End of year shopping spree

December 16, 2013 admin

In September, I wrote about summer sales and Labor Day sales ending. Investors were buying retail companies and retail properties, making billion-dollar headlines. Now it’s the holiday season, Black Friday was last month, and it’s a week or so until Christmas morning. The big spending continues. Individuals and families are spending and gearing up for Dec. 25. And the same can be said for global institutional investors spending the big bucks during the holiday season.

New York City continues to have high-priced transactions, particularly in Manhattan. Australian developer Grocon struck a deal to buy a 95 percent stake in Manhattan’s Park Avenue Tower, a 615,857-square-foot office building. The sales price was $800 million. Another Australian investor, The Westfield Group, purchased a 50 percent interest in the retail portion of New York City’s World Trade Center development it didn’t already own for $800 million. Nearby Ashkenazy Acquisition Corp. paid $400 million for the ground lessor’s position at 625 Madison Ave.

In the New York City office sector, Vornado Realty Trust agreed to sell 866 United Nations Plaza, a 360,000 square-foot-office building in Manhattan, for $200 million. Another big ticket office property was the NYMEX Building, which sold for $200 million. Brookfield Office Properties was the buyer and the CME Group was the seller. In addition, institutional investors advised by JPMorgan Asset Management paid $498.5 million for a controlling stake in Manhattan’s 195 Broadway.

On the West Coast, the Massachusetts Pension Reserves Investment Management Board, in a partnership with DivcoWest, acquired 333 Bush St. in the financial district of San Francisco for around $270 million. And further south, a unit of Hines REIT paid $506 million for Howard Hughes Center, a five-building office complex in Los Angeles, from a venture between Brookfield Office Properties and The Blackstone Group.

North of the U.S. border, Sears Canada sold its 50 percent joint venture interest in eight properties in a deal valued at about C$315 million ($301 million). And the Canada Pension Plan Investment Board sold three regional shopping centers across Canada in deals with a combined value of C$500 million ($475 million).

On the selling side and an ocean away, the government of Canada sold a large embassy building in London’s luxury Mayfair district to Indian developer Lodha Dwellers for more than $500 million. Another London-based transaction was Lloyds Banking Group plan to sell its stake in St. James’s Place for about £680 million ($1.1 billion). Also in Europe, Starwood Capital Group acquired seven retail parks and shopping gallerias in Sweden from Kooperativa Forbundet for approximately SKr 3.9 billion ($589.2 million).

In bundle deals, where institutional investors are buying portfolios, Newcastle Investment Corp. acquired a 52-property portfolio of senior housing properties from subsidiaries of Holiday Acquisition Holdings for approximately $1.01 billion. Another senior housing deal was CNL Healthcare’s purchase of a portfolio of 12 senior housing communities for approximately $302 million.

In the apartment sector, Rainbow Estates Group paid $340 million for 84 apartment properties in northern Manhattan. Another apartment portfolio acquisition was the $610 million deal between Berkshire Group and Crow Holdings. The portfolio consists of 2,300 multifamily units.

Other package deals include Kite Realty Group Trust’s purchase of a portfolio of nine retail properties for $304 million. And the U.S.-based real estate arm of Investcorp acquired a group of high-quality office and retail assets in the greater Chicago, Los Angeles, Minneapolis and New York City areas valued at $250 million.

Cole Corporate Income Trust acquired five single-tenant corporate properties for approximately $202.1 million. Griffin Capital Corp. also purchased a single-tenant portfolio, buying an 18-asset portfolio of predominantly single-tenant office properties for $521.5 million.

And Extra Space Storage acquired a portfolio of 17 self-storage properties located in Virginia for $200 million. Another storage deal was Clarion Partners and partner Private Mini Storage sale of their 30-property, 2.35 million-square-foot self-storage portfolio for $257.9 million.

Smaller portfolio deals were:

  • Shorenstein Properties buying the two-building Denver City Center for $286 million
  • ASB Real Estate Investments purchasing two luxury apartment towers in Rosslyn, Va., for $222 million
  • Washington REIT completing two separate sale transactions for $307.2 million
  • Rouse Properties agreeing to acquire two regional malls from affiliates of The Macerich Co. for $292.5 million

The year is coming to close. And I predict more high dollar transactions in the next few weeks and the start of 2014.

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AndreafinalwebAndrea Waitrovich is editor of IREN and web content editor of Institutional Real Estate, Inc.

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