See GRAPEVINE on Back Page

THE GRAPEVINE

CommonWealth Partners has hired John Prete to lead acquisitions and asset management of East Coast office properties. Prete spent the past four years at Abu Dhabi Investment Authority as a portfolio manager for U.S. properties. He’s relocating from Abu Dhabi to New York to join the Los Angeles investment manager. His start date is unknown. Prete had previous stints at Los Angeles fund operator PCCP, Lehman Brothers and PricewaterhouseCoopers. CommonWealth, which often invests on behalf of California Public Employees, is led by co-managing partners Richard Croft and Brett Munger.

Tom Huffsmith joined CBRE Hotels this month as a senior managing director to lead the unit’s U.S. advisory platform. He’s based in Denver, reporting to Kevin

8 M&A ADVISORS

2 MetLife to Shop Lower NY Tower

2 Mack-Cali Lists South Jersey Portfolio

2 New Luxury Rentals for Sale Near LA

2 Apartments Near US Bases on Block

4 Burbank Offices Have Leasing Upside

7 Expandable Offices Listed Near Phila.

8 M&A Tally Off 47%; Citi Top Advisor

10 US Steel Tower in Pittsburgh for Sale

10 Warehouse Available in Tennessee

12 Transwestern Dealing Dallas Offices

12 Revived Calif. Retail Center Available

15 MARKET SPOTLIGHT

Massive Manhattan Office Tower Up for GrabsOne Worldwide Plaza, a 2.1 million-square-foot office tower in Midtown Manhat-

tan, is in play.The 49-story building, valued at up to $1.8 billion, is owned jointly by a George

Comfort & Sons partnership (51.1%) and New York REIT (48.9%). New York REIT has listed its stake with Eastdil Secured. But it also has an option to buy the majority interest. That means full ownership could end up trading.

The listing is expected to draw heavy interest from foreign and domestic bidders. Investors that bid on the property in the past include Paramount Group of New York, RXR Realty of Uniondale, N.Y., and a South Korean consortium.

One Worldwide Plaza — one of the largest office buildings in Manhattan — is fully occupied, according to New York REIT’s website. Anchor tenant Nomura leases 820,000 sf, or 40% of the space, as its North American headquarters until 2033. Other tenants include law firm Cravath Swaine (617,000 sf until 2023) and public

See MANHATTAN on Page 10

Pushing Into Calif., Firms Chase Local TalentDemand for real estate pros is growing in top California markets as firms look to

establish beachheads or expand their presence.Recruiters are reporting an increase in assignments from investment shops seek-

ing local talent or executives who can quickly get up-to-speed in markets like Los Angeles and the Bay Area. Among those that have added staffers in the state recently are Bridge Development of Chicago and New York firms Atlas Capital, Emmes Realty and H.I.G. Realty.

“This steady flow of new companies is definitely real, and it will continue to hap-pen throughout 2017,” said Kent Elliott, a principal at RETS Associates of Newport Beach, Calif., which has handled several such assignments as of late.

The moves are fueled largely by the hunt for higher yields than can be found in major East Coast markets. Investment pros see room for returns and valuations to grow, at

See TALENT on Page 6

Va. Office Deal to Set Suburban DC RecordMorgan Stanley Real Estate has won the bidding for a Northern Virginia office

property at a record price for the Washington suburbs.The investment manager has offered nearly $470 million for the 647,000-square-

foot Waterview, a trophy building in the Rosslyn section of Arlington. At the valu-ation of roughly $725/sf, the initial annual yield would be in the vicinity of 5%. Eastdil Secured is brokering the sale on behalf of Paramount Group of New York.

The 24-story tower, at 1919 North Lynn Street, is virtually fully occupied, accord-ing to CoStar. CEB, a business services company headquartered in the building, and Deloitte occupy a majority of the space. Rosetta Stone is also a tenant.

The current record for a single office-property trade in Washington’s Virginia and Maryland suburbs is $435 million — set when Paramount bought the same building in 2007, while it was still under construction. The seller was a group that included developer JBG Cos. of Chevy Chase, Md. The previous highest per-foot price for suburban Washington office space was the $691/sf paid by KBS Realty of

See RECORD on Page 4

JANUARY 18, 2017

MetLife to Shop Lower NY TowerA MetLife Real Estate Investors partnership is preparing to

market a Class-A office tower in Lower Manhattan.The 1.1 million-square-foot building, at 85 Broad Street,

is valued at up to $700 million, or $635/sf. Brokerage Eastdil Secured has begun preliminary discussions with investors. A broader sales campaign is expected to begin soon.

The occupancy rate is 91%, which is in line with the 90% average for the Financial District. The tenants include Oppen-heimer & Co. (269,000 sf until 2028), shared-workspace pro-vider WeWork (which in 2015 signed a 16-year lease on 235,000 sf) and Nielsen (132,000 sf), according to CoStar.

The 30-story building, between Pearl and South William Streets, was developed in 1983 by Goldman Sachs, which fully occupied it until 2010. MetLife bought it in 1985 for $74.4 mil-lion, according to published reports.

In 2014, MetLife sold Boston-based Beacon Capital a 50% stake in a transaction that valued the property at $350 million, or $318/sf. At the time, the building was half empty. The joint venture then boosted the occupancy and started a renovation that, among other things, is adding a conference center and a wellness center. Both are scheduled to be completed by mid-year. A Le Pain Quotidien restaurant is on the ground floor. There is also a full-service cafeteria.

Mack-Cali Lists South Jersey PortfolioMack-Cali Realty is pitching a portfolio of office and ware-

house properties in Southern New Jersey that could attract bids of $100 million from value-added investors.

The 1.3 million-square-foot package encompasses 24 build-ings in the Moorestown West Corporate Center in Moorestown and two buildings in the Bromley Commons Business Park in Burlington. At the estimated value of $79/sf, the initial annual yield would be 7.5%. HFF is representing Mack-Cali, an Edison, N.J., REIT that has been shedding its suburban office holdings.

Investors can bid on the buildings individually or in any combination. HFF has told prospective buyers that they could boost the return by filling vacant space. It also is highlighting the option of purchasing the entire portfolio and selling the properties separately at higher prices.

The portfolio has a 91% occupancy rate. The 78 tenants include Cort Business Services, McKesson Simco Logistics and Xermisc. Nearly all of the occupants have net leases that make them responsible for expenses.

Some 45% of the space consists of offices, with warehouses making up the rest. The properties, with 20,000-84,000 sf apiece, were built from 1982 to 2000. They are near Interstate 295 and the New Jersey Turnpike, as well as the Philadelphia Regional Port.

Mack-Cali has been shifting its focus from suburban offices to waterfront and transit-oriented office properties and luxury multi-family buildings. Late last year, for example, it began marketing a 2.2-million-sf portfolio of Northern New Jersey office properties worth roughly $250 million. HFF also is advis-ing on that sale.

New Luxury Rentals for Sale Near LACIM Group is marketing a new luxury apartment/retail build-

ing just outside Los Angeles.The property, at 8500 Sunset Boulevard in West Hollywood,

Calif., encompasses 190 apartments and 39,000 square feet of retail space. Investors can bid on either component or both. The combined value is estimated at almost $250 million — based on $190 million, or $1 million/unit, for the apartments and $59 million, or $1,500/sf, for the retail space. Cushman & Wakefield has the listing.

CIM just completed the eight-story building, which is at La Cienega Boulevard. The Los Angeles shop is in the initial stage of renting the apartments. Clothing store Fred Segal and a Bill Chait-branded restaurant have signed 10-year leases on retail space.

The rental apartments are approved for conversion to con-dominiums. That would gave a buyer the option of exiting the investment by selling the units one-by-one.

Most apartments have one bedroom. The units range in size from 588-square-foot lofts to 2,050-sf penthouses with two bedrooms. They feature walnut hardwood floors, stainless-steel appliances and balconies. The amenities include a pool with a sundeck, a fitness center and 24-hour lobby service.

Los Angeles hasn’t seen active construction, and new units are being absorbed quickly. Last year, the average occupancy rate ticked up by 30 bp, to 97.4%, as about 13,000 apartments came on line. This year, about 11,000 units are expected to be completed, and Marcus & Millichap projects that the occupancy rate will rise again, driving rents up.

Apartments Near US Bases on BlockPlace Properties is marketing six apartment properties near

major military bases.The 1,428 Class-A and -B units, generally built in the past

10 years, are 94.2% occupied. Bids could come in at about $100,000/unit, or $143 million. Investors can bid on individual properties or any combination. Atlanta-based Place has given the listing to JRM Advisors of Dallas.

The properties have loans that can be assumed. Five have HUD debt with a 3.5% blended interest rate and 35-year terms. The other property has a Fannie Mae loan.

The complexes, most branded Independence Place, aren’t contracted as military housing, but primarily serve families and civilian employees of the nearby bases.

Three properties are in Texas. Two of them are in Killeen, near Fort Hood: the 240-unit Independence Place and the 160-unit Arbors of Killeen. The other one, the 264-unit Indepen-dence Place, is in El Paso, near Fort Bliss.

Rounding out the portfolio are:•The 300-unit Independence Place in Fayetteville, N.C.,

near Fort Bragg.•The 288-unit Flats at MacArthur in Lawton, Okla., near

Fort Sill.•And the 230-unit Independence Place in Prince George,

Va., near Fort Lee.

January 18, 2017 2Real EstateALERT

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©2017 Holliday Fenoglio Fowler, L.P. (“HFF”) and HFF Securities L.P. (“HFFS”) are owned by HFF, Inc. (NYSE: HF). HFF operates out of 23 offices nationwide and is a leading provider of commercial real estate and capital markets services to the U.S. commercial real estate industry. HFF together with its affiliate HFFS offer clients a fully integrated national capital markets platform including debt placement, investment sales, equity placement, advisory services, loan sales and commercial loan servicing. For more information please visit hfflp.com or follow HFF on Twitter @HFF. Justin Good, a licensed real estate broker in the state of South Carolina, along with Holliday Fenoglio Fowler, L.P. Holliday Fenoglio Fowler, L.P. acting by and through Holliday GP Corp a Texas licensed real estate broker. Holliday Fenoglio Fowler, L.P. is acting by and through Holliday GP Corp., a real estate broker licensed with the California Department of Real Estate, License Number 01385740. Photo Credit: Hercules Campus West, Charles Lenoir.

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Closed November 2016

Horizon Bay at Hyde Park

$74,000,000 Property Sale & $48,555,000 Financing 136-unit Seniors Housing Community

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Property Sale Two Hotel/Lodging Assets - 286 Rooms

Alexandria, VA

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The Addison

$154,250,000 Property Sale 271-unit, High-rise Multi-housing Property

Brooklyn, NY

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Hercules Campus West

524,759 SF Four-building Creative Office Campus

Playa Vista, CA

Closed December 2016

GSK Global Vaccines US R&D Centre

Fixed-rate Financing & $337,500,000 Property Sale 635,058 RSF - Three-building, Biotech Facility

Rockville, MD

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Handsmill on Lake Wylie

Land - 455 Lots Master-planned Community

York, SC (Charlotte)

On the Market

Turtle Creek Village

321,978 SF Mixed-use Property

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On the Market

KBS Legacy Portfolio

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Multi-market

On the Market

Burbank Offices Have Leasing UpsideA Shorenstein Properties partnership is marketing a large

office campus near Los Angeles that has a roster of technol-ogy, media and healthcare companies.

The 928,000-square-foot Media Studios complex, in Bur-bank, Calif., is expected to draw bids of around $450 million, or $485/sf. San Francisco-based Shorenstein and its partner, Worthe Real Estate of Santa Monica, Calif., have given the list-ing to Eastdil Secured.

A buyer would have room to boost the 88% occupancy

rate, which is well below the property’s 96.5% average since 2005. The average rate for Burbank office space is 90.4%.

Kaiser Foundation Health Plan is the largest tenant, leas-ing 191,000 sf until 2025. Most of the other tenants are tech-nology or media companies, including Walt Disney Pictures (131,000 sf until 2022), Yahoo (105,000 sf until 2021) and TiVo (62,000 sf until 2022).

The five-building complex was developed in phases between 1999 and 2006, on 19 acres along North Ontario Street between Thornton and Empire Avenues. It’s close to Burbank Bob Hope Airport and about 14 miles northwest of

downtown Los Angeles.The campus features indoor

and outdoor collaborative workspaces, two full commis-saries, a fitness center, several screening rooms, a jogging path, an outdoor chess board with human-sized pieces and other sculptures and landscaping. The three- to five-story buildings are designated LEED gold.

Record ... From Page 1

Newport Beach, Calif., two years ago when it bought a new, 216,000/sf building at 3003 Washington Boulevard in Arlington for $149.2 million.

The Waterview, designed by architectural firm Pei Cobb, was completed in 2008 as part of a mixed-use development at 19th and Lynn Streets. The other components, which aren’t included in the pending sale, are a luxury Le Meridien hotel, a residential building and a garage. The property is within a few blocks of the Francis Scott Key Bridge to Washington and the Rosslyn Metrorail station.

Rosslyn, just across the Potomac River from Washing-ton’s Georgetown neighbor-hood, checks the boxes for investors seeking urban envi-ronments with walkable ame-nities and easy access to public transportation. Office prop-erties in such submarkets in Greater Washington have had better luck finding both tenants and buyers than those further out in the suburbs.

January 18, 2017 4Real EstateALERT

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least outside of the hottest districts in San Francisco and Silicon Valley. Whether making their first forays into the state or step-ping up their acquisitions, they seek investment and asset-man-agement pros to bolster those efforts.

For example, Bridge, which builds and buys industrial prop-erties, recently opened an outpost in Manhattan Beach and just added a third staffer there. Emmes, which entered the San Diego market in 2014, stretched out further last year with hires in Irvine, and Atlas set up a Los Angeles office. Seattle firm KG

Investment, which recently acquired the Bay Area branch of a property-management firm, just added a staffer there as it looks to expand its activities.

Companies looking to plant their flags in the state are gen-erally seeking pros that already know the territory. “It’s not enough that the person is smart and understands acquisitions and/or asset management,” said Debra Barbanel, who leads the global real estate practice at Russell Reynolds Associates. “Firms want professionals who have strong local relationships, too . . . who know the local owners, operators and brokers.”

Barbanel recently filled an acquisitions spot for an East Coast private equity firm that’s expanding its West Coast office. She’s also recruiting an acquisi-tion/asset-management pro for a public REIT opening its first Southern California outpost.

Finding staffers with local connections can be a tall order because unemployment among real estate professionals in the major California markets is at or near zero, recruiters say. That means firms must be flexible in how they staff an office, and what they are willing to offer recruits.

Some companies moving into a market are electing to hire just one or two senior people and forego support staff, relying instead on backup from head-quarters. Barbanel has advised some shops to consider hiring younger pros while bringing in a local industry veteran as a con-sultant to groom them. Other firms are willing to consider relo-cating an employee from the East Coast — which requires boosting pay closer to New York levels. In any event, the competition is pushing compensation levels upward.

“Firms are expecting a higher level of talent from their candi-dates than they would have five years ago, and they are starting to pay more too,” said Chris Papa, a senior managing director in the San Francisco office of national executive-search firm Bachrach Group. “At one point there weren’t companies there that would pay for Ivy League-caliber talent. Now there are.”

January 18, 2017 6Real EstateALERT

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Expandable Offices Listed Near Phila.A suburban Philadelphia office property with approvals to

nearly double in size is on the block with expectations that bids will top $90 million.

The 222,000-square-foot Five Tower Bridge, in West Con-shohocken, Pa., is 96% occupied. At the estimated value of $405/sf, the initial annual yield would be about 6%. The mar-keting campaign emphasizes a buyer’s ability to add value by developing a second building with 220,000 sf.

MIM-Hayden Real Estate Funds, a joint venture formed by local firms Maguire Hayden Real Estate and Miller Investment, has given the listing to JLL.

The Class-A building, com-pleted in 2001, was designed by Skidmore Owings with high-end features such as a two-story Ital-ian marble lobby and wood-pan-eled elevators. Its occupancy rate tops the 92% average for Class-A offices in the surrounding Con-shohocken submarket. The aver-age in-place rent of $35.74/sf, plus electricity cost, is several dollars higher than at compara-ble properties in the market.

Tenants include BTG Interna-tional, Oracle and Wells Fargo. The weighted average remaining lease term is 5.3 years.

Five Tower Bridge is on a 10-acre site at 300 Barr Harbor Drive, alongside the Schuylkill River. The eight-story building stands atop a three-level garage. Full approvals are in place to expand the garage and build a

second tower above it.The property is near the Conshohocken rail station and the

intersection of Interstates 76 and 476, about 15 miles northwest of downtown Philadelphia. West Conshohocken and neighbor-ing Conshohocken are well-developed, with an abundance of shops, restaurants and hotels.

Hayden partnered with Davis Cos. of Boston to acquire the property from KBS Realty of Newport Beach, Calif., for $70 mil-lion in 2013, when investor interest in Philadelphia-area proper-ties was just beginning to revive. The MIM-Hayden joint venture later bought out Davis’ interest for an unknown price.

January 18, 2017 7Real EstateALERT

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January 18, 2017 8Real EstateALERT

Mergers and acquisitions of real estate companies plunged last year as global vola-tility took a toll, but a healthy deal pipeline and ripe market conditions have advisors confident of a rebound in 2017.

Sixteen deals totaling $36.3 billion closed last year, down 47% from the post-crash high of $68.4 billion in 2015, according to Real Estate Alert’s 21st annual review of the M&A market.

Citigroup was the most-active advisor, working on nine deals totaling $21.1 billion, or 58.2% of the total volume. J.P. Morgan came in second, working on four deals total-ing $16.8 billion. Next came Bank of America

($15.7 billion), Wells Fargo ($15.1 billion) and Goldman Sachs ($12.7 billion).

Despite the down year, advisors are bull-ish that the ingredients necessary for merger activity remain in place. Indeed, there are $29.5 billion of 2017 transactions already completed or pending — nearly equaling last year’s total.

“Foreign-capital demand still exists, debt is still attractively priced, and the broader capital markets are still liquid,” said Scott Eisen, head of North American real estate investment banking at Citi. “All three factors should continue to be positive catalysts for

See VOLUME on Page 9

M&A Volume Plummets 47%; Citi Tops Ranking of Advisors

RANKINGS

Real Estate M&A Advisors in 2016 Full credit given to all advisors to buyers and sellers

2016 Market 2015 Market Deals No. of Share Deals No. of Share ($Mil.) Deals (%) ($Mil.) Deals (%) 1 Citigroup $21,132.0 9 58.2 $21,977.0 8 32.1 2 J.P. Morgan 16,800.0 4 46.3 12,558.0 5 18.4 3 Bank of America 15,702.0 5 43.2 17,625.0 5 25.8 4 Wells Fargo 15,050.0 5 41.4 26,714.0 7 39.1 5 Goldman Sachs 12,680.0 3 34.9 17,040.0 6 24.9 6 Raymond James 9,900.0 2 27.3 0.0 0 0.0 7 Morgan Stanley 9,450.0 2 26.0 16,400.0 5 24.0 8 Moelis & Co. 4,500.0 3 12.4 0.0 0 0.0 9 Barclays 2,900.0 1 8.0 11,200.0 3 16.4 9 Centerview Partners 2,900.0 1 8.0 2,300.0 1 3.4 9 RBC Capital 2,900.0 1 8.0 8,100.0 1 11.8 12 BMO Capital 2,802.0 2 7.7 0.0 0 0.0 13 Silver Portal Capital 2,300.0 1 6.3 0.0 0 0.0 14 Robert W. Baird & Co. 1,300.0 1 3.6 0.0 0 0.0 14 SunTrust 1,300.0 1 3.6 0.0 0 0.0 16 Credit Suisse 1,150.0 1 3.2 0.0 0 0.0 UBS 0.0 0 0.0 6,575.0 3 9.6 RCS Capital 0.0 0 0.0 4,100.0 2 6.0 Houlihan Lokey 0.0 0 0.0 3,900.0 1 5.7 GreenOak 0.0 0 0.0 3,800.0 1 5.6 Deutsche Bank 0.0 0 0.0 3,758.0 3 5.5 Hodes Weill 0.0 0 0.0 3,200.0 1 4.7 Hentschel & Co. 0.0 0 0.0 3,000.0 1 4.4 Others 0.0 0 0.0 15,179.0 12 22.2 TOTAL 36,312.0 16 100.0 68,363.0 25 100.0

Real Estate M&A Amount No. of ($Bil.) Deals2007 $168.4 332008 7.1 52009 0.8 22010 28.2 72011 44.1 92012 12.3 112013 40.4 142014 34.1 112015 68.4 252016 36.3 16

Volume ... From Page 8

M&A in 2017.”Eisen suggested that three key events hampered confidence

in the commercial real estate sector at times last year: volatil-ity in the Treasury-bond market, Brexit and uncertainty sur-rounding the outcome of the presidential election.

“Liquidity and access to capital have not changed, despite recent volatility in the market,” he added. “If a cli-ent were asking me now, ‘Do I have sufficient access to capi-tal to do a large transaction?,’ the answer is, ‘Absolutely.’ ”

This year’s volume has already been turbocharged by the largest M&A deal since 2011. Last week, Colony NorthStar was created via the three-way, $19.1 billion merger of Colony Capital, NorthStar Asset Management and NorthStar Realty Finance.

Phil Owens, managing director of Green Street Advisors, said that confidence is being bolstered by strong fundamentals in commercial real estate. But he added that the potential for takeovers by REITs depends in large part on their focus. Retail, office and lodging REITs are trading at discounts to underlying net asset value, which could inhibit them from seeking to grow aggressively, including via mergers. But industrial, student-housing, data-center and net-lease REITs are trading at premi-

ums, which could help spur activity in those sectors.On the private side of the market, domestic and foreign

investors still have plenty of dry powder that could be used to acquire REITs trading at a discount, Owens noted.

In summary: “You have to look at it sector by sector, and by source of capital,” he said.

A big wild card is uncertainty about the policies that the Trump Administration will enact. For example, Trump’s tax-reform proposals include changes to acquisition accounting and tax-deferred exchanges that could make real estate trades more difficult.

“Until we can get clarity on how they are going to act, it’s very difficult to see where things might shake out,” Owens said.

Real Estate Alert’s merger survey tracks the acquisition of entities that primarily own income-producing commercial properties in the U.S. It excludes single-property or portfo-lio transactions, sales of advisory, management or brokerage firms, and roll-ups of investment vehicles or other reorgani-zations in which ownership didn’t substantially change. Advi-sors are given full credit for transactions if they represent either the buyer or the seller. As a result, two or more advi-sors often receive full credit for a deal. Advisors don’t receive credit if their duties are limited to providing fairness opin-ions.

January 18, 2017 9Real EstateALERT

Real Estate Mergers and Acquisitions in 2016 Purchases of companies that primarily own U.S. commercial properties

Price Acquired Entity (Seller) Buyer Seller’s Advisor Buyer’s Advisor ($Mil.)BioMed Realty Blackstone Morgan Stan., Raymond James Wells, Citi, JPM, BofA, Goldman $8,000.0Post Properties Mid-America Apartment J.P. Morgan Citigroup 4,400.0Parkway Properties Cousins Properties Wells Fargo, Bank of America Goldman Sachs, J.P. Morgan 3,000.0Diamond Resorts International Apollo Global Centerview Partners Barclays, RBC Capital 2,900.0Rouse Properties Brookfield Asset Mgmt. Bank of America (None) 2,800.0Inland Real Estate DRA Advisors BMO Capital, Silver Portal (None) 2,300.0Campus Crest Communities Harrison Street Real Estate Moelis & Co. Raymond James 1,900.0Carefree Communities (Centerbridge) Sun Communities Goldman Sachs Citigroup 1,680.0Colony American Homes Starwood Waypoint Morgan Stanley Moelis & Co., Wells Fargo 1,450.0Apple REIT Ten Apple Hospitality REIT Citigroup Wells Fargo, Robert W. Baird 1,300.0LifeStorage Sovran Self Storage Citigroup Wells Fargo, SunTrust 1,300.0Vistana Signature (Starwood Hotels) Interval Leisure Citigroup, Credit Suisse Moelis & Co. 1,150.0Landmark Apartment-A Starwood Capital Bank of America, Citigroup (None) 1,400.0University House (InvenTrust) Canada Pension, GIC, Scion Citigroup, J.P. Morgan (None) 1,400.0Simply Self Storage Brookfield Asset Mgmt. (None) (None) 830.0Landmark Apartment-B Milestone Apartments REIT Bank of America, Citigroup BMO Capital 502.0

RANKINGS

US Steel Tower in Pittsburgh for SaleThe trophy U.S. Steel Tower in Pittsburgh has gone on the

block and could attract bids of about $350 million.The 2.3 million-square-foot office building is 87% occupied,

with most leases having long remaining terms. The property has undergone some $60 million of upgrades over the past five years.

Cushman & Wakefield is advising the owner, 601W Cos., a New York firm led by Mark Karasick and Victor Gerstein. The estimated value, equivalent to $152/sf, would indicate an initial annual yield of 6.75%. A buyer could assume a $202 million securitized mortgage, with a 5.6% interest rate, that matures in 2021.

The 64-story U.S. Steel Tower, at 600 Grant Street in the Central Business District submarket, is Pittsburgh’s tallest and largest office building, boasting dramatic views of the city and its rivers.

The occupancy rate is slightly below the submarket’s 90% Class-A average. Nearly three-quarters of the building is occupied by credit-rated tenants. The University of Pittsburgh Medical Center and U.S. Steel have their headquarters in the building. The medical center has a lease on 962,000 sf until 2030. U.S. Steel occupies roughly 270,000 sf under a lease it renewed last year until 2028. Other tenants include Eckert Seaman, PNC and PricewaterhouseCoopers. The weighted average remaining lease term is 11 years.

The building, completed in 1970, was purchased by the cur-rent owner in 2011 from an AREA Property partnership for $250 million, or $109/sf. That transaction was brokered by the New York investment-sales team of Eastdil Secured. Late last year, that team, led by Doug Harmon and Adam Spies, jumped to Cushman, where it is overseeing the new listing.

Since acquiring the property, 601W has completed substan-tial upgrades to maintain its Class-A status. During that period, Pittsburgh’s office market has seen a substantial influx of tech-nology-related firms, which has boosted occupancy rates and rents.

Warehouse Available in TennesseeA Tennessee distribution center that’s fully leased to General

Electric is up for grabs.The 851,000-square-foot warehouse, valued at $45 million,

is in Cleveland, Tenn., about 40 miles northwest of Chatta-nooga. Avison Young is advising the unidentified seller.

The property, at 1520 Lauderdale Memorial Highway, was developed 10 years ago for GE, which recently extended its lease to 2024. The facility is the largest in the North American distribution network of the GE Lighting division. GE Lighting uses it to serve some of the world’s biggest retailers, including Lowes, Target and Wal-Mart.

A third-party logistics provider, DHL unit Excel Logistics, operates the facility for GE. The property has 150 dock doors, 32-foot ceilings, modern lighting and 350 parking spaces.

The 44.7 million-sf industrial market in the Chattanooga

area was 92.4% occupied at yearend, up from 79.8% in 2010. Companies that have leased space in the market in recent years include Amazon.com, Coca-Cola and Whirlpool.

Manhattan ... From Page 1

television station WNET (95,000 sf until 2026). The property, at 825 Eighth Avenue, includes 125,000 sf of retail space and a 132,000-sf garage with 475 spaces that is leased to Mercury Parking until 2027.

The property’s valuation is estimated at $850-875/sf. At the upper end of that range, the buyer of a stake would have a 5% initial annual yield, based on annualized net operating income of $88 million.

New York REIT bought its stake from the George Comfort partnership in 2013 for $220.5 million. That New York partner-ship, which also includes DRA Advisors, Feil Organization and RCG Longview, retained the majority interest, but gave New York REIT an option to buy it.

It’s unclear whether New York REIT can pass that option on to a buyer of its stake or must first exercise the option and then sell full ownership. But either way, market pros expect full ownership to trade.

New York REIT, which invests exclusively in New York, was formed in 2010 under the name American Realty Capital New York Recovery REIT. It was one of more than a dozen nontraded REITs operated by Nicholas Schorsch under the American Realty Capital banner. Schorsch resigned from the boards of the REITs in 2014 after a scandal involving accounting irregu-larities at American Realty Capital Properties.

That same year, American Realty Capital New York Recovery REIT changed its name to New York REIT and listed its shares on the New York Stock Exchange. Schorsch was replaced as chief executive by Michael Happel, a veteran of Morgan Stanley and New York fund shop Westbrook Partners.

Last August, New York REIT announced plans to liquidate its holdings. That came after a proposed merger with JBG Cos. of Chevy Chase, Md., was scuttled. The merger, which would have created an $8.4 billion commercial real estate platform with 14.5 million sf of office, residential and retail holdings, was called off following opposition from shareholders, includ-ing investors Michael Ashner and Steve Witkoff. JBG subse-quently struck a deal to be acquired and spun off by Vornado Realty of New York.

One Worldwide Plaza, which is between West 49th and West 50th Streets, is part of a three-building complex built in 1989 by local developer Zeckendorf Realty. The two other compo-nents — Two and Three Worldwide Plaza — are residential condominium towers that aren’t included in the offering.

The George Comfort team bought One Worldwide Plaza for $700 million in 2009 from a Deutsche Bank syndicate, which had seized it after Macklowe Properties of New York failed to refinance debt. Blackstone had flipped the building and seven other Manhattan office buildings to Macklowe in 2007 for $7 billion as part of its $39 billion takeover of Equity Office Properties of Chicago.

January 18, 2017 10Real EstateALERT

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Transwestern Dealing Dallas OfficesTranswestern Investment is marketing a Dallas office build-

ing that it recently renovated.The 162,000-square-foot property, at 8235 Douglas Avenue

in the Preston Center neighborhood, could attract bids of $50 million. Eastdil Secured has the listing.

The offering is pitched as a rare opportunity to invest in Preston Center, which has just 4 million sf of office space and is dominated by institutional owners like J.P. Morgan, KBS Realty and Lionstone Investments that rarely sell their properties

The 13-story building is 83% occupied. That’s down from 95% when Transwestern bought it in 2013 from a local indi-vidual for $36.3 million, in a deal brokered by CBRE.

Transwestern completed a $5 million renovation in 2015, while converting all rents to a triple-net format and raising them by the equivalent of 30%, to $23/sf, which is below the average asking rent.

The Houston firm also upgraded the tenant roster, which is made up of smaller operations including law firms, wealth managers and banks. Because many of the current leases were struck during the construction process, however, those agree-ments carry relatively short terms of three years. As a result, Eastdil is telling prospective buyers that there’s still room to raise rents upon rollover while filling vacant space.

Investors are being told the building offers tenants a low-cost option compared to other institutionally owned locations in Preston Center. The submarket’s office space had an overall occupancy level of 89.3% at yearend, according to CBRE. The district is surrounded by two of Dallas’ wealthiest residential neighborhoods: Preston Hollow and University Park.

Revived Calif. Retail Center AvailableWestport Capital is marketing a Southern California retail

center that it bought out of foreclosure in 2010 and turned around.

The 244,000-square-foot Kaleidoscope shopping center, in the affluent Orange County community of Mission Viejo, could attract bids of about $60 million. Westport, an investment manager in Wilton, Conn., has given the listing to HFF.

The occupancy rate is 82.4%, with 38% of the space occu-pied by entertainment venues. Other tenants include a fitness center, restaurants and shops.

The marketing campaign is emphasizing the property’s sta-bility. Leases on less than 14% of the space mature within six years, and the weighted average remaining lease term is eight years. The pitch is a buyer could boost revenue by filling vacant space and, in the long term, raising below-market rents as leases roll over.

The anchor tenants are a 10-screen Edwards Theatre (43,000 sf) and LA Fitness (46,000 sf). Edwards recently renewed its lease for 10 years and plans to add food and beverage options at its own expense. Other tenants include the 28,000-sf Union Market, which is a collection of restaurants and shops inspired by the Ferry Building in San Francisco, and Laser Quest (13,000 sf), a laser-tag venue.

The center is at 27741 Crown Valley Parkway, just off Inter-state 5, where 350,000 vehicles pass daily. It’s adjacent to the 1.1 million-sf Shops at Mission Viejo, an upscale mall whose tenants include Apple and Nordstrom. Some 132,000 people with an average household income of $135,000 live within a five-mile radius.

When Westport acquired the then-distressed property for $22 million, the occupancy rate was just 62%, according to published reports. The company pumped in significant capital to renovate and reposition it.

Useful industry information available for FREE in the Market section of REAlert.com includes conference calendars, market spotlights and listings of recruiters and placement agents.

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January 18, 2017 14Real EstateALERT

CALENDARCALENDAR Main Events Dates Event Location Organizer Information Feb. 23-24 PREA Spring Conference New York PREA www.prea.org

June 25-27 U.S. Real Estate Opportunity & Private Fund Investing Newport, R. I. IMN www.imn.org

Nov. 14-16 REIT World Dallas NAREIT www.reit.com

Events in US Dates Event Location Organizer Information Jan. 23-24 ALIS Law Los Angeles BHN www.alisconference.com/alis-law

Jan. 23-25 ALIS Los Angeles BHN www.alisconference.com

Jan. 24 NMHC Apartment Strategies Outlook San Diego NMHC www.nmhc.org

Jan. 24-26 NMHC Annual Meeting San Diego NMHC www.nmhc.org

Jan. 26 Washington, D.C. & Mid-Atlantic Data Center Summit Washington CapRate Events cre-events.com

Jan. 26 REIA Cocktail Party Chicago REIA www.reia.org

Jan. 31 Greater New York Healthcare Real Estate Summit New York CapRate Events cre-events.com

Feb. 2 Economic Conversation & New Year’s Networking Chicago RELA www.rela.org

Feb. 7 Multifamily Leadership Summit New York CapRate Events cre-events.com

Feb. 7 Real Share Philadelphia Philadelphia Globe Street www.globest.com

Feb. 8 Global REITs Summit New York iGlobal Forum www.iglobalforum.com

Feb. 14 Breakfast Meeting New York RELA www.rela.org

Feb. 21-22 Northern California Data Center Summit San Francisco CapRate Events cre-events.com

Feb. 23 Conference on Sustainable Real Estate New York NYU Schack www.scps.nyu.edu

Feb. 28-March 1 RealShare Apartments East Miami Globe Street www.globest.com

March 7 Net Lease West Los Angeles InterFace interfaceconferencegroup.com

March 8 Healthcare Real Estate West Los Angeles InterFace interfaceconferencegroup.com

March 9 Seniors Housing West Los Angeles InterFace interfaceconferencegroup.com

March 14 Breakfast Meeting New York RELA www.rela.org

March 14-15 Bank Special Asset Forum: Real Estate, C&I & SBA Fort Lauderdale IMN www.imn.org

March 29-31 Real Estate Lending Conference Orlando ABA www.aba.com

April 4 Real Share Houston Houston Globe Street www.globest.com

April 4-5 Forum on Land, Homebuilding & Condo Dev. Miami IMN www.imn.org

April 5-6 PERE Global Investor Forum Los Angeles PERE www.perenews.com

April 5-6 Real Share Net Lease New York Globe Street www.globest.com

April 5-7 Student Housing Austin InterFace interfaceconferencegroup.com

April 6 Navigating the REIT & Real Estate Cycles New York NYU Schack www.scps.nyu.edu

April 11 Breakfast Meeting New York RELA www.rela.org

April 24-25 Women’s Real Estate Investment Summit New York Kayo Conf. Series womensrealestatesummit.com

April 26-28 National Real Estate Conference Costa Mesa, Calif. Crittenden www.crittendenconferences.com

May 11-12 Real Estate Family Office & Private Wealth Mgmt. Huntington Beach, Calif. IMN www.imn.org

May 16-17 Real Estate CFO Forum West San Diego IMN www.imn.org

Events Outside US Dates Event Location Organizer Information Jan. 24 Greater Montreal & Quebec Date Centre Summit Montreal CapRate Events cre-eents.com

Feb. 1-2 European Family Office Winter Symposium 2017 London Opal Financial www.opalgroup.net

March 7 Switzerland Institutional Investor Forum Zurich Markets Group www.marketsgroup.org

April 20-21 Real Estate Investment: Valuation & Financing Singapore Fitch Learning www.fitchlearning.com

April 23-24 Real Estate Investment: Valuation & Financing Dubai Fitch Learning www.fitchlearning.com

May 10-11 PERE Summit: Europe London PERE www.perenews.com

To view the complete conference calendar, visit The Marketplace section of REAlert.com

January 18, 2017 15Real EstateALERT

MARKET SPOTLIGHT

Los Angeles County Multi-Family Properties Los Angeles is projected to be the nation’s strongest apartment market this year, based on a variety

of real estate and economic fundamentals calculated by a Marcus & Millichap index. A year ago, the market ranked 11th in the index.

The combination of strong job growth and limited construction has pushed the average occupancy rate up to 97.1%

Only about 10,900 units are slated to be completed this year, down from 12,900 in 2016. The tight supply should push occupancy up further.

On the Market Hit No. of Estimated ValueProperty Seller Market Apts. ($Mil.) (Per Apt.) BrokerVentana, Playa Vista Capri Capital, Finger Cos. September 405 $260 $642,000 ARA Newmark8500 Sunset Boulevard, West Hollywood CIM Group January 190 190 1,000,000 Cushman & WakefieldVistara, Ontario Picerne Group January 294 73 250,000 Cushman & Wakefield

Recent Deals No. of Sales PriceProperty Buyer Closed Apts. ($Mil.) (Per Apt.) Broker9 property portfolio Fulcrum Group, SPI November 662 $431 $650,000 Eastdil SecuredAshton Sherman/Emerson, Valley Village Essex Property December 408 185 453,000 HFFJefferson at Hollywood, Los Angeles Redwood Urban, Beverly Pacific January 243 133 545,000 ARA NewmarkNoHo Lofts, North Hollywood M West Holdings November 292 102 350,000 ARA NewmarkGibson Santa Monica, Santa Monica ASB Real Estate Investments December 106 83 783,000 Eastdil SecuredTowne at Glendale, Glendale Interstate Equities December 126 54 430,000 BerkadiaVillage Green, Panorama City Coastline Real Estate December 201 28 137,000 (Unidentified)

ON THE MARKETON THE MARKET

Office/Retail Property

Size

Estimated Value

Owner

Broker

Color

Turtle Creek Village, 3838 Oak Lawn Ave., Dallas

322,000 sf Office: 227,000 sf Retail: 95,000 sf Occupancy: 93%

$140 million Morgan Stanley and Lincoln Property, Dallas

HFF Newly renovated mixed-use complex in thriving Uptown/Turtle Creek submarket. Retail anchor is grocer Tom Thumb. Pitch is a buyer could raise below-market rents and add up to 1.2 million sf of space, including 444 apartments. Expected to trade as a package, but separate bids for components aren’t ruled out. Some 200,000 people with an average household income of $175,000 live within three miles.

Parking Property

Size

Estimated Value

Owner

Broker

Color

LaGuardia Airport parking facility, 22-61 94th Street, East Elmhurst, N.Y.

107,000 sf 340 spaces

$33 million Yield: 5%

Pacifica Cos., San Diego

HFF Five-year, triple-net lease to Port Authority of New York and New Jersey began in September. There is one five-year renewal option with a 5% rent bump. Garage is used by airport executives and air traffic controllers.

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January 18, 2017 16Real EstateALERT

Mallory, senior managing director and global head of the hotel practice. Huffsmith previously spent nearly nine years at Beacon Hospitality of New York, where he was a senior managing direc-tor.

Peter Gottlieb jumped this month to DRA Advisors in New York from Greenfield Partners of Westport, Conn. He spent the last three years at Green-field, where he was a vice president focused on investments. Before that he worked at Goldman Sachs for about five years as a manager of acquisitions and asset management. His title at DRA is unknown. The New York fund operator seeks value-added returns via office, retail, multi-family and industrial pur-chases nationally.

Jessica Fields is joining Macy’s as a director of real estate. She’ll start later this month as part of the team charged

with developing strategies for the retailer’s properties. The effort is led by executive vice president Doug Sesler. The retailer recently announced plans to vacate and sell off a portion of its store portfolio. CBRE has been tapped to handle the dispositions. Fields is mov-ing from Simon Property, where she’d worked since 2013. Executive search firm Rhodes Associates arranged the hire.

Boutique Manhattan brokerage Prince Realty has added a managing direc-tor. Josh Berkowitz started last month, focusing on property transactions and reporting to principal and founder David Ash. Berkowitz came from Ariel Property, another New York boutique brokerage. He spent three-plus years there and had prior stints at Brixmor and Lincoln Equities.

MacKenzie Capital of Baltimore has hired William Goetschius as a vice presi-dent. He started at the capital-markets advisory firm this month, working alongside president John Black to build

new relationships and business lines. Goetschius was previously an advisor at Singer & Bassuk, where he worked for just over two years.

Dividend Capital has added an associ-ate in San Francisco to work on asset management and acquisitions. John Michael Block, who joined the Denver firm this month, will work on Dividend Capital Diversified Property Fund, a public REIT. He reports to executive vice president Greg Moran. Block spent the past two years as an analyst at Eastdil Secured, and before that worked at Deloitte.

Fund operator Artemis Real Estate of Chevy Chase, Md., is looking to hire a senior vice president of asset manage-ment to work at its Washington office. Applicants should have at least 10 years of experience. The recruit would report to president Alex Gilbert and manag-ing principal Rich Banjo, who oversees acquisitions and asset management. Interested candidates can email Rita Parker at Rita.Parker@ArtemisREP.com.