Blackstone is no stranger to huge deals, and its latest transaction makes it the owner of 3.5 million square feet of industrial property in the United Kingdom. Prologis Inc. sold the 13-property portfolio for an aggregate $335 million.

“We were pleased with the amount of interest this portfolio garnered as the combination of quality assets and lease term appealed to multiple investors,” Philip Dunne, president of Prologis Europe, said. “We have sold this portfolio as it no longer fit within our investment strategy, and offered us the ability to redeploy our capital.”

The portfolio comprises 13 properties located in England’s Midlands and Yorkshire. The properties are 100 percent leased with an average unexpired lease term that exceeds nine years.

Blackstone has been picking up large parcels of property in multiple sectors of late. In early January, the firm — in a partnership with DDR Corp. — spent $1.4 billion on a 47-property retail portfolio across 20 states. In December, Blackstone purchased 36 shopping centers from Equity One Inc. for $473 million, including the assumption of $177.4 million in debt. In October of last year, the firm purchased $1.1 billion of office assets from Duke Realty Corp., netting it 10.1 million square feet of property across 82 buildings.

The U.K. industrial market is similar to its Stateside counterpart, ending the year on a mixed note as events in Europe threaten to erode the confidence that rose toward the end of 2011. According to a fourth-quarter report by services firm Cushman & Wakefield Inc., manufacturing surveys at year’s end pointed to improved performance in December, but the strong showing didn’t erase the weaker outturns for October and November – when many producers reported their worst quarters since the middle of 2009.

Mesa West Capital looked at the Hyatt Regency San Francisco’s impressive performance, its increasingly strong market and its solid ownership and decided to put its money where its mouth is. The portfolio lender has provided a partnership involving affiliates of Dune Real Estate Partners L.P. and DiNapoli Capital Partners L.L.C. with a $130 million first-mortgage loan for the refinancing of the 802-room hotel in downtown San Francisco.

“In the context of the hotel world, definitely lenders are warming up to the San Francisco hotel market because it’s arguably, outside of New York, the strongest hotel market in the United States,” Thomas E. Callahan, co-president & CEO-West, with PKF Consulting USA, told Commercial Property Executive.

Dune and DiNapoli snapped up the Hyatt Regency San Francisco from a subsidiary of Strategic Hotel Capital L.L.C. in 2007, after which point the team initiated a major renovation program at the 19-story property. Built in 1973 along the waterfront at 5 Embarcadero Center, the lodging destination sits in the bustling Financial District and features 67,000 square feet of function space, as well as a fitness center, restaurant and lounge.

As Ronnie Gul, principal with Mesa West, noted in a press release on the refinancing deal, the Hyatt Regency San Francisco is “outperforming the market in both rate and occupancy.” It’s an impressive achievement given the enviable strength of the city’s hotel market. The lending community may not be as keen on the hospitality sector as it is on multi-family, however, there are always exceptions and San Francisco’s hotel market is one of them.

“Room rates and RevPAR are extremely high,” Callahan said. “Most hotels’ occupancies are in excess of 80 percent, room rates of most hotels increased 14 to 15 percent in 2011 over 2010, and most people are forecasting room rates to increase at 8 to 10 percent this year.”

Furthermore, he added, there is no new construction on the horizon in San Francisco, as opposed to New York, where a fair number of new rooms are scheduled to come online.

The San Francisco hotel market’s positive fundamentals and strength are the keys to opening the door to financing in the current environment. “The truth is, of course, most lenders aren’t really excited about hotels per se, but if you are a lender looking to lend money on hotels, San Francisco is perceived as one of the best markets you can be in.”

Continuing the trend of a high transaction volume in the Texas markets, Core Real Estate and BayNorth Capital Inc. have sold The Plaza at Enclave to an affiliate of Azrieli Group, a real estate development and investment company located in Tel Aviv. Holliday Fenoglio Fowler L.P. marketed the property on behalf of the sellers and arranged financing for the buyer through Cornerstone Real Estate Advisers, an investment subsidiary of MassMutual.

Dan Miller, a senior managing director with HFF, called The Plaza “one of the finest office buildings, if not the finest, in West Houston,” after the transaction closed. The building was completed in 2008 and is currently 100 percent leased to Dow Chemical Corp. as its regional headquarters as well as to Ridgewood Energy, Petrofac and HRT America. The six-story, 344,295-square-foot Class A property is situated on eight acres of property and has LEED Gold certification.

Houston, which weathered the economic downturn better than most other metro areas in the United States, has been in the news quite a bit recently. Just yesterday, the city saw the signing of a 4.2 million-square-foot leasing-and-management contract signed by CBRE Group Inc. for the five buildings in the Houston Center complex. Last week, Cassidy Turley picked up a 2.5 million-square-foot management contract in Houston and Dallas. And, after signing a 358,100-square-foot lease at 1 Houston Center in late January, plastics and chemical manufacturer LyondellBasell saw the building renamed for the firm.

According to a fourth-quarter 2011 report by services firm Cushman & Wakefield Inc., Houston turned a corner last year by regaining all jobs lost in the recession. The office market, specifically, mirrored the overall economic climate in the city, with falling vacancy rates citywide and an increase in rent levels. “The outlook for Houston’s office market will closely follow the path of job creation in the city,” the report noted. “With a strong forecast of around 3 percent job growth in 2012, absorption is likely to be again be positive in 2012.”

Construction lenders raised concerns about the possibility of future overbuilding in key multi-family markets, at the Mortgage Bankers Association’s Commercial Real Estate Finance / Multi-Family Housing Convention 2012, which opened yesterday in Atlanta. The financiers were speaking on the panel titled “Lending for Bank Portfolios—Easy Does it or Rocky Road?”

Ken Broussard, regional executive of the income property group of KeyBank, said the bank has had conversations questioning whether there is “too much development or structures that can cause a bit of a bubble” in multi-family. “No one is saying ‘yes, probably,’ but at least there is a discussion,” he said, “because across the country all of our regions are seeing a lot of requests on new construction in multi-family.” Broussard said 60 to 62 percent of the group’s new originations in 2011 were in the multi-family sector, primarily in permanent debt.

In particular, Washington, D.C. was singled out by the panelists as a market to be cautious about. Broussard said that the multi-family markets in Washington, D.C. and Baltimore are still holding up pretty well, but that there is much discussion about possibility of overbuilding in those markets. “We are seeing a ton of construction in Washington, D.C. and New York. The gateway cities are huge right now,” agreed Pete Matthews Jr., senior vice president of M&T Bank.

Marc McAndrew, executive vice president of PNC Real Estate, said there could be too much supply in both D.C. and Seattle if all the projects that are discussed are brought to fruition. While he noted that all markets are submarket specific, McAndrew added that a close eye should be kept on Texas, where it is easy to buy land to develop real estate. The supply and demand balance of multi-family housing is currently “pretty good” in Texas, but could disappear pretty quickly, he said.

While the lenders expressed concerns, they also said they intended to maintain, if not increase, their level of lending activity this year, whether of permanent or construction debt. “A lot of 2011 for many of us was continuing to cope with the residual of the financial crisis and the recession, but we are looking forward to getting some new loan growth,” said moderator Diana Reid, executive vice president of PNC Real Estate.

Matthews said M&T Bank will be focused on serving its customers and their liquidity needs this year. “We are taking advantage relative to 2011 of getting some new opportunities with different partners,” he said. He said the bank will provide construction capital and bridge financing, in “the right structures with the right players.”

In terms of lending to the different real estate sectors, Matthews said M&T bank is making some retail construction as well as refinance loans. Development in the retail sector, he said, is so difficult that there is no great oversupply. The office market is “lukewarm,” but the bank would lend in the right situation, while industrial properties are generally steady. M&T has also started providing capital for condominiums in New York City again, he noted.

McAndrew said PNC Real Estate is targeting $8 billion to $9 billion in new product this year, spread across construction, REIT and permanent financing.

As to favorite markets, the panelists unanimously agreed that New York City was the most desirable market in which to provide debt capital. It is difficult to overbuild in New York City, said McAndrew. In addition to Pittsburg, McAndrew said he also favors to certain multi-family submarkets in Washington, D.C.

Image courtesy Flickr user laverrue

It’s good to buy when opportunity presents itself and, capitalizing on one of those opportunities, a consortium including affiliates of Starwood Capital Group, the LeFrak Organization and Invesco Ltd. have purchased a beachfront, mixed-use property in Miami’s South Beach, including a hotel formerly known as the Gansevoort.

While the terms of the deal were not disclosed, the partners announced a $100 million renovation project for the property, which already includes 334 hotel rooms, 255 condo units across 294,000 square feet and 90,000 square feet of retail space. The hotel rooms will be renamed The Perry South Beach until its re-launch in 2013, when a new brand will be unveiled after the renovation. The partners also anticipate improvements to the condos, which will put the units on the market in late 2012.

Barry Sternlicht, chairman & CEO of Starwood, said that “global interest in the Miami marketplace is close to surpassing an all-time high,” noting that his firm has the opportunity to “create an outstanding destination resort and residences in this outstanding city.”

According to a report by Marcus & Millichap Real Estate Services Inc., Miami saw a 9 percent increase in demand for hotel rooms year-to-date in August of 2011, as compared to the same period a year prior. Additionally, the sector as a whole performed well into the fourth quarter of last year, with Florida as a whole seeing occupancy rise by 4 percent on a 6.7 percent jump in room demand. And, to Sternlicht’s point, not all of the spending has been from domestic sources: “A weak dollar relative to the euro has also boosted international travel to leisure markets such as Miami and Orlando,” the report noted.

As Commercial Property Executive previously reported, a Jones Lang LaSalle Inc. report sees hotel investment volume to hold steady in 2012, reaching the same $30 billion range as last year.

The property was sold by entities controlled by Credit Suisse, which had acquired it through foreclosure in 2010. Jones Lang LaSalle Inc.’s hotels group brokered the transaction for the financial-services company.

SL Green Realty Corp. may be New York City’s largest office landlord, but the REIT hardly has tunnel vision when it comes to property types. In two separate joint ventures, SL Green has completed the acquisition of eight retail and residential assets in Manhattan’s Midtown and Upper East Side submarkets.  The REIT had announced plans for the $416 million purchase of the properties in October of last year.

In a partnership with Jeff Sutton, SL Green snapped up the 65,000-square-foot retail building at 724 Fifth Ave., relying on a $120 million, five-year mortgage loan to make the purchase. The property counts Prada as its lead tenant; the Italian luxury goods retailer leases 20,700 square feet of retail space on various levels, in addition to a boutique office space.

SL Green also just claimed 402 residential units and even more retail space for $193 million through its joint-venture purchase with Stonehenge Partners. The group of assets includes the 260-unit apartment building at 400 E. 57th St., which also features 16,000 square feet of ground-level retail, and 400 E. 58th St., a 125-unit residential tower with roughly 3,300 square feet of ground-level retail space. SL Green secured seven-year mortgage financings totaling $100 million to facilitate the acquisition.

Interests in the four-story retail building at 752 Madison Avenue and 19 & 21 E. 65th St., two mixed-use properties encompassing 17 multi-family units and 9,000 square feet of retail space, were also part of the SL Green-Stonehenge joint venture deal. And two commercial properties, the 6,000-square-foot mixed-use building at 762 Madison Ave. and the five-story commercial building at 44 W. 55th St., round out the group.

SL Green’s penchant for joint venture pursuits — both acquisitions and dispositions — continues, as indicated during the REIT’s fourth-quarter earnings conference call. “On both sides of the table, we were active, we continue to be so in 2012, notably 10 East 53rd Street, which was not discussed in December, is our latest acquisition,” Marc Holliday, CEO of SL Green, said. “It fits right in with our core business line of acquiring, repositioning and redeveloping prime New York midtown Manhattan assets in prime location. And in that case, we subsequently brought in a foreign and institutional equity joint venture partner to both leverage our equity, enhance our returns and increase our opportunity set.”

It’s seen a flurry of activity in just a few months of its existence. Yesterday, Griffin-American Healthcare REIT II picked up $166.5 million worth of commercial real estate from the partnership of Westport Capital Partners and Reichmann International Development Co. in the form of ten skilled-nursing facilities across the Southwest.

Affiliates of Westport will continue to operate the facilities, and entered into a master lease with an initial term of 15 years with Griffin-American after the deal was struck. The portfolio features 1,364 beds in the ten facilities.

Just two weeks ago, Griffin-American spent $174 million on 11 facilities – ten skilled-nursing centers and one medical-office building – that totaled approximately 454,000 square feet. “Demand for healthcare services will only increase in the future,” Griffin-American CEO & president Danny Prosky told Commercial Property Executive. “As Baby Boomers continue to turn 65 over the next 18 years, and along with the general aging of the population, we’re bullish on growth and demand for the sector.”

In early December, amid its spinoff from former owner Grubb & Ellis Co., the healthcare REIT purchased an eight-property medical-office portfolio for $112 million. After that transaction, Prosky mentioned that, under his leadership, Griffin-American would be “aggressively acquiring quality, income-generating healthcare properties throughout the country and expects to own a portfolio of 73 buildings valued at nearly $710 million … in the next few months.”

Westport saw the sale as a win for its balance sheet. Russel Bernard, managing principal with the firm, noted that Westport grew the company’s operating income by a double-digit compounded growth rate for the first time since 2007. “The team was able to achieve this performance by repositioning the assts, driving improved occupancy and concentrating on census mix,” he said. “We are very pleased with the outcome of this transaction.”

Westport and RIDC have held a majority interest in the Westport portfolio since 2007.

CB Richard Ellis Realty Trust has expanded its presence in Florida with the purchase of Sabal Pavilion, a 120,500-square-foot office building in Tampa. The fully leased Class A property last changed hands in 2006, when KBS Real Estate Investment Trust snapped it up for just under $24.3 million.

CBRE Realty Trust is not disclosing the purchase price of the asset; however, the transaction did include the assumption of debt.

Carrying the address of 3620 Queen Palm Dr., Sabal Pavilion first opened its doors in 1998 within Sabal Park, a master-planned business complex in the East Tampa submarket. Since 1999, the building has been home to Ford Motor Credit Co., which recommitted to the location last July by extending its lease for an additional 10 years beyond the previously scheduled expiration of 2017.

CBRE Realty Trust competed with other investors who were eager to snap up the asset, and for good reason. “Some of those criteria that were particularly appealing in this investment were the length of the remaining lease term, the credit of the tenant, an appealing initial yield and the nature of the function of the property to our tenant,” Philip L. Kianka, executive vice president and COO of CBRE Realty Trust, told Commercial Property Executive.

With the addition of Sabal Pavilion to its holdings, CBRE Realty Trust now owns 14 assets in Florida. While the Sunshine State is the second largest market in CBRE Realty Trust’s portfolio, it is not the only location on the firm’s radar right now. “We have found some very attractive acquisitions in Florida; however, our focus is not on a particular market but rather our commitment to our investment philosophy of finding the right acquisitions that fit our investment criteria,” Kianka said. “We will continue to look at other investments and continue to diversify our portfolio where we believe best serves our shareholders.”

Capitalizing on what will likely be a strong year for retail, Clarion Partners has acquired a 187,000-square-foot shopping center in Covington, Wash., for $31 million. The purchase was made on behalf of one of the firm’s clients.

“Covington is a highly desirable, family-oriented town with strong employment and household growth,” Stephen Latimer, a managing director at Clarion, said. “With its outstanding list of tenants and attractive location, the center is well positioned to take advantage of the expanding retail sales and improving economic fundamentals anticipated for the area.”

According to a third-quarter 2011 report by services firm Marcus & Millichap Real Estate Services Inc., Latimer’s sentiments are correct. Leasing velocity has been increasing rapidly in the entire Seattle-Tacoma market, with core areas leading the way but with suburban locations also seeing the benefits of growth. “In the past 12 months,” the report noted, “institutional and high-net-worth buyers resumed multi-tenant acquisitions, targeted core-anchored centers.” The area’s addition of 48,000 jobs through 2011 – led by the tech sector – increased payrolls by an average of 2.9 percent.

The shopping center is 98 percent leased, and Home Depot serves as the anchor tenant. Other tenants include Bank of America, Verizon Wireless, UPS, International House of Pancakes, and Remax, as well as numerous local businesses. Annual income averages over $90,000 within five miles of the property. In addition to the center, Covington is home to a number of national retailers, and acts as a retail hub for the surrounding region. New construction in the area is generally limited by high design standards and a lack of developable land parcels.

Omninet Capital has closed on the purchase of Commerce Office Park, a 285,368-square-foot institutional-quality office campus at South Eastern and East Slauson avenues in Commerce, Calif., Omninet, which is headquartered in Beverly Hills., Calif., announced Monday. A dollar amount was not released.

The five-building Class A office property is situated on six separate parcels in the Los Angeles Basin, giving the buyer the option of selling off the buildings individually in the future.

Dan Vittone, senior vice president, and Alan Pekarcik, executive vice president, of Voit Real Estate Services’ Irvine office, represented both Omninet and the seller, Thompson National Properties, on behalf of the tenant-in-common owners of record, in the sale. Kevin Shannon, Scott Schumacher and Ken White of CBRE Group Inc. and Tom Sheets of Cushman & Wakefield Inc. also represented the seller.

The park has access to several major Los Angeles freeways, including the Long Beach I-710, Santa Ana I-5, SR-60, San Gabriel I-605 and Century I-105.

Commerce Office Park is 90 percent leased, predominantly to departments of Los Angeles County and the State of California, said Vittone, who added, “This investment offers the buyer the ability to increase rents over time.” Michael Daniel, a partner at Omninet, said that with this acquisition, the company ends 2011 with more than $200 million in commercial acquisitions.

Los Angeles’ Class A office market was sluggish in the fourth quarter, according to a report by Cresa Los Angeles. Leasing activity was slow, and the overall availability rate of 19.1 percent remained near its 2010 peak. The average for Class A space was $32.16.

The technology sector appears to be starting to expand, the report commented, but most other industries “continue to find ways to do more with less … office space.” Most submarkets reportedly are struggling with high vacancy and soft demand, and lackluster leasing is expected to continue for most of this year.