Photo: Kenneth Berke

Lakeway Center, a 1.2 million-square-foot office property in Metairie, La., just outside of New Orleans, has come under new ownership. The Feil Organization now calls the asset its own, having purchased the three-building complex from Equity Office Properties for a rumored sum of roughly $150 million.

Commercial real estate and capital markets services provider HFF orchestrated the sale of Lakeway Center on behalf of EOP, which had owned the premier office buildings since late 1993. Investors took note when the complex became available.

“While there are a handful of properties on the market that are candidates for adaptive re-use development, the true Class A assets do not regularly trade and as such, when they are marketed for sale, they typically attract strong interest,” Andrew Levy, senior managing director with HFF, told Commercial Property Executive.

Carrying addresses on Causeway Blvd., along Lake Pontchartrain, the Lakeway Center towers sprouted up between 1981 and 1987, and all three underwent renovations in 1996. Today the complex is 90.5 percent leased, with such names as People’s Health Network and the U.S. Drug Enforcement Administration taking up space on the tenant roster. Feil plans to upgrade Lakeway Center to ensure that the property–one of the largest office developments in the State of Louisiana–maintains its sheen.

It’s no Manhattan, but the New Orleans office market is certainly moving up investors’ radar. “Although still considered a secondary market, New Orleans office properties are attracting a significant amount of private and institutional capital from outside of the region,” Levy said. “The market offers investors a higher return than what they would typically expect from a comparable asset in a primary market and the office market is on extremely solid footing given the high existing occupancy in the Class A properties, strong job growth and lack of new construction on the horizon.”

Glimcher Realty Trust, of Columbus, Ohio, plans to purchase, for about $112 million, the remaining interest in WestShore Plaza, Tampa, from its joint venture partner, an affiliate of Blackstone Real Estate Partners VI, the REIT announced Thursday. The purchase will put WestShore Plaza fully into Glimcher’s ownership for the first time in about three years.

In an unrelated transaction, both partners will sell their interests in Lloyd Center in Portland, Ore.

Both properties currently are held in a JV in which Glimcher holds a 40 percent interest and Blackstone 60 percent.

The sales are expected to close within 60 days, subject to customary closing conditions. After the closings, the JV will no longer own any real estate properties or other assets, other than certain liquid assets to cover post-closing obligations.

Glimcher will purchase the 60 percent interest in WestShore Plaza for $111.8 million: $40 million in cash and an assumption of Blackstone’s pro rata share of the $119.6 million loan. The purchase price will be funded initially by a combination of the proceeds from the sale of Lloyd Center and availability on Glimcher’s credit facility.

“Consistent with our long-term growth plan, we are pleased to regain full ownership of WestShore Plaza. With sales in excess of $410 per square foot, the center continues to perform well and … offers one of the best restaurant line-ups in the region, which research shows is increasingly important to our shopper,” Michael Glimcher, chairman and CEO of Glimcher, said in a release.

Built in 1967 at the corner of West Shore and Kennedy boulevards, WestShore was acquired by Glimcher in 2003. The JV with Blackstone closed in early 2010.

The center is anchored by Macy’s, JCPenney and Sears, with other stores including H&M, Ann Taylor, White House Black Market, Victoria’s Secret and Francesca’s. Restaurants include Maggiano’s Little Italy, Mitchell’s Fish Market, PF Chang’s China Bistro, The Palm Restaurant and Seasons 52.

The two buyers of the Lloyd Center, described only as “unaffiliated third parties” were not disclosed, and a Glimcher spokesperson was unable to provide CPE with further information.

After repayment of the existing loan on the property, Glimcher’s share of the net proceeds from the sale of Lloyd Center and four outparcels will be about $28.4 million.

Lloyd Center was developed in 1960 as the country’s largest shopping center. With nearly 1.5 million square feet of space, today it’s still one of Oregon’s largest shopping. It features six anchors, 180-plus shops, a 900-seat food court, four full-service restaurants, an indoor ice-skating rink and an eight-screen theater.

Regency Properties increases the square footage of its Florida portfolio fivefold with the purchase of the 170,000-square-foot Oak Station Shopping Center in Marianna. The seller, a private developer based in Arizona, had owned the retail center since 2010.

Sited on 17 acres along Highway 90, Oak Station is 98 percent occupied, with Save-A-Lot, Big Lots, Fred’s, Bealls Outlet, Citi Trends & Goodwill serving as anchors. Commercial real estate services firm Cassidy Turley marketed the asset on behalf of the seller and found no shortage of interested investors. As Drew Fleming, a vice president and principal with Cassidy Turley, told Commercial Property Executive, hopeful buyers were lured in by the fact that, “90 percent of the GLA is leased to national and regional tenants and the property had recently undergone physical upgrades.”

Approximately $2 million in renovations were completed at the 24-year-old Oak Station, and there’s more to come.  Christopher Folz, leasing representative with Regency, told CPE that the new ownership is planning its own makeover with the renovation of the shopping center’s façade.

Oak Station also offers outparcel development potential in a market with just 675,000 square feet of multi-tenant retail spread across eight shopping centers, and an average vacancy rate of 8.2 percent, which, Fleming noted, is below the national average. “The market is healthy due to the fact that there has been little to no major speculative retail construction in this area for a long time,” he added. 

For Regency, the acquisition of Oak Station marks its second purchase this year and its second property in the Sunshine State. Regency also owns the 35,400-square-foot Green Acres Shopping Center in Havana, which the real estate company bought in 2011. 

As for shopping around for more additions to its portfolio, Regency will continue to stick with the program. “We target county seat communities in the Midwest and Southeast,” Folz said.

Federal Capital Partners has acquired Erwin Square Plaza, a 238,800-square-foot office and retail building in downtown Durham, N.C. The real estate investment company purchased the Class A property from National Asset Services Inc. in a $37.5 million transaction. 

Commercial real estate services firm CBRE Group Inc. orchestrated the sale on behalf of NAS.

Erwin Square sprouted up on a 7.5-acre parcel at 2200 W. Main St., in 1990. The 10-story building encompasses approximately 215,000 square feet of office space accented by 23,800 of retail space in wings on either side. FCP plans to invest in capital improvements to reposition the retail segment and, as Esko Korhonen, managing partner at FCP, noted in a prepared statement, bring the property “back to its institutional-grade potential.” 

Facelift or not, Erwin Square Plaza has long been a coveted office destination in downtown Durham. The property’s occupancy level has held strong over the last several years, hovering in the mid- to upper-90 percent range, even during the Great Recession. Today, the building is 96.2 percent occupied, with a roster featuring the likes of Duke University, Princeton Review, UBS Financial Services and other creditworthy tenants. 

FCP has a strong presence in the Triangle area, having provided financing or holding an interest in an additional 350,000 square feet of commercial space and nearly 2,000 apartment units. However, FCP does not have tunnel vision; the company casts a wide net when hunting for transactions. 

“Besides the Triangle area, FCP continues to look at acquisition opportunities in all sectors–commercial, residential, manufactured housing–throughout the Mid-Atlantic region, including Washington, D.C., and its suburbs, Philadelphia and other areas of the Carolinas such as Charlotte,” Korhonen told Commercial Property Executive. “Within those markets, we can invest outright, provide structured debt or venture with a strong local partner.” In May, the company, along with Cross Properties and Alterra Property Group, commenced the historic renovation and transformation of Philadelphia’s 1616 Walnut St. property into a 206-unit luxury apartment community.  Earlier this year, FCP closed a $10 million mezzanine loan for the $52 million development of a 240-unit apartment community in Alexandria, Va., just outside of Washington, D.C.

The private equity giant’s real estate affiliate has acquired a 751-room, four-property Hilton Select Service portfolio from Sage Hospitality and Apollo Global Management.

Jones Lang LaSalle represented the sellers in the transaction.

“The Hilton Select Service Portfolio provided an outstanding opportunity to acquire institutional quality assets strategically located in thriving markets with superior brand affiliation,” Adam McGaughy, JLL managing director, said in a company statement. “The new ownership will benefit from strong in-place cash flow and exceptional upside potential.”

The portfolio includes three Hilton Garden Inns located in Atlanta, Orlando, Fla., and Denve, and a Homewood Suites in San Francisco. Sage has been retained to manage all four properties.

Located at 1501 Lake Hearn Drive in Atlanta’s desirable Perimeter market, the Hilton Garden Inn is an eight-story, 193-guest room/six-suite hotel that was constructed in 1999. Last year the property completed more than $2.3 million in capital improvements.

The Hilton Garden Inn is located at 6850 Westwood Blvd., in Orlando and is an official on-site hotel for the popular SeaWorld attraction. The 224-room hotel features seven meeting rooms, outdoor swimming pool and whirlpool, fitness center, business center, sundry shop, The Great American Grill and Sting Ray’s Lounge.

Denver’s Hilton Garden Inn, built in 1999, is located in the Meridian Business Park at 9290 Meridian Blvd. in Englewood. The six-story, 157-room hotel underwent $2.3 million in capital improvements in 2011, and now boasts three meeting rooms, indoor swimming pool, fitness center, business center, sundry shop, The Great American Grill and Branch Water Lounge.

Located at 2000 Shoreline Court in Brisbane, Calif., Homewood Suites in San Francisco is a four-story, 177-suite hotel, which completed an extensive renovation in 2008 and a renovation to the public areas in 2013. It features one meeting room, indoor swimming pool and fitness center.

Kelly McCourt, Sage Hospitality’s vice president of marketing, said that the company will continue to drive the properties forward seeking optimum results, while focusing on providing outstanding customer service to all our guests.

JLL managing director Mark Fair and vice president Katy Reynolds helped with the transaction.

CBRE Strategic Partners U.S. Value 6, a Los Angeles–based fund sponsored by CBRE Global Investors, has purchased Three Ravinia, a 31-story, 813,750-square-foot trophy office building in north suburban Atlanta, the fund announced Friday. The off-market transaction was for $144.3 million, according to a release by the seller, Colonial Properties Trust, of Birmingham, Ala.

The building, developed by Gerald Hines Interests and completed in 1992, is in Dunwoody, in metro Atlanta’s Central Perimeter submarket, reportedly the largest concentration of office space in the Southeast.

“The Perimeter submarket experienced significant net office absorption in 2012 and is projected to have accelerated job growth in the near-term,” Vance Maddocks, president of CBRE Strategic Partners U.S., said in a release.

Three Ravinia is currently 91 percent occupied, and InterContinental Hotels Group occupies almost 50 percent of the building, a CBRE spokesperson told Commercial Property Executive.

As part of a strategy to address near-term lease expiration risk, the buyer is planning a capital campaign to upgrade building systems and the amenities package, as well as make cosmetic improvements to common areas and begin seeking LEED Silver certification.

The property was unencumbered, according to the seller, and sales proceeds were used to repay a portion of the outstanding balance on Colonial Properties Trust’s unsecured credit facility.

“The disposition of Three Ravinia is a significant step in the execution of our multi-family-focused strategy and strengthens the company’s balance sheet,” Colonial chairman and CEO Thomas Lowder said in the REIT’s release. “Following the disposition, 95 percent of the company’s net operating income will be generated from our multi-family portfolio.”

As of the fourth quarter, the average Central Perimeter Class A office vacancy was 15.3 percent, versus an overall 18.5 percent rate for metro Atlanta, according to CBRE. In addition, the submarket absorbed more than 950,000 square feet of office space in 2012.

CBRE Strategic Partners U.S. Value 6 has been very active of late. Among its recent acquisitions was its first hotel, the 506-room San Jose Marriott, for roughly $83 million.

 In the latest round of the high-stakes competition to masterplan and redevelop the 52-acre Miami Beach Convention Center, the South Beach ACE team yesterday laid out the key points of both proposals and contended not only that its plan is better, but that the Portman-CMC plan is shifting to resemble their own.

Last week, Commercial Property Executive reported on a letter of intent that Portman-CMC had sent to the City of Miami. That letter described the business and financial terms of the group’s proposal and of course emphasized what Portman-CMC believes are the advantages of its plan. <www.cpexecutive.com/cities/miami/portman-cmc-reveals-cost-effective-master-plan-for-miami-beach-convention-center/>

The exchange might be the last before Miami Beach commissioners decide which development team to choose for the $1 billion-plus project, though apparently no firm date has been set for that announcement. At that time, a public referendum will be scheduled to approve the plans or maintain the status quo.

Portman-CMC consists of a master development team (Portman Holdings, CMC Group, Bal Harbour Shops and Cirque du Soleil) and a master design team (BIG/Bjarke Ingels Group, John Portman & Associates, West 8, Fentress Architects and Revuelta Architecture International), along with engineering, construction and finance consultants.

South Beach ACE includes Tishman, UIA, architecture partnership OMA (led by Rem Koolhaas and Shohei Shigematsu), MVVA/Michael Van Valkenburgh Associates, Raymond Jungles and tvsdesign.

As to the competing plans, in broad strokes:

* The South Beach ACE plan calls for a taller facility with a smaller footprint, intended in part to free up more than 28 acres for green space, but also to improve pedestrian access through and around the site. Portman-CMC contends that its lower structure (124 feet versus 194 feet of height) won’t take views away from neighboring properties or risk casting a shadow on the nearby Holocaust Memorial.

* The Portman-CMC proposal will cost the public less, and the group will charge the city less in design and development fees. South Beach ACE counters that its financing package carries only 50.9 percent debt and that MetLife has tentatively committed to signing on as a partner, while Portman-CMC has proposed 61 percent debt and has not announced an equity partner.

* South Beach ACE touts its better integration of the convention center and hotel in one building, while Portman-CMC contends that it can build its version 19 months faster, saving the city substantial money.

The two plans will be displayed side by side at Miami Beach City Hall, Mondays through Saturdays through June 21.

The convention business is mature enough that any municipality aiming to increase its share has to wrestle the business away from someone else, Hank Staley, senior vice president at the Jacksonville office of PKF Consulting USA, told Commercial Property Executive. He contrasted Nashville’s convention center, now nearing completion and enjoying substantial presales, with Philadelphia’s new convention center, which has significantly underperformed.

Whichever proposal is accepted for the Miami Beach Convention Center, Staley said, the center is likely to do very well indeed, as the area remains extremely popular as a destination. He noted that the metro Miami hotel market has “roared back” since the worst of the recession, and in 2011 regained its 2007 peak RevPAR, one of the few major cities so far to have done so.

Duke Realty Corp. has sold the Shops at Pembroke Gardens, a 391,120-square-foot lifestyle retail center in South Florida for $188 million to an undisclosed buyer as it continues to reposition to mainly industrial holdings. The Indianapolis REIT noted that proceeds of the sale to an institutional joint venture would be used toward the purchase of an industrial portfolio.

“The sale of this retail asset is in alignment with our asset repositioning strategy, which includes divesting our retail holdings and targeting an asset allocation mix of 60 percent bulk industrial, 25 percent suburban office and 15 percent medical office by the end of 2013,” Denny Oklak, Duke Realty chair and CEO, said in a news release. “This disposition is a significant and strategic step in our repositioning strategy that has decreased our investment allocation in retail assets and resulted in significant gain. Proceeds from the sale will be accretively recycled into an eight-building industrial portfolio that we currently have under contract for purchase.”

Duke Realty built the retail center, located at the Interstate-75 and Pines Boulevard interchange southwest of Fort Lauderdale, in 2008 in conjunction with Jeffrey R. Anderson Real Estate, according to a company spokesperson. The center is 90 percent leased with stores like Bath & Body Works, Sephora, Banana Republic, Barnes & Noble, Old Navy, Ann Taylor and Cold Water Creek and numerous restaurants including The Cheesecake Factory.

“The Shops at Pembroke Gardens is a highly leased property and has quickly established a dominant presence in the South Florida landscape since it was built in 2008, making it attractive to investors,” Danny Finkle, senior managing director of HFF, which advised Duke Realty on the sale, noted in the release.

Finkle’s team at HFF included Jim Batjer, managing director; Luis Castillo, director; and Robert Saracco, a senior analyst. The team worked with Jeff Behm, vice president of dispositions for Duke Realty.

Duke Realty also owns seven acres slated for retail development outside but contiguous to the Shops at Pembroke Gardens and another 44 acres that has been master planned for approximately 700,000 square feet of Class A office space. A Duke Realty spokesperson told Commercial Property Executive that the firm is interested in either selling or leasing those properties.

Ed Mitchell, senior vice president of Duke Realty’s South Florida operations, noted in the news release that the properties have “outstanding accessibility and visibility.” He added that his team is “ready to work with interested parties on land sales and development opportunities.”

Duke Realty has been remaking its portfolio since the fall of 2009, when it consisted of 55 percent office, 36 percent industrial, 5 percent medical and 4 percent retail. Since that time, the firm has been disposing of non-core assets and acquiring more industrial properties, including selling a suburban office portfolio to an affiliate of the Blackstone Group in October 2011 for $1.1 billion. More recently, Duke Realty sold its interests in a joint venture to its partner Chambers Street Properties for $98.6 million. The portfolio consisted of 16 office properties and one industrial asset – Goodyear Crossing Industrial Park III, an 820,000-square-foot warehouse and distribution facility in Phoenix.

The REIT currently owns two other lifestyle retail properties – The Shops at West End in St. Louis Park, Minn., and The Shoppes at Montage in Moosic, Pa.

“Duke Realty’s long-term strategic plan calls for exiting the retail sector,” the REIT spokesperson told CPE. “We will market and sell our remaining retail properties when appropriate to maximize value.”

Club at Danforth in Jacksonville

Carroll Organization continues its shopping spree across the Southeast with the recent acquisition of four apartment communities for $102.5 million. The group of properties adds 1,126 units to the real estate company’s fast-growing portfolio.

In Jacksonville, Fla., Carroll purchased the Club at Danforth, a 288-unit property that is presently 96 percent leased. The company picked up another asset in the Sunshine State, the 200-residence Harbour Green, which boasts an occupancy level of 96 percent. The 360-unit Links at Georgetown in Savannah, Ga., is also part of the newly acquired collection, as is the 278-unit Vintage at the Parke in Murfreesboro, Tenn. Links and Vintage have respective leasing levels of 92 percent and 96 percent.

“All four properties are situated in markets with exceptional market fundamentals and provided Carroll Organization with a great investment opportunity,” M. Patrick Carroll, founder and CEO of Carroll, said in a prepared statement. “This acquisition is parallel with our strategy of buying in good locations with excellent visibility, and the additional opportunity to increase value.” 

Carroll will submit the assets to capital improvements and will further enhance value through its tried-and-true marketing strategies. The properties will also be renamed to reflect the company’s ARIUM brand.

Carroll has already had quite a busy second quarter. In April, it acquired two metropolitan Atlanta multi-family properties for $46 million; an Orlando asset with a price tag of $40.5 million; and two properties in Houston.  The company has shelled out approximately $500 million on purchases over the last 18 months.

There’s been no lack of activity in the metropolitan Jacksonville hotel market this year, and the Hampton Inn & Suites Ponte Vedra and the Courtyard by Marriott Flagler Center are among the latest properties to change hands. Commercial real estate services firm CBRE Hotels, acting on behalf of different sellers, recently facilitated the disposition of the assets in transactions totaling approximately $17.8 million.           

Mercury Investment Co. picked up the 13-year-old Hampton Inn, which carries the Jacksonville Beach address of 1220 Marsh Landing Pkwy., from Marsh Landing Hotel Associates L.L.C. for $8.4 million. The 117-room hotel benefits from its location within close proximity to the Mayo Clinic.

Peachtree Hotel Group grabbed a piece of the Jacksonville pie with the approximately $9.4 million purchase of the six-year-old Courtyard from Jacksonville Hotels Associates L.L.C. With a location at 14402 Old St. Augustine Rd, the 120-room property offers easy access to the JaxPort Cruise Terminal.

Both of the new owners plan to upgrade the latest additions to their respective portfolios, with the Hampton Inn getting a few more enhancements to its recently completed refreshing, and Courtyard undergoing a major renovation. 

Strong travel and tourism activity is bolstering Jacksonville’s hotel market, as noted in a recently released report by PKF Hospitality Research. Visitation among the leisure crowd is on the rise, and conventions in the area are attracting more attendees. The experts expect the good times to continue. “The outlook for 2013 remained positive with hospitality contacts projecting increases in occupancy rates,” per the report.