August – Briefs/Finance

MAA, Colonial Properties Trust to Become One; TIAA-CREF, Henderson to Birth New Euro-Asia Entity; HFF Lands $581M for Hotel Portfolio; Prudential Provides $73M for Hines’ London Office Purchase; Natixis Provides $128M for Chetrit M-F Redevelopment; Grossman Receives $88M Financing for Arizona Grand Resort; JLL Secures $112M for Suburban DC Office Complex; Cassidy Turley Arranges $84.5M First Mortgage for Stamford M-F Asset.

MAA, Colonial Properties Trust to Become One

MAA and Colonial Properties Trust have made a multibillion-dollar pact that will change the rankings in the apartment REIT arena. In an all-stock transaction valued at $8.6 billion, the companies will merge and, with a combined 84,772 residential units, become the second-largest publicly traded apartment REIT in the country after Equity Residential.

Terms of the agreement call for each Colonial common share to be converted into 0.36 newly issued MAA common shares, leaving the equity split in the new company at 56-44 in favor of MAA’s equity holders. The resulting entity will be known as MAA and operate as an UPREIT.

TIAA-CREF, Henderson to Birth New Euro-Asia Entity

In a transaction worth $176.4 million, TIAA-CREF and Henderson Global Investors will create TIAA Henderson Global Real Estate, a new investment management company with a European and Asia-Pacific focus. Under the deal, which is expected to close in the first quarter of next year, TIAA Henderson will consist of TIAA-CREF’s European real estate business, Henderson’s European and Asia-Pacific-based real estate business, and a new global distribution and client service organization. TIAA Henderson will be owned 60 percent by TIAA-CREF and 40 percent by Henderson Global Investors. In a related transaction, TIAA-CREF is acquiring Henderson’s U.S. real estate business, which includes a staff of 27 at offices in Chicago and Hartford, and focuses primarily on U.S. core and value-add investments across the major property types, with a specialty in multi-family housing

HFF Lands $581M for Hotel Portfolio

Holliday Fenoglio Fowler L.P. has closed a major hospitality refinancing package for an affiliate of The Blackstone Group L.P. The $581 million three-year, floating-rate loan was placed with GE Capital Real Estate and serves to refinance a portfolio of 16 hotels and one golf course/tennis club. The hotels are Sheraton San Francisco Fisherman’s Wharf in San Francisco; Hilton Irvine-Orange County Airport and Marriott Irvine in Irvine, Calif.; DoubleTree Austin; DoubleTree Suites Indianapolis-Carmel in Carmel, Ind.; Hilton Clearwater Beach Resort in Clearwater, Fla.; South Seas Island Resort in Captiva Island, Fla.; The Inns of Sanibel (four boutique hotels) and The Dunes Golf and Tennis Club in Sanibel Island, Fla.; DoubleTree Orlando-Universal in Orlando; Hilton Cocoa Beach Oceanfront in Cocoa Beach, Fla.; Hilton Key Largo Beach Resort in Key Largo, Fla.; Ritz-Carlton Pentagon City in Arlington, Va.; and Marriott Princeton-Forrestal in Princeton, N.J.

Prudential Provides $73M for Hines’ London Office Purchase

Prudential Mortgage Capital Co. has provided $73 million for Hines Global REIT’s purchase of One Westferry Circus in London’s Canary Warf. The 219,000-square-foot mid-rise asset was built in 1992 by Olympia & York. According to Prudential Mortgage Capital, the Canary Wharf submarket is an area with improving infrastructure and access that is being explored by companies looking for a low occupancy cost. Hines announced its acquisition back in mid-May. The asset is currently 96 percent leased to Valero Energy Ltd., De Vere Venues Ltd. and Littlejohn L.L.P.

Natixis Provides $128M for Chetrit M-F Redevelopment

Natixis Real Estate Capital L.L.C. has come through for Chetrit Group once again. The direct lender provided Chetrit—along with partners Clipper Equity and Robert Wolf of Read Property Group—with a $128 million loan for the purchase and redevelopment of the former Cabrini Medical Center complex on E. 19th Street in Manhattan. The team will use the funds to transform the approximately 395,300-square-foot property into a 372-unit luxury multi-family community. The one-year loan, which comes with a floating rate and an option for one three-month extension, lays the groundwork for Chetrit and its partners to move forward with plans for redeveloping the five-building site, which last traded in 2010, when an affiliate of Memorial Sloan-Kettering Cancer Center acquired it for $83.1 million.

Grossman Receives $88M Financing for Arizona Grand Resort

Grossman Company Properties has secured $88 million in financing for its 740-key, all-suite Arizona Grand Resort in Phoenix. CBRE Hotels/Finance acted as financial advisor on the deal, arranging the $88 million six-year, floating-rate, non-recourse loan through a domestic debt fund. Grossman purchased the asset in 2006 and its hospitality division, Class Hotels & Resorts, manages it. Arizona Grand Resort was constructed in 1987 and underwent a $66 million renovation and expansion in 2009.

JLL Secures $112M for Suburban DC Office Complex

Jones Lang LaSalle Inc.’s capital markets team has assisted CalSTRS with landing $122 million in financing for Lincoln Place, a 503,800-square-foot office complex in Arlington, Va. SunTrust Bank Inc. provided the funds for the property, which is fully leased to the U.S. Drug Enforcement Agency. The non-recourse financing came in the form of a 10-year, floating-rate loan. CalSTRS has owned Lincoln Place since 1999, when the pension fund acquired the property for $156 million. The complex consists of two 12-story towers that have been occupied by the DEA since opening in 1988.

Cassidy Turley Arranges $84.5M First Mortgage for Stamford M-F Asset

Cassidy Turley has arranged first mortgage financing for The LockWorks at Yale & Towne, a Class A, 329-unit multi-family asset in Stamford, Conn., that is part of the Harbor Point mixed-use development. The service firm represented Wafra Investment Advisory Group Inc. on behalf of an institutional investor in arranging the 10-year, fixed-rate financing package with lender HSBC Bank USA. Wafra acquired the asset in December 2012. Harbor Point, which is one of the largest redevelopment projects in the U.S., was completed in 2011.