Tag Archives: portfolio

Blackstone Purchasing Another Logistics Portfolio, This Time from FL-Based FRP Holdings

FL-Based Land, Mining and Advancement Business Capitalizes on Tax Benefits on $359 Million Sale

The 200,000-square-foot building at 7021 Dorsey Road in Hanover, MD’s Hillside Organisation Park is one of the biggest structures in the FRP Holdings portfolio.

FRP Holdings, Inc. (Nasdaq: FRPH) has actually accepted sell 41 warehouses and 2 advancement lots located primarily in the Baltimore, Philadelphia and Washington, D.C. markets to an affiliate of Blackstone Realty Partners VIII, LP for $358.9 million.

The sale of mainly smaller sized storage facility buildings averaging less than 100,000 square feet is anticipated to close in the second or third quarter of this year. The portfolio amounts to almost 4 million square feet, according to CoStar information and info in FRP’s regulatory filings.

Most of the structures are located in the Baltimore metro, with smaller sized clusters of homes in the Manassas/I -66 commercial submarket of D.C. and the Delaware submarket of Philadelphia. One of the biggest homes remains in the Norfolk Industrial Park in Hampton Roads, VA, at 188,000 square feet.

Blackstone entities have bought infill U.S. and Canadian industrial portfolios at a stable clip because returning to the logistics market in late 2016. Investors have actually sought to capitalize on the growing demand for e-commerce distribution centers, particularly metropolitan and rural properties near population centers where carriers can Amazon and other e-commerce business can fulfill same-day or next-day delivery to online buyers.

Jacksonville, FL-based FRP Holdings was formed in 1986 through the spin-off of the real-estate and transport organisations of Florida Rock Industries, Inc., now a completely owned subsidiary of Vulcan Materials. The business has company sectors in industrialized structures, mining royalty lands and other development lands.

FRP said in a release it would redeploy proceeds from the sale into other organisation segments, including mining and land advancement.

“The reduction in business income tax rates in a low cap rate environment created too good an opportunity to give up,” stated John D. Baker II, executive chairman and CEO.

Eastdil Safe, LLC is functioning as FRP’s unique broker in the deal. Houlihan Lokey Capital, Inc. functioned as monetary advisor and Nelson Mullins Riley & & Scarborough LLP serves as legal counsel to FRP. Simpson Thacher & & Bartlett LLP acts as counsel to Blackstone on the transaction.

Blackstone REIT Expands '' Last-Mile ' Warehouse Holdings with $1.8 Billion Portfolio Purchase

22 Million-SF Canyon Industrial Portfolio Consists Of Amazon, DHL, FedEx and Coca-Cola Amongst 377 Tenants

Blackstone Realty Earnings Trust, Inc. (BREIT) revealed it has successfully closed on a $1.8 million transaction to obtain a 22 million-square-foot portfolio consisting of 146 infill storage facility and circulation properties throughout the country.

Referred to as the Canyon Industrial Portfolio, the properties were offered by a set of funds sponsored by Boston-based Cabot Properties: Cabot Industrial Worth Fund IV, L.P. and Cabot Industrial Worth Fund IV Manager, LP. Blackstone had previously put the portfolio under contract in late December.

The gotten properties includes 146 “last-mile” structures, with the biggest concentration in Chicago at 4 million square feet accounting for 18% of the portfolio’s aggregate base rent; followed by Dallas (3.22 million SF, 12%), Baltimore and Washington D.C. (1.86 million SF, 12%), Los Angeles and Inland Empire, CA (1.12 million SF, 7%), South-Central Florida (1.12 million SF, 7%) and Denver (1.07 million SF, 6%).

The portfolio’s 377 occupants consist of Amazon, Federal Express, DHL, Coca-Cola, Fiat Chrysler and the U.S. federal government, according to a securities filing.

BREIT noted that the industrial job rates throughout the portfolio’s markets has actually continued to decline over the previous seven years and is presently just 4.6%, while rents have actually increased 5.7% year-over-year.

“The ongoing market lease development in the portfolio’s markets resulted in leas on brand-new leases surpassing leas on expiring leases by 9% in the portfolio during the third quarter of 2017,” Blackstone stated, adding that the portfolio has some leasing upside as it’s presently 90% inhabited.

“BREIT’s portfolio, with its emphasis on steady, income-producing warehouse and apartment or condo assets, is well placed to take advantage of continued tailwinds in these sectors,” stated A.J. Agarwal, Blackstone REIT president and head of U.S. core-plus real estate for the private-equity giant.

The Blackstone-sponsored non-traded REIT buys supported U.S. industrial realty homes, including multifamily, industrial, retail and hotel possessions.

BREIT’s portfolio now amounts to $7 billion over 272 properties, consisting of 33 million square feet of commercial area and 17,200 multifamily houses, with some select-service hotels and grocery-anchored shopping centers.

Blackstone has re-entered the U.S. commercial market in a huge way considering that last year, when it acquired a 38-property portfolio totaling 4.4 million square feet in Southern California from Principle Realty Investors for about $500 million.

In January, the private-equity business consented to buy Canada-based Pure Industrial Real Estate Trust, which owns and operates industrial residential or commercial properties throughout The United States and Canada, in an all-cash offer valued at about $2 billion.

Wheeler REIT Weighing Choices for 64-Property Grocery-Anchored Portfolio

Following weeks of turmoil in its C-suite, Virginia Beach, VA-based Wheeler Property Investment Trust (NASDAQ: WHLR )has begun the procedure of selecting an independent third-party consultant to help in determining and pursuing options to make the most of shareholder worth.

Regardless of investors petitioning for such a relocation last summertime, it took the shooting of the REIT’s name chairman, CEO and president, Jon Wheeler, and the resignation of its CFO prior to the REIT’s board put the plan into action. The REIT supplied no reasons for the executive departures.

After the REIT’s stock lost more than 60% of its worth given that the very first week of December, the company has actually now taken a number of steps planned to support, inning accordance with newly appointed CEO David Kelly. Among its initial steps was a choice to close its Charleston, SC, workplace and put the 7 undeveloped homes in Virginia and North Carolina on the market for sale.

The REIT stated it’s also working to identify other possessions to put on the market.

Wheeler owns and runs 64 grocery-anchored shopping mall, one office complex and has 7 undeveloped properties in Virginia, North Carolina, South Carolina, Georgia, Florida, Alabama, Oklahoma, Tennessee, Kentucky, New Jersey, Pennsylvania and West Virginia.

“We have actually discovered through a thorough evaluation that the business’s existing portfolio and organizational structure validates our pre-existing belief that our real estate portfolio is strong and performing well,” Kelly said in a declaration.

Nevertheless, Wheeler revealed that it is presently in “proactive and substantive” discussions among its main tenants, Southeastern Grocers (SEG), concerning a potential result on the stability of the REIT’s portfolio.

Recent media reports have actually shown that Southeastern Grocers might remain in financial distress and has been thinking about applying for insolvency protection.

Since last September, Southeastern Grocers leased 19 supermarket locations from Wheeler, including 14 Bi-Lo grocery store shops. SEG’s leases total 724,348 of rented square feet with annualized base rent of $6.2 million, which represents about 15% of Wheeler’s leasable square footage.

“We have been in proactive and substantive conversations with SEG with the goal of ensuring our portfolio’s stability,” Kelly stated. “While we are not at liberty to talk about all the information surrounding these conversations, we are encouraged by our development and plan to be able to share more information with you in the future.”

Likewise troubling to investors has been Wheeler REIT’s newest purchase.

Last month, Wheeler REIT obtained a retail shopping center in Norfolk, VA, known as JANAF, an acronym for Joint Army Navy Flying Force, for $85.65 million, including the assumption of roughly $58.9 countless mortgage loans protected by the property. The REIT paid for the property in part by releasing about $1.5 million of the REIT’s common stock.

That offer didn’t agree with Andrew Jones, managing partner of North Star Partners, which controls about 6.6% of Wheeler’s exceptional stock. Jones was among the very first to call on the REIT to consider tactical alternatives last summer season. He composed once again to them late last month.

“After disregarding his earlier request, “the board went on to approve the improperly conceived JANAF acquisition, which has actually led to more destruction of investor worth. In addition to being a diversion from the company’s strategy of getting smaller grocery anchored shopping centers, it was financed with favored equity that essentially handed out $12.475 million in shareholder worth. This represents a dilution in investor worth of $1.33/ share,” Jones composed.

Jones has required a total liquidation of the REIT that would lead to the sale of all the business’s possessions in an organized way.

Main and Main Portfolio Locked Up

Group of Trinity Advancement Group and Timbercreek Asset Management Said to be Winning Bidder

CoStar News can report that Trinity Advancement Group Inc. has actually partnered with Timbercreek Possession Management Inc. for the winning quote on the Main and Main portfolio.

The much sought after portfolio, expected to be sold in the range of $400 million to $500 million, has actually been explained by brokers from CBRE Ltd. as a “generational opportunity” to bidders aiming to obtain prime, city income-producing homes along with key redevelopment chances in downtown Toronto and Ottawa.

Sources state as many as 70 groups took a look at the portfolio, that includes 13 development properties, 6 earnings homes and 2.1 million square feet of prospective advancement chances. The portfolio comprises 10.7 acres and consists of 16 difficult corners and 5,574 square feet of frontage.

CBRE authorities would not comment on the offer, nor would Trinity and Timbercreek authorities. 2 different sources suggested the two companies had paired up on the deal and confirmed their choice however might not explain the specific nature of how they will handle the properties, other than keeping in mind that Timbercreek was providing monetary support. Sources likewise could not confirm a timeline on when the offer will close.

“Land assemblies and zoned advancement websites are hot right now, with property density prices rising rapidly. Toronto prices were $75 per square foot buildable 5 years earlier, and today they top $250 per square foot,” said Alex Avery, previous property analyst from CIBC World Markets and author of The Wealthy Tenant.

“Ontario zoning policy, including 2017 proposed modifications, are driving this rapid growth in value,” said Avery, who added he expects prices will continue to increase quickly, and may even accelerate.

“Toronto property costs have increased a lot over the previous 15 years, however can still go a lot even more before becoming economically troublesome,” Avery said, adding he was not amazed to see a lot interest in this portfolio offered the state of the marketplace.

“The buyers of Main and Main are buying an extremely limited resource, that at the very least will remain really scarce, and at best offers significant utilize to increasing domestic worths,” stated Avery.

The Main and Main portfolio was started in 2011 by Toronto-based First Capital Realty Inc. (TSX: FCR) and Rick Iafelice, the president of the company. The financial investment vehicle enabled First Capital to silently enter markets without paying exorbitant prices potential purchasers may demand from a company with a $5 billion market capitalization. Iafelice’s vision is credited with developing the platform.

Adam Paul, chief executive of First Capital, would not talk about the sale but he has stated openly that divestment of its stake in Main and Main shouldn’t be viewed as any modification in strategy which it is still very much thinking about mixed-use developments.

In its 2016 yearly report, First Capital states that the partners of Main and Main Urban Real estate have together allocated $320 million of equity capital toward present and future growth and development of the Main and Main Urban Realty portfolio, which First Capital Realty’s direct and indirect commitment is approximately $167 million. Since December 31, 2016, $120.3 countless that overall had actually been invested.

In Timbercreek, Trinity has a monetary backer with deep pockets. Founded in 1999, Timbercreek has more than $7 billion under management worldwide.

Under the leadership of Fred Waks, who joined Trinity in early 2015 as president and CEO, the company is heavily associated with a strategy to redevelop Ottawa’s Lebreton Flats, that includes a new downtown hockey rink in the capital. Trinity is part of a joint endeavor with Senators Sports & & Home entertainment called RendezVous LeBreton, which has actually been designated as the preferred supporter to establish the site. The group is currently in negotiations on the Lebreton Flats website with the National Capital Commission, a government body managing the development.

High Prices, Limited Building Tempting Industrial Portfolio Sellers Back Into Sales Market

Heightened Year-End Trading Could Push U.S. Logistics, Light-Industrial Investment Volumes Past 2016 Levels

Practically any way you take a look at it, from increasing rents and e-commerce-related leasing demand, to strong financial investment sales and pricing, 2017 is forming up as perhaps the greatest year on record for U.S. industrial property.

” It’s really hard to find anything unfavorable to state about the current market,” stated Rene Circ, director of U.S. research study, commercial at CoStar Portfolio Method, who co-presented the 2017 Q3 State of the United States Industrial Market with senior handling specialist Shaw Lupton.

Net absorption of logistics area increased 3.3% in the 3rd quarter from a year ago while the U.S. job rate for industrial area reached another historical low of 6.5%, even as new supply increase by more than 3%, and light-industrial structures ticked down to 3.1%.

On the other hand, lease growth in both the warehouse and light commercial classifications once again surpassed a remarkable 6% in the 3rd quarter.

Stimulated by e-commerce supply chains that require merchants to bring larger stocks to satisfy next-day or same-day shipment expectations in warehouse closer to large population centers, logistics and light-industrial principles have actually clearly outshined the workplace, retail and multifamily sectors so far this year.

” And this explains why there’s so much interest and capital from foreign and domestic financiers flowing into the sector,” Lupton included.

” While some financiers may want they had actually invested in 2014, we still think commercial represents a great relative worth for investors putting capital today. We’ve seen an impressive run up in costs and we anticipate more growth in the sector,” Lupton said.Return of the

Industrial Portfolio Premium

Financial investment sales of storage facility and circulation facilities stay off the blistering speed set in 2015 and 2016 when foreign capital-fueled huge portfolio and platform purchases by Blackstone Group, LP, KTR Capital Partners and others resulted in record levels of financial investment volume.

Nevertheless, while couple of large portfolios were readily available on the marketplace in the very first half of 2017, financial investment activity got in the 3rd quarter and purchasers are again paying a premium for portfolios as “another wave concerns the market,” Circ stated.

” We understand there are brand-new portfolios back on the market that will cost $2 billion or more, so there’s a likelihood we’ll end year on a positive note in terms of sales volume, and we expect 2018 will begin on a strong note,” Circ said.

Earlier this month, Blackstone Group acquired 38 metropolitan commercial residential or commercial properties totaling 4.4 million square feet in Los Angeles County and the Inland Empire for $500 million from Des Moines, IA-based Principal Real Estate Investors.

Blackstone, which sold its IndCor portfolio to International Logistic Characteristic, Ltd. (GLP) for an incredible $8 billion in 2015, leapt back into the logistics sector more than a year ago with the $1.5 billion acquisition of logistics residential or commercial properties amounting to over 26 million square feet from LBA Real estate. Like many buyers, the private-equity giant is concentrated on obtaining “last-mile” circulation residential or commercial properties serving e-commerce near major population centers.

In other big offers since completion of the 3rd quarter, Toronto-based Granite Realty Financial investment Trust completed its $122.8 million purchase of a 2.2 million-square-foot Midwest commercial portfolio from Brookfield Asset Management’s Atlanta-based commercial real estate subsidiary, IDI Gazeley.

Duke Real Estate Corp. (NYSE: DRE) agreed to acquire a 10-building, 3.4 million-square-foot portfolio and a set of development parcels from Chicago-based Bridge Development Partners in a deal valued at nearly $700 million.

Supply (Mostly) in Balance with Need

While some experts have actually alerted of oversupply in certain U.S. markets, construction starts moderated in the third quarter, causing development volumes that disappointed need and additional improved U.S. rent growth, according to Prologis, Inc. (NYSE: PLD), the world’s biggest owner and designer of industrial space.

“For the very first time in my profession, net absorption is being constrained by a serious shortage of area,” Prologis Chairman and CEO Hamid Moghadam informed investors during the logistics giant’s current third-quarter profits conference. “Tight land and labor markets are functioning as governors on new building and construction.”

Moghadam added “we are hearing consistent feedback from our consumers telling us that they are operating at capacity and that is hard for them to discover extra quality space in the right locations.”

Nevertheless, with foreign capital completing versus domestic capital for the very best offers and bidding up costs, REITs and other traditional acquirers have dialed back acquisitions and refocusing on pursuing yields through advancement.

“For us to take down a big portfolio and the financing threats that brings, and after that have to arrange through and keep half– or less than half– of the residential or commercial properties, that’s a quite inefficient and expensive method to acquire possessions,” Phil Hawkins, president and CEO of DCT Industrial Trust (NYSE: DCT).

Keppel, KBS Forming New REIT to Acquire $800 Million U.S. Office Portfolio

Singapore-based Keppel Corp. has actually received approval to launch a brand-new REIT on the Singapore Exchange and has reached an offer for that REIT to get 11 U.S. office properties from Newport Beach, CA-based KBS Strategic Opportunity REIT, a nontraded REIT.

The homes have actually not been specifically identified nor has a last purchase price been set. However, KBS presently values the portfolio at $800 million with $400 million in arrearage, inning accordance with a KBS bondholder filing in Israel.

The preliminary portfolio will include workplace residential or commercial properties in markets consisting of Seattle, Houston and Denver, according to a Singapore filing by Keppel.

In those markets, KBS Strategic Opportunity REIT currently owns:

Bellevue Innovation Center– Bellevue, WA– 330,508 square feet– valued at $85.9 million;
1800 West Loop– Houston– 400,101– $73.6 million;
West Loop I & & II– Houston– 313,873– $41.4 million;
Westmoor Center– Westminster, CO– 612,890– $82.4 million;
Central Building– Seattle– 191,705– $35.4 million;
Westpark Portfolio– Redmond, WA– 778,472– $129.9 million; and
Plaza Structures– Bellevue– 490,994– $199.2 million.

KBS Strategic Chance REIT also owns workplace properties in Atlanta, Austin, Dallas, Folsom, CA, and Orlando.

After the Singapore deal, KBS Strategic Chance REIT expects to maintain a 9.5% ownership interest in the SREIT.

The SREIT will be externally handled by a joint venture in between KBS Capital co-founders Keith D. Hall and Peter McMillan III and Keppel Capital Holding. Keppel Capital has actually agreed to pay $27.5 million for its 50% share in Keppel-KBS US REIT Management Pte. Ltd., which will manage the new SREIT to be called Keppel-KBS United States REIT.

Keppel-KBS US REIT will have a financial investment technique of investing, directly or indirectly, in additional commercial residential or commercial properties in crucial growth markets of the United States

“With growing need by global financiers for U.S. realty financial investments in view of the continued steady and sustainable growth of the United States economy, this joint endeavor will offer Keppel with a tactical platform to broaden its geographical footprint in the United States market,” Keppel stated in its Singapore filing.

KBS Strategic Opportunity REIT expects to use most of the earnings from the transaction to acquire new residential or commercial properties. Last month, KBS Strategic Chance REIT acquired 125 John Carpenter Freeway, an office residential or commercial property including two office complex totaling 442,039 rentable square feet in Irving, TX for $83.4 million plus closing expenses.

The Singapore transaction undergoes a number of conditions, including the SREIT getting the essential capital, which might not be raised from U.S. financiers, to obtain the homes. Nevertheless, Keppel said the sale transaction is expected to be completed no later than Dec. 31, 2017.

Ilmarinen Teams Up with New york city Life on $620 Million Office Portfolio

Finnish Pension Fund Wants to Double its U.S. Investments with NYLife

Ilmarinen Mutual Pension Insurance Co., Finland’s earliest pension fund, and New York Life Insurance Co. have formed a new joint endeavor to own and obtain U.S. commercial properties.

New york city Life seeded the endeavor with a portfolio of initial financial investments: 6 workplace properties in Boston, Washington DC, Charlotte, San Francisco, Los Angeles and Orange County. However, the residential or commercial properties have yet to be specifically recognized other than one being the 295,451-square-foot Westory Structure in Washington, DC, inning accordance with Ilmarinen.

The combined worth of the portfolio is around $620 million. The objective is to roughly double the volume of the joint venture’s property investments in the coming years.

“The bought properties represent a geographically diversified portfolio in growing cities on both the East and West Coast of the United States. Our investments will focus on office homes that are technically sound and functionally modern-day with good occupancy rates,” said Mikko Antila, Ilmarinen’s portfolio supervisor in charge of international real estate financial investments.

Ilmarinen’s share of the joint endeavor is 49% and New York Life holds the rest.

“The tactical partnership with a conventional and reputable institutional investor provides us a strong structure to broaden our investments in United States property markets. The collaboration provides us deep insight into regional business property markets,” Antila said.

Mark Talgo, head of New york city Life Realty Investors, said the JV enables New york city Life to cast a wider web within the workplace sector, and offers further diversification to the company portfolio.

This new real estate collaboration supports Ilmarinen’s financial investment method which focuses on enhancing the international diversification of its realty financial investments. Recently, Ilmarinen has purchased the United States housing market and in another office property in the greater Washington D. location. In addition to Finland, the company has European direct realty financial investments in Germany, Belgium and the Netherlands.

QIC To Get Interests in Portfolio of 10 U.S. Regional Malls

Australian Mutual fund Obtaining Forest City’s JV Interests in $3.175 Billion Portfolio

QIC, a government owned investment company owned by the Queensland(Australia) Federal government, is expanding its property financial investment in the U.S. by getting additional interests of its joint venture partner, Forest City Real estate Capital (NYSE: FCEA), in 10 U.S. regional mall on behalf of a QIC client.

The portfolio is valued at $3.175 billion.

QIC and Forest City have been joint endeavor partners in the portfolio considering that 2013.

“We are constructing off more than a decade of generating market intelligence and understanding in the U.S. retail sector,” stated Steve Leigh, managing director of international realty for QIC. “We view the United States real estate market and the retail sector in specific as a strong investment chance. We are encouraged by the more comprehensive economic conditions in the U.S. and the durability of the customer as shown by continuing strength in the underlying fundamentals for the portfolio. We understand the value of regional shopping centers to their regional neighborhoods and have the ability and the capital to progress these assets into multi-faceted destinations,” he said.

The deal will be completed in 2 tranches with the transfer of interests in the very first six malls expected to complete by the end of the year.

The possessions in the first batch consist of:

The Shops at Northfield Stapleton in Denver, CO;
Westchester’s Ridge Hill in Yonkers, NY;
The Shops at Wiregrass in Tampa, FL;
The Mall at Robinson in Pittsburgh, PA;
Antelope Valley Mall in Palmdale, CA; and
South Bay Galleria in Redondo Beach, CA.

The first six shopping centers represent $1.24 billion of worth, roughly $667.5 million at Forest City’s share.

Forest City offered the purchaser $150 million of seller financing for a period of approximately 18 months from closing. Net proceeds for the very first 6 shopping malls, after transaction expenses and seller financing, will be around $180 million.

QIC has an option over the following 4 shopping malls in the 2nd tranche:

Victoria Gardens in Rancho Cucamonga, CA;
Galleria at Sunset in Henderson, NV;
Boardwalk Temecula in Temecula, CA; and
Brief Pump Town Center in Richmond, VA.

. The remaining 4 shopping centers represent $1.93 billion of worth, approximately $887 million at Forest City’s share.

“We are really happy to attain this essential milestone with our partner,” said David J. LaRue, Forest City president and CEO. “This transaction is a win-win for all celebrations, as we continue to focus our company on metropolitan property, workplace and mixed-use possessions, and QIC obtains complete ownership of a U.S. retail presence with high-quality local shopping centers in strong markets.

As part of the deal, Forest City is likewise transferring its retail operating platform, including most workers, to QIC. To date, functions including leasing, marketing, tenant coordination, legal and human resources have actually transitioned to QIC. Accounting, home management and remaining functions will transfer to QIC as extra closings are achieved.

With the awaited dispositions of the regional malls to QIC and the business’s New york city specialized retail focuses to Madison International, Forest City will have exited from significantly all of the shopping center-based retail in its portfolio.


Morgan Residence Purchases $509 Million Mark Center Portfolio from JBG in Largest Transaction in Virginia This Year

Pennsylvania Company Obtains 2,664 Apts. to End up being One of the Largest Multifamily Owners in Washington, D.C. MSA

King of Prussia, PA-based property investment and management company Morgan Properties swung for the fences in its very first financial investment in Northern Virginia, acquiring the Mark Center portfolio from The JBG Cos. in a $509 million offer that signs up as the biggest real estate transaction in Virginia so far in 2017.

The sale likewise positions Morgan Characteristic as one of the biggest owners of multifamily home in the greater Washington, D.C. metropolitan area.

The 150-acre Mark Center includes a multifamily and retail portfolio southwest of downtown Washington, D.C. along N. Beauregard St. in Northern Virginia’s I-395 Corridor. It encompasses 2,664 apartment units in 6 adjacent garden-style neighborhoods. Morgan Characteristic plans to invest $35 million in upgrades to the units.

The sale also includes The Shops at Mark Center, a 63,320-square-foot grocery-anchored retail center real estate CVS, Starbucks, SunTrust Bank and Global Foods, in addition to redevelopment rights protected by JBG in 2012 that increased the maximum allowed density from 2.5 million square feet to 6.4 million square feet.

Morgan Residences stated the purchase ranks as the second largest in its 30-year history. The investment company owns and handles more than 40,000 houses across Pennsylvania, Delaware, New Jersey, New york city, Ohio, Maryland, North Carolina, South Carolina, Virginia and Nebraska.

Over the past 5 years, the business has actually been especially aggressive in expanding in the Baltimore-Washington corridor, having grown its area portfolio from 4,300 to 21,500 houses through a handful of investments, consisting of the $309 million purchase of a portfolio from Berkshire in 2015 and the $247 million acquisition of a 2,000-unit rural Baltimore portfolio earlier this year.

“We felt this offer was an unique financial investment opportunity to get substantial size and scale to generate functional performances and improve the worth of the properties,” said Jonathan Morgan, president of Morgan Residence JV Management. We are on track to acquire over $1 billion of realty in 2017 and anticipate continuing to grow our portfolio.”

William Roohan, Michael Muldowney, Martha Hastings, Michael Rudolph, Robert Dean, Jonathan Greenberg and Brian Margerum of CBRE worked out the disposition on behalf of The JBG Cos., which obtained the Mark Center portfolio from the Mark Winkler Co. in 2006.

For more details on Morgan Properties’ acquisition of the Mark Center portfolio, please see CoStar Compensation # 3992026.

Nest NorthStar Forecloses on $1.3 Billion Hotel Portfolio

REIT Takes Control of 148 Limited-Services Hotels Previously Held by Goldman Sachs Funds

Nest NorthStar Inc.(NYSE: CLNS) foreclosed on a $1.3 billion, 148-property limited-service hotel portfolio.

Known as the “Tharaldson Portfolio,” the hotels were owned by Whitehall Street Global Realty LP 2005 and Whitehall Street Global Worker Fund 2005 which Goldman Sachs & & Co. was the significant financier. The homes are handled by Tharaldson Hospitality Management, which initially sold the properties to the Whitehall funds in 2006.

Whitehall finished a $1.335 billion refinancing of the homes in 2013, a $734 million portion of which was securitized in a CMBS offering. In addition, the predecessor firm to Nest NorthStar stemmed a $289 million junior mezzanine loan as part of that refinancing.

Based upon that mezz funding, Nest NorthStar took control of the 31-state portfolio through a consensual foreclosure following a maturity default on the junior mezzanine loan. In its 2nd quarter profits conference call this past week, the business now says it owns roughly 55% of this portfolio with the balance owned by third-party capital under Colony NorthStar’s management.

“At a basis of $92,000 per key and a 9% debt yield as the June 30, 2017, on depressed monetary results, we are positive about the ultimate potential customers for this financial investment,” Darren Tangen, CFO of Colony NorthStar informed analysts.

Tangen said the business considers it a non-core investment and anticipates to ultimately offer the portfolio.

In May 2015, Moody National REIT I Inc., a non traded public REIT, struck a deal to purchase the portfolio for $1.725 billion. It ended that offer 2 months later on.

Fitch Scores was one of 2 bond rating agencies that rated the 2013 CMBS offering.

The largest share of the portfolio are hotels in California with 22 hotels. The security consists primarily of limited service or extended stay residential or commercial properties, with the largest flags consisting of Fairfield Inn, Home Inn, Hampton Inn and Courtyard. A significant portion of the hotels lie in secondary and tertiary markets, consisting of some direct exposure to areas impacted by volatility in energy costs and/or weak financial development, inning accordance with Fitch. Tharaldson is based in Fargo, ND.

As of Might 2017, Fitch reported that total performance at hotels has been at peak levels, but that performance of the portfolio is likely to decline or remain steady throughout the staying loan term which grows in 2030.

Of the 148 hotels, 75 had experienced a boost in typical day-to-day space rates (ADR) and revenue per readily available room (RevPAR) for the trailing 12-month period ending March 2017. The other 73 had actually experienced a decrease.

On a general portfolio basis, issuer net capital (NCF) for the 148 hotels had increased 7.8% since issuance. Since first-quarter 2017, the hotel portfolio’s TTM tenancy and RevPAR were 70.1% and $77.97, respectively. The provider’s underwritten tenancy and RevPAR were 69.6% and $71.98.