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.

Jack Cuneo

By Gail Kalinoski, Contributing Editor

Less than a month after telling shareholders it was exploring ways to provide a “liquidity event,” Chambers Street Properties, a self-managed Maryland REIT, made it official Tuesday, announcing it intends to list its common shares on the New York Stock Exchange. The REIT said it expected to be trading on the NYSE under the ticker CSG on or by May 21.

The REIT, which has its headquarters in Princeton, N.J., also said it was planning a modified “Dutch Auction” tender offer to purchase as much as $125 million of its common shares. Chambers Street would select the lowest price within a range of $10.10 and $10.60. The tender offer will be paid for with funds from its unsecured revolving credit facility.

In an April 2 letter to stockholders, Chambers Street president & CEO Jack Cuneo said the firm had hired Wells Fargo Securities L.L.C. and Citigroup Global Markets Inc. as its financial advisors. He noted listing its shares on a national exchange was a possible outcome as it positioned itself for a “future liquidity event.”

The firm’s board of trustees deemed listing on the NYSE to be “in the best interest of the company and its shareholders,” according to a news release from Chambers Street Tuesday.

“Chambers Street believes that a listing will enable it to continue to execute its asset management, portfolio growth, and capital strategies designed to maximize shareholder value,” the release stated. “Publicly traded real estate companies have enjoyed strong returns in recent years, and companies that own net lease properties, similar to Chambers Street, are trading at attractive valuations. In addition, Chambers Street believes that a listing on the NYSE will provide access to additional potential investors as well as to a broader range of potential sources of capital.”

Because of the pending listing, Chambers Street officials could not comment beyond the firm’s news release.

The plan for public listing comes as the REIT has had a particularly active year since changing its name from CB Richard Ellis Realty Trust last June and moving to self-management. The REIT has about $3.2 billion in real estate holdings in the United States and abroad. It currently owns or has majority interests in 129 properties, mostly industrial and office assets, in 22 U.S. states, Germany and the United Kingdom. As of Dec. 31, 2012, the portfolio was 98 percent leased to 272 tenants, with diversity in locations, industries and lease expirations.

Two weeks ago, Chambers Street said Big O Development Inc., a major tenant at its Summit Distribution Center property in Salt Lake City, had signed a five-year lease renewal. An automotive tire distributor, Big O leases more than 100,000 feet of the 275,000-square-foot center, acquired in 2010 as part of a seven-property industrial portfolio.

Celebration Office Center, Orlando

Chambers Street has made four big acquisitions so far this year, including acquiring the remaining interests in 17 properties it owned in joint venture with Duke Realty Corp. The portfolio, which sold for a reported $98.6 million, comprised 16 office properties and one industrial asset, an 820,000-square-foot warehouse/distribution facility in Phoenix. The office properties included three buildings with a total of 542,000 square feet in Cincinnati and two buildings with a total of 451,000 square feet in Columbus. Other properties were located in Dallas; Fort Lauderdale; Houston; Minneapolis; Raleigh, N.C.; and two in Orlando  – Celebration Office Center and Northpoint III, with a total of 209,000 square feet.

In February, Chambers Street made its first acquisitions in the Philadelphia area, closing on two office buildings totaling 300,000 square feet in Malvern, Pa. The two buildings were developed by Chambers Street, then still known as CB Richard Ellis Realty Trust, and Trammell Crow, a CBRE Group subsidiary, in joint venture and leased to Endo Health Solutions.

Christopher White, of Cassidy Turley

Cassidy Turley’s activities in the state of Georgia just mushroomed by 195 million square feet. The commercial real estate services firm has been tapped by the Georgia State Properties Commission to provide a wide range of corporate services to achieve efficiency and cost savings for its sprawling portfolio of leased and owned real estate properties. 

It’s no small undertaking. Cassidy Turley’s long list of responsibilities for the portfolio, which consists predominantly of office space, will include transaction management, project management, lease administration and portfolio consulting. With well-honed expertise, vast organizational capacity and solid transaction resources, the firm brings the necessary tools to the table. And, perhaps most important of all, Cassidy Turley has its finger on the pulse. 

“Though the economy is steadily improving, metro Atlanta remains a tenants’ market, so it’s a great opportunity and time for the State to analyze and optimize its portfolio and uncover savings through market-rate transactions, consolidations and other methods that, ultimately, will save taxpayers money,” Christopher White, a senior managing director and principal with Cassidy Turley, told Commercial Property Executive. 

Cassidy Turley is no stranger to such gargantuan endeavors but for the State, the establishment of a real estate partnership of this kind is new territory. However, it’s what the people want. With an eye toward saving taxpayer dollars, voters green-lighted Amendment 2 in November 2012, giving the Peach State the freedom to enter into multi-year lease agreements and take a strategic approach to managing its real estate portfolio; an approach that the SPC estimates will result in a savings of approximately $3.5 million in the first year and an aggregate $66 million over the next decade. The selection of Cassidy Turley is the first major step toward fulfilling the goal.

SPC held a competition for the job, and Cassidy Turley emerged victorious as the best team to, as SPC deputy executive director Frank Smith said in a prepared statement, “help the state of Georgia reap the same savings opportunities traditionally enjoyed by private sector tenants.”

Cassidy Turley has a simple–but tried-and-true–plan for tackling the newly awarded assignment. “[We will] analyze the portfolio and look for opportunities to reduce occupancy costs,” White said. Options abound, from the disposition of properties to occupancy consolidation to the employment of new methods for a more efficient use of workspace. Cassidy Turley is off and running.

Innovative Student Housing and Harrison Street Real Estate Capital formed a joint venture to acquire College Station at Valdosta, a student housing property less than one mile from Valdosta State University in Valdosta, Ga.

“The property is a Class A asset located within walking distance of Valdosta State University with significant management upside potential,” David Neef, Innovative’s COO, told Commercial Property Executive. “Innovative chooses off-market opportunities where we can implement our best practice management platform and create immediate results for our partners.”

Prior to the acquisition, Innovative took over management of the property and became familiar with its operations.

“The property is being re-branded as The Gates at Valdosta, and will see some cosmetic changes such as exterior paint on two of the buildings and interior paint in the model unit,” Neef said. “The acquisition comes with an option to develop an additional 500-plus beds, which could be delivered as early as 2015.”

Located at 1400 Baytree Dr., The Gates at Valdosta will offer residents a swimming pool, satellite television, alarm systems in each unit, walk-in-closets and the convenience of being walking distance to campus.

According to Nee, the property’s location being the closest Class A, purpose-built student housing property to campus is key to its appeal.

This is Innovative’s eighth student housing property, and first in Georgia. Previously, the company has invested in Idaho, Texas, Ohio, Missouri and Utah.

Harrison has a collection of acquisitions and developments totaling more than 230 properties across the country.

More than 12,000 students attend Valdosta State University each year.

Salt Lake City

RHP Properties Inc., of Farmington Hills, Mich., is now the nation’s largest privately held owner and operator of manufactured-home communities, thanks to its most recent acquisition, of an $865 million manufactured-housing portfolio, the company announced Monday. The portfolio totals about 17,000 home sites in 71 communities in five states, including Utah, New York and Florida.

The acquisition was made in partnership with NorthStar Realty Finance Corp., New York. In a separate announcement last week, NorthStar stated that the transaction was financed with a $640 million non-recourse, 10-year mortgage with a fixed interest rate of 4.02 percent. The company anticipates an initial current yield of approximately 14 percent on its equity investment. 

David Hamamoto, NorthStar’s chairman and CEO, described the manufactured-housing sector in a release as having “consistently demonstrated stable cash flows, steady rental growth, very low turn-over rates and minimal capital expenditures.”

The ages and amenity packages of the just-purchased communities vary widely, RHP Properties CEO Ross Partrich told Commercial Property Executive, though most are aimed at RHP’s core market of working-class families. These communities typically have a club house for events and for private rental and often a swimming pool and/or a basketball court. 

“The sector is doing very well,” Partrich said, if only because there’s always demand for affordable housing.

Earlier this year, RHP, in partnership with NorthStar, completed a $333 million acquisition of 36 communities, primarily in metro Denver and in Wyoming, totaling 6,269 home sites. 

RHP’s current $2.25 billion portfolio includes 218 manufactured-home communities, totaling approximately 51,000 home sites across 25 states, and 13 apartment properties with more than 3,500 units in Michigan. 

In 2011, the average selling price of a new single- or multi-section manufactured home (average 1,470 square feet) was $60,600, versus $207,950 for the average new site-built home (average 2,494 square feet), according to a 2012 report by the Manufactured Housing Institute. The averages quoted, which do not include land costs in either case, are based on U.S Census Bureau figures. 

The costs per square foot work out to $41.22 for manufactured and $83.38 for site-built.

Also in 2011, site-built housing starts totaled around 431,000 versus nearly 52,000 manufactured homes shipped, for a breakdown of 89 percent versus 11 percent of the single-family market. 

Nationwide, about one-quarter of new manufactured homes are placed in communities and the remainder go onto private property, also according to the MHI report.

The University of North Carolina Kenan-Flagler Business School’s Real Estate Fund II (KFBS-REFII) has co-invested, along with Admiral Capital Group, of San Antonio, and Wood Partners, of Atlanta, in Brookhaven, a 17-story, 209-unit Class A multi-family building in Atlanta’s Buckhead area, the parties announced Thursday. Financial terms were not disclosed.

As Commercial Property Executive reported on Nov. 12, a joint venture of Admiral Capital and Wood Partners acquired the building, a broken condominium built in 1985, in early November. As the general partner, Wood Partners led the acquisition. 

The building, at 3833 Peachtree Road, underwent renovation in 2008, when its interiors were modernized with hardwood floors, custom cabinetry, granite counters, stainless steel appliances and enclosed sunrooms.

As of November, Wood Partners planned to enhance the common areas with expanded parking, a fitness center and a resort-style amenity deck with a water feature, outdoor bar and bocce court. Existing amenities include a heated pool, men’s and women’s saunas, and a lighted tennis court.

Wood Partners has close ties to UNC. Founder Leonard Wood earned his MBA from Kenan-Flagler in 1972 and has since donated $4 million to establish the Leonard W. Wood Foundation for Excellence in Real Estate and endow the Leonard W. Wood Center for Real Estate Studies.

Kenan-Flagler’s two real estate funds were formed with the dual missions of providing competitive financial returns to investors and giving UNC undergraduate and MBA students first-hand real estate experience. That experience includes the opportunity to establish personal and professional relationships with national real estate developers and investors.

KFBS Real Estate Fund I, which was established in 2007, is fully invested. Fund II was formed in 2011 and is currently in its investment period.

Recent investments by the student-managed funds include a portfolio of industrial properties in the Dallas–Fort Worth area, a hotel development in Charleston, S.C., and retail centers in Charlotte, N.C., and Washington, D.C.

The funds “typically co-invest alongside another fund, developer or other type of sponsorship on our investments,” Kirk Mobley, Kenan-Flagler MBA Class of 2013, told CPE. The transactions are thus not “acquisitions” in the truest sense of that word, he added.

Atlanta Property Group, a privately held real estate investment firm, has acquired Northcreek Office Park, a four-building, 536,000-square-foot Class A office campus located in Atlanta’s Buckhead/West Paces Ferry corridor for a reported $72 million from CBRE Global Investors.

Cushman & Wakefield represented the seller in the transaction. CBRE Global Investors had originally purchased the office park in 2008 on behalf of its Strategic Partners U.S. Value V fund, for about $60 million.

“Northcreek is an exceptional asset,” Court Thomas, a partner at APG, said in a company statement. “A majority of the tenants are local companies, and several are owned by principals with whom we have existing relationships.”

Located at 3715 Northside Parkway, Northcreek Office Park consists of four fully renovated, eight-story class A office buildings featuring a full array of tenant amenities including onsite dining and catering, conference and meeting facilities, a state-of-the-art fitness center, and abundant structured and surface parking.

The eight-story structure was constructed between 1971 and 1979 and each floor ranges between 133,520 and 134,667 square feet.

The property is prominently located along Northside Parkway near the intersection with West Paces Ferry Road, surrounded by some of the highest income demographics areas in the Southeast.

At the time of the sale, the property was approximately 91 percent leased to 74 tenants.

Atlanta Property Group now owns 15 assets that total about 2.7 million square feet.

“Our recent leasing velocity affirms our position as the go-to provider of well-located, quality office space for value-conscious small and mid-size tenants,” Jonathan Rodbell, a partner at APG, said in the company release. “We intend to maximize the property’s value as the economy continues to improve.”

Cushman & Wakefield’s investment sales team consisted of executive director David Meline, executive director Stewart Calhoun, director Samir Idris and senior associate Casey Masters.