the Editors of Commercial Property Executive
Lehman to Spin Off Commercial RE Assets
Lehman Brothers Holdings Inc., after posting its largest quarterly loss in its 158-year company history–some $3.9 billion, or $5.92 a share–has unveiled plans to spin most of its commercial real estate assets off into a new and separate public company. The move is part of a larger effort by the beleaguered investment bank to turn its fortunes around that also includes selling most of the firm’s asset-management unit and cutting its dividend to five cents a share from 68 cents a share. The plan to spin off commercial real estate to Lehman shareholders will involve roughly $25 billion to $30…
Federal Realty Expands into South Florida, Acquires Shopping Center
Working toward expanding its presence in South Florida, Rockville, Md.-based Federal Realty Investment Trust has acquired Courtyard Shops, a 127,000-square-foot Publix-anchored neighborhood shopping center located in Palm Beach County, from an unnamed institutional owner for $37.9 million. In the upscale area of Wellington, Fla., the shopping center’s location in an affluent trade area made it an attractive investment while also meeting Federal Realty’s goal of expanding into South Florida, according to information from Federal Realty. Courtyard Shops (pictured) was built in 1990 and expanded in 1998 and is anchored by a 49,000-square-foot Publix supermarket. Publix, the largest and fastest-growing employee-owned…
Parkway Sells South Carolina Office for $47M
Parkway Properties has wrapped up the $47.5 million disposition of Capitol Center, a 460,000-square-foot office building in Columbia, S.C. The Jackson, Miss.-based company, which acquired the 25-story tower in 1999 for $38 million, pocketed net proceeds totaling $45.8 million, which allowed for the prepayment of an $18.1 million first mortgage, as well as the paying down of debt under the company’s credit facility. Located at 1201 Main St. in Columbia’s Central Business District, Capitol Center was originally developed in 1987. The property is home to a bevy of law firms, in addition to a range of other businesses including the…
CREIT Buys 8 Canadian Tire Properties for $137M
Canadian Real Estate Investment Trust (CREIT) has acquired a portfolio of eight retail properties from Canadian Tire for C$137.3 million. Canadian Tire has leased each of the eight properties back under 15-year triple-net leases at current market rental rates, with escalating contractual rents over the term. The properties have all been either significantly renovated or expanded within three years by Canadian Tire. The sale and leaseback form is somewhat atypical of Toronto-based CREIT’s acquisition patterns, according to Adam Paul, the company’s vice president for investments, who spoke with CPN today .The stores range from 54,000 to 130,000 square feet and…
CBRE Provides $60M in Financing for New Jersey Retail Center
Days after news emerged that Millbrook Properties had acquired the 445,200-square-foot Aviation Plaza retail property in Linden, N.J., in a 1031 exchange transaction, CB Richard Ellis Inc. has revealed it was the source behind the attainment of $60 million in financing for the transaction. Principal Real Estate Advisors provided the loan. Manhasset, N.Y.-based Millbrook snapped up the power center from BlackRock Realty Advisors, which came into possession of the property when it acquired SSR Realty for $325 million in 2004. SSR Realty Advisors paid $54.5 million for Aviation Plaza in 2003; Millbrook reportedly shelled out at total of over $90…
Hospitality Q&A: Perkins Coie’s Phil Gordon Says Room Buyers Have ‘Whip Hand’
September is the time when hotels negotiate rates with its corporate customers for the upcoming year, but hotel owners may feel a chill in the air that has nothing to do with a change in the weather.Business travelers typically pay higher room rates, spend more money at the hotel, and are a more dependable revenue base than leisure travelers. But, because of the economic downturn, corporations will likely spend less on business travel this year, and hotel owners will not be in a favorable bargaining position, because of lower occupancy and falling revenues.Phil Gordon, a partner in the hotel and…
Park Capital Commits Most of $1B to CRE Projects
Park Capital Group L.L.C., a Miami-based private equity firm, has announced that it intends to place at least $1 billion in investment funding in the next 12 months, primarily in commercial real estate and primarily in the United States. CEO Matthew Kleinsmith, who founded the company about two years ago, has owned businesses in several industries, including payment processing and factoring. It was through the latter that he developed a relationship with a large hedge fund. A long-time entrepreneur, Kleinsmith told CPN that his background has a lot to do with Park’s current push. Too many developers are “all singing…
Hartman REIT Closes $67M Loan, Plans Acquisitions
Houston-based Hartman Income REIT has completed a $67.6 million facility with an affiliate of J.P. Morgan with the dual intent of consolidating debt while taking advantage of a weakened real estate market for more acquisitions. “We are very gratified to have this transaction go through given the state of the current economic environment,” firm president Al Hartman (pictured) told CPN. “It is a testament to the solidity and stability of Hartman Income REIT to close on a transaction of this size.” The debt was structured by Tom Melody and Bernard Branca of CBRE | Melody on behalf of the commercial…
Philly Theater to Reopen as $95M Mixed-Use
ARCWheeler has unveiled plans to purchase, rehab and add an adjacent hotel to the 80-year-old Boyd Theatre in Downtown Philadelphia, all at an estimated price tag of $95 million. The seller of the property is current owner Live Nation, a major live events company and concert promoter. The project (pictured) will comprise a historic rehabilitation of the landmark theater, construction of a 250-room Kimpton Monaco Hotel on a parking lot adjacent to the theater, and development of two restaurants, one in the hotel and a cafe in the theater, an ARCWheeler spokesperson told CPN. ARCWheeler plans to apply for historic…
General Growth’s Debt Problems Unusual for REITs
Recently mall giant General Growth Properties took another few steps in dealing with its problematic debt, which totals about $18.4 billion coming due over the next three and a half years. One step was the paydown of $391 million in short-term debt. The other was another closing in a new loan facility, to the tune of $1.75 billion that Chicago-based General Growth is putting together, with Deustche Bank as the lead lender. Currently, that credit facility totals $1.41 billion. Most observers feel that General Growth will be able to overcome its debt problems in the long run, but also say…