the Editors of Commercial Property Executive
$1B Investment Vehicle to Target Florida M-F Market
Leading multi-family developer The Related Group has joined forces with real estate private equity firm Lubert-Adler to form a $1 billion investment vehicle focusing on the multi-family market in Florida, Related’s home state. The partners will acquire property and mortgages from third-party developers, owners and lenders. A bevy of real estate assets are up for consideration by the Related/Lubert-Adler investment instrument; everything from existing condominium properties to developable land will be targeted. Working in partnership with Lubert-Adler provides Related with the financial freedom to orchestrate deals on a grander scale. The decision to focus on Florida stems from the firms’…
Developers Diversified Clarifies Divestiture Plans
Contrary to a recent news report suggesting that Developers Diversified Realty Corp. has an unusually high number of retail properties on the chopping block, a spokesperson for the REIT told CPN that the approximately 37 assets currently available for disposition reflect “an ongoing culling of our portfolio” and dispositions in groups of one and two properties. The spokesperson also clarified that some of these properties have been on the market for over a year. Non-core assets for DDR, the spokesperson explained, include remote locations, where distance from other properties makes management and leasing less efficient, and fully-leased centers, especially smaller…
Hotel Construction Up, As Is Economic Uncertainty
The hotel construction pipeline reached a new milestone in 2007, according to Lodging Econometrics. But a record number of hotel rooms may be entering the U.S. market at a time of softening demand. The lodging real estate consulting firm, based in Portsmouth, N.H., said that the lodging construction pipeline stood at 5,438 projects, encompassing 718,387 guestrooms as of the fourth quarter of 2007, breaking the 700,000 barrier for the first time. The lion’s share of the projects are in the upscale tier, encompassing brands such as Courtyard by Marriott and Hilton Garden Inn; and the mid-scale, without food and beverage…
Capital Senior Living Terminates Hearthstone Deal
Capital Senior Living Corp., one of the country’s largest operators of senior living communities, has backed out of a deal announced in late December to acquire 32 purpose-built assisted living and dementia care facilities from Hearthstone Senior Services L.P. Initially, Capital Senior Living said the acquisition would increase its resident capacity by about 40 percent. However, after “due diligence and financial analysis,” Capital executives recommended that the company’s board of directors reject the deal because it would not “create demonstrable value” for the company, according to a company release. On Dec. 27, CPN reported that the agreement called for Capital…
GMH to Be Acquired in 2 Parts for $1.8B
Two deals have been struck that will leave GMH Communities Trust under new ownership. The Newtown Square, Pa.-based REIT will merge with American Campus Communities Inc. in a $1.4 billion deal after selling off its military housing division to the U.S. subsidiary of Balfour Beatty Plc for $350 million. The bulk of the money involved in the definitive agreement between specialty housing REIT GMH and Austin-headquartered ACC–which owns, develops and manages student housing properties across the United States–involves the buyer’s assumption of existing debt. ACC will take on responsibility for GMH’s $963 million in outstanding debt, leaving a remaining payment…
SCI Buys 1M SF of Properties in 3 States
SCI Real Estate Investments, a Los Angeles-based tenant-in-common sponsor, has acquired three new properties totaling about 1 million square feet.Each of the three are in different markets, all of which the buyer calls “robust”–Dallas, Greenville County, S.C., and Tempe, Ariz.In Dallas, the company acquired Estancia Townhomes, a 207-unit apartment building in North Dallas. The property features two-, three-, and four-bedroom units with two-car garages and gated entries.The South Carolina property is Verdae Village, a 241,500-square-foot grocery-anchored shopping center in Greenville. The property is located adjacent to Verdae Development, a 1,100-acre master-planned project currently under construction, and its tenants include Super…
Trio of Jones Lang LaSalle-Managed Manhattan Office Towers Get Green Commendation
Real estate services firm Jones Lang LaSalle has just revealed that three office buildings it manages in New York City have attained the Energy Star rating. The prominent properties–320 Park Ave (pictured)., 460 Park Ave. and 51 Madison Ave–account for a total of more than 2.5 million square feet. The U.S. Environmental Projection Agency created the Energy Star program in 1992 as a means of encouraging businesses and citizens alike to reign in spending through instituting energy efficient practices. Four years later, the U.S. Department of Energy joined forces with the EPA on the endeavor. Commercial office properties became eligible…
Reports: Vornado Plays Role in Macklowe Default Deal
Vornado Realty Trust, which owns some of the mezzanine debt on Macklowe Properties’ $7 billion debt on a portfolio of Manhattan trophy towers, may be playing the spoiler in a deal enabling Macklowe to fend off foreclosure.Developer Harry Macklowe was served with a notice of default Monday, according to a report by Jennifer Forsyth in the online edition of the Wall Street Journal. Forsyth reported that two sources close to the deal noted Vornado was the most vocal opponent of a proposed bailout plan.Citing an October federal filing, Forsyth reported that Vornado had bought a 42 percent interest in two…
Grubb & Ellis Chief Economist Predicts 40 Percent Drop in CRE Transaction Volume
In an exclusive interview, Grubb & Ellis chief economist Bob Bach told CPN that his firm is predicting a 40 percent decline in commercial real estate transaction volume this year compared to 2007. A big reason for the prediction is a survey of lending officers at large banks, done by the Federal Reserve and released in January. The survey notes that 80.3 percent of such loan officers are tightening their lending requirements, a figure unequaled in nearly 20 years. The credit crunch “really does show up in fourth-quarter sales being down,” Bach said. According to Real Capital Analytics’ figures, the…
Interstate, FFC Capital Acquire 22 Exel Inns
Interstate Hotels & Resorts and FFC Capital Corp. have formed a joint venture, acquired 22 Exel Inns, and converted each to various Wyndham Worldwide brands.A hotel operator that has undertaken a strategic plan to grow by developing a portfolio of properties owned individually and through joint ventures, Interstate has taken a 10 percent equity position in the 22 properties. The Interstate equity includes the company’s share of capital improvements for re-branding, re-imaging, and repositioning the hotels. Interstate will also manage the properties. “We have been using this ownership and joint venture strategy since 2005,” Carrie McIntyre, senior vice president and…