Industrial Contractors Skanska, the resulting entity of Skanska’s acquisition of Industrial Contractors Inc. just one month ago, has entered into its first contract. The company, a unit of Skanska’s civil division, Skanska USA Civil, will provide construction services for a project in Indiana under the $120 million deal.

Work has already gotten underway on the development, for which Industrial Contractors Skanska will furnish construction services for maintenance and capital projects for the endeavor. The company is on track to complete the assignment in December 2014.

In its announcement of the $120 million contract, Industrial Contractors Skanska did not offer further details about the undertaking. However, a real estate services firm that worked closely with the company when it operated as Industrial Contractors Inc., speculates that given the current state of the industrial market in Indiana, the project is most likely linked to the energy sector.

“Something of that size, I would say, may be related to the energy division, one of the power plants,” Ken Newcomb Jr., president and co-manager of Evansville, Ind.-headquartered F.C. Tucker Commercial, told Commercial Property Executive. “We’ve got a lot of power plants in this area that are switching over and going to the new scrubbers and the new cleaners and updated technology to be able to use Midwestern coal. So I think that may be a possibility.”

Taking into consideration the presently positive conditions in certain areas of Indiana’s industrial sector, more and more sizeable civil contracts could be on the horizon for Industrial Contractors Skanska, Newcomb believes. “They’re very qualified to do that type of work, and there are a lot of industrial plants within the Midwest that need those services.”

Skanska’s acquisition of Industrial Contractors and the subsequent formation of Industrial Contractors Skanska enabled the national construction company to enter the industrial sector in the Midwest overnight. However, Skanska’s activities so far this year extend well beyond the Heartland. In late January, acting through its Skanska USA Commercial Development division, the company acquired a 43,000-square-foot parcel in Seattle’s burgeoning South Lake Union neighborhood. And at the beginning of the year, Skanska entered into a design-build agreement with the Santa Clara Valley Transportation Authority to build a 10-mile extension of the Bart system in Northern California.

In a sale arranged by real estate investment banking firm Savills, one of the firm’s institutional-investor clients picked up the Springhurst Towne Center, an 830,000-square-foot retail complex in Louisville, for $78 million. The seller, a partnership led by D. Talmadge Hocker of the Hocker Group, was represented by Savills.

Springhurst last changed hands in 2009, when Centro Properties took it off its books for $42 million – meaning the purchase price appreciated nearly 86 percent in two years. Market conditions for retail – specifically grocery-anchored retail. “As investors continue to seek out reliable investments, cap rates will continue to fall only for core properties, particularly urban retail, fortress malls and top-ranked grocery-anchored strip centers,” Margaret Caldwell, managing director of Jones Lang LaSalle retail, said. “Average cap rates for strip centers have hovered around 8 percent this year, while strips with grocery stores have been much lower, dropping 50 basis points over the last nine months or so.”

The Louisville area has been on the road to recovery throughout 2011 – albeit slowly. The unemployment rate, which peaked at 11.1 percent in January 2011, dropped to an estimated 8.5 percent by year’s end. According to a report by services firm Cushman & Wakefield Inc., the city will see a drop in retail vacancy overall, especially as space vacated by national tenants is reabsorbed and no new construction sits in the pipeline.

“Talmage Hocker’s performance with this asset was impressive,” John Williams, managing director with Savills, said. “Not only was he able to buy the property when credit markets were frozen, he succeeded in leasing more than 60,000 square feet to new tenants and significantly strengthened the tenant roster and cash flow. “

Springhurst is the area’s largest shopping complex, with sales in excess of $200 million per year. The venue is nearly 100 percent leased to retailers including Target, Dick’s Sporting Goods, Office Max and a Cinemark Cinema.

CoSentry, an Omaha-based provider of data center, cloud computing, co-location and managed-Internet services, has purchased a 57,500-square-foot former light industrial building in Lenexa, Kan., for use as a data center, the company announced late last week. Construction on the $31.6 million rehab project, at 14500 W. 105th St. in Lenexa, is expected to begin next month.

After a two-year evaluation process, CoSentry chose the Kansas City region out of 21 markets, based in part on competitive energy prices, said Doug West, vice president and general manager for CoSentry’s south region. Colliers International led the real estate search.

A CoSentry spokesperson told Commercial Property Executive that the new facility will likely be a Tier 3 data center. Such centers typically have redundant power for all IT equipment and guarantee more than 99.98 percent availability.

The Kansas City Area Development Council, Kansas Department of Commerce, and Lenexa Chamber and Economic Development Council worked together to bring CoSentry to the KC region. The data center reportedly will create more than 60 jobs.

The two-state Kansas City region reportedly ranks among the nation’s top three for IT workforce availability and is a focal point for both long-haul fiber and transcontinental fiber networks.

Earlier this month, CPE reported on Digital Realty Trust’s purchase of major data centers in San Francisco and Atlanta, for $85 million and $63 million, respectively.

And in late December, we reported that Hines Global REIT had acquired, for $160 million, Fisher Plaza, a two-building complex in Seattle that includes a multi-tenant data center in addition to office, retail, broadcast and telecommunications space. As of the purchase, Hines already owned the 661,500-square-foot One Wilshire Building in Los Angeles, which houses more than 300 telecommunications and data carriers.

The past year saw a surge of interest in data centers. “There is an insatiable amount of demand happening around the globe,” Bo Bond, co-lead of Jones Lang LaSalle’s data-center solutions team, told CPE last month. “As speculative development commences, we will begin to see a new crop of winners and losers in the data-center arena.”

It’s akin to a good marriage. Carlson and The Rezidor Hotel Group have come together in a union that will allow them to act as one, while maintaining their own individual identities. The two international hotel companies just formed the Carlson Rezidor Hotel Group, a separate hotel entity created to be a global force in the hotel industry.

Carlson and Rezidor will remain separate legal entities.

The decision to join forces and create a new company was born from a synergy created between Carlson and Rezidor through working together for nearly two decades. The two first teamed up in 1994, when they entered into a master franchise agreement for the Radisson brand in Europe the Middle East and Africa. In 2005, Carlson acquired a 25 percent interest Rezidor, and continued to increase its ownership stake in the company over the years until it became majority shareholder with a 50.1 percent interest in 2010.

Carlson Rezidor makes its debut as one of the largest hotel groups in the world, with a portfolio exceeding 1,300 hotels carrying a range of premier hotel flags across 80 countries. In a prepared statement, Kurt Ritter, president and CEO of Rezidor, explained the new company’s objective. “The goal of this development is to generate more attractive financial returns for the owners and greater value for all shareholders, to be perceived by business partners around the world as one global hotel company, to offer more compelling and consistent value propositions to the guests, and to offer global career and development opportunities to the staff.”

The new company’s financial aspirations entail the production of at least $400 million in additional revenue and a nine-point expansion on the RevPAR Index by 2015. Indeed, industry experts forecast notable revenue increases for the hotel sector in a bevy of major metropolitan areas across the globe; although, those increases are not expected to be as large as they were in 2011. Of the 10 top markets in the Europe and Asia Pacific regions, Hong Kong topped the list with RevPAR growth of 24.7 percent in 2011, according to an early report by STR Global. The hotel research firm anticipates that Singapore will lead the pack in 2012, with estimated RevPAR growth of 9.6 percent, nearly one percentage point lower than 2011’s 10th highest ranking city, Cologne. Overall, RevPAR in the U.S. rose an estimated 6.1 percent, and it is on track to jump 8.6 percent.

Carlson Rezidor will maintain headquarters in both companies’ respective corporate office locations of Minneapolis, Minn., and Brussels, Belgium.

Image courtesy Flickr user UIC Digital Collections

In what Jones Lang LaSalle is calling “one of the Chicago market’s largest year-end transactions,” The Hearn Co. purchased 55 W. Monroe from LaSalle Investment Management for $136 million. The 803,000-square-foot, 40-story, Class A office tower was once known as the Xerox Center.

JLL, which brokered the transaction, also secured acquisition financing of $108 million — $86.5 million in senior debt through Wells Fargo Bank and $21.5 million in a mezzanine facility through Redwood Trust.

“Seldom is there an opportunity in a top-tier market to acquire an asset of this quality with the potential to execute a realistic business plan and add significant value,” Stephen Hearn, president & CEO Hearn, said. “After a considerable amount of investing in the West and Southwest over the past decade, this acquisition gives us the ability to return home to this great city and recapitalize an iconic Downtown Chicago asset.”

According to JLL managing director Bruce Miller, “the Chicago market continues to show strong recovery, especially with the lack of new construction expected to be delivered to the market in the near future.”

The tower, completed in 1981, underwent a 2002 modernization and was named office building of the year in 2007 by Chicago’s Building Owners and Managers Association. The property also received LEED Gold certification in 2010. Hearn will manage, construct, and oversee the leasing and marketing program at 55 West Monroe, as they do all properties owned by the firm.

Amid a flurry of multi-family trades in Chicago in December 2011 – including Miami-based Crescent Heights’ purchase of 1212 S. Michigan Ave. for $60 million and L&B Realty Advisors’ $90 million purchase of 77 W. Huron – MetLife Inc. has bought EnV, a luxury high-rise tower, from LYND Development Partners. Crain’s Chicago estimated the sale price at approximately $125 million.

The development, situated in the city’s River North neighborhood, was developed by LYND starting in 2008 and features 249 rental units in a LEED-certified building. MetLife, which was very active in the capital markets during 2011, originating $550 million in loans for San Francisco and Washington, D.C., office properties, saw the EnV purchase as way to “manage each of our investments for the long term.”

“EnV is an excellent fit for MetLife’s real estate equity strategy of acquiring core properties in top-tier markets,” Robert Merck, senior managing director and head of real estate investments for MetLife, said.

The vacancy rate in the Chicago apartment market continues to fall, and is on track to drop to 4.6 percent for 2011, marking a decline of 100 basis points from 2010, according to a third quarter report from Marcus & Millichap Real Estate Investment Services. The city’s outlook into 2012 appears to be strong as well, with total employment across the city increasing by 0.3 percent in the first half of 2011 as employers added 10,800 positions to their rolls – up strongly from the 1,500 jobs created in the previous six-month period.

The Chicago office of CBRE Group Inc. brokered the sale on behalf of the seller.

Hines Global REIT has picked up a premier 254,900-square-foot office property in Minneapolis, Minn., in a $69.5 million sale-leaseback transaction with Cargill Inc., a producer and marketer of food, agricultural, financial and industrial products and services. Hines, sponsor of Hines Global REIT, will take on management responsibilities at 9320 Excelsior Blvd. and Cargill will stay put, occupying the building in its entirety under a new long-term lease scheduled to expire at the end of September in 2023.

“Whether single-tenant or multi-tenant, Hines focuses on great real estate with solid credit tenancy that meets the return objectives of our investors,” Edmund Donaldson, senior vice president with Hines, told Commercial Property Executive. “In the case of 9320 Excelsior, the acquisition happens to be a single-tenant sale leaseback.”

Developed in 2010, 9320 Excelsior is one of three structures at the Excelsior Crossings campus off Hwy. 169. With a prime location and Class A status, the property fits right in with Global REIT’s portfolio. The seven-story building is also LEED Gold-certified by the U.S. Green Building Council.

Hines Global relied on a $65 million bridge loan from JPMorgan Chase Bank N.A. and proceeds from its current public offering to finance the acquisition, which is the REIT’s second in Minneapolis. In late 2010, Hines Global bought Fifty South Sixth, a 94 percent-leased, 698,600-square-foot office tower in the city’s central business district for $180 million.

“Hines has had a longstanding presence in the City and we are strong believers in its underlying fundamentals,” Donaldson noted. “The market has been among the nation’s leaders in office using job creation over the last several quarters and is projected to continue to be among the leaders over the next several years. The Global REIT will continue to evaluate opportunities in this market as long as portfolio concentration levels remain below acceptable levels.”

The REIT’s purchase of the Cargill property kicks off what may very well be another year of binge shopping. In 2011, Hines Global added five assets to its portfolio, including the 750,000-square-foot FM Logistic Industrial Park in Moscow and the 152,800-square-foot Stonecutter Court office complex in London. ”We expect to invest at a similar pace in 2012,” Donaldson said.

And those investments will occur near and far. “Global REIT has managed to achieve solid regional diversification within its U.S. portfolio and will continue to focus on markets like Minneapolis that are expected to lead the nation in private sector employment growth over the next several years,” Donaldson said. “The Global REIT has targeted making up to 50 percent of its investments internationally. In addition to the U.K. and Russia, in the near term, the vehicle is focused primarily on both Western and Central Europe, and the primary Asian markets including Australia and Brazil.”

There certainly is money available for taking advantage of new opportunities. Since its $3.5 billion initial public offering in 2009, Hines Global has raised in excess of $900 million for commercial real estate investments. “We are buying and developing multi-tenant assets in the U.S. and around the world,” Donaldson said.

*This story was updated Jan. 9, 2012, at 9:32 a.m. EST to reflect quotes from Hines SVP Edmund Donaldson.

Louisville's Oxmoor Apartment Homes

Continental Realty Advisors is keen on Kentucky, as evidenced by its recent purchase of a 1,200-residence apartment portfolio in Louisville. The multi-family housing owner and institutional fund manager acquired the group of four assets from Camden Property Trust for $97 million.

Among the properties in the portfolio is Brookside Apartment Homes, a 224-unit residential community that first opened its doors in 1987, and Meadows Apartment Homes, which reached completion in 1990 with 400 residences. Completing the group are the 12-year-old Oxmoor Apartment Homes, featuring 432 units, and the 138-unit Prospect Park Apartment Homes, built in 1990. All four properties are now part of the CRA’s CRA-B1 Investment Fund. “Since we can close quickly on large-scale multi-family portfolio deals on an all-cash or loan-assumption basis, the Louisville portfolio fit nicely in our investment strategy,” David Snyder, chairman of CRA, said.

Louisville has long been on CRA’s radar. CRA-B1 made its debut in the market in 2007 with the $19.6 million acquisition of the 272-unit Park Laureate Apartments, followed closely by the $17 million purchase of the 256-unit Canter Chase Apartments. In 2010, CRA bought Jamestown at St. Matthews, a 355-unit property, for $25 million.

The forecast for the rental market in Louisville is sunny. With a growing gap between supply and demand, the average apartment vacancy rate in the city is on track to drop to 4.2 percent in 2012, according to a report by national multi-family investment banking company Hendricks & Partners Inc.

For CRA, the portfolio purchase marks a major commitment to Louisville, but for Camden, the deal is indicative of a different strategy. With the disposition of the assets, Camden bids adieu to Kentucky–but not the South. “Based on Camden’s operating results in the third quarter for Houston, Dallas, Austin and Charlotte, the south is definitely rocking again,” Richard J. Campo, Camden CEO, noted during the company’s third quarter earnings call. The company’s focus extends west, as well; Camden is looking to increase its presence in Sin City.

“Year-over-year numbers are all pointing upwards for Las Vegas,” Campo said. “Air traffic is up 8.7 percent. Convention attendance is up 19.6 percent. Hotel occupancy is up 2.1 percent. Average room rates are up 11.1 percent. With virtually no new supply on the horizon, all of these metrics point to a better market in the next few quarters and next year.”

The timing, he explained, is just right. “I think Las Vegas is a great opportunity for us next year to accelerate growth as the market improves,” Campo added. “Our team in the field and the support teams, and corporate teams at the regional office, the corporate office are prepared to step up and end the year strong, I’m sure.”

And Camden has other ideas. Phoenix made the company’s list of its top performing markets in the third quarter. Of course, there is competition among investors in the market. CRA has an eye on the southwestern city, too. The fund manager shelled out $45 million in cash for the 629-unit Canyons Luxury Apartment Community in 2010.

Industrial Contractors in Evansville, Ind.

Taking a big step in enhancing its civil business unit, Skanska USA has acquired Industrial Contractors Inc. for $135 million. The purchase of the Evansville, Ind.-headquartered contractor, a leader in the commercial, industrial and power markets, allows Skanska to enter the industrial sector in the Midwest and further enhance its presence in the energy sector.

The transaction included Skanska’s acquisition of ICI’s affiliate companies Professional Consultants Inc., Tri-State Refractories Corp., and Industrial Equipment Inc. Established in 1964, ICI has become a force in the Midwestern construction arena in its three areas of business: power and energy, commercial and light industrial and heavy industrial. Past ICI projects include work at American Electric Power Rockport in Rockport, Ind., and in the commercial sector, the $85.4 million, 260,000-square-foot Deaconess Gateway Hospital in Newburgh, Ind. The company closes 2011 with annual revenues totaling approximately $500 million.

“Our strategy has always been to increase our portfolio of services and expand our geographic footprint in the Midwest,” Richard Cavallaro, president of Skanska USA Civil. “The region is the manufacturing and industrial hub of the US, and home to some of the largest electrical power generating facilities in the country.” Skanska and its newly acquired division will also focus their efforts on construction projects in the higher education, healthcare and pharmaceutical industries.

With the merger, ICI is reborn as Industrial Contractors Skanska and becomes a unit of Skanska USA Civil, making up one-third of the business. It’s a blending of two companies with a history in high-profile projects and mirroring cultures. Part of that culture includes, as ICI chairman and CEO Alan Braun describes it, a “family feel.” Braun, who will stay aboard as an active advisor to ICS’s Midwest operations Skanska’s national civil operation, is a standard-bearer of the concept, as he is the son of the founder of ICI, Charles Braun.

Skanska USA is a subsidiary of Stockholm-based Skanska AB, which expanded its construction business footprint in other parts of the world this year. Earlier this month, Skanska Poland entered into an agreement to acquire 100 percent of the shares of PUDiZ Group, a leading road construction company in the region. And in October, Skanska Finland signed on to purchase Soraset Yhtiöt Oy, a civil construction firm, in an all-share transaction. Financial specifics of Skanska USA’s acquisition of ICI have not been publicized.

Hines is getting greener and greener. The international real estate company has achieved LEED-EB, or LEED for Existing Buildings, certification for its 896,500-square-foot office building at 321 North Clark at Riverfront Plaza in Chicago. Hines took it up a notch. LEED Silver certification just wouldn’t do; the 35-story tower won the Gold.

The glass and stainless steel high-rise has hovered over the Chicago River since making its debut in 1987. Hines came into ownership of the asset in 2006 when Hines Real Estate Investment Trust Inc. snapped up the property.

Sustainable development is practically de rigueur, but transforming an existing structure into a green marvel is more of a challenge. However, it’s a challenge Hines does not hesitate to face. At 321 North Clark, the company incorporated a series of features to achieve the LEED Gold stamp, including low-flow aerators and water closets; efficient LED lighting in the lobby; and high-performing green cleaning services. Additionally, the building provides the option for tenants to minimize HVAC usage on weekends when space is not being occupied.

The tower stands above the rest, but not necessarily for its height. 321 North Clark also has an Energy Star rating of 83, which means it is 32 percent more energy efficient than the typical office building in the U.S.

“Achieving LEED Gold certification validates the diligent efforts by the on-site team to generate significant cost savings and environmental improvements for the long-term benefit of the tenants, owners and the city of Chicago,” Gary Holtzer, global sustainability officer with Hines, said.

The Chicago high-rise is hardly Hines’ first time at the rodeo. In December alone, the company’s Gateway Oaks I and IV office structures encompassing 204,700 square feet in Sacramento earned LEED-EB Gold certification, as did the 92,900-square-foot office building at 5820 Canoga Ave. in suburban Los Angeles.

Some of the best-known buildings in the country are taking the lead, so to speak, in the trend of transforming from less-than-efficient into shining examples of sustainability. The Empire State Building, benefiting from a $550 million rebuilding program that includes an energy retrofit, won LEED-EB Gold certification in September. The 2.9 million-square-foot, 1930s-era skyscraper is just one of a handful of National Historic Landmarks to earn the designation. In 2009, the owner of the Willis Tower, formerly Sears Tower, announced a $350 million sustainable modernization program for the 4.5 million square-foot office property, which is the tallest office building in the Western Hemisphere.