Plans for a $900 million mixed-use project at Denver International Airport (DIA), the 10th busiest airport in the world, take on a greater sense of reality as officials unveil renowned architect Santiago Calatrava’s conceptual design for the South Terminal Redevelopment Program.

The project will be constructed in phases, with the first stage carrying a development price tag of $650 million. Phase I will consist of a 500-room hotel to be designed by architectural firm Gensler, approximately 40,000 square feet of meeting space. “We think there will be great demand for the hotel,” John Ackerman, Acting Deputy Manager of Revenue and Business Development,” told CPE. “The nearest hotel to the terminal is about five to six miles away and the next nearest hotel is about 10 miles away, so we will have the only hotel situated directly on the airport property. And, with a strategic location in the middle of the country there will be robust demand from companies planning to fly people in and out for day-long meetings.”

In addition to the hotel, there will be a plaza featuring approximately 38,000 square feet of retail and concession offerings. “We want a blend of restaurants and amenities for our customers,” Ackerman said. “We’re in the early stages of looking at a mix of offerings to complement what we already have in the terminal. The project’s mixture of uses will be a regional draw to people to experience the plaza retail offerings and the hotel.” The first phase will also produce a rail bridge and a terminal train station that will ultimately be incorporated into commuter rail service between the airport and Union Station in downtown Denver.

No date has been set for the commencement of Phase II of the South Terminal Redevelopment Program; however, should plans proceed to the second stage, the cost of the entire redevelopment endeavor will increase by $250 million for a final development cost of $900 million.

Financing for the program will be provided predominantly through General Airport Revenue Bonds to be repaid by airport revenues. Airport officials will forego usage of taxpayer dollars altogether.

Mortenson, Co. is on board as construction manager and contractor for DIA’s South Terminal Redevelopment Program. Completion of Phase I, which will result in the creation of over 6,000 jobs, is on schedule for 2016.

Courtesy Flickr Creative Commons user espensorvik

Hooters of America, Inc. has selected Colliers International to help spearhead an ambitious expansion agenda. The restaurant chain says it plans to increase its location count by at least 15 to 20 percent annually over the next several years.

Currently, Hooters has more than 455 locations worldwide, with restaurants in 29 countries on six continents.

“Hooters … plans to expand its footprint in all 29 of those markets,” Patrick Duffy of Colliers International told CPE. “In addition, Hooters has signed franchise agreements to enter Turkey, India and Japan as its first foray into those nations, and is starting to look for sites there. Hooters also has plans to enter other countries in which it does not currently have a presence.”

Duffy said there were several compelling reasons to expand at this time, including the fact that the costs of real estate is down substantially over what the company saw in 2004 to 2008.

“Now is an excellent time for tenants to negotiate long-term leases,” he said. “Existing Hooters restaurants have performed well through the global recession and the franchisees are confident that as the world economy improves, they will see stronger performance still.”

He added that it can be a challenge to explain the restaurant’s casual beach-theme concept to some people unfamiliar with the chain, but that that challenge can be overcome with education and collateral material showing what he called “the family and clean, fun atmosphere that Hooters provides. .. Hooters is one of the world’s most recognized brands and offers customers a place to unwind, watch some sports, eat some comfort food and be served by a smart, attractive, personable, iconic ‘Hooters girl.’”

The restaurant’s ideal locations range between 3,000 and 5,000 square feet, with a flexible design concept that alllows for freestanding or in-line locations.

“The real estate requirement of a Hooters restaurant … works in many different venues,” Duffy said. “For example, Hooters recently opened a restaurant in Prague in a building that was constructed in the 1300s.”

The first Hooters opened in 1983 in Clearwater, Florida.

In Michigan, Southfield’s loss will be Detroit’s gain now that Blue Cross Blue Shield of Michigan has committed to relocating to the 5.5 million-square-foot mixed-use GM Renaissance Center. The nonprofit healthcare insurance carrier will occupy approximately 435,200 square feet of the complex’s 2.3 million square feet of office space, bringing the office segment’s occupancy level up to 90 percent.

Blue Cross will lease the space from General Motors, owner of the Renaissance Center since the company acquired it to serve as the company’s global headquarters in 1996. The complex, which recently underwent a sweeping $500 million renovation, encompasses a 1,300-room Marriott Hotel encircled by four 39-story office towers. A five-story podium beneath the five buildings houses 165,000 square feet of retail space. As a result of the recent upgrade, the property also features a five-story glass winter garden, a 1,100-seat food court and a suspended glass walkway connecting the four office facilities. It will share the tenant roster with a bevy of businesses including Deloitte, national law firm Dykema Gossett PLLC, Hewlett Packard, insurance broker and strategic risk advisor Marsh Inc. and Urban Science Applications Inc., which maintains its global headquarters at Renaissance Center.

In 2011, Blue Cross will commence a phased relocation of approximately 3,000 employees from its current digs about 15 miles away in a four-building complex in Southfield at 11 Mile Road, which the organization plans to sell. The move to Renaissance Center will allow Blue Cross to form a multi-structure Detroit campus, as it already occupies office space at 500 and 600 Lafayette Boulevard and 441 East Jefferson Avenue.

The Renaissance Center lease agreement has its pluses–and minuses. Blue Cross anticipates that it will, over the long-term, save about $30 million in real estate costs. However, as the company’s office needs decreased last year with the acceptance of voluntary separation packages by numerous employees, it will be occupying 400,000 square feet less than it occupies currently, thereby potentially leaving a sizeable and much dreaded office vacancy in Greater Detroit. While the area’s office vacancy rate is leveling off, according to a second quarter report by real estate services firm Grubb & Ellis Co., it is still at a staggeringly high 25.2 percent.

KBS Real Estate Investment Trust II has just expanded its portfolio by more than a million square feet. The REIT has closed on the purchase of the 1.3 million-square-foot, 60-story 300 North LaSalle office building in Chicago.

Located on the north bank of the Chicago River in the River North submarket, the property was completed in March 2009 and is currently 93 percent leased. Its tenants include law firm Kirkland & Ellis, L.L.P., which occupies 687,857 square feet and management consulting firm Boston Consulting Group, which occupies 124,253 square feet.

The transaction boosts KBS-purchased commercial real estate to more than 3.5 million square feet thus far in 2010. That square footage includes properties in Dallas, St. Louis, San Diego, Portland and Herndon, Va.

The seller was represented by Glenn Whitmore, Jamie Fink and Jeff Bramson of the New York and Chicago offices of Holliday Fenoglio Fowler, while Mike Kavanau of the Chicago office of Holliday Fenoglio Fowler assisted with acquisition financing.

KBS was founded in 1992 by Peter Bren and Charles Schreiber, Jr. Since that time, it has completed transactional activity exceeding $17.6 billion via 19 separate accounts, six commingled funds and four non-traded REITs.

Northern California commercial office landlord Equity Office has inked two new lease transactions at Skyway Landing in San Carlos, California.

Wells Fargo Insurance Services has taken 40,257 square feet at 959 Skyway Road – the building’s entire second floor – and will relocate from its current quarters in Redwood City. Wells Fargo was represented by Marcus Wood of Cassidy Turley/BT Commercial, while Equity’s in-house Peninsula leasing team of Vahe Soghomonian and Rick Buziak along with the Cornish & Carey listing team of Jack Troedson, Kristoph Lodge and Graham Woodall represented the landlord.

In adition, information infrastructure software firm MarkLogic Corp. has extended its existing lease at 999 Skyway and nearly doubled its occupancy by expanding into an additional 18,630 square feet, making for a total of 40,268 square feet. Derek Johnson and Chris Holland of Jones Lang LaSalle represented MarkLogic, while Soghomonian represented the landlord.

The 247,000-square-foot Skyway Landing was built in 2000 and sits on 12.6 acres.

Having reached an agreement with Paramus, N.J.-headquartered REIT Vornado Realty Trust and Los Angeles-based Geyser Holdings, MGM Resorts International has taken the next step in the planned disposition of assets at The Borgata Hotel Casino & Spa. The Las Vegas-based global hospitality company will sell four long-term ground leases and the corresponding underlying real property parcels at the Atlantic City gaming property to the partners for $73 million.

With ownership of land leases and underlying land at The Borgata, Vornado and Geyser will have a tidy income stream from the seven-year-old hotel and gaming property, which offers 2,000 guestrooms, a 161,000-square-foot casino floor and a 54,000-square-foot spa. The Borgata also features a 2,400-seat event center, a 1,000-seat theater and retail and restaurant space.

While MGM Resorts will be relinquishing ownership of the 11.3 acres of real property parcels that come with the ground-leases at The Borgata, it will continue to possess a substantial chunk of Atlantic City land–developable land–in its portfolio. The company still owns 85 acres in the famous gaming town, and approximately 70 of those acres are located across from The Borgata. While Atlantic City, like most gaming markets across the country, has yet to fully recover from the ramifications of the economic downturn, the city is heading in a direction that will call for new development.

“Atlantic City is making an effort to diversify its entertainment offerings, and they’re trying to evolve into a travel destination, similar to the evolution Las Vegas had in the 1990s”, Jacob Oberman, Director of Gaming Research & Analysis with real estate services firm CB Richard Ellis’s Global Gaming Group, told CPE. “The market is evolving and Atlantic City has to compete with surrounding states.” If relying on Las Vegas as a model, Atlantic City’s transformation could reach fruition in the early 2020s. “Over the course of a 10-year period, Las Vegas evolved from a gaming city into a tourist city.”

The walls of building number 149 at the former Frankford Arsenal in Philadelphia have come down, making way for The Shopping Center at the Arsenal. Hankin Management Co. is behind the 500,000-square-foot retail project, which carries a development price tag of $50 million.

It was the War of 1812 that led to the original development of the Frankford Arsenal in 1816, and today, the site is still home to a bevy of historic buildings, a great number of which will remain as the property undergoes redevelopment. After serving predominantly as a small arms production facility during the Civil War, World War I and World War II, the U.S. Department of Defense shuttered the arsenal in 1977. Hankin acquired the property in 1983 and reinvented it in 1984 as the Arsenal Business Center, which now houses two charter schools and approximately 1.4 million square feet of office and light industrial space in over 100 buildings.

The structure that was recently demolished is the first of 40 buildings–once utilized for military research, heavy manufacturing, munitions manufacturing and munitions storage–that will be removed from the northern section of the former arsenal to accommodate the new shopping destination. Once completed, The Shopping Center at the Arsenal will occupy 40 acres and will feature a wide range of both large and small retail shops and a broad selection of restaurants. With a location easily accessible by rail and bus transportation, I-95 and the Betsy Ross and Tacony-Palmyra bridges, the new retail property will be well positioned to attract not only Philadelphians, but shoppers from neighboring suburbs and the State of New Jersey as well.

With a 9.3 percent vacancy rate in the first quarter, Philadelphia’s retail market fared better than most major metropolitan markets during the recession, according to a mid-year report by Marcus & Millichap Real Estate Investment Services. “A combination of relatively low vacancy, a steady and recovering local economy, and modest construction of retail space has made Philadelphia one of the best performing retail markets in the country,” the report notes. While the vacancy rate is expected to reach 9.9 percent this year, “vigorous economic recovery” in Philadelphia is expected to take hold later this year and into 2011.

The Shopping Center at the Arsenal will certainly benefit from the impending recovery of the Philadelphia retail market, but it has a couple of other advantages that the developer believes will help facilitate the property’s success. “We think demand for The Shopping Center will be quite strong,” Mark Hankin, president of Hankin Management, told CPE. “It is in a good area with a large, strong population within five miles, and there aren’t a lot of shopping centers with half-a-million square feet that have just about everything you would want in one center. And the retail options will be unique compared to what is in the city.” Hankin also pointed out that many retail destinations in the area do not provide the easy access from a variety of points that the Arsenal project will offer.

Development of the Shopping Center at the Arsenal will result in 250 temporary construction jobs and, upon its scheduled completion for the holiday season in 2011, approximately 1,000 permanent retail positions. Once the center opens its doors, a portion of the rent payments will benefit the historic buildings in the southern section of the site. “It will give us continuous cash flow to help maintain these historic buildings,” Hankin said.

On schedule to open its doors in 2012, the Courtyard Charleston/Summerville in South Carolina will break new ground for Marriott International Inc. as the Bethesda, Md.-based hospitality company’s first green hotel prototype. All Courtyard-brand Marriott properties adhering to the prototype, a pre-approved model developed in conjunction with the U.S. Green Building Council in 2009, will achieve LEED certification when USGBC gives the final green light.

The Courtyard Charleston/Summerville will be part of the initial phase of The Parks of Berkley, a 5,000-acre master planned community. A joint venture involving Blanchard & Calhoun Commercial and MeadWestvaco is behind the development of the hotel. Employing the model for new developments puts Marriott ahead of the game in securing LEED certification for its properties. With the new prototype’s USGBC pre-approval status, Marriott will be able to expedite its plan to expand its portfolio of LEED-certified hotels to 300 by 2015.

Use of the prototype will not only accelerate the greening of Marriott’s portfolio, it will lower property owners’ development costs by approximately $100,000, reduce the design timeline by six months and ultimately save as much as 25 percent in energy and water usage.

The prototype, however, is not just a first for Marriott. It is also the first in the hotel industry to obtain USGBC’s pre-approval as part of the non-profit organization’s LEED Volume program. Marriott intends to expand beyond the Courtyard-brand prototype by creating similar models for its hotel properties carrying the Residence Inn by Marriott, TownePlace Suites by Marriott, SpringHill Suites by Marriott and Fairfield Inn by Marriott flags.

The federal government and government contractors like ASM Research Inc. continue to liven up the market in suburban Washington, D.C. The technology solutions provider has just signed a new lease for approximately 91,400 square feet of premier space at the 410,000-square-foot Centerpointe office complex in Fairfax, Va.

Located about 20 miles west of the District, Centerpointe sits on Legato Road at the intersection of I-66 and Route 50, and consists of Centerpointe I and Centerpointe II, twin structures that were developed in 1987 and 1989, respectively. Los Angeles-headquartered Thomas Properties Group Inc. has owned the two-building office park since 2007. ASM will make its home at Centerpointe II, consolidating employees from two Fairfax locations. The company’s current offices total 80,000 square feet, so ASM is actually absorbing 20,000 square feet in the market.

Real estate services firm CB Richard Ellis represented Thomas Properties Group in the lease transaction, while Newmark Knight Frank stood in for the tenant. Laurence D. Bank, managing principal with Newmark Knight Frank, told CPE, “It was a combination of location, quality of the building and the economics that led to the selection of Centerpointe.”

While the Northern Virginia office market has not escaped the ravages of the economic downturn, it is reaping the rewards of federal government expansion. According to a second quarter report by CB Richard Ellis, growth among the federal government and government contractors resulted in an increase in net absorption during the second quarter. Additionally, the office vacancy rate in Northern Virginia decreased from 14.4 percent to 14.2 percent, quarter-over-quarter.

While stabilization is afoot, it is still a tenants’ market. “We don’t see that changing for a couple of years,” Bank said. “When we’re getting an overall vacancy rate of 5 to 10 percent, that is more of a landlords’ market.”

Bethesda, Md.-based Host Hotels & Resorts Inc. has acquired the five-star Le Méridien Piccadilly in London for approximately $97.6 million from London-based Starman Hotels, a joint venture created in 2005 between affiliates of Greenwich, Conn.-headquartered Starwood Capital Group and the now-defunct Lehman Brothers Holdings Inc. The 266-room leasehold hotel did not change hands unencumbered; the price tag included Host Hotels’ assumption of $50.3 million in existing debt

Developed in 1908 and recently renovated, Le Méridien sits in the Mayfair district of London’s West End and, in addition to its luxury guestrooms, features 12,000 square feet of meeting space, a restaurant and a fitness facility.

Real estate services firm Jones Lang LaSalle Hotels orchestrated the disposition of Le Méridien on behalf of Starman, which put the property on the market as part of its divestment strategy. “This transaction confirms the strong appetite investors have in the London hotel market at present,” Robert Seabrook, Managing Director for Jones Lang LaSalle Hotels, noted in a prepared statement. “Strong trading fundamentals, a comprehensive international marketing exercise and transferable debt have facilitated an extremely smooth and successful transaction for all parties concerned.”

The London hotel market has not been a stranger to the consequences of the global economic crisis, but now it is in recovery mode. In the first quarter, the London market experienced a 9.8 percent jump in RevPAR, a 5 percent increase in occupancy and a 4.6 percent increase in average room rates, according to Deloitte’s most recent Hotel Market Outlook report.

The month of April did not bring such large improvements, but numbers for the following months are expected to demonstrate that the recovery is on track to continue. “The slight softening in outlooks for London and Regional U.K. demonstrates the impact that extraneous events such as the ash cloud and to a lesser extent the U.K. election can have on performance,” Deloitte notes in the report. “May and June look to be strong months with potentially the first gains in average room rates in the regions. Absent more ’shocks’ the outlook is looking increasingly positive in both markets.”