Real Estate Alert’S Logo — an Ideal the 14-Story Building, Completed in 1986, Has a Marble Addition to Your Marketing Materials

JULY 9, 2014 CenterPoint Eyes Recap of Industrial Portfolio CenterPoint Properties has hired CBRE to advise it on the recapitalization or sale 8 M&A ADVISOR RANKING of a 20 million-square-foot industrial portfolio in the Midwest. CenterPoint, which is owned by a Calpers partnership, prefers to sell a majority 2 Angelo Gordon Marketing 2 Funds stake — perhaps 90% or more — and continue to manage the properties, valued 3 Exeter Dealing Industrial Portfolio at about $1 billion. But it evidently would consider an outright sale and might also look at selling full or partial ownership of properties in stages. 3 Value-Added Office Plays in Virginia Market pros said the Calpers partnership has no intention of selling the rest of Cen- terPoint’s properties, totaling roughly 25 million sf. Those are “intermodal” distribu- 3 Phila.-Area Apartments Up for Grabs tion campuses, which are large facilities where shipping containers can be transferred 4 HIG Mapping $500 Million Fund from one mode of transportation to another, such as from ship to rail. The crown jewel among them is the 12 million-sf CenterPoint Intermodal Center in the Chicago suburb 5 Partner Sought for Jamaica Project of Elwood, Ill. CenterPoint has invested $1 billion in that 2,500-acre development. CenterPoint, of Oak Brook, Ill., is owned by CalEast Global Logistics, a joint 6 Ohio Warehouse Portfolio for Sale See CENTERPOINT on Page 7 6 Power Center Near SF Up for Grabs 6 Industrial Park Near Seattle Available Niche Fund Shop Pitching $1 Billion Vehicle Kayne Anderson Real Estate 7 Industrial Sale-Leaseback Pitched Niche specialist is seeking to raise $1 billion of equity for its fourth value-added fund, just a year after the final close of its third vehicle. 7 JP Morgan Showing Atlanta Rentals The real estate arm of Los Angeles-based Kayne Anderson Capital shoots for a roughly 15% return by acquiring senior housing, student housing, self-storage 8 American Realty Boosts Merger Tally properties and medical-office buildings nationwide. 9 Core-Plus Office Play in Virginia With leverage, the fund, Kayne Anderson Real Estate Partners 4, would have some $2.8 billion of buying power if it reached the equity goal. 9 REIT Tees Up NJ Office Building The predecessor vehicle, which wrapped up fundraising in May 2013, was over- subscribed, exceeding its initial $700 million equity target by $50 million. That 11 MARKET SPOTLIGHT vehicle is more than half invested. Kayne, which isn’t using a placement agent, is primarily soliciting limited partners from its earlier funds. According to Preqin, investors in those vehicles include THE GRAPEVINE Eisner Foundation, Nationwide Insurance, Nationwide Retirement Fund, Wyoming See NICHE on Page 5 Vivian Tongalson has leftNorthwood Investors, where she was head of investor relations and fund raising. Her plans are South Korean Player Zeroes In on DC Offices unknown. Tongalson, a managing direc- Mirae Asset Global Investments is in talks to buy a Washington office building for tor, joined New York-based Northwood roughly $440 million. in 2011. Before that, she was director of The 570,000-square-foot property, at 1801 K Street NW, is owned bySomerset fund communications for Highstar Capital Partners of New York. of New York, a private equity shop. She At the $772/sf price tag, Mirae’s initial annual yield would be 5%. If the deal is previously was an associate at Blackstone. completed, the South Korean asset manager would likely syndicate the investment Northwood, which was founded in 2007 among other South Korean pension funds. JLL is the broker. by former Blackstone real estate chief Somerset came close to selling the building last year to the Federal Reserve John Kukral, operates the $3.6 billion Board, which occupies about 35% of the space. But that deal — rumored to be in Northwood Real Estate Partners fund. the range of $450 million to $475 million — fell through. The L-shaped building, completed in 1972, fits the profile of well-located, stabi- Industry veteran Laurance Kaufman lized properties that investors are eager to acquire. It’s almost fully occupied, with joined Bluerock Real Estate in New York a weighted average lease term of more than 8 years. All tenants, including the Fed, See GRAPEVINE on Back Page See PLAYER on Page 6 July 9, 2014 Real Estate 2 ALERT Angelo Gordon Marketing 2 Funds vehicle. Initial closes for both vehicles are expected before yearend. Angelo, Gordon & Co. is back on the marketing trail, solicit- The predecessor vehicles — the $1.25 billion AG Realty ing a combined $2.5 billion of equity for opportunistic and Fund 8 and the $1 billion AG Realty Core Plus Fund 3 — core-plus funds. held final closes in 2012. Each is more than three-quarters The New York shop is telling investors it wants to corral invested. $1.5 billion for AG Realty Fund 9, an opportunistic vehicle Angelo Gordon has been one of the more active fund- that would target a 20% return, and $1 billion for AG Core raising shops in the past few years. The manager is close Plus Realty Fund 4, which would aim for a 12% return. With to halfway toward the $500 million equity goal for its first leverage, the investment capacity would be up to $4 billion European vehicle, AG Europe Realty Fund, which will target for the opportunity fund and up to $3 billion for the core-plus value-added deals. It completed raising $1 billion this year for a core-plus vehicle that invests in net-leased properties, AG Net Lease Realty Fund 3. And it is seeking to raise $750 million for an opportunity fund, AG Buy & Sell Real Estate Online Asia Realty Fund 3. The AG Realty Fund series mostly buys buildings and distressed commercial mortgages. It also develops properties. The core-plus series buys properties and distressed loans. Both vehicles invest in office, retail, multi-family and mixed-use properties. Angelo Gordon doesn’t use a placement agent. Investors in prior funds include Boston City Retirement, Contra Costa Employees, Hawaii Employees, Los Angeles Water & Power, Montana Board of Investment, Nebraska Investment Council, New Mexico Investment Council, Pennsylvania Public Employ- ees, Texas County and District Featured Closings • June 2014 Retirement and Texas Perma- nent School Fund, according to Preqin. The roughly core-plus series has raised roughly $2.3 billion of total equity to date, while the opportunistic platform has lined up $3.7 billion. 

Fully-Occupied STNL Global HQ Building High Visibility, Class A Ofﬁce Correction Low Vacancy Metro Detroit Industrial Market Strategically Located for Dynamic Tenant Mix 44,246 SF • Michigan 58,763 SF • Indiana A “New Deals” item on July 2, “Philadelphia Apartment Com- $25 Billion Sold plex,” misidentified the broker www.auction.com/sell that represented AvalonBay Communities in the sale of the 855-574-6325 Oakwood Philadelphia apart- View licensing at www.auction.com/licensing ©2014 Auction.com, LLC All rights reserved. 1 Mauchly, Irvine, CA 92618 800-499-6199 ment property in Philadelphia. The broker wasJLL, not HFF.  July 9, 2014 Real Estate 3 ALERT Exeter Dealing Industrial Portfolio two four-story buildings, was completed in 1987. It has a fitness center and underground parking. Exeter Property is shopping a virtually fully leased portfolio James Campbell, based in Kapolei, Hawaii, acquired the prop- of industrial properties that could attract bids of $325 million. erties for almost $130 million in separate transactions in 1999 The 6.7 million-square-foot offering encompasses 22 distri- and 2006. The investment shop is now redeploying capital into bution centers across seven states in the Midwest and South- other asset classes, including industrial and retail properties.  east. At the estimated value of $49/sf, the buyer’s initial annual yield would be about 6.5%. JLL has the listing. Phila.-Area Apartments Up for Grabs Exeter, an investment shop in Plymouth Meeting, Pa., con- trols the properties via a fund that has reached the end of its life J.P. Morgan Asset Management is marketing a suburban cycle. It is offering them as a package. Philadelphia apartment complex as a value-added play. The buildings range in size from 60,000 sf to 771,000 sf. Sin- The 375-unit Riverwalk at Millennium, at 309 Washington gle-tenant properties account for three-quarters of the space. Street in Conshohocken, Pa., is expected to attract bids of $95 Two-thirds of the space was developed for specific tenants. million, or $253,000/unit. HFF has the listing. Close to half of the space is leased by investment-grade com- The property is 95% occupied. It encompasses a mix of one- panies. The 27 tenants include Caterpillar, CEVA Logistics, Home and two-bedroom units, some with loft-style floorplans. Fea- Depot and Zappos. tures include nine-foot ceilings and washer/dryers. Community The weighted average remaining lease term is about three amenities include a pool, a business center, a fitness center and years. The pitch is that a buyer could boost below-market rents underground parking. The complex is on the Schuylkill River, upon rollover. with many units offering river views. The largest concentrations of space are in the Indianapolis The five-building development is relatively new, having area (1.8 million sf) and Kentucky and Tennessee, which have been completed in two phases in 2005 and 2010. But the units’ 1.4 million sf each. The rest is in North Carolina (670,000 sf), interior finishes are considered inferior to those of competing South Carolina (660,000 sf), Illinois (451,000 sf) and Ohio properties. The pitch is that a buyer could update the appli- (355,00 sf). ances and flooring in a move to bring rents closer to those in Exeter bought most of the portfolio — 6 million sf — from downtown Philadelphia — about 15 miles to the south. Pinchal & Co. of Houston in 2011 via JLL for $238.2 million, or Riverwalk at Millennium’s one-bedroom units currently $40/sf. The capitalization rate was about 8.2%. command rents of $1,437, with the two-bedroom units averag- ing $1,868. That compares to a Class-A average of $2,004 for Value-Added Office Plays in Virginia one-bedroom apartments in the Center City submarket and $2,905 for two-bedroom units. James Campbell Co. is pitching two office properties in The Philadelphia rental market has gained momentum in Northern Virginia to value-added investors as leasing plays. recent years, driven by job growth. It also has benefited from The Class-A properties, in Falls Church, encompass 470,000 a trend in which residents are moving back toward the city square feet. They are expected to attract bids totaling about center from the suburbs. The market-wide occupancy level has $100 million. Brokerage JLL is pitching them separately to been hovering at 94.8%, even as a wave of new units has hit the investors that would seek to lease vacant space in a market that market. Investors have taken notice, and newer, well-located seems poised to improve. properties have been commanding capitalization rates of 5% The offering encompasses the 253,000-sf building at 3110 or lower. Fairview Park Drive, which is 53% occupied, and the 217,000- J.P. Morgan purchased Riverwalk at Millennium in 2006 sf complex at 7600 Leesburg Pike, which is 63% leased. together with the 310-unit Riverview at Valley Forge in West The 7.4 million sf of office space in the surrounding Norriton Township, Pa. It paid $166.5 million, or $243,000/ Bailey’s Crossroads/Falls Church/Annandale submarket was unit, to the developer of the two complexes, O’Neil Properties 79% occupied in the first quarter, according toTranswestern. of King of Prussia, Pa. Rockwood Realty brokered the deal.  Asking rents for vacant space average $29.65/sf. No office construction is on the drawing board, which should benefit Class-A buildings. The tenants at 3110 Fairview Park Drive include law firm Need Reprints of an Article? Reed Smith (52,000 sf), government contractor ENSCO (18,000 Want to show your clients and prospects an article or listing that sf) and insurer Johnson Lambert (18,000 sf), according to mentions your company? We can reprint any article with a CoStar. customized layout under Real Estate Alert’s logo — an ideal The 14-story building, completed in 1986, has a marble addition to your marketing materials. Contact Mary Romano at lobby, a fitness center and a food court. It’s next to a Marriott 201-234-3968 or [email protected]. Information on hotel that is separately owned. reprinted articles is also available on REAlert.com in the The rent roll at 7600 Leesburg Pike includes engineering, “Advertise” section. technology and financial-services firms. The complex, with July 9, 2014 Real Estate 4 ALERT HIG Mapping $500 Million Fund based Praedium Group, where he was a director overseeing acquisitions in the Southern U.S. Dowell was recruited by HIG Realty is seeking to raise $500 million of equity for a Rhodes Associates, a New York executive search firm. high-yield real estate fund. HIG is targeting a first equity close by yearend. With lever- The vehicle, HIG Realty Partners 3, would aim for opportu- age, the vehicle would have about $1.5 billion of buying power. nistic returns by acquiring properties that can be improved by HIG, the real estate investment affiliate of Miami private repositioning, renovation or leasing. It would invest $10 mil- equity firm HIG Capital, was formerly known as Cronus Capi- lion to $30 million of equity at a clip, thereby targeting invest- tal. The company completed raising $200 million of equity in ments that are generally too small for the largest institutional 2007 for a high-yield vehicle called Cronus Real Estate Fund. buyers, but too big for local operators acting independently. Like many other fund shops, Cronus struggled to line up capi- New York-based HIG, which teams up with operating part- tal during the market downturn, prompting it to shelve plans ners, will consider properties of mixed types nationally. Its for a successor fund. previous acquisitions have included apartments, hotels and Weidhorn and Hirschberg took the company’s reins in medical-office buildings. 2012. They have since deployed $275 million of equity, con- The shop, led by managing directorsIra Weidhorn and David tributed by a $3 billion multi-strategy fund operated by HIG Hirschberg, has added an acquisitions pro, David Dowell, who Capital, into 21 investments and added four staffers, includ- will join as a principal this month. He is leaving New York- ing Dowell. 

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SS&C Technologies | 80 Lamberton Road Windsor, CT 06095 | +1-860-731-5022 | [email protected] | www.ssctech.com/realestate July 9, 2014 Real Estate 5 ALERT Partner Sought for Jamaica Project Florida portfolio. Kayne has also formed a joint venture with MB Real Estate of Chicago to buy medical-office space. A partnership that includes golf superstar Tiger Woods is The real estate platform, based in Boca Raton, Fla., was seeking a partner to kick in roughly $100 million of equity for a launched in 2007 by Al Rabil and Frank Duemmler. Rabil is planned hotel and casino resort on Jamaica’s north shore. managing partner and chief executive, and Duemmler is The 1,000-room Hard Rock Hotel and Casino would be chief operating officer. The chief investment officer isDavid the first phase of a mixed-use development dubbed Harmony Selznick. Cove. The phase, which would include a championship 18-hole Kayne’s first real estate fund had its final close in 2009 with golf course, is projected to cost $575 million. Construction is $136 million in equity. The follow-up vehicle completed rais- scheduled to begin next year and would take several years to ing $575 million in the fall of 2011, well above the $350 million complete. target. The operator now has some $1.6 billion of assets under The partnership is made up of the government of Jamaica, management.  investment firm Tavistock Group of the Bahamas and Woods, who would oversee the design of the golf course. The group has tappedCBRE to line up additional equity. It is willing to negotiate the size of the stake held by a new partner, who would also receive a portion of the management fees col- lected by Tavistock, a developer Meridian Capital Group Proudly Arranged and manager of high-end resorts in the U.S. and the Bahamas. The Financing for the Following Transaction: fee structure entitles Tavistock to half of the cashflow once all equity investors have received a 10% preferred return on top of their origi- nal investments. Harmony Cove will be developed on a 2,325-acre oceanfront site in Trelawny Parish, between the popular tourist spots of Mon- $100,000,000 tego Bay and Ocho Rios. Plans call for the mixed-use project Fixed-Rate Balance Sheet Financing to include high-end residences, marinas, shops, restaurants and Structured with an interest-only component entertainment venues.  and declining prepayment penalty

Niche ... From Page 1 230-Unit Multifamily Property Retirement and the University of Williamsburg, Brooklyn, NY Utah’s endowment. Kayne’s first two funds focused Drew Anderman, Senior Managing Director, on student housing, particularly off-campus complexes near public Alan Blank, Senior Vice President universities with limited on-cam- and David Bollag, Associate pus housing. Fund 3 has invested primarily in senior housing and negotiated the financing for this transaction medical-office deals. The vehicle closed its first senior-housing investment last September, when it teamed up with Discovery Senior Living of Bonita Springs, Fla., to pay $413 million for a 1,930-unit 1 Battery Park Plaza New York, NY 10004 | 212 972 3600 | www.meridiancapital.com

CMA - $100MM - D. Anderman A. Blank D. Bollag - July 2014.indd 1 6/27/14 10:48 AM July 9, 2014 Real Estate 6 ALERT Ohio Warehouse Portfolio for Sale ple with an average household income of $76,000 live within a five-mile radius. DCT Industrial is marketing a dozen warehouses in the The property was developed as an open-air center and later Columbus, Ohio, area that are valued at about $120 million. became an enclosed mall called Bay Fair Mall. It was just 73% The 3.5 million-square-foot portfolio is 95.6% leased. At the occupied when Madison acquired it in 2003. estimated value, the capitalization rate would be roughly 6.1%. Madison redeveloped the property, updating the facade It’s unclear if investors can bid on individual properties. CBRE and reorienting the stores as outward facing in an open-air is advising Denver-based DCT. format. It also leased vacant space. The improvements helped Despite the high occupancy rate, the marketing campaign boost the center’s sales by 15%, according to Madison’s web- is pitching the offering as a core-plus play. That’s because the site. Investors are being told a buyer could add value by mak- weighted average remaining lease term is just 2.3 years, and the ing additional physical upgrades and further improving the rents are 20% below the market’s prevailing asking rate. With tenant mix.  leases on 37% of the space maturing in the first year, investors are being told they should be able to quickly boost rents. Industrial Park Near Seattle Available Eighty-nine percent of the space is in warehouses developed since 1998. They have modern features, such as ample parking Colony Realty is marketing an industrial park in suburban and trailer storage, minimum ceiling heights of 28-30 feet and Seattle that could attract bids of about $34 million. flexible layouts that can accommodate one or more tenants. The 239,000-square-foot property, in Woodinville, Wash., Columbus has 229 million sf of industrial space that was is 96% leased. The initial annual yield at the estimated value 94.6% occupied at the end of the first quarter, up 70 bp from is unclear, but similar properties in the area have been trad- yearend. ing at capitalization rates of about 5.5%, amid strong demand DCT’s offering includes six properties in Lockbourne: at and scarce listings. Boston-based Colony has given the listing 1450 and 1500 Commodity Boulevard, 5653 and 4900 Creek- to Colliers International. side Parkway, 6450 La Salle Drive and 2525 Rohr Road. There The five-building complex, called Park at Woodinville, is in are three in Grove City: at 3495 and 3735 Gantz Road, and 3600 the Eastside submarket, less than three miles from Interstate Brookham Drive. The remaining buildings are at 4531 Indus- 405 and 20 miles northeast of Seattle. trial Center Drive in Obetz, 2450-2500 Spiegel Drive in Grove- The industrial park, constructed from 1982 to 1986, includes port and 3635 Zane Trace Drive in Columbus.  a light-manufacturing component. In addition, about 21% of the total space, spread across the complex, is used as offices. Power Center Near SF Up for Grabs The buildings, with minimum ceiling heights of 13.6 to 23.6 feet, can accommodate multiple tenants of various sizes. The Madison Marquette is marketing a mall-turned-power cen- weighted-average remaining lease term is six years. ter in an East Bay suburb of San Francisco. Because the buildings are on separate tax parcels, a buyer Bayfair Center, in San Leandro, Calif., could attract bids of could split them up and sell them to end-users as an exit strat- about $100 million. The property, which is 96% leased, encom- egy. The marketing campaign is emphasizing that the shortage passes 843,000 square feet, but only 696,000 sf is being offered of land available for development in the area is putting upward because a Target store is separately owned. pressure on occupancy rates and rents. At the estimated value, the buyer’s initial annual yield would Greater Seattle has 243 million sf of industrial space, which be 6%. Washington-based Madison has given the listing to HFF. was 93.4% occupied at the end of the first quarter, according to Macy’s, which developed the property in 1957, anchors the CBRE.  center along with Target. Macy’s recently renewed its lease for another seven years and invested $5.8 million in interior and Player ... From Page 1 exterior improvements to its store. The rent roll also includes Kohl’s (98,000 sf until 2025), have annual rent bumps. Century Theatres (60,000 sf until 2036) and 24 Hour Fitness The Fed’s 202,000-sf lease runs until 2023, according to (40,000 sf until 2023). PetSmart, Bed Bath & Beyond, Old CoStar. Other tenants include JLL (85,000 sf until 2017), KPMG, Navy, DSW and Ulta are also tenants, as are such restaurants as Lockton Cos. and Bank of America. There is some retail space Chili’s, Chevy’s and Panda Express. Staples is leasing 20,000 sf on the ground floor, including a newly opened Nordstrom Rack until October 2016, and prospective buyers are being told they store. could try to rent some or all of that space to a supermarket, Somerset bought the property in 2005 for $250 million, or such as Trader Joe’s. $443/sf, from a Starwood Capital fund, which had acquired it in The marketing campaign is emphasizing Bayfair Center’s 2003 from TIAA-CREF for $181.8 million. Somerset spent about location next to a Bay Area Rapid Transit station. The property $100 million on a redevelopment that was completed in 2010. is at Route 185 and Fairmont Drive, two of San Leandro’s busi- It also boosted the occupancy rate from 86% at acquisition. The est roads, and near several major highways. Some 366,000 peo- property now has a LEED gold designation.  July 9, 2014 Real Estate 7 ALERT Industrial Sale-Leaseback Pitched buster assignments this year. The brokerage is shopping an $800 million portfolio for another Calpers partnership and has A big technology company is seeking to sell and lease back negotiated the pending $725 million sale of a portfolio by USAA two Indianapolis-area distribution centers valued at about $65 Real Estate of San Antonio to Abu Dhabi Investment Authority. million. CBRE is also sharing with Eastdil a $1.8 billion assignment for The buildings, which encompass 1 million square feet, are Cobalt Capital of Irving, Texas. owned by Ingram Micro, a wholesale distributor of information CalEast acquired CenterPoint for $3.4 billion in 2006, technology products. The public company, which has an invest- when the company was publicly traded. At the time, LaSalle ment-grade credit rating, plans to net-lease the properties for Investment of Chicago was Calpers’ partner and advisor on the 10 years at market rates. investment, but GI Partners replaced LaSalle in 2010. The distribution centers, in Plainfield, Ind., are being offered CenterPoint is still in the early stages of deciding how to as a package via Cushman & Wakefield. At the estimated value proceed on its portfolio. It’s unclear whether the firm would of $63/sf, the buyer’s initial annual yield would be 6.75%. consider bids only on the entire package or would be open to The offering encompasses the 534,000-sf warehouse at 1451 selling it in pieces, perhaps in stages. Allpoints Court and the 495,000-sf building at 510 Airtech Industrial pros said Calpers has expressed some concern Parkway. The properties, a few miles apart, are near Indianapo- that if it sold the portfolio in one fell swoop, it might have a lis International Airport. The Allpoints Court warehouse, built hard time redeploying the proceeds into new industrial invest- in 2010, has 32-foot ceilings. The other property, built in 1999, ments. Even though listings of blockbuster portfolios have has 28-foot ceilings. picked up this year, only a few are now available. Mid-size list- Ingram Micro, which is based in Santa Ana, Calif., has a mar- ings also are in short supply. ket capitalization of $4.5 billion and 22,000 full-time employ- One option would be for CenterPoint to initially list just 6.5 ees. It’s graded triple-B-minus by the major rating agencies. million sf of space in Northern Chicago and Milwaukee. Those The Indianapolis area has 218.5 million sf of industrial space properties, worth roughly $300 million, are about 90% leased, that was 92.9% occupied on March 31, according to Cushman. with a weighted average remaining lease term of about four That was up from 92.1% at yearend. years. CenterPoint could then take a wait-and-see approach on listing the remaining properties.  JP Morgan Showing Atlanta Rentals J.P. Morgan Asset Management is offering a high-end apartment complex in Atlanta’s upscale Buckhead neighborhood. The 314-unit Lindbergh Vista, at 2591 Piedmont Road, could attract bids of close to $200,000/unit, or $63 million. Engler Financial has the marketing assignment. The property, which was developed in 2008, is 95% occupied. The units have 1-2 bedrooms, hardwood floors, granite countertops and balconies. The amenities include a fitness center, a rooftop pool and a meditation garden. The complex is just north of downtown Atlanta, within walking distance of a Metro Atlanta Regional Transit Authority station. Greater Atlanta’s rental market has bounced back from the $30 million lows of 2009. The average occupancy rate has climbed five percentage points, to 93.1%, according to Marcus & Millichap. Banco Inbursa, S.A. But fundamentals are best downtown and in Buckhead. Rents in Buckhead increased by an average of 10.9% in the last 12 Downtown Manhattan months, the largest gain in the metropolitan area. Recent-vin- tage properties in Buckhead have been trading at a capitaliza- Land Parcel tion rate of about 5%. 

CenterPoint ... From Page 1 venture between Calpers and GI Partners of Menlo Park, Calif. The company held a beauty pageant to select a broker to advise 460 Park Ave., 13th Floor it on the disposition. CBRE edged out Eastdil Secured, Cushman New York, NY 10022 & Wakefield JLL. (212) 616-9969 and www.LightstoneGroup.com In recent years, Eastdil almost exclusively locked up the mega-industrial listings. But CBRE has landed a string of block- July 9, 2014 Real Estate 8 ALERT

RANKINGS

American Realty Boosts Merger Tally Real Estate M&A Advisors American Realty Capital dominated merger activity among Full credit given to all advisors to buyers and sellers real estate companies in the first half. 1H-14 Market A fast-growing public REIT sponsored by the New York firm Deals No. of Share accounted for 57% of the $23.9 billion of mergers that closed ($Mil.) Deals (%) from January to June, according to a survey by Real Estate Alert. 1 Barclays $14,300.0 2 59.8 The REIT, American Realty Capital Properties, paid $10.8 bil- 2 RCS Capital 13,600.0 2 56.9 lion for Cole Real Estate of Phoenix and $2.8 billion for Ameri- 3 Goldman Sachs 10,800.0 1 45.2 can Realty Capital Trust 4, a nontraded REIT that American 4 Citigroup 8,400.0 2 35.2 Realty Capital managed. 5 Bank of America 6,300.0 2 26.4 The first-half merger volume was slightly behind the year- 6 UBS 5,600.0 1 23.4 earlier total of $25.4 billion. Four pending deals will lift the 6 Wells Fargo 5,600.0 1 23.4 amount to $32.7 billion, putting the market within reach of last 8 Houlihan Lokey 196.2 1 0.8 year’s $40.4 billion total. There were six deals in the first half, TOTAL 23,896.2 6 100.0 down from seven a year earlier. Barclays was the most-active merger advisor, working on two transactions totaling $14.3 billion. Those deals — the $10.8 billion Cole buyout and W.P. Carey’s $3.5 billion takeover dence about business prospects and the macro fundamentals,” of Corporate Property Associates 16 — equaled 60% of the first- said Richard Landgarten, who heads the global healthcare and half merger volume. real estate groups for Barclays’ investment banking division. RCS Capital, an affiliate of American Realty Capital, ranked “You overlay that with historically low interest rates, coupled second, with $13.6 billion of credit, by virtue of working on its with significant capital access for public REITs, nontraded parent’s two deals. REITs and institutional capital managers, as well as foreign Rounding out the top five in the advisor capital sources, and you have a meaning- league table were Goldman Sachs ($10.8 bil- ful amount of capital that is looking to put lion), Citigroup ($8.4 billion) and Bank of Real Estate M&A money to work in the sector.” America J.P. Morgan, ($6.3 billion). which Amount No. of Nontraded REITs, in particular, are won the ranking last year with $19.3 billion ($Bil.) Deals expected to be a driver of volume over the of deals, didn’t work on any transactions that 2005 $26.1 13 next few years. Forty nontraded REITs, with closed in the first half. 2006 69.9 24 equity valued at $46.1 billion, are expected to According to advisors, conditions for 2007 167.6 32 make their exits during the next three years mergers and acquisitions remain positive, 2008 7.1 5 by conducting initial public offerings, sell- although nowhere near as buoyant as the ing their properties or agreeing to buyouts, 2009 0.8 2 peak year of 2007, when a mind-numbing according to a projection earlier this year by 2010 28.2 7 $167.7 billion of deals closed. Market pros investment banking firm Robert A. Stanger & expect annual volume to continue to range 2011 44.1 9 Co. of Shrewsbury, N.J. from $25 billion to $50 billion for the next 2012 12.3 11 Steve Hentschel, who runs his own advi- few years if prevailing market fundamentals 2013 40.4 14 sory shop, Hentschel & Co. of New York, remain in place. 1H-14 23.9 6 believes the preferred exit for most nontraded “It starts with CEO and boardroom confi- See TALLY on Page 9 Real Estate Mergers and Acquisitions in the First Half Purchases of companies that primarily own U.S. commercial properties Price Acquired Entity Buyer Seller’s Advisor Buyer’s Advisor ($Mil.) Cole Real Estate Investments American Realty Capital Properties Goldman Sachs Barclays, RCS Capital $10,800.0 BRE Properties Essex Property Wells Fargo UBS, Citigroup 5,600.0 Corporate Property Associates 16 W.P. Carey Barclays Bank of America 3,500.0 American Realty Capital Trust 4 American Realty Capital Properties Bank of America Citigroup, RCS Capital 2,800.0 Millard Refrigerated Services Lineage Logistics (None) (None) 1,000.0 Paladin Realty Resource Real Estate Houlihan Lokey (None) 196.2 July 9, 2014 Real Estate 9 ALERT Core-Plus Office Play in Virginia yield would be an estimated 5.5% to 5.75%. CBRE is representing the owner, One Liberty Properties of New York. Bentall Kennedy is marketing a Class-A office building in The four-story building is fully occupied byDSM Nutritional Reston, Va., that’s expected to attract bids of up to $40 million. Products under a lease that runs until 2027, with annual The 140,000-square-foot property, in the six-building Com- rent increases. DSM, the U.S. affiliate of Dutch conglomerate merce Executive Park campus, is being pitched to core-plus Koninklijke DSM, uses the location as its North American investors that would seek to increase the 89% occupancy rate. headquarters. The company has completed $7 million of capital At a stabilized rate of 95%, the buyer’s annual yield would be improvements to the property in the past few years, including more than 7%. the addition of laboratory space on part of the first floor. Bentall Kennedy, a Seattle investment manager representing The building is near the intersection of state Route 46 and an unidentified client, has given the listing toHFF. Interstate 287, about 30 miles west of Midtown Manhattan in The six-story property, called Commerce Executive 6, is at affluent Morris County. 11480 Commerce Park Drive. It was completed in 1998 and has One Liberty bought the property in 2005 for $30 million.  about 460 parking spaces. There aren’t any substantial lease expirations until 2021. The Tally ... From Page 8 tenants include Siteworx (43,000 sf), Information Management Consultants (35,000 sf) and Young America’s Foundation REITs will be buyouts. “I think it’s their best alternative,” he said. (21,000 sf). The rents are 10% below the average asking rate. Rag Bala, head of real estate mergers and acquisitions at Bar- Commerce Executive Park faces Dulles Toll Road, at Wiehle clays, noted that in past cycles, the sector typically was domi- Avenue. The site is within walking distance of a metro station nated by either public companies being taken private, or private scheduled to open on the Silver line this year. The surrounding companies being acquired by public ones. Now there’s a mix. area has been approved for substantial development, including “It’s definitely more balanced in terms of activity,” Bala said. up to 3,400 residential units, 4 million sf of office space, a hotel Real Estate Alert’s merger tally counts deals in which the and shops and restaurants.  acquired entity primarily owns income-producing commercial properties in the U.S. It excludes single-property or portfo- REIT Tees Up NJ Office Building lio transactions, sales of advisory, management or brokerage firms, and roll-ups of investment vehicles or other reorgani- Core investors are getting a crack at a single-tenant office zations in which ownership didn’t substantially change. Only building in Northern New Jersey. transactions that closed in the first half were included. Advi- The 107,000-square-foot property, at 45 Waterview Bou- sors were given full credit for transactions if they worked with levard in Parsippany, is expected to attract bids approaching either the buyer or the seller. As a result, two or more advisors $400/sf, or $43 million. At that price, the buyer’s initial annual can receive full credit for a deal. 

CALENDAR CALENDAR

Main Events Dates Event Location Sponsor Information Nov. 5-7 REIT World Atlanta NAREIT www.reit.com Mar. 26-27, 2015 PREA Spring Conference Washington PREA www.prea.org Nov. 17-19 REIT World Las Vegas NAREIT www.reit.com

Events in US Dates Event Location Sponsor Information July 15 Illinois Partnering for Profits Tinley Park, Ill. IL Real Estate Journal www.rejournals.com July 15 Southern Wisconsin Apartment Summit Pewaukee, Wis. Baker Tilly www.bakertilly.com July 16 Multifamily Summit San Diego Bisnow www.bisnow.com July 16 Future of South Philly & the Navy Yard Philadelphia Bisnow www.bisnow.com July 22 Multifamily Summit Denver Bisnow www.bisnow.com July 24 Does ESG Help Real Estate Investors Decide? New York ULI www.newyork.uli.org July 24 Future of South Jersey Mt. Laurel, N.J. Bisnow www.bisnow.com July 31 Healthcare Real Estate Summit Baltimore Bisnow www.bisnow.com July 31 Creative Office Summit Dallas Bisnow www.bisnow.com July 31 Creative Office Summit Los Angeles Bisnow www.bisnow.com To view the complete conference calendar, visit The Marketplace section of REAlert.com

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MARKET SPOTLIGHT Manhattan Hotels  JLL projects that sales will soar this year to $2.8 billion, from $1.8 billion in 2013.  Starwood Capital has fielded unsolicited bids for the 114-room Baccarat Hotel. The offers are in the vicinity of $2 million/room, or $228 million.  Heavy construction will boost the number of rooms by almost 17%, to 98,408, by yearend 2016. But the increased supply isn’t spooking buyers, who are focusing on the market’s high average occupancy rate and revenue per room. On the Market Hit No. of Estimated Value Property Seller Market Rooms ($Mil.) (Per Rm.) Broker Hudson Hotel Morgans Hotel Group (Pending) 866 $440 $508 (Not yet selected) Sofitel Hotel Whitehall Street, Accor, GEM April 398 300 754 Eastdil Secured Holiday Inn Downtown McSam Hotel, Yiduo Investment May 493 225 456 CBRE Fairfield Inn & Suites Midtown OTO Development March 239 125 523 Eastdil Secured Comfort Inn Manhattan (Unidentified) March 132 55 417 Cushman & Wakefield Recent Deals No. of Sales Price Property Buyer Closed Rooms ($Mil.) (Per Rm.) Broker Standard High Line Standard International February 330 $400 $1,212 Eastdil Secured Novotel Hotel Millennium & Copthorne Hotels June 480 266 554 (None) InterContinental N.Y. Barclay (80% stake) Constellation Hotels February 685 300 438 JLL Mondrian Soho Sapir Organization, Gerard Guez June 270 205 759 (None) Courtyard Times Square West Carey Watermark Investors May 224 95 424 (None) Hilton Garden Inn Midtown East Hersha Hospitality June 205 85 416 (None) Hotel 373 CPMC Holdings May 70 37 529 Solid Rock Advisors Note: For the deal involving a stake, the sales price and number of rooms reflect the full value of the property. July 9, 2014 Real Estate 12 ALERT

THE GRAPEVINE a staffer at its New York headquarters. He reports to Jeffrey Reder, senior vice Janet Souk started in San Francisco last president of private real estate for the ... From Page 1 week as a director and project manager, Plymouth Meeting, Pa., firm. Macklin sourcing deals in the Bay Area. Souk previous worked at McCarthy Cook & Co. last month as vice president of asset previously worked on acquisitions and and Wells Fargo. CenterSquare is the real management. He will primarily work on project management for Hines. Paul estate investment-management subsid- the Bluerock Residential Growth REIT, Apostolakis started two weeks ago in iary of BNY Mellon. Executive search firm which acquires apartment properties. Manhattan as an associate and project RETS Associates arranged the hiring. Kaufman previously was a managing manager. He was previously an analyst director and head of asset management at Peterson Cos. in Fairfax, Va. Synapse, Multi-family shop Wolff Co. is looking at Gaia Real Estate Investment in New formed in 2011 by former Lehman to hire a chief financial officer at its York for about a year. Before that, he Brothers executive Al Picallo, focuses on Scottsdale, Ariz., headquarters. The was a vice president at AREA Property development and redevelopment plays. recruit would work on multiple invest- for just over six years. ment funds, reporting to chief operat- Apartment specialist Jeffrey Haag ing officerJay Petkunas. BCGI American Word is that retail specialist Gary signed on with HFF in Denver last Real Estate of New York is conducting Saykaly has been talking with both week as an associate director focused the search. buy-side shops and brokerage firms on multi-family investment sales. He following his May departure from moved over from JLL, which he joined Developer Live Oak Gottesman has Cushman & Wakefield. He was a senior in September after a stint atCushman added a vice president at its Austin director at the brokerage, where he led & Wakefield. He previously worked headquarters. Marcus Segui started this retail investment sales in the Southeast, for Denver developer St. Charles Town month, working on development deals except Florida, for the last three years. Co. and as a commercial MBS analyst and property acquisitions. He spent Previously, he was a managing partner at Clayton Services, also of Denver. At the past two years working for Grupo at BridgePointe Advisors and predeces- HFF, he reports to senior managing Acero in Colombia. Before that, he was sor NewBridge Retail Advisors, both of director Eric Tupler. an associate vice president at New York Atlanta, and spent nine years at CBRE. fund operator O’Connor Capital. Live Todd Macklin joined CenterSquare Oak, which makes office, industrial and Synapse Capital has hired a former Hines Investment last month as an acquisi- retail investments, is led by chief execu- executive in San Francisco and added tions associate in Newport Beach, Calif. tive Rob Golding.

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