October 2014 – Briefs/Sales & Development

Select Income, Cole Corporate Income Trust to Merge

The list of 2014’s REIT M&As continues to grow as Select Income REIT announces that it has signed on to acquire Cole Corporate Income Trust Inc. in a $3.1 billion merger. Select Income will walk away with an 87-property portfolio of net-leased office and industrial assets totaling approximately 18.3 million square feet of 100 percent leased space. When all is said and done, excluding a 2.2 million-square-foot medical office building portfolio to be sold to Senior Housing Properties Trust for $539 million, the total merged portfolio will consist of 114 properties encompassing 42.1 million square feet in 35 states (plus land in Hawaii), with a total occupancy level of 98 percent.

Health Care REIT to Acquire HealthLease, Partner with Mainstreet Property Group

In a multi-pronged deal that could eventually reach $2.3 billion, Health Care REIT Inc. has agreed to acquire Toronto-based HealthLease Properties REIT in an all-cash transaction for $950 million and begin a partnership with Mainstreet Property Group for $369 million to expand its seniors housing offerings. The HealthLease portfolio includes 53 high-quality seniors housing, post-acute care and long-term care facilities managed under long-term triple-net-lease agreements. The partnership with Mainstreet, the external management company of HealthLease and the largest developer of seniors housing and post-acute facilities in the U.S., includes an agreement to buy 17 Next Generation communities. The communities each feature 70 post-acute beds and 30 assisted-living beds. A second agreement with Mainstreet gives Health Care REIT the rights to buy 45 additional Next Generation projects in the development pipeline for about $1 billion.

Jamestown Grabs 297 KSF Office in San Francisco

Jamestown is looking to capitalize on the continued strength of the San Francisco office market by purchasing a 297,620-square-foot complex in the North Waterfront submarket. Known as Waterfront Plaza, the four-building asset is located along the Embarcadero, and is bounded by Bay Street to the north, Kearny Street to the west and Chestnut Street to the south. LaSalle Investment Management was the seller. At the time of the sale, the buildings were 92 percent occupied. There are 40 tenants, the largest of which include Giant Creative Strategy, Comcast of California Inc., Advance Magazine Publishers, HQ Global, Weisscom Partners and Andre-Boudin. Waterfront Plaza is dog friendly, and Jamestown plans to add more tenant amenities.

Related, Renard JV to Develop New FBI Headquarters

Related Cos. and Renard Development Co. have formed a partnership to develop a new headquarters for the FBI in Greenbelt, Md. Greenbelt Station is a “green tape”/priority-status project with in-place approvals. Its size and close proximity to Metro and MARC transport will allow for true transit-oriented development. As for the old FBI digs at 1000 Pennsylvania Ave., Related is pitching its expertise in a redevelopment play.

Waterton, Clal Acquire Stamford M-F for $121M

A joint venture between Waterton Associates and Clal Insurance has acquired 75 Tresser, a 344-unit apartment community in downtown Stamford, Conn. Waterton will retain a 51 percent stake, while Clal will own the remaining 49 percent. Waterton will manage the asset following the initial lease-up. The four-story tower contains 90 percent market-rate and 10 percent affordable units. There is 5,500 square feet of retail space and a two-story parking lot. Amenities include a resident’s lounge, a 5,000-square-foot fitness center, pools, two courtyards, a private screening room, meeting/dining rooms, a catering kitchen and a business center. Bozzuto Management is currently handling the initial lease-up.

KBS REIT II Sells Palm Beach Office Tower for $150M

KBS Real Estate Investment Trust II has sold CityPlace Tower, an 18-story, 295,000-square-foot Class A office building in West Palm Beach, Fla., for $150 million. The REIT acquired the asset in April 2011 for $126.5 million. Developed jointly by the Related Cos. and Crocker Partners L.L.C., the tower was designed by Elkus/Manfredi Architects and is part of the New Urbanist-style CityPlace, an approximately 600,000-square-foot lifestyle center anchored by Macy’s, Muvico Parisian 20 &IMAX, LA Fitness and Publix. In April, the asset, which is managed and leased by JLL, won a TOBY Award from the Building Owners and Managers Association of Fort Lauderdale/Palm Beaches.

Hines Acquires 400 KSF Chesapeake Plaza in Fort Worth

There has been a small hole in Hines’ vast Texas portfolio—until now. In a deal with Chesapeake Energy Corp., the international real estate firm just acquired the 410,000-square-foot Chesapeake Plaza office building, giving the Houston-based real estate giant one property in Fort Worth. Hines acquired Chesapeake Plaza on behalf of the Hines US Office Value Added Venture III. Neither Hines nor Chesapeake is talking dollar figures, but the property traded for $104 million when Chesapeake snapped it up back in 2008.

Colliers’ Cooke Team Brokers $168.5M Phoenix M-F Sale

The Cooke Multifamily Investments Team at Colliers International has completed the largest multi-family portfolio sale in Phoenix year-to-date, paying $168.5 million for the 2,759 units. Scottsdale’s P.B. Bell partnered with New York’s Stonecutter to purchase the Class A and Class B value-add metro Phoenix portfolio from Standard Phoenix Fund of Arcadia, Calif. This marked the second time the Cooke team sold the seven assets—the first time was part of a 12-property portfolio that traded for $427.5 million in 2007. That is still the largest multi-family deal ever closed in Phoenix.