U.S. Bank has given a big helping hand in the addition of 165 new units to Los Angeles’ depleted affordable housing market. The bank is providing approximately $55.1 million to Retirement Housing Foundation for the development of the Broadwood Terrace and Las Alturas senior affordable housing communities.

“Affordable housing for seniors is an essential component to the health and vibrancy of urban communities,” Tiena Johnson-Hall, vice president with U.S. Bank Community Lending Division in Los Angeles, and member of RHF’s local advisory committee, told Commercial Property Executive. “We take pride in funding projects that, in addition to creating lively senior living communities, provide resources and services to help maximize quality of life for people in all of life’s stages.”

Groundbreaking for both LEED-certified properties is this month. Broadwood Terrace will carry the address of 5001-5025 South Main St. in South Los Angeles, and offer 88-units for seniors in a five-story building. In the Boyle Heights neighborhood, the five-story Las Alturas will be erected at 3545 East Whittier Blvd., featuring 77 units.  

U.S. Bank is supporting the Broadwood Terrace and Las Alturas projects with $24.9 million in construction debt, as well as approximately $30.2 million of Low-Income Housing Tax Credit equity through its tax credit investment subsidiary, U.S. Bancorp Community Development Corp. Currently, the LIHTC program is the vehicle that creates the nation’s only notable new supply of subsidized rental units, according to a report by the Joint Center for Housing Studies of Harvard University. 

In addition to the construction and LIHTC financing, U.S. Bank has committed to making another loan to RHF in the amount of $1 million for working capital.

“Growth in the number of individuals and families opting to rent has created a greater need in the market for affordable housing,” said Johnson-Hall. “Naturally, rental prices have increased as vacancy rates have declined in places like Los Angeles. This trend has had a particularly negative effect on those seniors who are living on a fixed budget, and don’t have as much flexibility in their monthly finances.” 

Broadwood Terrace and Las Alturas will open their doors to residents in late summer or early fall of 2014.  

U.S. Bank is consistently active in assisting to increase affordable housing availability in the U.S., not just for low-income households in general, but for often-forgotten segments of renters in the low-income bracket. Earlier this year, the financial institution came through with funding for the Stout Street Health Center & Renaissance Stout Street Lofts project being developed by the Colorado Coalition for the Homeless in Denver. U.S. Bank also closed a $15.5 million financing package for the development of Mercy Housing California’s 40-unit El Monte Veterans Housing community in Los Angeles County.

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.

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.

Left to right: Bill Hughes, Joe Dykstra, Joseph McKeska, Tom Roberts and Hessam Nadji assess the state of retail real estate during Marcus & Millichap’s annual panel discussion at RECon.

The panel’s moderator, Marcus & Millichap managing director Hessam Nadji, set the stage for the Monday evening discussion by pointing to retail’s broad recovery. “The consumer that was supposed to go hide in the corner—and never be back—is back,” Nadji told an audience of several hundred real estate professionals Monday at the Renaissance Hotel in Las Vegas.

Nadji noted that retail sales volume is 12 percent higher than it was at the economy’s pre-recession peak in 2007. Centers of technology, energy and trade are producing growth that is fueling job growth and retail. In another positive sign, forward-thinking retailers are meeting the challenge by embracing technology to complement their brick-and-mortar stores, he said.

Asked to speculate about vacancy trends during the next 12 months, Cole Real Estate Investments’ executive vice president Tom Roberts suggested a modest change. “The pace of vacancy reduction will pick up a bit,” he said. He expects both cap rates and interest rates to remain relatively stable during that period, a view shared by Joseph McKeska, senior vice president of real estate for Supervalu. Bill Hughes, senior vice president of Marcus & Millichap Capital Corp., responded that interest rates will likely rise during the next 12 months. Fellow panelist Joe Dykstra, executive vice president and head of acquisitions and dispositions for Westwood Financial Corp., predicted that interest rates will edge downward.

Panelists likewise commented on evolving retail real estate strategies. Prospects for financing retail are still decidedly mixed. Bill Hughes, senior vice president of Marcus & Millichap Capital Corp. cited the rising profile of securitization in retail finance. This year, CMBS accounts for 64 percent of retail financing by dollar value, a significant increase from 45 percent last year, he noted.

Citing loan terms reminiscent of the last boom, such as multiple years of interest-only payments, Hughes said, “There’s a little bit of froth out there.”  But he added that lenders are largely sticking to the more conservative credit standards that took hold after the recession. Hughes agreed with the widespread perception that many capital sources to keep a tight handle on the retail finance spigot. “Commercial banks and private funds are looking for deals to put dollars into, but it’s got to be a great story,” he explained.

Joseph McKeska, senior vice president of real estate for the grocery wholesaler and retailer Supervalu, urged the audience to view credit standards more broadly. “There’s a lot of emphasis on financial underwriting, but I think it’s also important to understand the grocer’s business plan,” he said. “You are becoming a business partner to that grocer.” In March, Supervalu completed the $3.3 billion sale of five of its grocery brands to a consortium led by Cerberus Capital Management L.P. Part of Supervalu’s restructuring strategy, the sale included $3.2 billion in assumed debt and $100 million in cash.

Other panelists also tempered their generally upbeat outlook with a strong note of caution. “The big value-add plays are really behind us,” Dykstra said. Capital sources, as well as investors, must now carefully weigh their risk tolerance. As a rule, Dykstra added, “We will not buy properties at less than a 6 cap rate. We will buy very, very few properties at less than a 7-cap.”

Hines Global REIT Inc. has added the Campus at Playa Vista, a 325,000-square-foot office complex in the Playa Vista neighborhood of West Los Angeles, to its portfolio. The REIT acquired the premier, well-leased asset from Tishman Speyer for $218 million.

It was, roughly, a half-cash, half-debt deal for Hines, which financed the acquisition of the property with proceeds from its it public offerings and a mortgage loan of $115 million.

Developed by Tishman, the Campus at Playa Vista sprouted up on seven acres in the nearly 1,100-acre Playa Vista master-planned community in 2009, offering four four-story office buildings with the addresses of 12015, 12025, 12035 and 12045 East Waterfront Dr. The complex garnered a great deal of attention from the start. In advance of the property’s completion, lead tenant Belkin International Inc. staked its claim to 150,000 square feet for its corporate headquarters in an agreement that will keep the technology manufacturer in its two-building home until fall 2021, and the University of Southern California’s Institute for Creative Technology followed with a deal for 103,200 square feet  under a lease scheduled to expire in 2020.

Today, with a roster of seven predominantly tech-industry tenants, the Campus at Playa Vista is 97 percent leased. It’s a feat that belies the current state of the Playa Vista submarket where, according to a report by commercial real estate services firm Transwestern, the total vacancy rate in the first quarter was 33.4 percent. The vacancy rate for West Los Angeles is 16.4 percent, and in metropolitan Los Angeles it was 16.4 and 18.7 percent, respectively.

“We were attracted to this property due to its strong tenancy, recent construction, excellent access and long-term prospects for this emerging West L.A. submarket.” Doug Metzler, managing director with Hines, said in a prepared statement. “The Lower West L.A. submarket is one of the most attractive office markets on the West Coast.”

The entertainment, media and technology firms take to West Los Angeles like bees to honey, which has led to a steady increase in rents, while rates remain flat for metropolitan Los Angeles, per the report.

And investors are willing to pay the big bucks for West Los Angeles assets. The average office sale price during the first quarter was $300 per square-foot in metropolitan Los Angeles; the average price for the four leading building sales in West Los Angeles was just over $482 per square-foot. The Campus at Playa Vista sold for approximately $670 per square-foot

Renewed development, technology, taxes on internet sales and other retail trends will be in the air when 32,000-plus professionals gather at the Las Vegas Convention Center next week for RECon, commercial real estate’s largest event.

Real estate professionals talk deals at the Las Vegas Convention Center during the 2012 edition of RECon.

Attendees at the International Council of Shopping Centers’ annual spring convention will be pursuing deals and connecting with clients in an atmosphere marked by some upbeat metrics. Colliers International reported on Wednesday that shopping centers absorbed nearly 4.5 million square feet during the first quarter as average asking rents rose 0.3 percent to $14.80 per square foot and vacancy improved from 10.09 percent to 10.06 percent nationwide.

New retail center development and expansion is on the minds of many professionals. “One of the things I’m focusing on is trying to identify (the location) and the velocity of new shopping centers,” said Mark Keschl, national director of Collier’s retail services group. “So far during the first quarter, we’re starting to see green shoots of new centers.” He cited outlet centers as a category that has been subject to considerable buzz, as well as some projects. But, he added, rumored projects of all categories must still land tenants in order to advance beyond the talking stage. In addition to talking deals on behalf of their various clients—retailers, restaurants, owners and investors—Colliers professionals will be taking time to walk the show floor and scope out new retail and restaurant concepts, Keschl said.

An increasingly upbeat assessment of the market is prompting Kemper Development Co. to reveal details of a planned $1.2 billion expansion of the Bellevue Collection, its mixed-use property in Bellevue, Wash. “We are excited about what’s going on in the market,” said Jennifer Leavitt, vice president of marketing. She points to such indicators as 48 consecutive months of improving sales in the company’s retail portfolio and increasing interest in high-end retail, along with strong demand for the property’s office space. Kemper Development regards this year’s RECon more as an opportunity to introduce clients to its plans than as a place to sign tenants to the new space.

In addition to development and leasing opportunities, retail real estate investment will also be in the air at RECon. Heading into the show, the retail real estate investment atmosphere has been somewhat sketchy, asserts Gerard Mason, executive managing director for Savills. “Right now it’s kind of a Mexican standoff,” he said. REITs and other institutional investors are flush with cash, and deploying capital is a higher priority than filling their coffers through asset sales. As Mason sums up the dilemma:  “You can’t sell, because you don’t need the money, and you can’t buy, because nobody’s selling.” New product is difficult to come by these days, but Mason said he expects retail property trades to pick up later in the year as investment managers look to meet goals for allocating capital.

Douglas Emmett Inc. now owns over one-fifth of the Class A office stock in Beverly Hills. The REIT just acquired the 225,000-square-foot property at 8484 Wilshire Blvd. from L. Flynt, LTD.-8484 Inc. for $89 million, bringing its total presence in the submarket to 1.6 million square feet. 

Douglas Emmett financed a portion of the acquisition with cash on hand. The 10-story tower last traded in 1994, when publisher and activist Larry Flynt acquired it for, as reported in the Hollywood Reporter, less than $19 million. Since then, the office destination has become commonly known as the Flynt Building.

It’s not just any building. The William Pereira-designed property, originally developed in 1972 to house offices of Great Western Savings, holds the distinction of being one of the few elliptical-shaped buildings in Los Angeles.

The property comes with a diverse tenant roster that includes users ranging from physicians and attorneys to entertainment firms and the consulates of Brazil and the Consulate of Ecuador.

With a price tag of $395 per square-foot, 8484 Wilshire fetched a pretty penny, but a few other office properties in Beverly Hills have recently commanded even prettier pennies. During the first quarter of 2013, the building at 100 Crescent Dr. sold for $667 per square-foot, and in the fourth quarter of 2012, 474 N. Beverly Dr. reeled in a whopping $1 million per square-foot.

Douglas Emmett’s last office purchase in the submarket came in 2011, when the REIT snapped up the 74,000-square-foot asset at 150 S. Rodeo Dr. for $42 million, or $568 per square-foot.

CBRE Strategic Partners U.S. Value 6 fund is making its first hotel acquisition with the purchase of the San Jose Marriott, a 506-room, full-service hotel that is attached to the San Jose Convention Center.

Sponsored by CBRE Global Investors, fund officials did not publicly disclose the sale price or the seller citing a confidentiality agreement. However, several media reports state it was Prudential Real Estate Insurance (PREI). The Silicon Valley Business Journal put the price at between $80 million and $85 million while the Private Equity Real Estate (PERE) global news service said the hotel sold for $83 million. CBRE Global Investors would only say that it bought the 28-floor hotel at 301 Market St. for “significantly less than replacement cost.”

“The Silicon Valley lodging market is fed by strong corporate demand from the significant concentration of high-tech companies in the region,” Vance Maddocks, president of CBRE Strategic Partners U.S., said in a news release. “With strong current cash flow, the San Jose Marriott, in particular, is an attractive business hotel with an added benefit of being directly connected to the now-expanding San Jose Convention Center.”

The Strategic Partners U.S. team is planning renovations at the hotel, which opened in early 2003. The plan includes upgrades to guest rooms, suites, corridors, the lobby, and meeting space, according to a CBRE Global Investors spokesperson. The dollar amount was not released.

SCS Advisors, the original developer of the hotel and a leading hotel asset management company, will serve as the asset manager. The hotel was built for $93.9 million with $10.6 million provided by the San Jose Redevelopment Agency, according to an agency document. It is still the newest hotel in the submarket, according to CBRE Global Investors. Features include a swimming pool, fitness room, business center, 23,000 square feet of meeting and event space and acclaimed restaurants.

The hotel purchase comes five months after the Strategic Partners U.S. team purchased Fairmont Plaza, a 17-story office building at 50 West San Fernando St. in downtown San Jose, from Forest City Enterprises Inc. for $93.1 million.

CBRE Global Investors closed the Strategic Partners U.S. Value 6 fund in December with equity commitments of almost $1.1 billion from 22 institutional investors. It is expected to have total purchasing power of $2.7 billion. As of December, the fund had already closed on or committed more than $900 million in investments, including several multi-family and office properties.

The global real estate investment management had $90.7 billion in assets under management as of March 31. It is an independently operated affiliate of CBRE Group, Inc. Founded in 2000, the Strategic Partners U.S. program has closed eight funds and three co-investment partnerships.

BNSF Railway’s $500 million Southern California International Gateway took a big step forward this week when the Los Angeles City Council approved the environmental impact review and a 50-year lease for the 156-acre project near the Port of Los Angeles.

Southern California International Gateway

Located within four miles of the San Pedro Bay ports, the SCIG facility would shorten the distance trucks loaded with cargo would have to travel before transferring containers to rail. Supporters say that would reduce emissions and provide cleaner air because the trucks would not have to travel 24 miles up the 710 Freeway. But media reports note there is opposition to the project, particularly from city of Long Beach officials, area residents and some health and environmental groups.

Both BNSF and Los Angeles officials deny there would be significant health and environmental issues and say the Fort Worth, Texas,-based freight transportation company’s project would set standards for the use of green technology.

“We applaud the Los Angeles City Council, the Mayor’s office and the Port of Los Angeles Harbor Commissioners for their commitment to green growth. With their input, BNSF’s SCIG project is setting a new standard of excellence in reducing emissions and realizing a positive impact on local communities,” Matthew K. Rose, BNSF chairman and CEO, stated in a release. “We are investing more than $500 million in private funds to build this state-of-the-art facility, which will help keep the San Pedro ports competitive, and we look forward to the jobs, air quality and traffic benefits the facility will bring to Southern California.”

Noting that SCIG would be the “greenest intermodal facility in the United States,” Los Angeles City Councilman Joe Buscaino said in the release that BNSF was including more than $100 million in green technologies, clean trucks and funding for zero emissions research.

“This project demonstrates that it’s possible to achieve air quality and health risk improvements and keep the international trade industry in Southern California strong,” Buscaino said.

The facility would be located at an existing industrial site, which is between Sepulveda Boulevard, the Pacific Coast Highway, the Dominguez Channel and the Terminal Island Freeway. A BNSF spokesperson told Commercial Property Executive that there were currently four tenants still operating at the site and the company was working with them on relocation.

The project dates back to 2003, when BNSF sent letters to officials of the ports of Los Angeles and Long Beach asking if they had property available and would they be interested in working with BNSF on a new intermodal facility, according Lena Kent of BNSF. The Port of Los Angeles officials agreed to the proposal and in 2005, BNSF began to draft the environmental impact review. Kent said the company hopes to begin construction in 2014 if the start is not held up by potential litigation from opponents. Construction will take three years from start to finish, she noted.

The project will provide approximately 1,500 jobs each year during construction. By 2036, the SCIG is expected to create 22,000 new direct and indirect jobs in Southern California, including 14,000 in the Los Angeles area.

About $100 million of the estimated $500 million to build the SCIG will come from investments in green technology. The intermodal facility will feature wide-span, all electric cranes, ultra-low emission switching locomotives and low-emission rail yard equipment. Only trucks built after 2010 will be allowed to transport cargo between the marine terminals and the SCIG. By 2026, 90 percent of the truck fleet will be LNG or equivalent emissions vehicles.

GID Development Group, a privately held, globally diversified, and fully integrated real estate organization headquartered in Boston, is developing a 41-story residential project in downtown Seattle, Wash.

GID’s 2030 8th Ave. in Seattle

Located at 2030 8^th Ave., the 355-unit luxury apartment tower features panoramic views of Seattle’s downtown skyline, Lake Union, Puget Sound and Elliot Bay. The tower will feature a unit mix of studio, one-, two- and three-bedroom apartment homes as well as 4,200 square feet of retail and 242 parking spaces.

“The project has an array of ingredients that are not matched by any competing high-rise apartment buildings in the Seattle marketplace,” James Linsley, GID Development Group’s president, told CPE. “Other buildings may have certain elements similar to 2030 8th Ave, but none have the complete package. Residents will live and socialize in a unique urban environment that is characterized by an unrivaled combination of superior location, height, views, amenities, services, finishes, floor plans, balconies, and sustainable design.”

The building’s amenities will create an atmosphere oriented toward health, fitness, relaxation, socialization, entertainment, private functions and a variety of programmed events.  2030 8th Avenue will have over 10,000 square feet of amenities including the entire 41st floor of the building.

GID’s 2030 8th Ave. in Seattle

“Indoor amenity features will include a resident club room, game room and sports lounge, fitness center, yoga room, private theater, private function and dining room, demonstration kitchen, catering kitchen, pet spa, and bicycle center,” Linsley said. “Outdoor amenity features will include an outdoor terrace, lounge areas, cooking stations, landscaping features, water garden and outdoor fireplaces.”

The project is being designed by Seattle-based architecture firm Weber Thompson and constructed by Sellen Construction Company. When completed, it will be Seattle’s most advanced high-rise residential product and is designed to achieve a LEED Silver rating.

According to Linsley, GID is highly selective in its development activities, and will only pursue premier sites capable of justifying the development of market defining Class A product.

“We are pursuing development opportunities in 24/7 gateway cities with compelling growth potential and vibrant urban environments in which people can live, work, shop, dine and access a variety of cultural and entertainment venues,” he said. “This project is superbly located in the heart of downtown Seattle and will link the CBD’s office district, the core of the city’s retail, restaurant and entertainment destinations, the booming redevelopment of South Lake Union, and Amazon’s new 3.3-million-square-foot world headquarters project.”

Not only does the site have immediate access to the traditional high rise office employment centers and Seattle’s retail core but also the explosive job engines of Amazon’s world headquarters and the rest of the technology, biomedical, and philanthropic organizations flourishing in South Lake Union.

GID has acquired or developed more than 54,000 residential units and in excess of 13 million square feet of commercial space.

At the 2013 Mortgage Bankers Association CREF/Multifamily Housing Conference, Marisha Clinton, director of research, Capital Markets, at Jones Lang LaSalle, names markets and industries that are on the “to watch” list for real estate investors.

The 85,000-square-foot office building at 995 Market St. in San Francisco’s blossoming Mid-Market area is under new ownership. Columbia Pacific Advisors and Long Market Property Partners acting in a joint venture as 995 Market Street SF Investment L.L.C., acquired the property from a private group in an off-market transaction for $17 million.

Newmark Knight Frank Cornish & Carey Commercial Capital Group orchestrated the disposition on behalf of the seller and Kyle Kovac, managing director with NKFC&CC Capital Group, conceded in a prepared statement that “the buyer was able to acquire the asset at a very attractive basis.” 

Acting on behalf of Long Market Property Partners, financial advisory firm Mission Capital Advisors L.L.C. raised structured debt and equity from Columbia Pacific Advisors for the purchase of the asset.

Developed in 1908, 995 Market sits in an area that is becoming known as a haven for San Francisco’s creative and high-tech set. “Some call it the ‘Twitter effect’ since they were the first substantial tenant to commit to the neighborhood in 2011,” Kovac told Commercial Property Executive. Last year the social networking giant moved into 215,000 square feet just blocks away in the 890,000-square-foot building at 1355 Market. “The creative tenants located here appreciate the [absence of the] corporate, buttoned-down culture that is more common in the Financial District,” he added.

And at 995 Market, the trend of attracting creative and high-tech users is in full swing. Black Rock City, the mastermind of the Burning Man Festival, is anchor tenant at the 16-story tower, occupying 20,000 square feet. With a tenant roster that fills only 55 percent of its space, the building has ample room to accommodate office-space seekers, and the new owners plan to capitalize on the growing interest in the area through an extensive improvement program that will commence immediately.

But the new owners of 995 Market, the tallest tower along the Mid-Market corridor, will be able to rely on more than just updated digs to reel in occupants. The property is sited practically next door to the 250,000-square-foot Market Street Place retail development that is currently underway. Also, 995 Market offers another coveted amenity: location in the Payroll Tax Exclusion zone. “Additionally, payroll tax incentives were enacted by the City of San Francisco to encourage tenants to locate in the area,” Kyle noted.

The San Francisco office market, as a whole, is thriving. The direct vacancy rate in the first quarter of the year was just 5.5 percent, according to a NKFC&CC report.

A joint venture of Behringer Harvard and CT Realty Investors has sold the Interchange Business Center, a 667,024-square-foot industrial asset in Southern California’s Inland Empire. The purchase price and identity of the buyer—described as one of the nation’s largest privately held real estate advisors—were not immediately disclosed.

Located at 1420-1440 Third St., in San Bernardino, the three buildings sold by Behringer Harvard and CT Realty are situated on a 34-acre site. Interchange Business Center’s fourth property, a multi-tenant office building, was sold last October.

Behringer Harvard acquired Interchange Business Center in November 2010 through its third joint venture with CT Realty, a real estate investment and development firm based in Aliso Viejo, California.

“When we acquired this asset, we believed that Interchange Business Center represented an attractive opportunity to capitalize on market stress by acquiring Class A industrial space in a recovering market at a significant discount to replacement cost,” Jason Mattox, Behringer Harvard’s COO, told Commercial Property Executive. “We expected this asset to benefit from a strong Inland Empire location and superior quality of construction. We believe this property fulfilled our expectations for upside potential.”

According to Mattox, the partners had completed their value creation strategy for the asset, which focused primarily on improving occupancy, so this was an opportune time to sell the property and redeploy the proceeds.

All told, partnerships of Behringer Harvard and CT Realty Investors have acquired and disposed more than 2.4 million square feet of high-quality industrial space in the Inland Empire.

“The Behringer Harvard REIT that invested in Interchange Business Center pursues an opportunistic investment strategy,” he said. “CT Realty has been an outstanding business partner and we are pleased with the attractive returns achieved by our joint ventures.”  The REIT reaped a 12.7 percent annual average return from the sale of the four buildings at Interchange Business Center.

Rexford Industrial has purchased a seven-building, 473,345-square-foot industrial complex on 21 acres in Glendale, Calif., from an undisclosed institutional owner for $56.2 million. The acquisition was made through its Rexford Industrial Fund V REIT, which will be used to buy more than $500 million of industrial assets in Southern California.

The high-quality property has single and multi-tenant buildings, including two retail frontage buildings. It is fully leased to 27 tenants, including Staples, Anderson Printing, Nordstrom and Pep Boys. Located at 3332-3424 North San Fernando Road and 3550 Tyburn St. in Glendale, the property has easy access to I-5, and is not far from Burbank and downtown Los Angeles. The tenant spaces range from 3,000 to 5,000 square feet and have high ceiling clearance and dock-high loading.

“This project is best in class in that particular market,” Howard Schwimmer, Rexford co-founder and senior managing partner, told Commercial Property Executive. “It has always had a strong occupancy level, even during the recession.”

Schwimmer, who has been in the industrial real estate business for 30 years, said every time he passed the location, “I looked at that and wanted to own it. That has finally come to fruition.”

Both the buyer and seller were represented by Steve Silk, Jay Borzi and Adam Pastor of Eastdil Secured.

Rexford is a leading industrial real estate investment firm that acquires, manages and develops all classes of industrial properties in Southern California, including core, value-add, repositioning and re-development.  The company, which operates more than 7 million square feet of industrial properties, specializes in highly-sought-after infill Southern California locations.

The Glendale property is “the epitome of infill industrial real estate,” Schwimmer said, adding that it is in a very densely populated area, where most of the product was built in the 1950s and 1960s.

Schwimmer said the firm has “a huge pipeline of additional acquisitions we’re working through.” He said they make three or four bids a week on properties and about 60 percent of the properties they do acquire are off market or lightly marketed.

In January, Rexford announced that its fifth real estate fund, RIF V, had closed with $127 million in capital commitments. Schwimmer told CPE that over the past two years, Rexford has bought more than 3 million square feet of assets. He said the firm has the buying power to acquire an additional 2.5 million to 3 million square feet.

“Our strategy is two-fold, we focus on the distressed that still continues to be present in the marketplace as well as looking at stabilized acquisitions and others,” Schwimmer said.

One of the keys to the firm’s success is the ability to do all the redevelopment and repositioning in-house. Schwimmer said they even have two general contractors on staff to focus on the value-add assets.

“We’re very nimble in terms of some of the deals we’re working on now,” he added.

In June 2012, Rexford acquired a 1.2 million-square-foot industrial complex in Camarillo, Calif., for $59.1 million. The property had 300,000 square feet of vacant space that was in an older building. Schwimmer said the firm is converting that into seven new industrial units with all new offices and loading areas.

More recently, Rexford picked up two industrial complexes for a total of $12.6 million. A 78,183-square-foot asset that is fully leased was acquired in Carson, Calif., for $5.4 million. The property has five units and is located near the Ports of Los Angeles and Long Beach in the South Bay submarket, one of the top performing industrial markets in the United States. The second acquisition was an 88,146-square-foot, multi-tenant property in Montclair, Calif., in the West Inland Empire submarket. Purchased for $7.2 million, it has six multi-tenant buildings and is 84 percent leased.

Schwimmer said Rexford focuses solely on Southern California because it is the largest industrial market and has the lowest vacancy rate in the U.S.

“It is 70 percent larger than number two, which is Chicago,” he concluded. “Tenants that occupy our buildings are from national companies to local entrepreneurs and generally all have to be here serving this large population.”

April has been a busy month for Behringer Harvard, which is announcing its investment in a third luxury multi-family housing development through its Behringer Harvard Multifamily REIT I, Inc. The latest investment project is a 113-unit apartment community located in Costa Mesa, Calif., in Orange County.

The amount of the equity investment in Pacific Gateway was not disclosed. The luxury apartment community will be built on a 2.5-acre site at Bernard Street and Harbor Boulevard. Construction is expected to start this month and be completed by the fourth quarter of 2014. The project will be developed and constructed by affiliates of Fairfield Residential, a San Diego-based developer and multi-family management firm.

“Pacific Gateway will be one of the few newly constructed apartment communities in the highly desirable Newport Beach and Costa Mesa submarket in Orange County,” Mark Alfieri, the REIT’s COO, said in a news release. “We were attracted to this opportunity to invest in a top-quality asset in an institutional market with favorable demographics and high barriers to entry.”

The mid-rise apartment community will have units with up to three bedrooms and two baths, averaging about 985 square feet each. The common area will feature a swimming pool, outdoor pavilion and business center. Located near California State Route 55, the complex is near major employment centers in Costa Mesa, Irvine and Santa Ana.

The rental market is strong is Orange County, where single-family home prices are still high. Countywide, vacancy is expected to rise to 4.6 percent, 10 basis points above the year-end 2012 rate, according to Marcus & Millichap’s ApartmentResearch Market Report for the second quarter. The report notes that rents should increase about 4.8 percent to an average effective rent of $1,669 per month. Effective rents ranged from $1,264 per month in the West Anaheim submarket to $1,919 in the South Irvine submarket.

Last week, Behringer Harvard announced it was investing in Seven RIO, a 220-unit luxury apartment community in Austin, Texas, as an equity partner. Behringer Harvard will have a 90 percent stake at an estimated cost of $60.7 million, according to a filing with the SEC. CWS Capital Partners L.L.C. is the project developer. In early April, Behringer Harvard teamed up with Trammel Crow Residential to construct a 270-luxury apartment complex in the Montrose/Museum District submarket of Houston. The REIT’s expected share of that project is about $51.2 million, according to a SEC document.

The REIT has worked with Fairfield Residential on numerous projects in recent years, including Fairfield at Columbia Village, a 234-unit, multi-family residence in Arlington, Va., and Cameron House in Silver Spring, Md. Brookfield Residential Opportunity Fund also teamed with Fairfield and Behringer Harvard on that project, a 15-story building with 325 apartments.

Union Square L.L.C. owned by Washington Real Estate Holdings and a major pension fund investor, received $400 million in refinancing for Union Square, two office buildings in Seattle, Wash.

Northwestern Mutual and New York Life each provided 50 percent—or $200 million—in the refinancing.

Union Square consists of One Union, a 36-story building containing 670,000 square feet and Two Union, a 56-story building containing 1.1 million square feet. The two buildings are connected by a fireplace lobby and underground pedestrian concourse to the neighborhood.

It is home to some of the most prominent financial institutions, law offices, real estate professionals, health care and other professional firms.

“Union Square is an iconic office property that is very well-positioned within Seattle’s financial district,” Kelly Havey, Northwestern Mutual Real Estate Investment’s director, said in a company statement. “Seattle is a dynamic city where it makes sense for us to invest on behalf of our policy owners.”

Located in the heart of Seattle at Sixth Avenue between Union and University Streets, The LEED-certified building is a vibrant and lively destination that offers a variety of retail, intimate outdoor spaces, casual and fine dining.

Union Square is located in the heart of downtown, walking distance to some of the best restaurants, hotels, retail and entertainment Seattle has to offer. It is nearby the Convention Center and Freeway Park, Pike Place Market, Seattle Art Museum, the Seattle Aquarium, ferry terminal and Olympic Sculpture Park.

It also has convenient access to I-5, I-90 and 520.

Washington Real Estate Holdings, as the managing member of the ownership, handles both the leasing and management of Union Square.

Rosemont Realty L.L.C. pushes up its presence in the metropolitan Denver market by 770,200 square feet with the acquisition of the Denver World Trade Center. The real estate company purchased the two-building office property from I & G Denver WTC L.L.C., an entity of LaSalle Investment Management  for $176 million.

Rising 28 and 29 stories above downtown Denver at 1625 and 1675 Broadway, the 34-year-old Denver WTC has a prominent place on the city’s skyline. It also has a prominent place on the list of the best occupied office assets in Denver’s central business district. The property’s tenant roster is 95 percent full with 55 businesses calling the location home, including the likes of Key Bank, Noble Energy Inc. and Resolute Energy Corp.

It’s an occupancy level that, like the towers’ height, is head and shoulders above many office buildings in the area. The overall vacancy rate for Class A assets in the city’s CBD is 14.1 percent, according to commercial real estate services firm Jones Lang LaSalle, which has been tapped to oversee leasing at Denver WTC.

“This acquisition follows a broader strategy by Rosemont of migrating more of its portfolio into commercial business districts where tenant demand is improving and rates have the potential to grow rapidly in the coming years,” Daniel Burrell, CEO of Rosemont, said in a prepared statement.

Denver fits the bill. The city’s office market is poised for an upswing, buoyed by growth in the oil and gas industry, according to a first quarter 2013 report by JLL. Demand is expected to go on the rise this year, and rental rates will surely follow.

With the purchase of Denver WTC, Rosemont’s portfolio in metropolitan Denver now totals approximately 1.4 million square feet. Its last acquisition in the area came in November 2012, when it snapped up the 167,000-square-foot Cole Center at Denver West in Golden.

There’s going to be a lot of action on the stretch between MGM Resorts International’s New York-New York and Monte Carlo casino-resort properties along the Las Vegas Strip. Last month, MGM and entertainment facilities organization AEG announced plans for a 20,000-seat arena on the site and now MGM Resorts has just disclosed the specifics for what it is calling Stripside experiences and a public park highlighting the state-of-the-art arena.

Experiences? It’s not a shallow attempt to reel in gamblers. “All the revenue growth [in Las Vegas] in the past couple of years has been towards non-gaming amenities and non-gaming facilities like retail and shows, and this project is very much designed to capture that trend,” Brent Pirosch, director of gaming consulting with commercial real estate services firm Newmark Grubb Knight Frank, told Commercial Property Executive.

MGM Resorts’ new experiences will be produced through alterations to the front facades of New York-New York and Monte Carlo, which will allow for the development of an outdoor plaza linking both casino resort-hotels. Hershey’s Chocolate World flagship store will anchor the open-air experience, where commitments have also been secured in advance for a roadhouse restaurant-bar destination and a pizzeria. The global hospitality company’s goal is to create an outdoor collection of casual bars, eateries and retail destinations to encourage social interaction and people-watching.

And to further facilitate a vibrant pedestrian-friendly atmosphere, MGM Resorts will develop a park that will serve as a walking path to the indoor arena, with both the park and entertainment facility occupying 10 acres behind New York-New York and Monte Carlo.

“All great cities offer vibrant pedestrian experiences, and Las Vegas is certainly no exception, as The Strip is one of the world’s greatest boulevards,” Jim Murren, chairman and CEO of MGM Resorts, said in a prepared statement. “Our vision is to extend the excitement we traditionally create within our world-class resorts outside onto The Strip, and ultimately in an entertainment district leading to our new arena.”

Cooper, Robertson & Partners is aboard the project as master planner and architectural and urban design firm! melk is masterminding the landscape architecture.

MGM Resorts is not alone in its pursuit of orchestrating non-gaming experiences in Sin City. Caesars Entertainment is working on The LINQ, an open-air retail, dining and entertainment district that will be anchored by the tallest observation wheel in the world.

“The Strip is very much about an experience these days, seeing things and doing things you can’t do anywhere else,” Pirosch said. “Gaming is everywhere; nobody is more than 90 minutes away by car from gaming in the continental U.S., so it doesn’t have the mystique that it once did. But there aren’t too many places in the U.S. that have things like the Forum Shops [at Caesars Palace], there aren’t 500-foot observation wheels and towers and a list of shows that you can see so it’s all very different. It’s all about the experience these days.”

In the latest milestone for the 145-acre redevelopment area around San Francisco’s new Transbay Transit Center, Kilroy Realty Corp. broke ground Tuesday on 350 Mission St., a new office tower that will rise at Mission and Fremont streets, directly across from the transit center.

The building has been fully pre-leased to Salesforce.com, a provider of enterprise cloud computing, since the project was first announced last fall. It’s scheduled to be completed in early 2015.

The LEED Platinum glass-and-concrete tower is currently set for 27 stories, Mike Sanford, the REIT’s senior vice president/Northern California, told Commercial Property Executive, but he’s confident that approval for a final height of 30 floors will be granted within a couple of months. At that height, the building will total about 450,000 square feet.

Partly because it closely adjoins a building at 50 Beale St., the new tower has a side-core design and no windows on its northeast side, Sanford said. The design will also help create large floor plates with more contiguous open space.

The four-story, open-air lobby will feature a 45-foot-high, 75-foot-wide LED “digital media canvas” (a media wall rather like a Jumbotron, Sanford saidd) that will be used primarily for public art.

And in another unusual feature, the tower’s 11-foot exterior glass walls won’t be perfectly vertical, but will instead cant slightly in or out on alternate floors, Sanford added. Beyond the architectural effect, the benefit is that although this allows as much light in as vertical glass would, the slight angle will reduce solar loading.

The 350 Mission St. groundbreaking is the latest event in a flurry of activity in the Transbay district.

CPE recently reported that Hines and Boston Properties had closed on their purchase of the 101 First St. site, where construction will begin this summer on what will be the West Coast’s tallest building, the 60-story, 1.4-million-square-foot Transbay Transit Tower.

And just a day later, CPE reported that Jay Paul Co. had acquired the 181 Fremont St. project from SKS Investments and would begin construction of that 54-story, 684,000-square-foot mixed-use building.

The vacancy rate for Class A space in San Francisco’s South Financial District is 9.4 percent, according to first-quarter figures from Jones Lang LaSalle.

The South Financial District “has experienced significant growth over the past three years as a result of the flourishing technology industry,” Julia Georgules, JLL’s research manager for Northern California, told CPE.

High leasing activity in the SOMA submarket “has resulted in low vacancy and few options for tenants,” she added, so the South Financial District has become the next best location for tech companies.

These companies, according to Georgules, are driving San Francisco out of the recession, with forecasts pointing to continued hiring over the next several years. This being driven in part by tech start-ups that prefer to locate in the city “rather than in the suburbs where after-work activities and amenities are lacking,” she said. 

The South Financial District has space currently and, with several new developments under way, will be able to offer nearly 5 million square feet over the next few years. Georgules concluded.

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Construction has gotten off the ground on Runway, the $260 million mixed-use center that will sit on the former runway of billionaire Howard Hughes’ aerospace complex in the Los Angeles community of Playa Vista.  Lincoln Property Co., Phoenix Property Co. and Paragon Commercial Group are the forces behind the project, which is one segment of the 111-acre Village at Playa Vista development.

Designed by the architectural firm of Johnson Fain, the multi-faceted Runway will have no shortage of shopping options with a whopping 221,000 square feet of retail space. CBRE Group Inc., the commercial real estate services firm charged with filling up the retail square footage, has already landed a few big tenants, including Whole Foods and a Cinemark multiplex, which will occupy a respective 35,800 and 46,000 square feet. And with CVS, a national bank branch and an eatery having already claimed space, Runway’s retail segment is nearly half-full.

Additionally, a total of 420 apartment residences will be available at Runway to feed what appears to be an unfailingly strong appetite among renters in Los Angeles. Despite an influx of new product on tap for 2013, demand is expected to remain strong and allow the city to close this year with an enviable vacancy rate of approximately 3.7 percent, according to a report by Marcus & Millichap Real Estate Investment Services.

“The rebound we are seeing in the larger economy has certainly helped to drive demand for apartments on a greater scale,” Rusty Ross, a vice president with Phoenix Property, told Commercial Property Executive. “In Playa Vista, specifically, we are seeing a rapidly growing cluster of technology, Internet and entertainment companies in the area including Facebook, Google and Electronic Arts. Those firms are attracting young, entrepreneurial employees who want to live in well-designed, modern homes that are close to where they work and have direct access to stores, theaters, and restaurants. The residences in Playa Vista and at Runway fit squarely into that profile.”  

And as for the work segment of the live-work-play Runway project, the development partners will provide 35,000 square feet of office space, which is also being marketed by CBRE.

It’s a carefully planned endeavor. “We want Runway to be at the forefront of everything new in the worlds of fashion, art, design and technology and to be a real center of the community where people come to shop, eat, and to just relax,” David Binswanger, Executive Vice President of Lincoln Property, said in a prepared statement. 

Lenders have taken kindly to Runway. With the assistance of commercial real estate and capital markets services HFF, the developers were able to secure $150 million in construction financing from a consortium of banks led by Bank of America. In addition, Alcion Ventures came through with equity financing.

Runway is on schedule to make its debut before 2014 draws to a close.

Ultimately, the entire Village at Playa Vista will be home to 2,800 residences, including 200 senior and assisted living units; 221,000 square feet of retail offerings; 50,000 square feet of office space; and 40,000 square feet of community serving space. The destination will also encompass plenty of room for roaming, with 11.5 acres of parks and 12 acres of open space.

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.

Spanish-style Montecito in Valencia, Calif.

Ivanhoé Cambridge of Montreal has made its largest multi-family investment, joining a partnership of Goldman, Sachs & Co. and Greystar Real Estate Partners in the $1.5 billion acquisition of 8,010 multifamily units in the United States from Equity Residential.

The announcement comes three months after Greystar and the Real Estate Principal Investment Area of Goldman, Sachs & Co. agreed to buy the 27 high-quality properties featuring Class A and Class B units in core U.S. locations with high barriers to entry and strong economic and job growth potential. More than 1,500 units are located in Phoenix and over 1,000 are in Denver. Other regions include Washington, D.C.,  northern New Jersey, South Florida, and the San Francisco Bay Area.

The amount of Ivanhoé Cambridge’s investment in the partnership was not disclosed.

“I can say that this is our largest investment in the multi-residential segment, globally speaking,” an Ivanhoé Cambridge spokesperson told Commercial Property Executive.

A real estate company that invests, develops, manages assets, and offers leasing and operations services, Ivanhoé Cambridge is a real estate subsidiary of the Caisse de depot et placement du Quebec, a leading Canadian institutional fund manager. The firm has assets in 20 countries valued at more than $35 billion. The Ivanhoé Cambridge representative said about $3.7 billion has been invested in the U.S. office market and more than $2 billion in U.S. multi-family assets.

“Ivanhoé Cambridge’s significant participation in this transaction aligns perfectly with our strategic plan to seize promising real estate investment opportunities and increase our critical mass with a well-distributed diversification in priority U.S. markets,” Sylvain Fortier, executive vice president, Residential and Hotels, said in a news release.

“We are pleased to begin this relationship with new partners who believe in the strength and growth of this market segment in the United States,” Bob Faith, Greystar’s chairman and CEO, said in the release.

“This transaction fits perfectly in our investment strategy to acquire assets with strong existing cash flows at values below replacement cost located in markets with high employment and population growth,” Faith added.

In February, Greystar and Goldman, Sachs worked with CBRE Capital Markets Debt & Equity Finance group to secure more than $1 billion to finance the portfolio purchase. CBRE secured seven-year Freddie Mac loans for each of the 27 properties, loans that were non-crossed and floated over 30-day Libor. The two-stage funding was to have concluded in late March, allowing Greystar and Goldman, Sachs to close on the acquisitions.

The transaction valued the properties at about $187,000 per unit. Most of the multi-family properties were built in the years 1999-2000. The partners have agreed to fund a multi-year maintenance and renovation program for all the assets.

While most of Ivanhoé Cambridge’s recent acquisitions, both in the U.S. and abroad, have been in the office market, the firm did invest $234 million in the Silicon Valley multi-family market in October. The company acquired Kimberly Woods, a 208-unit apartment building in San Jose, Calif., and teamed up with Shea Properties to develop a $171 million, luxury, two-building apartment community in the same city. ICS Transit Village wall have 648 units, when it is completed in spring 2015.

Jamestown, an Atlanta-based national real estate investment and management firm, has acquired more than 200,000 square feet of retail and office space in downtown San Luis Obispo, Calif., from Copeland Properties, for a $50.5 million investment in its Premier Property Fund.

Copeland will continue to manage the properties, which consist of 86 percent retail and 14 percent office space. The retail assets consist of seven properties in the downtown area bounded by Chorro, Oso, Monterey and Marsh streets and totals about 195,000 square feet. The most notable properties in the retail portion of the portfolio are Court Street Center and Downtown Centre.

Tenants include Barnes & Noble, Urban Outfitters, Pottery Barn, Abercrombie & Fitch, Express, Gap, Banana Republic, Victoria’s Secret and Apple.

The portfolio has about 25,000 square feet of retail space available.

“This acquisition is part of Jamestown’s strategy to acquire street-level retail in vibrant markets with a strong sense of community,” Michael Phillips, Jamestown COO, said in a news release. “Downtown San Luis Obispo is a pedestrian friendly, desirable shopping and recreational destination with a unique small-town feel.”

Jamestown, which has assets in Georgia, Florida, North Carolina, South Carolina, Tennessee, Boston, Washington, D.C., and New York City, where they own Chelsea Markets and One Times Square among other high-profile properties.

In California, Jamestown owns three other properties, all in the San Francisco Bay Area, including Alameda South Shore Center, a 594,000-square-foot open-air shopping center in the East Bay community of Alameda. The firm also owns a mixed-use property in San Francisco with two buildings – 22 Fourth St. and 801 Market – and 799 Market St., a 142,000-square-foot urban retail and technology-oriented office building.

Jamestown, which has made about $8 billion in strategic investments since its founding in 1983, recently created a Latin American division. The firm opened offices in Rio de Janeiro, Brazil, and Bogota, Colombia, and planned to work with local partners to invest in various real estate assets that will serve the region’s growing middle class.

Copeland is continuing to develop its own project in downtown San Luis Obispo. Chinatown will be comprised of 46,140 square feet of retail space, 32 residential units and a 76-room hotel, according to SanLuisObispo.com.

Steadfast Income REIT, Inc., a California-based real estate investment and development firm, has acquired two apartment communities in separate transactions for an aggregate purchase price of approximately $61 million. 

Steadfast acquired Deep Deuce at Bricktown in Oklahoma City, Okla., for $38.22 million from Omaha-based multi-family investment firm DEI Communities.

The property consists of one- and two-bedroom apartments that have average in-place rents of $1,083. Units include attached garages, kitchen islands, vaulted ceilings and wood-burning fireplaces in addition to washer/dryer hook-ups, garden tubs and spacious closets.

Deep Deuce at Bricktown also offers a swimming pool with deck, a clubhouse, and a 24-hour fitness center.

Built in 2001, the Deep Deuce complex is the third Oklahoma City metro-area acquisition in the past year for Steadfast Income REIT. The property is located in downtown Oklahoma City in walking distance to the river walk, restaurants, bars, music and entertainment venues.

The second purchase was Vantage at Buda Ranch, a 264-unit apartment community, which sold for $23 million and is being renamed to Trails at Buda Ranch.

Built by Vantage Communities in 2009, the 96 percent occupied property consists of 14 three-story residential buildings that offer a mix of one-, two- and three-bedroom apartments that have average in-place rents of $936.

Amenities include laminate wood floors, full-size washer and dryer, spacious closets, granite-style countertops and patios or balconies. The pet-friendly community also offers a pool, 24-hour fitness center, a clubhouse and ample open space for residents.

This is the sixth Texas property for the REIT and the fourth in the Austin area.

“These latest acquisitions exemplify two key facets of our strategy—to invest in apartment communities that are located in strong job growth markets, and to seek concentration in those markets to add synergy to our operating platform, reduce operating costs and increase revenue,” Ella Shaw Neyland, president of Steadfast Income REIT, said in a company statement. “These are our sixth and fifth properties, respectively, in Texas and Oklahoma, and both submarkets have economies that are expected to continue expanding steadily.”

Deep Deuce at Bricktown in Oklahoma City, Okla. and Vantage at Buda Ranch in Austin, Texas are now among the REIT’s 34 apartment communities in 10 Midwestern and Southern states.

Waveland Ventures L.L.C., along with partners Jackson Street Holdings L.L.C. and Arrival Partners L.L.C., has a mixed-use plan in the works for the active Fitzsimons neighborhood in Aurora, Colo. The team will develop Block 21, a $160 million project that will deliver apartments, retail offerings and a hotel and conference center to the area, just 10 miles outside of Denver. 

Block 21, which takes its name from the World War I-era Army Hospital 21 that once occupied the site, will sit in the bustling enclave that is home to the Fitzsimons complex of medical-related facilities, which encompasses Children’s Hospital Colorado, the Anschutz Medical Campus, the Fitzsimons Life Science District and the Veterans Affairs Medical Center. A vast well of demand will be practically right outside the project’s doors.

“The Primary driver for our development is the business traveler that is currently spending time at the medical complex during the day but staying in Denver or Cherry Creek at night,” Rick Hayes, CEO of Waveland, told Commercial Property Executive. “The secondary driver is the employee base at the campus.”

The six-story hotel at Block 21 will feature 200 guestrooms, as well as 30,000 square feet of meeting and exhibition space. “[There is a] huge demand source with no competing product and improving demographics,” Hayes said. A 500-space parking facility will be connected to the hotel.

The development will also cater to those who are interested in making a home in the area. A four-story building will house 100 apartments and adjoin a 300-space parking structure. “[There are] growing, young professionals that want or need to be close to where they work, close to a major highway system with efficient airport access,” he added. The property also sits adjacent to a planned light rail station. 

Block 21 will also offer 10,000 square feet of retail space to be located on the first floor of the residential structure, in addition to 8,000 square feet designated for a destination restaurant. And the Quadrangle, a landscaped urban park, will round out the complex. 

Waveland and partners expect to kick off construction of Block 21 in late 2013.

Boston Properties and Hines have closed on the $192 million purchase of 101 First Street in San Francisco, where they will erect the 60-story, 1.4 million-square-foot Transbay Transit Tower, the tallest building on the West Coast. The JV partners bought the 50, 0000-square-foot site from Transbay Joint Powers Authority, paying almost $4,000 a foot.

The TJPA will use the money for the Transbay Transit Center at First and Missions streets, a $4 billion transit hub under construction that will feature a bus and rail station and 5.4-acre park on top of it. Both Transbay Transit Tower and Transbay Transit Center are being designed by Pelli Clarke Pelli Architects.

The tower will be 1,070 feet, making it the tallest on the West Coast and beating out New York City’s Chrysler Building for the honor of seventh tallest in the United States. While a ceremonial groundbreaking was held this week to celebrate the sale of the property, actual construction is not expected to begin until summer. The project is slated for completion in 2016.

“This record transaction signifies the investor confidence that we all have in San Francisco’s future,” Mayor Edwin M. Lee said in a news release. “Soon to be the West Coast’s tallest building, the Transbay Tower benefits not only a world-class transit facility but also represents the strength of our city’s economic recovery, providing jobs to build a better, more sustainable future.”

Final planning approval for the tower was granted in October. Boston Properties and Hines finalized a joint venture to acquire the property and construct the tower in December. Each company has a 50 percent interest in the project.

Dan Fasulo, managing director of Real Capital Analytics, expressed some concern that the tower does not have tenants signed yet.

“A lot of the big tenants out there in San Francisco are the fast-growing tech firms. They want space today, not in five years,” Fasulo told Commercial Property Executive. “While you do see some spec construction going on, it’s for buildings a third of this size.”

But Hines Senior Managing Director Paul Paradis noted that tenant interest across the financial, professional and tech sectors had been “extremely high.”

“Now that we are closing on the land and moving full speed ahead with the design, I’m confident that discussions will progress into leasing quickly,” Paradis stated in the release. “Transbay will be a new icon for the city and state, but also a beacon for a progressive anchor tenant looking for the finest, sustainable office space.”

Both Hines and Boston Properties are active players on the San Francisco commercial real estate scene. Earlier this month, Hines and Invesco Real Estate said they were acquiring the Rialto Building at 116 Montgomery Street from Africa Israel USA. The amount wasn’t disclosed, but market specialists estimated the sale price for the historic, nine-story building to be about $57 million. The project contains 135,486 square feet of office and retail space and is 85 percent leased. Hines currently owns and manages 3.6 million square feet in San Francisco, including 101 California, 560 Mission, 580 California and 50 Fremont.

Last month, Boston Properties acquired 535 Mission St., a 27-story building development from Beacon Capital Partners for about $71 million. The office and retail building will be 378 feet tall and have 307,000 square feet of Class A office and retail space that is expected to be LEED Gold certified and aimed at tech tenants. In September, Boston Properties purchased 680 Folsom and 50 Hawthorne, abutting office buildings, for more than $62.2 million in cash and assumed a $170 million construction loan from TMG Partners and Rockwood Capital L.L.C. Once redevelopment is finished, the properties should have 521,000 square feet of Class A office space.

The office market is hot in San Francisco with “vacancy rates near pre-recession levels and asking rents reaching their highest point in over a decade,” according to the fourth quarter 2012 report on the San Francisco Office Market from Newmark Grubb Knight Frank. Most of the leasing is being driven by tech companies. Newmark Grubb Knight Frank reported that four of five leases signed in the fourth quarter of 2012 were for technology tenants, including Salesforce.com, which took 444,271 square feet at 350 Mission Street in the South Financial District.

The Picerne Group is working hard to answer the increasingly loud cry for apartments in Denver with the construction of a luxury apartment property in the thriving Denver Tech Center area. Work is currently underway on the project, which will yield 248 residences. 

The as-yet-unnamed development is sprouting up on a nearly nine-acre parcel on the Denver Tech Center Parkway. It has location on its side.

“Tech Center is thriving [because of] its proximity to employment,” Dr. Ronald L. Throupe, a professor with the Franklin L. Burns School of Real Estate and Construction Management at the University of Denver, told Commercial Property Executive. “The main interstate runs right through Tech Center and the rapid transit line is parallel to the highway, so it’s very easy access for commuters to go back and forth. That kind of connectivity does spur apartment growth.”

KTGY Group Inc. is behind the design of Picerne’s project, which is being developed in partnership with Grand Peaks Properties. “The community will appeal to a variety of individuals, from the young employees who work in the Denver Tech Center to the young families who want to live within the Cherry Creek School District and to those who are looking to downsize and move out of their single family homes,” Christopher Davis, managing director with Picerne, said in a prepared statement. 

Colorado Structures Inc. is onboard the endeavor as general contractor and is on schedule to complete construction in time for the apartment community’s debut in spring 2014.

The owners of Alameda Square, an industrial and creative office campus with more than 1.6 million square feet in downtown Los Angeles, have secured a $78 million refinancing and will use part of it for renovations for new tenants.

“We are excited to complete this transaction as we continue to renovate and build this premier fashion apparel and creative office campus in Southern California,” Martin Caverly, CEO of property owner EVOQ Properties Inc., said in a news release.

HFF represented the borrower, a subsidiary of EVOQ Properties, to secure the three-year adjustable rate loan through Olen Properties, a Newport Beach, Calif.-based commercial real estate developer and institutional investor. The loan will be used to refinance the first and second lien mortgages. Paul Brindley, HFF senior managing director, said the 7^th Street Produce Market, which is part of the property, and Alameda Square campus, served as collateral.

Brindley and senior real estate analyst Jeff Sause led the HFF team on the refinancing deal.

Asked why HFF used Olen Properties rather than a more traditional lender, Brindley told Commercial Property Executive that the complex nature of the property was one of the main reasons.

“There are a lot of small tenants that have been there a long time. Then they have American Apparel on the other side and creative office space. There’s garment manufacturing and the produce market. It’s not the simplest of deals. It’s not a traditional kind of underwriting,” he said.

The Alameda Square campus is located at 7^th and Alameda in downtown Los Angeles. It is comprised of four buildings in about 1.4 million square feet with creative office, retail and light manufacturing space next to the 7^th Street Produce Market and a wholesale market with more than 200,000 square feet of industrial space. The 32-acre campus is near the city’s arts and fashion districts and has become home to a number of fashion companies including American Apparel, which has grown from approximately 7,000 square feet at the site to about 700,000, according to Brindley.

The new loan will also be providing capital for tenant improvement and leasing costs for two subsidiaries of VF Contemporary Brands  – Splendid and Ella Moss. In October, EVOQ announced that the two contemporary fashion brands were moving their corporate headquarters and about 200 workers to Alameda Square. The brands will be sharing 82,000 square feet at Building 1, 777 Alameda, under a 10-year lease.

Another fashion company, Groceries Apparel, signed a five-year lease for 33,000 square feet at Building 2, 767 Alameda, in November. The company, which is based in Los Angeles and makes all its products from organic and recycled materials, said at the time of leasing that it expected to double its workforce to 60 and triple its output in the new space.

EVOQ Properties is one of the largest property owners in downtown Los Angeles with holdings in industrial, office, retail, residential and mixed-use real estate. Formerly known as Meruelo Maddux Properties Inc., the company filed for Chapter 11 reorganization in 2009. Eventually the company’s founders, Richard Meruelo and John Maddux, were ousted and a new team came on board with Caverly as CEO.

Since Caverly and the new leadership took over, they have been disposing of non-core assets and trying to reduce the debt load the previous owners had incurred as they refocus their efforts on downtown Los Angeles.

“We believe our focus on our core assets in downtown Los Angeles will bring long-term value not only to our company, but to the development of those neighborhoods into a stronger community,” Caverly said in a late January news release when he announced the sale of three non-core assets, which included vacant lots and industrial buildings in Los Angeles.

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Vestar, in a joint venture with a UBS Global Asset Management fund, has acquired Peninsula Center, a 300,000-square-foot retail center in Los Angeles County from Principal Real Estate Investors for $87.3 million in an all cash transaction.

“It was a value added investment in a tight coastal market,” Jeff Axtell, Vestar’s vice president of acquisitions and development, told Commercial Property Executive. “We plan to implement a program that will upgrade and enhance the landscaping and site amenities in the short term. We will reposition the center to bring in new tenants to make it the dominant center in the trade area.”

Located on the Palos Verdes Peninsula in the affluent city of Rolling Hills Estates, Peninsula Center is situated on 24.7 acres along Hawthorne Boulevard, the South Bay’s primary north-south thoroughfare. With 57,000 vehicles passing by each day, it offers tremendous exposure and identity.

According to Axtell, the transaction fits in with the company’s strategy as it looks to acquire Class A properties in Class A markets that are the dominant center in the trade area. During the next 18 months, the company will remodel and combine shop spaces to bring in larger junior anchor stores as well as create better circulation throughout the project. It will also upgrade the center with new landscape and amenities.

The center is currently 88 percent leased anchored by tenants Vons Pavilions, Rite Aid and TJ Maxx. Other nationally recognized tenants include Spectrum Health Club, Pier 1 Imports, and Petco.

“The neighborhood has fantastic demographics and when we provide the quality environment and tenant mix in our plan, the neighborhood will embrace the center as their community gathering place,” Axtell said. “We will be creating more identity and focal points for the anchor stores.” 

The acquisition marks the firm’s second Southern California retail center acquisition since September, when Vestar purchased Riverside Plaza for $84.84 million. 

The Eastdil Secured team of Christopher Hoffman, Rikki Keating and Thao Tran represented the seller in the transaction. Vestar represented itself in the transaction.

Vestar currently owns and/or manages in excess of 22 million square feet of retail assets.

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Maguire Investments has recapitalized Water’s Edge, its two-building, 6.5-acre “creative office campus” in Los Angeles’ Playa Vista submarket, with a $105 million loan, the company announced Thursday.

The funds reportedly will be used for tenant improvements and for commissions for new leases on available space. The financing was arranged on Maguire’s behalf by Rob Verrone of Iron Hound Management, New York.

In related news, Jones Lang LaSalle has been retained to handle leasing at Water’s Edge. The JLL leasing team will be led by Chris Strickfaden, Anthony Gatti, Brian Niehaus and Jaclyn Ward.

Phase I of Water’s Edge has available blocks ranging from 8,000 to 71,000 square feet within its total 260,000 square feet. The 58,000-square-foot, green glass–sheathed Water’s Edge I and the four-story, 185,000-square-foot Water’s Edge II were developed in 2002 by a JV of Maguire Partners and Equity Office Partners

at a total cost of $77 million. Gensler was the architect and Matt Construction the general contractor.

The complex is also entitled for a 180,000-square-foot Phase II building.

Current tenants include Electronic Arts, developer of such video games as Madden NFL, The Sims and Mass Effect; Luxury Link, an online travel service; LA Fitness, at 31,000 square feet; and the X Prize Foundation. The latter is best known for its first prize, the Ansari X Prize for Suborbital Spaceflight, which was won in late 2004 by the Burt Rutan–designed SpaceShipOne.

In January 2012, the Los Angeles Times reported that Electronic Arts had renewed its 125,000-square-foot lease at the complex in a deal worth an estimated $35 million. 

The “creative” in Maguire’s description of the property describes both the typical tenants and the type of space, a company spokesperson told Commercial Property Executive. Creative office space is characterized by taller ceiling heights, a more open floor plan, exposed ceilings, concrete floors and lots of amenities, with the goal of creating a more collegial environment. It’s “basically cooler space appealing to the Silicon Beach demographic,” the spokesperson said.

The complex adjoins the 350-acre Ballona Preserve, one of the L.A. region’s last sizable natural wetlands. Onsite amenities include a café, soccer field and  LA Fitness (with full court basketball and sand volleyball). An outdoor swimming pool will open this summer.

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