August – Briefs/Finance

3 min read

$200M Equity Investment Leads to 972 KSF Purchase; Swig, Silverpeak Refinance 900 KSF Manhattan Asset; Savanna Sells $158M Senior Note; Penzance, Invesco Land $94M Construction Financing; Prudential Closes First CRE Loan in U.K.; Lexington Realty Trust Lands $55M for Baltimore Tower; California Landmark Group to Invest $75M in M-F; HFF Arranges $85M for Houstonian Hotel.

$200M Equity Investment Leads to 972 KSF Purchase

Aided by a $200 million equity investment from private investment firm TPG, Parkway Properties Inc. has completed its acquisition of Hearst Tower, a 46-story, 972,000-square-foot office asset in downtown Charlotte, N.C. The transaction totaled $250 million.

At $257 per square foot, the deal represents a significant discount to replacement cost. The 10-year-old building is 94 percent leased and includes a trading floor used by Bank of America, a 1,400-space parking garage and retail space. There are no material expirations until 2017, and Bank of America is expected to enter into a new lease for 322,000 square feet at the base of the building through March 2022.

The property should generate a cash net operating income of about $17.5 million in the first year of ownership. Though the acquisition was financed with funding from TPG, Parkway plans to obtain further financing on the property to use as capital for future investments.

Swig, Silverpeak Refinance 900 KSF Manhattan Asset

Swig Equities and Silverpeak Real Estate Partners have successfully closed on the refinancing of 110 William St., a 900,000-square-foot office building located in Manhattan’s Financial District. The loan totaled $161.5 million and was led by a $141.5 million first mortgage provided by UBS Real Estate Securities Inc. and Barclay Capital, which should be securitized in an upcoming CMBS transaction. In addition, Pearlmark Real Estate Partners L.L.C. provided a $20 million mezzanine loan.

Savanna Sells $158M Senior Note

Savanna has wrapped up the sale of a majority interest in a $157.7 million note collateralized by a 1.4 million-square-foot office portfolio located in suburban Washington, D.C. The company sold the $81 million senior note piece to an account managed by Apollo Global Real Estate and will retain the remaining $76.7 million junior note. The portfolio is owned by a joint venture involving Monday Properties and Goldman Sachs’ U.S. Real Estate Opportunities Fund. It encompasses three trophy office buildings in Arlington, Va.’s Rosslyn submarket.

Penzance, Invesco Land $94M Construction Financing

Penzance and Invesco Real Estate have gotten their hands on $94 million in construction financing for 3001-3003 Washington Blvd., a 280,000-square-foot office development in suburban Washington, D.C. Jones Lang LaSalle Inc.’s capital markets group obtained the non-recourse funding through Sun Trust Bank. The two-building complex will sprout up in the Clarendon submarket of Arlington, Va.’s Rosslyn/Ballston corridor. Upon completion, the asset will feature a 10-story, 200,000-square-foot tower linked to an eight-story, 80,000-square-foot building. The property is designed to quality for LEED Silver certification and will include 28,000 square feet of retail space.

Prudential Closes First CRE Loan in U.K.

Prudential Mortgage Capital Co. has closed a $108 million commercial real estate loan in the United Kingdom. The loan is secured by a portfolio of U.K. properties comprising four multi-tenanted office properties in central London and a grocery-anchored retail property in Bath, a World Heritage Site in southwestern England with a population of about 80,000. The 11-year financing is Prudential’s first secured CRE debt transaction in Europe since the opening of its London advisors office in January.

Lexington Realty Trust Lands $55M for Baltimore Tower

Lexington Realty Trust has financed the Transamerica Tower in Baltimore with a $55 million secured mortgage loan. The loan bears interest at a fixed rate of 4.32 percent and matures in 2023. The 476,000-square-foot tower was 95 percent leased when the transaction was announced.

California Landmark Group to Invest $75M in M-F

California Landmark Group has announced a plan to invest more than $75 million into urban infill, multi-family development over the next 12 months in Southern California. Projects will range from 50 to 500 units. The firm will acquire both entitled and untitled properties in the five-county region surrounding Los Angeles. In the last six months, California Landmark Group has acquired a three-building, 122-unit asset in the San Fernando Valley and completed and sold a 21-unit West Los Angeles condo project.

HFF Arranges $85M for Houstonian Hotel

Holliday Fenoglio Fowler L.P. has secured an $85 million refinancing for The Houstonian Hotel, Club & Spa on behalf of The Redstone Cos. Situated on 18.3 acres in Houston, the urban resort has 289 guest rooms that were renovated in 2003. Capital was provided by AXA Equitable Life Insurance Co. through its advisor, Quadrant Real Estate Advisors.

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