 sq ft Bridgeview, IL $800,000 2IÀFH 44,515 sq ft Port Saint Lucie, FL $750,000 2IÀFH 29,352 sq ft Fort Worth, TX $500,000 2IÀFH 131,728 sq ft Rockford, IL $250,000

Commercial Notes TYPE SIZE LOCATION STARTING BID Got a Message for the Retail 33,631 sq ft Rosemont, IL $2,000,000 Real Estate Marketplace? Industrial 44,832 sq ft Ringwood, NJ $400,000 Your company’s advertisement in Real Estate Alert will get 2IÀFH 23,414 sq ft %URRNÀHOG:, $200,000 the word out to hundreds of professionals actively involved in buying, selling and 7ROHDUQPRUHDERXWDVSHFLÀFDVVHW managing real estate assets. For more information, please visit our March Auction page contact Mary Romano at 201-234-3968 or www.RCM1.com/REA [email protected]. or call: 888-440-7261 Or go to REAlert.com and click on “Advertise.” proven results in real estate capital markets solutions

hfflp.com REPRESENTATIVE LISTINGS & RECENTLY CLOSED TRANSACTIONS

Lincoln Road The CARMEL Flagship Block Domain Midtown Square Apts.

+1.1 Acres Four Class A Office Assets, 291 Units Premier High Street Retail Approximately 36 Acres, Class A Apple, Nike and Gap Leases Multi-housing & Transit-oriented Multi-housing Miami Beach, FL Commercial Land Camp Springs, MD Austin, TX

On the Market On the Market On the Market

Puente Hills The 550 West Adams Mall Nathaniel

$185,000,000 Property Sale $100,000,000 Property Sale & Acquisition Financing & 483,677 SF $15,000,000 Mezzanine Financing $98,250,000 Property Sale Class A Office Tower 1,102,845 SF Total 85 Units Chicago, IL Super Regional Mall Luxury Multi-housing & Retail City of Industry, CA Manhattan, NY

Closed - Jan 2015 Closed - Dec 2014 Closed - Feb 2015

Jory Trail Hilton at the Grove 1401 14th Street Clearwater

$59,000,000 Property Sale & Property Sale Property Sale $44,250,000 Financing 191,151 SF 416 Keys 324-unit, Class A, 16-story CBD Office Building Oceanfront Resort Garden-style Multi-housing Denver, CO Clearwater, FL Community Wilsonville, OR Closed - Jan 2015 Closed - Jan 2015 Closed - Jan 2015

DEBT PLACEMENT | INVESTMENT SALES | EQUITY PLACEMENT | ADVISORY SERVICES | LOAN SALES | LOAN SERVICING March 18, 2015 Real Estate 6 ALERT Boston Lab Building on the Block term of six years. Their average rent is $53.51/sf on a triple-net basis, with scheduled increases and extension options. Spaulding & Slye Investments is offering the leasehold inter- Both tenants have invested considerably in their spaces. The est in a biomedical-research building adjacent to Boston Uni- property includes a pneumatic tube system connected to four versity Medical Campus. other buildings in the medical center. It also has a vivarium, The 161,000-square-foot property, at 670 Albany Street, is classroom space and a hematology lab. expected to command bids of $100 million. At that price, the Boston University and Boston Medical Center own the land buyer’s initial annual yield would be 6%. JLL has the listing. beneath the building. The ground lease runs for another 64 The offering is suitable for core investors. The building is years. fully occupied by Boston University and Boston Medical Center, Spaulding & Slye, a Boston subsidiary of JLL, completed which have staggered leases with a weighted average remaining the building in 2005. It’s in the South End, among a cluster of biomedical facilities known as BioSquare. The immediate area recently has seen more residential and retail development. Boston is home to the largest concentration of biomedical-research and bio- CAN YOUR medical-technology centers in the U.S. — reflecting the pres- ence of numerous universities and hospitals. Laboratory space BROKER DO THIS? across the city is 99% occupied. Class-A lab space in the Long- wood Medical area, west of the South End, carries an average ask- ing rent of $90/sf on a triple-net basis. The average in East Cam- bridge, to the north, is $70/sf. 

The Retail at 535 & 545 Fifth Avenue

535-545 Fifth Avenue Need Reprints $310,000,000 Of an Article? FIXED-RATE BELOW 4.00% New York, NY Want to show your clients and Two adjacent buildings prospects an article or listing -YEAR LOAN ZXM[VѝJLZWHJL that mentions your company? CMBS LENDER 85,000 sq. ft. retail space We can reprint any article with a 10 customized layout under Real FULL-TERM INTEREST-ONLY Estate Alert’s logo — an ideal addition to your marketing materials. Contact Mary Romano at 201-234-3968 or Drew Anderman | Senior Managing Director [email protected]. 212.612.0236 | [email protected] Information on reprinted articles is also available on REAlert.com MeridianCapital.com in the “Advertise” section.

CMA_545 Fifth Avenue_DAnderMan_032015.indd 1 3/13/15 4:24 PM Feats of technological ingenuity.

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For everyone who touches CBRE. March 18, 2015 Real Estate 8 ALERT Senior Pros Eyeing Later Retirement housing experts say that helped keep overall home prices from sinking even further. In the wake of the “Great Recession,” many veteran real Blackstone indicated last week it would slow its single-fam- estate professionals plan to extend their careers, leaving less ily home acquisitions, after spending $8 billion in recent years room for midlevel employees to advance, according to a survey to buy more than 43,000 homes in about a dozen cities. The by executive recruiter RETS Associates. investment giant will continue making purchases, but has nar- The downturn meant reduced bonuses and lower salaries rowed its focus to a few markets, including Miami, Orlando, for many senior professionals, according to Jana Turner, a prin- Seattle and Tampa.  cipal at the Newport Beach, Calif., search firm. The upshot: Now they want to stay in the workforce to make up lost ground. Equity Needed for NY Rental Project The firm surveyed 120 real estate professionals born between 1946 and 1964 — the “Baby Boom” generation. It A joint venture is seeking equity for the development of a found that 37% intend to delay retirement because of the luxury apartment building just north of . financial impact of the recession. And the vast majority (84%) The partners, Alexander Development of New York and Blue- intend to continue working on a part-time or consulting basis stone Organization of Jamaica, N.Y., have hired DTZ to find a once they retire from full-time employment. “They have a lot of partner willing to kick in $25 million to $30 million. They also great experience and knowledge that can still be used by these have tasked DTZ with lining up a construction loan that would companies,” Turner said. cover the rest of the project’s estimated $85 million cost. Most of those surveyed (74%) said they remained employed The 16-story building, at 42 Broad Street in the wealthy during the downturn. But of those, just over half sought to Fleetwood section of Mount Vernon, would encompass 249 change jobs for various reasons, including more security or units and 15,000 square feet of street-level retail space. It would better advancement opportunities. Those who did make a connect to an existing four-level garage with 580 spaces. The move often took a pay cut. amenities would include a heated swimming pool, a commu- More than a quarter of respondents reported that in their nity room, a rooftop garden and a fitness center. The property last job search, they felt they ran into age discrimination, as would be built with energy efficiency in mind, according to employers told them they were unwilling to pay more for expe- marketing materials. rienced workers. That could be leading more veteran profes- The Westchester County site currently houses the garage and sionals to stay put: 56% said they haven’t interviewed for a new a vacant retail center. The Alexander partnership purchased the job in the last year, even as hiring has picked up.  property last year and lined up all necessary building approv- als. Single-Family Rentals Offered in Fla. The property is 15 miles north of , just off the Cross County Parkway. The pitch for financing high- A Miami investment group is shopping a large portfolio of lights the site’s location three blocks from the Fleetwood stop rental houses in South Florida. on the Metro-North rail line, which offers commuter service The 520 houses are spread out around Broward and Miami- to Manhattan. Dade Counties. The package is valued at about $165 million, or Suburban projects with access to mass transit can draw just over $315,000 per home. high-paying tenants priced out of urban markets, making such Owner Maynada Investment is looking to sell the houses as investments attractive to institutional investors.  a package, pitching them to REITs and a handful of big institu- tional investors that specialize in the single-family rental mar- ket. Apartment Realty Advisors, recently acquired by Newmark Grubb, has the listing. Search Prior Articles All the properties are detached, single-family homes built since 2003. Most are two-story structures, and many have In Real Estate Alert garages and swimming pools. Maynada, of Coral Gables, Fla., started buying them up about four years ago, in many cases via bank auctions. It refurbished the houses, upgrading appliances You can instantly find out about any investor, and fixtures, and fully leased them up. owner, property or anything else ever mentioned in The likely play would be to operate the homes as income Real Estate Alert by searching the newsletter’s properties at least for a few years and then sell them individu- archives at: ally. That strategy gained steam after the housing crash in 2008 REAlert.com led to widespread homeowner defaults. Several big shops, including Blackstone of New York and Colony Capital of Santa Free for Real Estate Alert subscribers. Monica, Calif., entered the niche, buying thousands of homes $7.95 per article for everyone else. across the country at steeply discounted prices. Many U.S. CRANK UP THE LATEST HITS SOLD THE VOLUME Capital Markets

The Foundry Building Pearl Highlands Center Beavercreek Town Center Washington, DC Pearl City, HI Beavercreek, OH $80M Office $140M Retail Retail $62M

Kennedy Heights One Neathouse Place Fox Plaza Hong Kong, China , UK San Francisco, CA $98M HK Residential €115M Euro Office $135M Retail

100 Cambridge Street StratReal Industrial The Family Center at Boston, MA Taylorsville $280M Office and Retail Portfolio Various Locations in TN & OH Taylorsville, UT $132M Industrial $75M Retail

colliers.com/capitalmarkets

2014 Fall ULI Ad_Crank up the Volume.indd 1 3/13/15 11:46 AM March 18, 2015 Real Estate 10 ALERT Offices Near Boston Shopped ating a gross return of 43% as of yearend 2014. Outside its funds, Security pursues ground-up development A partnership is shopping a suburban-Boston office build- and invests in affordable housing. It also operates a property- ing with an estimated value of $25 million. management arm. The 144,000-square-foot property, at 400 Riverpark Drive The firm was founded in 1969 byPaul Pfleger to invest in in North Reading, Mass., is being pitched as offering stable HUD-sponsored affordable housing for clients seeking to reduce income with the opportunity to lift rents by filling vacant their tax exposures. It is now led by chief executive David Dufen- space. DTZ is representing the owners, DivcoWest Properties horst. Managing director Edward McGovern oversees capital- and Taurus Investment. raising and investor relations.  The Class-A building is 81% occupied. The tenants are Avent, Bright Horizons, ISO Claims Partners and Tracelink. They have a Pennsylvania ... From Page 1 weighted average remaining lease term of 5.2 years. Any efforts to bring in new tenants likely would benefit from the Lehigh Valley area or suburban Philadelphia. All are close continued improvements in the surrounding Route 128 North to the Pennsylvania Turnpike or its Northeast Extension. Inves- submarket. Office properties in the area had an average occu- tors can bid on any combination of the following pools: pancy level of 88% last year, up from 81% in 2009. • Eleven buildings, totaling 669,000 sf, in Allentown, about The offered property was built in 1991, with renovations 60 miles northwest of Philadelphia. completed as recently as 2013. The four-story building includes • Six buildings, totaling 458,000 sf, in Fort Washington. a cafe and a fitness center. It is part of the seven-building Riv- • Nine buildings, totaling 318,000 sf, in Horsham. erpark Office Park, which is along Interstate 93, about 14 miles • Three buildings, totaling 167,000 sf, in Bensalem. north of Boston. There are 159 tenants, with roughly half classified as invest- DivcoWest, of San Francisco, and Boston-based Taurus pur- ment-grade. No tenant leases more than about 5% of the space. chased the building and an adjacent property, at 300 Riverpark Twenty percent of the space rolls over in 2017. Drive, for $27.5 million in 2008, just as the market started to The rent roll includesHartford Fire Insurance (85,000 sf), crash. The seller, Teradyne, agreed to lease back some of the ADP (68,000 sf), Berkadia Commercial Mortgage (60,000 sf) space on a short-term basis. and Quest Diagnostics (51,000 sf). DivcoWest and Taurus subsequently added tenants at 400 The buildings range in size from 18,000 sf to 132,000 sf and Riverpark Drive while leasing the entire building at 300 River- have amenities such as conference centers, restaurants and park to Amazon.com subsidiary Kiva Systems. They sold that walking trails. 210,000-sf property to Tritower Financial of Boston in 2013 for The profile of the 11 Lehigh Valley properties illustrates $32.3 million.  the potential for boosting revenues. Those buildings are 84% leased, below the submarket’s 88% average. Their rents average Apartment Fund Holds Final Close $15.88/sf, which is 11% less than the submarket’s average ask- ing rate of $17.89/sf. A longtime apartment investor has wrapped up capital-rais- DRA acquired an 80% stake in the portfolio from Brandy- ing for a fund it launched last year. wine in 2007. That deal valued the properties at $245.4 million. The Seattle operation,Security Properties, held the final At the time, the portfolio was 96% occupied.  close for its Security Properties Multifamily Fund 2 this month with $35 million of equity. It had set a target of $25 million. Security’s funds aim to produce returns of 12-14% via purchases of apartment properties in primary and second- ary markets in the Western U.S., including Denver, Portland, Free Sample Copies Ore., Scottsdale, Ariz., Seattle and the San Francisco Bay Area. The shop invests via joint ventures. Past partners include Do you know someone who would like to receive three BlackRock, California State Teachers, GE Capital Real Estate, J.P. issues of Real Estate Alert, without obligation? Just fax Morgan, Praedium Group, Principal Real Estate Investors and this form to the number below: Prudential Real Estate Investors. Security buys both market-rate and affordable properties. Name: Purchases typically range from $20 million to $25 million Company: apiece. With leverage, the new fund would have some $500 Address: million of buying power, including its partners’ capital. City/ST/Zip: The first fund in the series completed raising $20 million of equity in 2011. It teamed up on purchases totaling about $400 Fax: 201-659-4141 million. The vehicle already has sold several properties, gener- 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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be Trinity’s first large-scale office listing. Trinity ... From Page 1 The portfolio’s centerpiece is the 1.2 million-sf building at a large up-front payment for a portion of the lease, presumably One Hudson Square, which is fully leased, according to CoStar. to generate more proceeds to plow into its development plans. The tenants include Adelphi University, Command Financial, Last year, the church announced it would build four residential Getty Images, Horizon Media, the Jackie Robinson Foundation, towers in Hudson Square. Metropolitan College of New York, New York Magazine and Trinity has been a major real estate player in Manhattan Omnicom Group. The 17-story property, at 431 Canal Street, was since 1705, when Great Britain’s Queen Anne gave it 215 acres built in 1929. It occupies the city block bounded by Canal, Varick of prime farmland. The church sold or gave away much of that and Watts Streets, and an entrance road to the Holland Tunnel. land over the years, but still lays claim to being one of Manhat- The remaining properties are all across Canal Street from tan’s largest landowners. Trinity has retained 14 acres concen- One Hudson Square. They are: trated in Hudson Square, a rising section of Lower Manhattan • The 12-story, 387,000-sf building at 200 Hudson Street. that over the years has converted from a printing and manu- Occupancy rate: 100%. Built: 1926. facturing hub to a center for media and technology firms. At • The 12-story, 401,000-sf property at 205 Hudson Street. yearend 2013, Trinity valued its real estate holdings at $3 bil- Occupancy rate: 92%. Built: 1928. lion. The church owns 5.5 million sf of commercial properties • The seven-story, 61,000-sf building at 12-16 Vestry Street. and leases the remaining land. The CBRE listing is believed to Occupancy rate: 86%. Built: 1892. 

NEW DEALS

Northern Virginia Office Portfolio tower is 94% leased. The seller was its developer, local firm Alex S. Palmer Co., which will continue to manage the 18-story A joint venture between Angelo, Gordon & Co. and Atlantic property. Eastdil Secured brokered the deal. Apollo will hold Realty Cos. paid $82 million for a half-vacant, 500,000-square- the investment in one of its funds. Vanderbilt is led by former foot portfolio of office properties in Reston, Va. The four- Tishman Speyer and Trizec Properties executive Casey Wold. building package consists of 298,000 sf at Reston Corner 1-3, on Sunrise Valley Drive, and the 202,000-sf Parkridge 5, on Stake in Florida Apartment Project Parkridge Boulevard. New York-based Angelo Gordon and Atlantic, of Tysons Corner, Va., plan to spend some $5 mil- Gables Residential has landed an equity partner for a lion on renovations and work to lease the vacant space. The planned 400-unit apartment development in Aventura, Fla., a roughly 40 tenants include Reston Associates and Wal-Mart. northern suburb of Miami. FrontRange Capital, a Denver invest- Eastdil Secured brokered the sale, which closed two weeks ago, ment shop, agreed two weeks ago to kick in about $25 million on behalf of Garrison Investment of New York. Garrison took of equity for the project, which has an estimated cost of $95 control of the portfolio four years ago when the previous owner million. Construction of the garden-style complex is expected defaulted on debt. to begin this spring and take about 16-18 months. Gables, an Atlanta REIT, was represented by the Apartment Realty Advi- Oregon Medical Office Property sors unit of Newmark Grubb.  Harrison Street Real Estate has acquired a medical-office building in Springfield, Ore. The Chicago fund shop paid $61 million, or about $500/sf, for the 122,000-square-foot property, Search Prior Articles at 3355 Riverbend Drive. The five-story building, developed in 2009, is nearly fully leased to 14 tenants that belong to North- In Real Estate Alert west Specialty Clinics, a consortium of surgical practices. The deal closed this month. JLL represented the sellers, a group of local investors. You can instantly find out about any investor, owner, property or anything else ever mentioned in Real Estate Alert by searching the newsletter’s Nashville Office Building archives at: An Apollo Global partnership last week paid $50 million for a Nashville office building. The New York fund shop and REAlert.com Vanderbilt Partners of Chicago purchased the 243,000-square- foot Palmer Plaza, at 1801 West End Avenue. At the $206/sf Free for Real Estate Alert subscribers. price, the initial annual yield will be 7.3%, but the joint venture $7.95 per article for everyone else. expects to upgrade the building to boost its return. The Class-A March 18, 2015 Real Estate 13 ALERT

O ONN THE THE MARKETMARKET

Retail

Estimated Property Size Value Owner Broker Color Three BJ’s Wholesale 277,000 sf $70.8 million Private Stan Johnson Asking price is for portfolio, but owner will accept bids Club stores, in 100% occupied 6.11% yield investor group Co. on individual properties. Net operating income: $4.3 North Dartmouth and million. Fully occupied by BJ’s on 20-year, triple-net Pittsfield, Mass., and leases. Average remaining term: 17.9 years. Each Bellport, N.Y. lease has rent bumps and at least five 5-year renewal options. Drexeline Shopping 266,000 sf $35 million Local family JLL Grocery-anchored shopping center at busy Center, 85.1% occupied intersection with U.S. Route 1, about 12 miles from 5100 State Road, downtown Philadelphia. Anchored by ShopRite. Other Drexel Hill, Pa. tenants include CVS, Crozer-Keystone Health System, PNC and Wells Fargo.

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March 18, 2015 Real Estate 14 ALERT CALENDAR CALENDAR

Main Events Dates Event Location Sponsor Information March 26-27 PREA Spring Conference Washington PREA www.prea.org June 15-16 U.S. Real Estate Opportunity & Private Fund Inv. Forum New York IMN www.imn.org Nov. 17-19 REIT World Las Vegas NAREIT www.reit.com

Events in US Dates Event Location Sponsor Information March 24 Breakfast Meeting New York RELA www.rela.org March 25 Networking Event New York YREPNY www.yrepny.org March 26 Global Real Estate Capital Flows Conference New York GWU School of Busn. business.gwu.edu March 26 Commercial Real Estate Forum Chicago Marcus & Millichap mmchicagoforum.com March 30-31 Real Estate Investors Summit Miami Opal Financial www.opalgroup.net April 2 Multifamily Forum Houston Marcus & Millichap mmhoustonforum.com April 8-10 Student Housing Austin InterFace Conf. Grp. interfaceconferencegroup.com April 8-10 Real Estate Lending Conference Baltimore ABA www.aba.com April 13-14 Institutional Real Estate LatAm Forum New York Latin Markets www.latinmarkets.org April 14 Greater New York Data Center Summit New York CapRate Events cre-events.com April 14-15 Real Estate Private Equity Forum on Land, Homebuilding Miami IMN www.imn.org April 15 REIT Symposium New York NYU Schack www.scps.nyu.edu April 16 Luncheon Meeting Washington RELA www.rela.org April 23 Real Estate Private Equity Summit West San Francisco EisnerAmper eaprivateequity.com April 27 Networking Event Rye, N.Y. RELA www.rela.org April 27-28 Caribbean Hotel & Resort Investment Summit Miami BHN chrisconference.com April 28-30 National Real Estate Conference San Diego Crittenden www.crittendennational.com May 4-5 Real Estate CFO Forum (West) San Diego IMN www.imn.org May 4-5 Real Estate Family Office & Private Wealth Mgmt. Forum San Diego IMN www.imn.org May 6 Real Estate Mezzanine Financing Summit New York iGlobal Forum www.iglobalforum.com May 7 Real Estate & Regional Bank General Counsel Forum Chicago IMN www.imn.org May 13-14 Spring Meeting 2015 Houston ULI www.uli.org May 14 Real Estate CFO Summit New York WeiserMazars weisermazarscfosummit.com May 17-20 ReCon Las Vegas ICSC www.icsc.org May 26 Real Estate Investment World Latin America 2015 Miami Terrapinn www.terrapinn.com May 26-27 Real Estate Investment World Latin America 2015 Miami Terrapinn www.terrapinn.com May 28-29 Financing, Investing & Real Estate Dev. for Data Centers New York IMN www.imn.org May 31-June 2 International Hospitality Industry Investment Conf. New York NYU www.scps.nyu.edu June 8-10 CRE Finance Council June Conference 2015 New York CRE Finance Council www.crefc.org June 10-11 Real Estate Investment World Latin America 2015 Miami Terrapinn www.terrapinn.com

Events Outside US Dates Event Location Sponsor Information March 24-25 Africa GRI 2015 Johannesburg GRI www.globalrealestate.org April 20-21 Turkey GRI 2015 Istanbul GRI www.globalrealestate.org April 22-23 Asia GRI 2015 Singapore GRI www.globalrealestate.org April 28-29 British GRI 2015 London GRI www.globalrealestate.org May 6-7 Private Equity Forum on Spanish Real Estate IMN www.imn.org May 6-7 Deutsche GRI 2015 GRI www.globalrealestate.org May 20-21 Espana GRI 2015 Madrid GRI www.globalrealestate.org May 20-21 MIPIM Japan Tokyo MIPIM www.mipimjapan.com To view the complete conference calendar, visit The Marketplace section of REAlert.com

March 18, 2015 Real Estate 15 ALERT

MARKET SPOTLIGHT Silicon Valley Office Properties  Market fundamentals are still rapidly improving: The average occupancy rate climbed 1.3 percentage points last year, to 89.4%, and is projected to rise another point this year.  With listings having slowed in San Francisco, investors have turned their attention to Silicon Valley. Sales of large properties climbed to $5.5 billion last year, from $4.6 billion in 2013.  Technology firms prefer new properties, and developers are responding. Close to 5 million square feet of space is on track to hit the market this year, up from 1.6 million sf in 2014. On the Market Hit SF Estimated Value Property Seller Market (000) ($Mil.) (Per SF) Broker Crossroads, San Mateo Crossroads Ventures March 396 $190 $480 Eastdil Secured Airport Technology Park, Santa Clara Bixby Land February 295 100 339 Eastdil Secured The Campus, San Jose Bixby Land March 253 92 363 CBRE 2851 Junction Avenue, San Jose TMG Partners February 156 85 545 JLL Rose Orchard Tech Park, San Jose Rockpoint Group February 314 75 239 JLL Shores Center, Redwood City TA Associates March 142 65 457 JLL 101 Lincoln Centre Drive, Foster City TA Associates February 109 60 550 JLL SV Towers, San Jose Legacy Partners March 413 52 125 CBRE 3003 Bunker Hill Lane, Santa Clara TMG-Alcion January 81 35 432 Eastdil Secured 18735 Madrone, Morgan Hill Lone Star Funds January 151 35 231 Eastdil Secured Zanker Business Park, San Jose Deutsche Asset & Wealth March 120 25 208 DTZ Recent Deals SF Sales Price Property Buyer Closed (000) ($Mil.) (Per SF) Broker Equity Office portfolio, various Hudson Pacific Properties (Pending) 8,200 $3,500 $427 Eastdil Secured Tibco headquarters, Palo Alto Morgan Stanley Real Estate (Pending) 292 330 1,130 Cushman & Wakefield Sandhill Commons, Menlo Park (49% stake) Invesco January 133 240 1,800 HFF Tech Park at Freedom Circle, Santa Clara Irvine Co. January 427 137 319 HFF 700-900 Concar Drive, San Mateo DivcoWest Properties February 219 131 622 JLL Montague Park, San Jose MetLife December 418 130 311 Eastdil Secured Sunnyvale Crossing, Sunnyvale (Unidentified) (Pending) 262 115 439 HFF Vascona Technology Park, Campbell Carlyle Group January 311 84 270 DTZ 1390-1400 Kifer Road, Sunnyvale Westcore Properties January 165 53 319 CBRE, DTZ 2701 Orchard Parkway, San Jose Gramercy Property March 207 45 217 Eastdil Secured Milpitas Station, Milpitas Westport Capital February 400 45 113 CBRE March 18, 2015 Real Estate 16 ALERT

THE GRAPEVINE interested in the property. A sale at looking to grow. The firm plans to add roughly $159/sf would put a buyer’s a broker with expertise in large invest- ... From Page 1 initial annual yield at around 5.1%. ment sales and another that can arrange HFF is advising the seller, a partner- debt for institutional-size deals. The Michael Norton, has landed at J . P. ship between Boston firmLong Wharf positions require at least three years Morgan. Norton, who spent 18 years Real Estate and Dallas shops Champion of experience working on deals in at Tishman before stepping down in Partners and Lincoln Property. The trio Manhattan. Prince, launched by David January, started last week with the teamed up to pay $99 million for the Ash in 2010, works on dispositions, same title in the bank’s corporate real complex in 2011 and then spent $9 mil- acquisitions, arranging joint ventures estate group. He remains based in New lion on renovations. and lining up debt, equity and preferred York, reporting to David Arena, who equity. co-heads the group. Also this month, Retail specialist Gary Saykaly left Ray Quartararo joined Arena’s team as brokerage Franklin Street after less Michael Fermo joined Zar Group of global head of construction to oversee than a year and started this month as a New York last month as an acquisi- office, data-center and retail-branch managing partner at Phoenician Capital tions associate. He previously spent a development. Quartararo spent nearly of Atlanta. Phoenician is a boutique year and a half at Marcus & Millichap 11 years at JLL, where he was a vice investment advisor that focuses on as an analyst and investment-sales chairman and most recently oversaw retail properties in the Southeast. broker. Fermo reports to manag- business-development efforts in the Saykaly was a senior director in Atlanta ing director Avi Zukerman, head of New York metropolitan area. for Tampa-based Franklin Street. Before acquisitions at Zar, which invests in that, he spent three years at Cushman value-added and core assets in New Offers for the 941,000-square-foot & Wakefield as a broker handling York. The firm is led by chief executive Energy Square office complex in investment sales of shopping centers Bobby Zar. Dallas have come close to $150 mil- and malls. He had an earlier, 11-year lion, according to local pros. GlenStar stint at CBRE, leaving as managing Square Mile Capital has added an asso- Properties of Chicago appears to be the director. ciate at its New York headquarters. Ian leading bidder. BlackWatch Partners of Passmore started this month. He came Dallas and Walton Street Capital of Chi- Prince Realty, a Manhattan investment- from Canada Pension Plan, where he cago were among those who appeared advisory and capital-markets shop, is held the same title.

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