May – Briefs/Sales & Development

AIG, Associated Estates Enter JV to Build $220M M-U Development in San Francisco; Hollywood Micro Unit Asset Trades Hands; Blackstone Acquires Nationwide Select-Services Portfolio; HAP Investments to Buy 1 MSF Development Site in Jersey City; Harbor Group Int’l Acquires 55 Broadway for $157M; Pivotal Group Sells 3,000-Plus Apartments in West Texas; Kilroy Grabs Premier Life Science Property in Seattle for $106M; NorthStar to Buy $1B Healthcare RE Portfolio from Formation Capital, Safanad.

AIG, Associated Estates Enter JV to Build $220M M-U Development in San Francisco

0514_Briefs_SalesAIG Global Real Estate and Associated Estates Realty Corp. have entered into a 50:50 joint venture partnership to build a 3.4-acre site at Eighth and Harrison streets in San Francisco. The project will be called 350 Eighth St. and is located in the South of Market neighborhood. It will be a key component of the proposed Western SoMa development plan. The former bus parking lot, previously owned by Archstone Enterprise L.P. and bought by Associated Estates last year, will be turned into an eight-building, mixed-use development consisting of 410 rental apartment homes and 40,000 square feet of office, retail and art space. Site work has already started, and first occupancy is scheduled for the fourth quarter of 2015.

Hollywood Micro Unit Asset Trades Hands

An affiliate of Vista Investment Group has sold a Hollywood apartment property containing 100 micro units to a private investor for $14.8 million. Vista picked up the former hotel in 2010 in a lender-facilitated sale. At the time, the 1920s-built property was in the early stages of a major renovation that had stalled out during the recession. The building’s location at 1963 N. Cahuenga Blvd. and original hotel layout made it a prime target for a micro unit rehab. Lease-up began in the summer of 2012, following the extensive renovation. Seventy of the units average 250 square feet in size, and 30 junior one-bedroom units average 500 square feet. Building occupancy at the time of sale stood at 95 percent.

Blackstone Acquires Nationwide Select-Services Portfolio

The Blackstone Group has acquired a 15-hotel portfolio comprising 1,856 keys and located in Alabama, California, Connecticut, Florida, Pennsylvania and metropolitan Washington, D.C., from OTO Development L.L.C. JLL’s Hotels & Hospitality Group represented the seller in the transaction. The price was not disclosed. Statistics by JLL’s Hotels & Hospitality Group show that select-service hotel trades increased 145 percent during the first eight months of 2013, momentum that has continued into 2014. On average, the properties are less than five years old, and many feature amenities including sundry shops, fitness centers, outdoor patios and business centers.

HAP Investments to Buy 1 MSF Development Site in Jersey City

HAP Investments L.L.C. is in contract to acquire 500 Summit Ave., a nearly one-acre lot in Jersey City, for a reported $28 million. The company plans to develop the prime Journal Square location into HAP Tower, a 42-story apartment building with office and retail space. The anticipated cost of the 1 million-square-foot development is estimated to be $400 million. Currently a parking lot, the site is located at the city’s summit and offers views of Manhattan and the metropolitan region. The site is in close proximity to some of the region’s convenient transportation links, including PATH, Amtrak and bus routes.

Harbor Group Int’l Acquires 55 Broadway for $157M

An affiliate of Harbor Group International L.L.C. has acquired the 358,600-square-foot Class A office property at 55 Broadway in Manhattan from an affiliate of Broad Street Development for $157 million. The 32-story building was completed in 1983 and sits on the southwest corner of Broadway and Exchange Place. It features ground-floor retail, an urban plaza and access to four subway stations within a three-block radius. It’s currently 90 percent leased to more than 40 office and retail tenants. JLL’s New York office assisted the buyer in the transaction.

Pivotal Group Sells 3,000-Plus Apartments in West Texas

An affiliate of Phoenix-based Pivotal Group has sold a 21-community, 3,128-unit portfolio of Class B apartments in West Texas to the Related Cos.’ Related Real Estate Recovery Fund. The purchase price for the private transaction was not disclosed. Fourteen of the assets, totaling 1,751 units, are in Midland, Texas, and six, totaling 1,225 units, are in nearby Odessa. The remaining community, with 152 units, is in Longview, in eastern Texas, not far from Shreveport, La. The properties were completed between 1974 and 1983, but reportedly had been extensively renovated after being acquired by Pivotal about two years ago.

Kilroy Grabs Premier Life Science Property in Seattle for $106M

A four-story, LEED Gold-certified life science property at 401 Terry Ave. N. in Seattle’s South Lake Union submarket has been purchased by Kilroy Realty Corp. The investor/operator acquired the asset from its developer, Vulcan Real Estate. The price of $106.1 million covers both the building itself, which is fully leased (140,600 square feet) through 2021 to the Institute for Systems Biology, and a three-level underground parking structure. The tenant, a nonprofit, is described in JLL’s 2014 Life Sciences Outlook as focusing on global health and infectious disease in the Third World. Developed in 2003, the building was one of Vulcan’s first assets in South Lake Union and features 36,000-square-foot floor plates, floor heights of 14 to 19 feet, augmented floor thickness, enhanced loading and seismic capabilities, and above-standard building systems, including independent air handling and redundant power systems serving the lab space.

NorthStar to Buy $1B Healthcare RE Portfolio from Formation Capital, Safanad

NorthStar Realty Finance Corp., which has been growing its healthcare real estate holdings since former HCP Inc. chairman & CEO James Flaherty came on board in January, has agreed to acquire a $1 billion seniors housing and skilled nursing portfolio from Formation Capital and Safanad Ltd. The portfolio comprises 43 primarily private-pay seniors housing and 37 skilled nursing facilities located in 14 states, with 35 percent of the assets in Florida. The acquisition boosts NorthStar’s healthcare holdings to more than 160 properties valued at approximately $1.6 billion.