Apartment REIT MAA has increased its presence in Fredericksburg, Va., with the purchase of the Haven at Cosner’s Corner, an upscale, 260-unit multi-family community located roughly 50 miles south of Washington, D.C.  MAA picked up the year-old property from its developer, Johnson Development Associates, and has renamed it Station Square at Cosner’s Corner.

MAA got more than a collection of luxury residences with the acquisition of Cosner’s Corner; it walked away with room for growth, as the property also includes an undeveloped parcel of land. However, as an MAA spokesperson told Commercial Property Executive, the REIT has no plans for a project on the site at this time.

That’s not to say that Fredericksburg hasn’t been a source of success for MAA, which has a portfolio of approximately 50,000 apartment units spanning 13 states, predominantly in the Sunbelt region. During the company’s first quarter earnings call earlier this month, CEO Eric Bolton said that Fredericksburg, along with Lexington, Ky., and Chattanooga, Tenn., delivered top results in the REIT’s secondary markets. The numbers were based on what had been MAA’s only property in Fredericksburg at the time, Seasons at Celebrate Virginia, which the REIT acquired from Johnson Development in late 2011. 

Cosner’s Corner sits just four miles from Celebrate Virginia and MAA expects the property to perform just as well. “We feel its upscale amenities and central location to major employment hubs in combination with our proven operating platform provides an appealing choice for the rental market and will generate a terrific long-term investment for MAA,” CFO Al Campbell noted in a prepared statement.

Mill Creek Residential Trust, of Dallas, will hold a groundbreaking ceremony in Morristown, N.J., today for the 268-unit first phase of Latitude, a luxury apartment development. The project reportedly is the first large-scale residential development to be undertaken in Morristown in almost four years. The building’s cost has not been disclosed.

The 258,300-square-foot first phase will comprise studio and one-, two- and three-bedroom rental homes and a 350-space parking garage incorporated into the structure. The project’s location, at Early Street and Speedwell Avenue, is walking distance from downtown Morristown.

Apartments will feature 9-foot ceilings, walk-in closets, patios/balconies (in select residences), lofts (in select residences), washers and dryers, granite countertops and energy-efficient stainless-steel appliances. Amenities planned for Latitude include a fitness center outfitted for cardio, strength, spin and yoga; a rooftop deck; lounge with fireplace; business center; and game room.

Despite the community’s upscale nature, 26 deed-restricted, affordable rental apartments also will be part of the first phase.

Initial occupancy for Latitude is planned for next year.

The project’s second and third phases will add more residential units, as well as non-residential uses, both designed to blend with the existing architecture along Speedwell Avenue, Rich Murphy, managing director with Mill Creek, told Commercial Property Executive.

Latitude is roughly half a mile from the Morristown station on New Jersey Transit’s Morristown (Green) Line; commuter trains run from there to Hoboken Terminal or directly to New York’s Penn Station.

When the New Jersey Department of Transportation established its Transit Village Initiative in 1999, Morristown was one of the first municipalities to join.

The median age of Morristown’s approximately 18,500 residents is not quite 35, and one-third are foreign-born, according to the U.S. Census Bureau. The median household income is estimated at $62,600, though 13.2 percent of Morristown residents are below the poverty line.

Backed by a $660 million loan from a London investment fund, Silverstein Properties said it will begin construction this fall on a $950 million, 82-story skyscraper in Downtown Manhattan that will comprise a 185-room Four Seasons hotel and 157 luxury condos.

At 926 feet, it will be the tallest residential building in Downtown Manhattan and one of the tallest buildings in New York City. Located at Park Place and Church Street in Tribeca, the Four Seasons Hotel and Private Residences New York, Downtown, is expected to open by 2016. Now being called 30 Park Place, the site is the former Moody’s headquarters then known as 99 Church St. Silverstein Properties and the California State Teachers’ Retirement System (CalSTRS) bought the site from Moody’s in 2007. Silverstein unveiled plans for the hotel-condo project in January 2008 during an update on rebuilding efforts at the nearby World Trade Center site. But plans were put on hold following the fiscal downturn that started several months later causing credit markets to freeze.

Five years later, the project is moving ahead now that the financing has been secured from The Children’s Investment Fund Management L.L.P. of London.

“This project perfectly fits our investment strategy in New York City, which includes other high- end residential projects such as 432 Park Ave. and 737 Park Ave.,” Martin Frass-Ehrfeld, partner at TCIF, said in a news release. He said the fund was excited “to provide financing to a pristine group of partners.”

Larry Silverstein, president & CEO of Silverstein Properties, Inc., said the new tower will become a new and distinct landmark in the city’s skyline.

“It will join and enhance a world-class neighborhood that is already home to a dynamic blend of modern office towers, private residences, high-end retail and dazzling public spaces,” he said in the statement. “Downtown is fast becoming a vibrant, integrated, mixed-use destination on a scale not seen in New York City since Rockefeller Center in 1939.”

Robert A.M. Stern Architects is designing the building and the private residence floor plans and interiors. Yabu Pushelberg is designing the hotel interiors. SLCE Architects is the Architect-of-Record. Tishman Construction is the general contractor. The firm, which built 7 World Trade Center for Silverstein Properties in 2006, is also the general contractor for 3 and 4 World Trade Center. Corcoran Sunshine Marketing Group expects to begin marketing and selling the condos in spring 2014.

“We are thrilled that the project at 99 Church is slated to go forward and contribute to the tremendous growth in Lower Manhattan’s hospitality industry,” a spokesperson for the Alliance for Downtown New York, told Commercial Property Executive. “As the buildings at the World Trade Center site come online and major tenants, including Conde Nast, open their doors in Lower Manhattan, this hotel and others will serve as a huge draw to the city’s leisure and business travelers.”

Before 9/11, there were six hotels in the area. There are now 18 and the number of hotel rooms has grown by 78 percent to 4,100, the spokesperson noted, adding that there should be 23 hotels with more than 5,100 rooms south of Chambers Street by 2014.

The spokesperson added that the alliance partnered with NYC & Co. beginning two years ago to showcase the area’s recovery and revitalization. The international campaign urging visitors to stay in Lower Manhattan hotels and eat and shop in the area has been very successful.

When it opens, the Four Seasons will feature three floors of lobbies, lounges, a restaurant, ballrooms, meeting facilities, a spa, fitness center and pool. The hotel entrance will be on Barclay Street and there will be a second entrance to the restaurant on Church Street. The public rooms of the hotel will overlook a landscaped public plaza.

“Adding a second hotel to our existing iconic property in New York on 57^th Street, will be a great addition to the portfolio of the Four Seasons,”  Scott Woroch, executive vice president worldwide development, Four Season Hotels and Resorts, said in the news release.

Silverstein Properties and the Four Seasons are also teaming up in Orlando, Fla., where the world’s largest Four Seasons resort is under construction on the northeast portion of Disney World. The 445-room luxury resort is expected to open in July 2014.

JEMB Realty has signed existing tenant ASA College to a lease extension and expansion that will see the higher-educational institution more than double its space at JEMB’s Herald Center, a 10-story, 250,000-square-foot retail and office property at the southwest corner of 34th Street and Broadway.

The college currently occupies space on the first three floors of the property but with its new deal, ASA will leave that space and move to 112,000 square feet on the fourth, fifth, sixth and seventh and floors of Herald Center by June. The lease also allows further expansion when an additional 48,000 square feet becomes available early next year.

“We positioned the building by establishing it as multi-use with retail, office and school,” Joseph Jerome, JEMB Realty’s president, told Commercial Property Executive. “It’s a building within a building concept. We’ve allowed the tenant to establish its own identity, have control of its own elevator bank and now they own the whole top of the building.”

The expansion will allow ASA College to consolidate classroom and administrative space from elsewhere in the city to one convenient midtown location.

“They will be using the bulk of the space for classrooms and adding some administrative room as well,” Jerome said. “We started to build in January and they will be moving in the next 10 days. The additional space will be ready in the next 12 months.”

As part of the deal, JEMB will create a dedicated ASA ground floor lobby entrance on the 33rd Street side of Herald Center and give the college exclusive use of the elevators servicing their floors.

“Most of their students take mass transit and every subway line and every bus just converges on this corner,” Jerome said. “They’ve been at the property for 10 years and enrollment really grew and they attribute a portion of that to location.”

According to Jerome, the space that was occupied by ASA College will be converted into more than 50,000 square feet of prime retail space at one of the most heavily trafficked, high-visibility corners in the world.

Currently, the building is undergoing a renovation of its outside façade, removing the black glass panels on the first three floors and replacing them with transparent panes that will enable retailers to better showcase their brands and goods to the more than 100 million pedestrians who pass the property each year. Jerome added that floors 4-10 will also be transformed with LED panels, creating a light display that will invigorate Herald Square.

“The building has tremendous exposure on 33^rd, 34^th and Broadway and it will be a focal point of Herald Square,” Jerome added. “It will be a major presence on one of the busiest shopping streets in the city, if not the country.”

JEMB acquired the building in 1986.

The Hampshire Cos., owner of the newly redeveloped office building at 175 Park Ave. in Madison, N.J., has obtained financing to the tune of $75 million for the fully leased, 270,000-square-foot property. 

HFF orchestrated the deal on behalf of the owner and noted that there were more than a few lenders interested in providing financing for 175 Madison, which serves as the new headquarters of Realogy Corp. They had their reasons. “[It's a] Class A, newly renovated, award-winning building with a long-term lease,” Jon Mikula, senior managing director with HFF, told Commercial Property Executive. He added that the fact that there was an “excellent sponsor” was a strong draw as well. 

Cantor Commercial Real Estate Lending L.P. provided the financing, which came in the form of a 10-year, fixed-rate loan. Hampshire plans to utilize the proceeds to retire the existing construction financing debt on the asset.

311 Arsenal St.

Athenahealth Inc. has acquired the historic 11-building, 760,000-square-foot Arsenal on the Charles office campus in Watertown, Mass., from Harvard University for $168.5 million, it was announced yesterday. The purchase closed last Friday.

Avison Young, of Toronto, represented Athenahealth in what reportedly is the largest user-buyer transaction in Boston so far in 2013; Athenahealth began occupying space in the complex (initially 133,000 square feet) in 2005.

Avison Young principals Steve Cook in Boston and Suzanne Martinez in Chicago represented Athenahealth, and Harvard University represented itself.

Athenahealth provides cloud-based services for medical practice management, care coordination, medical billing and electronic health records.

The company has grown to become one of the area’s largest tech tenants and had been seeking up to 500,000 square feet for its corporate headquarters. The purchase reportedly followed a two-year search of properties and development sites throughout the Boston area by Avison Young and Athenahealth.

Given Athenahealth’s ongoing expansion requirements, Martinez said in a release, “long-term ownership is a financial home run when compared with a long-term lease.”

The choice reportedly was also driven by a lack of existing product and the high cost of new construction, coupled with the fact that Athenahealth’s employees were already happy with the Arsenal on the Charles’ location and amenities.

The campus is more than 90 percent leased. Athenahealth currently occupies 250,000 square feet, and other major tenants include Harvard Business School Publishing (100,000 square feet), Bright Horizons (90,000 square feet) and Boston Sports Clubs (50,000 square feet). The 29-acre complex is managed by The Beal Companies, Boston,

All 11 buildings on the campus were built around 1816 and rehabbed in 2000, Cook told Commercial Property Executive.

The buildings comprise three Class A offices (totaling 228,300 square feet), five Class B offices (totaling 485,750 square feet), two small Class C offices (totaling 22,680 square feet) and a Class B flex/R&D building of 13,000 square feet, according to information provided to CPE by Cook.

Harvard acquired the property in 2001, but after the economic downturn decided to use property closer to its main campus for institutional needs and instead leased the Arsenal on the Charles.

Although the complex has evolved to accommodate Digital Age high tech, it was once an example of Industrial Age high tech.

The campus is called Arsenal on the Charles, said Cook, because it was once part of the 90-plus-acre Watertown Arsenal, founded by the U.S. Army in 1816 as an ordnance storage depot. During the Civil War, the arsenal was expanded and began manufacturing gun carriages, and the complex was hugely expanded again during World War I.

Starting in 1968, the Army began to downsize its operations at Watertown, a process that was completed in 1995. One of the other redevelopments at the former arsenal is Arsenal Mall, a 502,000-square-foot shopping center owned by Simon Property Group.

American Campus Communities, Inc., has begun construction on a 325-unit faculty and staff housing project at Princeton University, its second development at the New Jersey school but the REIT’s first that’s not for students.

The Merwick-Stanworth project, located on two contiguous university-owned sites just north of the main campus along Route 206/Bayard Lane, will be built in phases with completion expected in three years. The first 127 units are slated for delivery by summer 2014 with the remaining 198 units to be ready between late 2015 and summer 2016. They will consist of one-, two- and three bedroom apartment and townhome units and are expected to receive LEED Silver certification.

The dollar amount of the development was not released by ACC or by Princeton University. ACC, an Austin, Texas, based REIT, will develop, own and manage the Merwick-Stanforth housing units through a 70-year ground lease. The deal is being done under ACC’s American Campus Equity (ACE) program, in which ACC serves as the college or university’s sole partner and doesn’t charge them fees up front. ACC gets financial returns through long-term cash flow and benefits of ownership. The REIT has used ACE on other developments including Portland State University, University of New Mexico, Arizona State University and Northern Arizona University, according to an ACC spokesperson. ACE was used on a student housing project at Drexel University, due to open this fall, she said.

“Many factors are taken into account when a university and ACC decide to do a tax-exempt structure or an ACE transaction,” the ACC spokesperson told Commercial Property Executive. “Lately, we’ve seen a pretty even split between the two models.”

While this is ACC’s first faculty and student housing project in the United States, it is the firm’s second development at Princeton University. The REIT is also building the Lakeside Graduate Student Housing project south of Faculty Road. Scheduled for completion in summer 2014, Lakeside replaces the Hibben and Magie apartments and will have capacity for 715 residents in 329 units.

Both developments are part of the University’s Housing Master Plan, which began in 2005 to upgrade campus housing facilities.

“We are honored to help deliver premier housing for Princeton faculty and staff,” Bill Bayless, American Campus CEO, said in a news release. “By providing an affordable housing option with updated amenities and located in a vibrant neighborhood convenient to campus, this community will be a wonderful place to live.”

As part of the municipality of Princeton’s 20 percent affordable housing requirement for new residential projects, apartments for low-and moderate-income families will be included in the Merwick-Stanworth buildings. Those units are available to the general public.

In recent months, ACC, the largest owner, manager and developer of student housing in the U.S., has also made news for purchasing a large portfolio. The REIT picked up a 19-property, 12,049-bed student housing portfolio for about $863 million from Kayne Anderson Advisors, L.P. affiliates. It comprises properties at 14 universities including Michigan State University, Louisiana State University, University of Kentucky, University of Southern California and Virginia Commonwealth University.

Bethesda, Md.—The Meridian Group, a real estate investment and development firm based in Bethesda, Md., has acquired Science Applications International Corp.’s landmark 18-acre corporate headquarters campus at Tysons Corner in Northern Virginia.

The purchase was made through Meridian’s $160-million discretionary real estate fund, Meridian Realty Partners I. Meridian’s purchase includes SAIC’s 600,000-square-foot three-building headquarters complex, and Meridian will lease back one of the buildings for seven years. The other two buildings will be vacated within a year. A fourth building with a surface parking lot is currently vacant and will be demolished for redevelopment.

“Tysons is the downtown of Northern Virginia, and is the 12th largest office market in the country. It has the largest concentration of retail space between DC and Miami, and will increase its attraction to employers due to its Beltway access, new HOT lanes and four new Metro stations,” Gary Block, The Meridian Group’s managing director, told Commercial Property Executive. “This transaction provides us with the ability to participate in the transformation of one of the largest office markets in the country into a dynamic live-work-play atmosphere.”

The property is located on Route 7 at the new Tysons Central 7/Greensboro Metro station, and it has the closest existing buildings to Metro anywhere in Tysons. Bounded by Westpark Drive and Greensboro Drive, the property sits in a major submarket of Tysons known as “The Hill” near Tysons Galleria Mall.

“The Greensboro area of Tysons, in particular, offers what we believe can be the true urban core of Tysons, and the property is right at the center of that,” Block said. “As tenants today are increasingly looking to relocate to newer, more efficient space, we believe the property is uniquely-situated to meet that demand at different price points, with new development competing at the upper end of the Tysons market and our existing, renovated buildings offering an extremely competitive product for more price sensitive tenants that are also seeking amenity rich, efficient space.”

According to Block, Meridian will start a $20-million renovation plan that includes repositioning and rebranding the three building complex, which will include an overhaul of the buildings’ mechanical system, renovation of all common areas including the main lobby, corridors, elevator cabs, ceilings (including lighting and sprinkler systems), fitness facilities, and restrooms, as well as creating exceptional outdoor work and social gathering spaces.

It will also create a new grand entrance to the complex immediately adjacent to the new Metro station, which should afford additional retail opportunities.

“Our investment philosophy is to acquire institutional quality assets in ‘path of growth’ locations near Metro rail stations, highway interchanges and retail or mixed-use projects;  and, with value-creation potential,” Block said. “This transaction represents well the strategy that we have devised for our $160 million+ discretionary private equity fund.”

Park Place, a $131 million, 12-story multi-family building funded by the AFL-CIO Building Investment Trust and to be developed by Bijou Properties and built by Tishman Construction, will break ground tomorrow (Tuesday) in Hoboken, N.J.

Unusually, the 262,000-square-foot building will include, along with its 212 market-rate apartments, both 13,000 square feet of retail space and 32,000 square feet of educational space. The latter was required by city approvals, and there is no specific tenant in mind, a spokesperson for the AFL-CIO Building Investment Trust (BIT) told Commercial Property Executive.

The building’s owner is an entity wholly owned by the BIT. The site at 1415 Park Ave., near Weehawken Cove and about five blocks from the Hudson River, was previously a parking garage, according to the spokesperson.

Like previous BIT projects, Park Place will be built by union labor; it’s expected to create about 650 union construction jobs. It joins a $1.4 billion BIT development pipeline comprising 10 projects around the United States.

Since its inception 25 years ago, the BIT, a collective investment fund for which PNC Bank, N.A., is the trustee, has directly or indirectly invested in 29 projects worth more than $2 billion in New York and New Jersey, including some 3,000 housing units and nearly 3 million square feet of commercial real estate.

Park Place is designed to attain LEED Gold status. Founded in 1999, Hoboken-based Bijou focuses on green development along the Hudson waterfront. Recent projects include Garden Street Lofts, New Jersey’s first LEED Gold residential high-rise); The Hostess Factory, a 42,000-square-foot retail restoration including a 20,000-square-foot green roof; and Edge Lofts, a mid-rise rental building at 1405 Clinton St.

Hudson County’s effective apartment rents are the highest in Northern New Jersey, at $2,742 per month, according to a second-quarter 2013 report from Marcus & Millichap. Job growth in the region continues to exceed the national average, and multi-family demand is expected to be boosted for a few more quarters by both families displaced by Hurricane Sandy and construction workers to be moved to the region to find rebuilding work.

Brack Capital Real Estate, a global real estate investment and development company, has sold The James New York, a luxury hotel in New York’s popular SOHO neighborhood, for approximately $85 million to an undisclosed buyer.

“There is an enormous appetite in the current market for income-producing assets that can generate cash. In an environment where interest rates are at historical lows and the future is unclear, investors that are looking for safe returns don’t have too many alternatives,” Issac Hera, BCRE’s CEO, told Commercial Property Executive. “The James New York presented such a great opportunity for buyers. Analyzing these facts, BCRE decided that it was the right time for us to realize the value we created at the James New York and look for new opportunities.”

Located at 27 Grand St., the 114-room hotel will continue to operate with Denihan Hospitality Group carrying on management, along with notable chef David Burke remaining to produce the highly acclaimed food and beverage menu.

Developed in 2010, the hotel was designed by ODA in collaboration with Perkins Eastman and Thomas Schlesser. The property features meticulously designed guestrooms and suites; sleek and spacious amenity spaces; renowned restaurants David Burke Kitchen and the Garden at David Burke; and a coveted rooftop lounge, called Jimmy, which includes jaw-dropping city skyline views, a private pool with cabanas and a bar with both indoor and outdoor seating.

The hotel includes spacious corner guestrooms with panoramic city views, one-bedroom suites and an impressive penthouse loft on the 15th floor. All rooms include carefully honed reclaimed materials complemented by a serene color scheme, to create a modern and inviting space. Additionally, the amenity spaces are bright and expansive, offering open, inviting common spaces not typically seen in comparable boutique properties. 

According to Hera, once value was created and the right opportunity presented itself, the company decided to realize its investment and focus efforts on locating its next opportunity to create value.    

“Downtown Manhattan is attracting many visitors and hotel guests that are looking for a unique experience of New York compared to what they would encounter in such locations as Midtown or Times Square,” he said. “This trend provides the opportunity for developers like BCRE to bring very unique assets, like the James New York, to the market that offer a distinctive design and program for discerning guests. We are continuing to focus on this market and are currently working on developing two hotels in the Downtown area that will be as unique and distinctive as the James New York and, I am confident, will be just as successful.”