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.

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.”

TD Ameritrade Holding Corp. is well on its way to creating a 600,000-square-foot corporate campus in Omaha, Neb., with the commencement of construction on a new 475,000-square-foot office tower.

TD Ameritrade currently leases an aggregate 125,000 square feet in three office structures at the site where the online stock trading and investment company’s new building will be erected. At completion, the corporate campus will occupy a total of 40 acres in the Old Mill area of west-central Omaha.

The new 12-story structure is being designed to meet LEED Platinum certification standards, which, if achieved, will make the new facility the second building in the state of Nebraska to earn the U.S. Green Building Council’s highest LEED rating. “Being green is very important for the recruitment and retention of associates,” Kim Hillyer, TD Ameritrade’s Senior Manager for Communications and Public Affairs, told CPE. “It’s also good for the community, so we took the opportunity to make it better for employees and the community.”

Established in Omaha in 1975, TD Ameritrade began making plans to centralize its various offices in the area two years ago. “We had moved into one of the buildings we currently occupy in Old Mill in the fall of 2007 and in the fall of 2008, we started thinking about creating a campus environment,” Hillyer said.

TD Ameritrade didn’t immediately choose the Old Mill site. The company considered leasing more space at the location of their call center in a former shopping mall where a significant amount of money would have been required for upgrades and operations costs, and potentially building farther west in Omaha where there is more space for new construction.

“We looked at other options, but it made more sense to stay where we are,” she said. “It’s right in the middle of the city and just off the interstate and expressway. The original plan had been to lease the land for a build-to-suit that, but it worked out better for us to purchase the land and build ourselves.” TD Ameritrade demolished structures that occupied that site to pave the way for its new office tower. The company expects to complete construction in late spring of 2013.

A portfolio of four Class A office buildings featuring an aggregate 725,000 square feet in the Preston Center submarket of Dallas, Tex., has just come under new ownership. The CBRE Strategic Partners U.S. Value 5 fund, a commingled private equity real estate fund sponsored by Los Angeles-headquartered CB Richard Ellis Investors, has purchased the three-building Preston Commons and Sterling Plaza from Chicago-based real estate investment firm Capri Capital Partners L.L.C.

CBRE is remaining mum on the amount of money it shelled out to acquire Preston Commons and Sterling Plaza. Los Angeles-based BentleyForbes had purchased the properties in 2005, relying on two separate first mortgage loans totaling $114.5 million from Hypo Real Estate Capital Corp. Capri provided two mezzanine loans for the properties and, after an agreement on refinancing was not reached between Capri and BentleyForbes, Capri stepped in as owner of the assets earlier this year.

Carrying addresses on Preston Rd., the three buildings that comprise Preston Commons feature a total of nearly 422,000 square feet on a 4.3-acre site. Preston Commons I is a 10-story structure that is also known as the Bank Building, and Preston Commons II and II are both eight-story buildings. According to BentleyForbes’ documentation on the properties, Preston I was originally developed in 1954, while the remaining two buildings sprouted up in 1986. Preston Commons also features three levels of structured parking accommodations.

Sterling Plaza, located on a 2.1-acre parcel at 5949 Sherry Lane, wraps up the group of buildings CBRE just acquired. The 19-story tower was built in 1984 and renovated in 2005. The property also boasts six levels of structured parking.

Now that CBRE has added the office assets to the Value 5 fund, it will institute a capital improvement program to reposition the properties. Currently, Preston Commons has an average occupancy level of 73.7 percent, and Sterling Plaza is 82.6 percent leased. The numbers, specifically for Preston Commons, come as no surprise given the current state of the Dallas office market. As per a second quarter report by real estate services firm Grubb & Ellis Co., the average vacancy rate in the Dallas area is 23.2 percent. With a 17.4 percent vacancy rate, Sterling Plaza is ahead of the game.

CBRE, however, is undeterred by the lackluster figures. “Dallas is a market where we have significant experience,” Vance Maddocks, President of CBRE Strategic Partners U.S., noted in a prepared statement. “We believe our strength of ownership coupled with our market knowledge will allow us to add considerable value to these already high-quality buildings.”

The New York Daily News and U.S. News & World Report have moved their headquarters to the 25-story 4 New York Plaza, which is located at the corner of Water and Broad streets in the city’s financial district. The two will occupy two entire floors comprising 100,000 square feet.

Four New York Plaza has nearly 1.1 million square feet of Class A space, located on two acres. The building features floor plates of 50,000 square feet and is 75 percent occupied by JPMorgan Chase.

CB Richard Ellis’ Howard Fiddle and Bradley Gerla represented the building’s owner, an affiliate of Harbor Group International L.L.C. The tenant was represented by Cushman & Wakefield’s John Cefaly and Michael Burgio.

The New York Daily News and U.S. News & World Report are currently located at 450 W. 33rd St. in the Hudson Yards area. They are expected to move to 4 New York Plaza by July 2011.

When announcing the news. Mortimer Zuckerman, chairman and publisher of the New York Daily News and chairman and editor-in-chief of the U.S. News & World Report, called the building “first-rate accommodations in the heart of the city’s financial district with superb amenities.”

Vulcan Real Estate has wrapped up construction of the second phase of Amazon.com’s headquarters in Seattle’s South Lake Union neighborhood. Located on the east side of Boren Avenue North between Mercer and Republican streets, the building encompasses 158,000 square feet of office and 14,000 square feet of street-level retail space.

Vulcan is going for LEED Gold certification from the U.S. Green Building Council. All of the remaining buildings in the development will also be LEED certified. Amazon’s headquarters include a total of five phases of development, of which phases three and four are currently under construction and the final phase is expected to break ground next spring. It will ultimately include 11 buildings totaling 1.9 million square feet of office space.

While Vulcan vice president of real estate Ada Healey declined to provide the exact number of employees that will be housed in the new building, she said that once completed the headquarters will house thousands of Amazon employees.

She also told CPE that the South Lake Union neighborhood is a perfect match for Amazon’s needs.

“It is a prime location between the downtown core and lakefront where accessible public transit, walking and biking are promoted, a diversity of housing choices are available for a range of income levels, cutting-edge employers contribute creative energy and intellectual capital to the area; lively retail amenities and services are in close proximity, and green streetscapes and public parks enhance the sustainable footprint,” she said.

South Lake Union is also home to companies such as Microsoft, Group Health and Cole and Weber, along with major life sciences research and global health institutions such as UW Medicine and Seattle Biomed.

In Bellevue, Wash., the change in ownership of City Center Plaza, leased in its entirety to Microsoft’s Bing division, is turning heads. Phoenix-based Cole Real Estate Investments’ $310 million all-cash acquisition of the nearly 583,179-square-foot office property from Boston-based Beacon Capital Partners marks one of the largest commercial real estate transactions in the U.S. to date this year.

City Center Plaza, developed by Wright Runstad & Company for Beacon Capital, sits about 10 miles east of Seattle at 555 110th Ave. N.E., in Bellevue’s central business district. Microsoft has been on the tenant roster since the 26-story building opened its doors in May 2009, and the company has a triple net lease agreement to occupy its digs through 2024. City Center Plaza also features approximately 19,800 square feet of fully occupied retail space and a parking facility with over 1,400 spaces. The office tower was developed as a premier asset, but Microsoft has taken the property to an even higher echelon by investing funds beyond the $43 million Beacon Capital had allotted for tenant improvements.

A bevy of City Center Plaza-size transactions in the Seattle area are not on the horizon, however, transaction activity in general is on the upswing, smaller trades have been buoying activity. While the majority of the second quarter’s 29 office transactions were under $20 million, the overall transaction volume rose to $430 million, the highest since the fourth quarter of 2007’s total of $843 million, according to a report by real estate services firm Grubb & Ellis Co. Additionally, the average per-square-foot sales price jumped in the second quarter from $150 to $200, a 25 percent quarter-over-quarter increase.

“There is a lot of capital placed to acquire properties and Seattle is on everyone’s radar screen,” Richard Wieneke, Senior Vice President with Grubb & Ellis, told CPE. “There is still a gap between what sellers want to sell for and what buyers want to pay, but it has narrowed somewhat, and there are a lot of transactions around the corner.”

The investment market, he adds, is a split market; there are two types of buyers. “There are those entities looking for properties with high-level credit tenancy on long-term leases. They’re buying for the cash flow and they’re paying prices that are almost unheard of. They’re buying the assurance of a AAA credit tenant.” And then there are those investors who want to acquire assets to capitalize on the future–the eventual decline in vacancy rates and increase in rents. “They’re willing to take on a substantial amount of risk.”

Of the two investor types, the group of buyers seeking troubled assets will account for the anticipated continued increase in sales activity. “There’s the impending debt maturity problem, so within the next 12 to 36 months, we’ll see more distressed property sales,” Wieneke said.

Courtesy Flickr Creative Commons user Dimitry B

The Carlyle Group, acting on behalf of its two-year-old Carlyle European Real Estate Partners III fund, has just snapped up a 1.6 million square-foot chunk of the Central London office market at the bargain price of $1 billion. The international private equity concern acquired six fully leased landmark office properties that had been part of the portfolio that secured the White Tower 2006-3 plc CMBS, which was placed in liquidation.

Each of the properties involved is leased in its entirety to a single corporation, a coveted feature given that the average vacancy rate in the Central London office market is presently 7.7 percent, according to a second quarter report by commercial real estate services firm CB Richard Ellis. Among the assets Washington, D.C.-headquartered Carlyle has snapped up are Alban Gate, a 382,000-square-foot property leased to JP Morgan Chase. The Thames Portfolio accounts for the remaining five assets and includes the 420,000-square-foot complex at 60 Victoria Embankment, also home to JP Morgan Chase; the Ludgate House, a 170,000-square-foot building occupied by United Business Media; the 350,000-square-foot Samson House, home to IBM; the 200,000-square-foot Millennium Bridge House where UBS is the name on the tenant roster; and BSI Tower, a 140,000-square-foot property occupied by BSI Management Systems Ltd. Together, the six assets generate an annual sum exceeding $93.7 million in rent.

“Whilst each property benefits from an existing secure income profile, there are considerable longer term opportunities across the portfolio for active asset management and redevelopment, where we believe we can add significant value,” Robert Hodges, Managing Director, Carlyle European Real Estate, noted in a prepared statement.

Carlyle’s steal of a deal comes as a result of the global financial crisis to which so many commercial real estate owners have fallen victim, including London-based investor Simon Halabi, who defaulted on loans secured by a group of nine assets, including the six that Carlyle just acquired. CBRE Loan Servicing Ltd. was appointed special servicer for the White Tower CMBS in August 2009, at which point the firm noted that the total value of the nine properties was approximately 1.4 billion pounds.

As for financing the mega-purchase, Carlyle pulled off what many investors may view as the impossible, given the current state of the credit market across the globe. To finance its acquisition of the Thames Portfolio, the company secured funds from an international consortium of banks led by Société Générale, which acted as structuring bank and arranger along with BNP Paribas, Crédit Agricole and ING. AXA REIM was also involved. Additionally, Société Générale served as arranger and sole bookrunner for financing for Alban Gate’s financing.