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Developers Boston Characteristic, Delaware North Secure 440,000 SF Lease from Verizon Affiliate to Anchor $1.2 Billion Advancement in Boston

Verizon Will Lease 70% of TD Garden Workplace Tower for Term of 20 Years in Largest Workplace Lease Checked In Boston Year to Date

An affiliate of Verizon Communications signed a 20-year lease for 440,000 square feet of office at a 31-story office tower planned as part of a $1.2 billion joint endeavor advancement in between national workplace investment trust Boston Residence and independently held hospitality company Delaware North.

Verizon’s lease at the 627,000-square-foot workplace tower under building and construction above North Station at The Center on Causeway is the biggest of the year in Boston. The 1.5 million-square-foot retail, office, hotel and property project, which includes a growth of Delaware North-operated TD Garden, Boston’s sports and home entertainment arena, is now 75% rented.

The lease dedication is reported to be on the part of Oath Inc., a subsidiary of Verizon Communications that functions as the holding business for its digital material subdivisions including AOL and Yahoo!

The first phase of the Gensler-designed Hub on Causeway, which integrates a revamped entryway for the TD Garden arena, is set for October. The retail and office space are scheduled to open in late 2019.

The second phase, which includes a hotel and property spaces, will likewise be completed late next year. Completion of the 31-story workplace tower to be occupied by Verizon, the tallest integrated in Boston in more than two decades, is arranged for mid-2021.

Building complemented in early July at Boston’s first citizenM hotel, a 269-room hotel in an eight-story tower on top of the west podium planned to open in fall 2019.

Boston Properties is managing all advancement elements of the job under construction by John Moriarty & & Associates. The Cushman & & Wakefield brokerage group led by Josh Kuriloff in New York and John J. Boyle III in Boston represented Verizon in the lease.

Mansueto Characteristic Purchases Iconic Wrigley Building for $255 Million

The renowned Wrigley Structure– one of the most famous in the world– is now in the hands of Chicago billionaire Joe Mansueto, whose new realty investment company Mansueto Characteristics purchased the historical two-building landmark for $255 million recently.

Perched at the corner of Michigan Avenue and the Chicago River at 400 and 410 N. Michigan, the structure, clad in white terra-cotta, is amongst the most identifiable in the city and on Chicago’s premier commercial district, the storied Spectacular Mile.

As the first high-rise building on Michigan Opportunity, the Wrigley Structure and its signature bell tower, styled after the Giralda Tower of the cathedral in Seville, Spain, poses as a gateway between the Gold Coast, the Loop and River North. Mansueto, the founder and executive chairman of Morningstar, the investment research firm, paid a 672 percent premium to the $33 million it last sold for in 2011.

“Located at the new center along the Chicago River, the Wrigley Structure stands high as a clear symbol of our city’s rich history,” Mansueto said in a statement. “We are dedicated to maintaining the tradition of this building and guaranteeing that it remains an essential part of Chicago’s development well into the future.”

Legend has it that chewing gum tycoon William Wrigley, Jr., called “Beau,” was so wide-eyed by the renowned White City of the World’s Columbian Exposition held in Chicago in 1893 when he was a kid, that he desired his namesake headquarters to show that aura. The glazed terra cotta has six different tones of white that ended up being brighter as the building increases. The fa├žade, whose white stone and gold information are cleaned frequently, is lighted during the night, producing a glow of the spacious plaza just steps from the river. Graham, Anderson, Probst & & White designed the structure, which sits across Michigan from another historic terra-cotta landmark, The Tribune Tower.

Considering that 2011, the Wrigley Building has undergone a $91 million remodelling by the sellers, a financial investment group led by BDT Capital Partners that also included Zeller Realty Group and Groupon founders Eric Lefkofsky and Brad Keywell. They bought the residential or commercial property from Mars Inc., which obtained it in its purchase of the William Wrigley, Jr. Co. in 2008.

The renovation of the 2 towers, which are connected by enclosed bridges at the 3rd and 14th levels, was sweeping, with a redesign of the general public areas, including must-have amenities for today’s office space that consist of a cafe, health club and occupant lounge, in addition to comprehensive facilities improvements.

The structure, which has approximately 311,000 square feet of rentable area, is nearly 95 percent leased – a considerable improvement from the 19 percent tenancy it had prior to the remodellings started. The Perkins + Will architecture firm is the largest tenant, at nearly 69,000 square feet in a lease that extends until 2026, inning accordance with CoStar research study.

The offer is stated to have been done in between Mansueto and Byron.

For additional information on the deal, please see CoStar Comp # 4343923.

LaSalle Hotel Characteristic Turns Down Takeover Proposition by Pebblebrook

Board Refuses Unsolicited Proposal as ‘Grossly Inadequate’ in Rates, Cash/Stock Mix

Pebblebrook’s portfolio consists of the LaPlaya Beach & Resort & LaPlaya Beach Club in Naples, FL.

LaSalle Hotel Characteristic (NYSE: LHO)today stated its board of trustees all turned down an unsolicited merger proposal from Pebblebrook Hotel Trust (NYSE: PEB), saying the quote undervalues the company.

Pebblebrook on March 6 sent out a letter to LaSalle offering to obtain all outstanding shares of LaSalle in an all-stock transaction implying a deal cost of about $30 a share based on today’s trading prices. Pebblebrook said a combination of the two Bethesda, MD-based REITs would create a “clear leader in the lodging REIT sector” with a portfolio consisted of 69 mainly upper-upscale and high-end hotels, would supply strong capital and enhanced liquidity, and would consist of essential tax benefits for LaSalle shareholders.

LaSalle responded in a letter on March 22, stating that its board had actually declined the proposition as “inadequate from both a cost and mix of factor to consider viewpoint” and “not in the very best interests of LaSalle Hotel Residence shareholders.” Pebblebrook released both letters Wednesday.

“The board is concentrated on the ongoing execution of our strategic strategy, prudent capital allocation and our remarkable hotel portfolio, which will deliver greater value, quicker to our investors than Pebblebrook’s low-premium proposal,” LaSalle board Chairman Stuart Scott said in a release.

“The proposition shows neither the worth intrinsic in the business’s portfolio nor its capacity for future value development,” LaSalle stated.

LaSalle’s stock surged 15% in midday trading on Wednesday to about $28.59. Pebblebrook’s share price was up about 4.7% to $35.10.

Simon Yarmak, expert with Stifel, Nicolaus & & Co., stated a merger could benefit the general lodging REIT sector by establishing an appraisal foundation, particularly for REITs with upper-upscale. full-service properties. Pebblebrook already holds a 4.8% position in LaSalle.

Though the stock assessments of the REITs is different, the business have complimentary portfolios, with overlapping markets in Boston, San Diego, Los Angeles and San Francisco. LaSalle’s portfolio, that includes company transient, store, coastal, upper-upscale residential or commercial properties, is a logical fit with the PEB portfolio, Yarmak stated in a research note.

In addition to having the same head office city, the REITs have some shared history in the C-suite. Pebblebrook CEO Jon Bortz served as LaSalle’s president from its 1998 IPO through mid-2009, and present CFO Ray Martz likewise served with LHO in the 2000s.

Scott stated the LaSalle board “continues to be unbiased” and will think about “any options that boost long-term investor value.”

Could another bidder for LaSalle come forward?

“While we have no knowledge of any other pending deals, in our view it is possible that Blackstone or another private-equity gamer could get in the fray with a money deal,” Yarmak said.

Federal government Characteristic REIT Purchasing First Potomac for $1.4 Billion

CEO Milkovich Engineers Sale of Company Following Strategy to Shed Assets, Increase Investor Value

Robert Milkovich, CEO and Chief Operating Officer of First Potomac Realty Trust.
Robert Milkovich, CEO and Chief Operating Officer of First Potomac Real estate Trust. Following an 18-month ‘crash course’in boosting investor worth under CEO Robert Milkovich, Bethesda, MD-based Very first Potomac Real estate Trust (NYSE: FPO )has accepted a buyout deal from Federal government Properties Income Trust(Nasdaq: GOV )for $1.4 billion in cash and financial obligation assumption. Federal government Residence Earnings Trust, which is managed by the operating subsidiary of alternative possession management company The RMR Group Inc. (Nasdaq: RMR)based outside Boston, accepted pay $11.15 per share in cash ($683 million in total). GOV likewise accepted choose up the tab for approximately $418 countless First Potomac’s financial obligation and assume roughly $232 million of exceptional mortgage financial obligation.

GOV mainly owns properties bulk leased to the United States federal government and other government occupants.

The money per share for the deal is less than First Potomac’s stock closing rate yesterday (June 27) of $11.35/ share, and lower than the closing rate of the last five trading days. First Potomac’s stock has actually traded as high as $11.44/ share over the last 12 months.

First Potomac likewise concurred not to pay any circulations to its investors before the transaction with GOV closes.

First Potomac preserves the list price represents a premium of 9.3% to its 30-trading day volume weighted average price ended April 24, 2017, the last trading day before market rumors concerning a possible sale started circulating. On April 24, FOP stock closed at $10.61/ share.

The deal undergoes the approval of at least a bulk of FPO’s typical investors.

First Potomac’s board tapped Milkovich to take over as the REIT’s CEO following the abrupt resignations of previous CEO Douglas Donatelli and Chief Investment Officer Nicholas Smith in 2015. He formerly worked as primary running officer. First Potomac’s market capitalization had taken a hit from investors concerned over the slow leasing activity in its portfolio of mostly rural office around Washington, DC, which experienced an uncommon slowdown in workplace leasing activity as an area coming out of the economic downturn.

First Potomac owns a portfolio of office and commercial properties mostly in the city Washington, DC, market. The portfolio includes 39 homes (74 structures) with 6.5 million square feet that was 92.2% leased as of March 31, 2017. The REIT reported that federal government and other investment-grade occupants represent 43.9% of its overall annualized rental income.

“Over the last 18 months we have worked vigilantly to refine the business’s portfolio, strengthen the balance sheet, and enhance First Potomac’s corporate governance,” stated Milkovich in a statement announcing the sale arrangement. “This deal and the appealing worth that investors will receive shows the effective execution of these efforts.”

“The acquisition of FPO allows GOV to broaden its company technique to consist of the acquisition, ownership and operation of office homes leased to both federal government and economic sector occupants in the metropolitan Washington, DC, market location,” said David Blackman, president and chief operating officer of Newton, MA-based GOV. “Outside of the urbane Washington, DC, GOV will continue to focus on obtaining, owning and operating office homes that are bulk rented to federal government renters.”

Government Characteristic Earnings Trust said it expects to realize $11 million of annual basic and administrative expenditure cost savings compared with FPO on a stand-alone basis.

GOV anticipates to fund the offer by offering shares and extra financial obligation, including senior unsecured notes, home mortgage funding and/or bank financial obligation, as well as earnings from the sale of some homes.

Citigroup is serving as special financial advisor to GOV and Sullivan & & Worcester LLP is serving as legal counsel to GOV. Wells Fargo Securities/ Eastdil Guaranteed is functioning as special monetary consultant to First Potomac, and Hogan Lovells United States LLP is functioning as legal advisor.

Monday Characteristic Rotates Back to Purchasing Mode, Trading for Five-Bldg Northern VA Office Portfolio

New york city City Realty Firm, Fresh With West Coast Aspirations, Utilizes CMBS to Recapitalize Its Rosslyn Portfolio to Raise Money for Re-Entry Into Office Investment Market

It’s clear that Monday Properties has been getting ready to obtain back into the hunt for investment workplace properties, and the New York City based real estate investment firm shot on its very first purchase in several years this, purchasing the Beauregard Workplace Park, a five-building office park in Alexandria, VA.

. Monday Characteristic, which last month completed an $888 million CMBS recapitalization of its nine-property portfolio in Rosslyn, VA, closed the purchase of the 300,000-square-foot portfolio of Class B homes on North Beauregard Street, formerly known as Mark Center Office Park, on terms that were disclosed.

The late last month revealed the recapitalization of the 2.6 million-square-foot Rosslyn portfolio, which the company said would supply the necessary funding to protect extra long-lasting tactical financial investments and upgrade its leasing efforts in the Washington, D.C. market.

The recapitalization through a CMBS loan sponsored by a joint-venture between United States Realty Opportunities I, L.P., a $1.3 billion fund formed by Goldman Sachs and an affiliate of Monday Characteristic, is protected by 7 office homes in the Rosslyn portfolio managed by Monday given that 2005.

The portfolio is a potential jewel in a Rosslyn submarket hard-hit by Department of Defense downsizing and federal spending plan sequestration. Those elements caused office need to plummet and job rates to spike to 26.5% in recent quarters. The security homes, however, “are considered to be a few of the very best in the market and offer unobstructed views of nationwide monuments and landmarks,” DBRS stated in a pre-sale report. “The properties are quickly available from downtown DC and the suburbs in Northern Virginia as they are within close distance to the Rosslyn Metrorail Station.”

While occupancy of the portfolio was just 67.5% since May 1, Monday Residence has actually produced considerable leasing momentum by performing 39 brand-new leases and renewals, DBRS said. Furthermore, 18.5% of the over 100 tenants are investment-grade, while only 8.5% are inhabited by federal government occupants.

Monday Properties signified its impending re-entry into the acquisitions market previously this year, revealing plans to open a Los Angeles workplace and start targeting financial investments on the West Coast for the very first time. Nevertheless, its first acquisition out of the gate, Beauregard Office Park, is best in the business’s home turf in Northern Virginia.

The homes are located at 500, 1600, 1800 1900 and 2000 North Beauregard Street north of I-395. The transaction “will further enhance Monday’s strategic thesis in finding unparalleled investments for our investors,” stated founding handling partner Anthony Westreich in a declaration.

Please see CoStar COMPs # 3934164 to find out more on the Alexandria transaction.

Quality Care Characteristic Thinks about Abandoning REIT Status to Save Largest Occupant


HCR ManorCare Falls Behind in Full Lease Payments, Pursues Out-of-Court Restructuring

Quality Care Characteristic(NYSE: QCP), the new healthcare REIT established by HCP last year to take the struggling skillled nursing center operator, HCR ManorCare Inc., off its hands, is dealing with a challenging choice.

With HCR ManorCare falling back in lease and doggedly pursuing an out-of-court restructuring, Quality Care Residence is thinking about taking over the struggling knowledgeable nursing center operator, which is by far its most significant occupant.

However, as QCP recently acknowledged, such a move could trigger it to lose its REIT status.

Quality Care Characteristic was formed in 2016 when HCP Inc. (NYSE: HCP) spun off HCR ManorCare and other health care-related residential or commercial properties. While freeing itself from ManorCare allowed HCP to focus on higher-growth opportunities in its diversified healthcare realty portfolio, it saddled Quality Care Residences with the prospect of a tough turn-around scenario.

As of March 31, Quality Care’s holdings consisted of 257 post?acute/ competent nursing homes, 61 memory care/assisted living properties, one surgical hospital and one medical office building throughout 29 states. HCR Manor Care leases 292 of the 320 residential or commercial properties, accounting for 94% of QCP’s revenue.

The REIT divulged that HCR ManorCare is in default of its master lease contract, behind completely rent payments, and HCR’s lending institutions have also accelerated loan repayments from the Toledo, OH-based nursing center operator.

The operator’s difficulties are not brand-new to Bethesda, MD-based Quality Care. HCP started the spin-off as part of a strategy to enhance its portfolio performance, which was being obstructed as the wider proficient nursing center market continued to experience challenges from much shorter lengths of stays for homeowners, changes in Medicare repayment designs that decreased reimbursement rates, and lower resident counts.

HCR ManorCare’s monetary difficulties escalated this spring. In April, the company participated in a forbearance arrangement with HCR ManorCare concurring not to pursue “workout of treatments” readily available to it as a result of HCR ManorCare’s default under its master lease and security arrangement.

The forbearance contract required, to name a few things, that HCR ManorCare pay $32 million in lease on the first of April, Might and June of 2017, with up to $7 countless the amount received monthly possibly avilable in loans back to HCR ManorCare.

This month, HCR ManorCare just made a $15 million rent payment, less than half its overall under the forebearance contract, according to a Quality Care filing with the U.S. Securities & & Exchange Commission.

HCR ManorCare notified Quality Care that its protected lending institutions have actually accelerated their loans and that the minimized lease payment “corresponds to the amount that it believed to be appropriate to pay at this time because of the impressive acceleration by HCR ManorCare’s protected lending institutions, the desire to preserve liquidity for its stakeholders, the incurrence of expert charges and other restructuring expenses and newly supplied HCR ManorCare management projections of minimized cash flow from the QCP-owned assets.”

HCR ManorCare also forecasted a decrease in the future financial efficiency compared to forecasts it made earlier this year.

Quality Care said it continues to be in conversations with HCR ManorCare about its lease default and a prospective out-of-court restructuring, stating it “thinks that an out-of-court restructuring will need a substantial decrease in HCR ManorCare’s liabilities, but included it might offer no assurance that the necessary contracts among stakeholders would be reached.

On the other hand, QCP stated it is considering all alternatives, consisting of taking full equity ownership of HCR ManorCare.

While Quality Care thinks such a restructuring would allow HCR ManorCare’s to produce a sustainable company operation, if it were to occur, it would also suggest that QCP would not have the ability to retain its REIT status.