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THE GRAPEVINE

HFF has hired Roland Merchant as a senior managing director in New York to work on investment sales and structured transactions across all property classes. He started this month, reporting to senior managing director Andrew Scandalios and executive managing director Michael Tepedino. Merchant previously was a director at Eastdil Secured, where worked for 11 years. Before that, he had stints in Cushman & Wakefield’s capital-markets group and Merrill Lynch’s leveraged-finance group. HFF has added to its New York roster in recent years, recruiting senior managing director Eric Anton from Brookfield Financial and managing direc-tors David Giancola and Graham Stephens from Cushman.

Blackstone has added a principal in its real estate group. The New York fund

2 Brookfield Snags Stake in LA Complex

2 Office Leasing Play in Cambridge

2 Brickman Selling NY Offices to RFR

4 Spruced-Up Offices Available Near LA

4 Lifestyle Center on Block in Bay Area

4 Dallas Office and Retail Space for Sale

5 Calif. Entertainment Project Pitched

5 Savanna Shows Retail Condo in NY

5 Value-Added Rental Play in Arizona

6 Mack-Cali Lists NJ Office Buildings

8 USAA Shows Warehouse Near Atlanta

8 Northern Virginia Offices on Block

10 Power Center Up for Grabs in NJ

Multi-State Industrial Portfolio Up for GrabsCardinal Industrial is quietly shopping an industrial portfolio valued at about

$500 million.The properties, encompassing 7.6 million square feet spread across 16 states, are

97.8% leased, mostly by single tenants. The weighted average remaining lease term is nine years — relatively long for a warehouse portfolio.

Cardinal, of Sherman Oaks, Calif., will consider bids on the whole package or any combination of properties. It has tapped Eastdil Secured to line up buyers, but there is no formal marketing process or offering memorandum.

At the estimated value of $66/sf, the portfolio’s capitalization rate would be 6.4%. On average, the properties are 20 years old and have 27-foot ceilings. They have $258.8 million of total mortgages, most of which are assumable.

The largest concentration — 1.7 million sf — is in Texas. That includes a 1.4 million-sf batch in Laredo that generates $6.1 million of annual net operating

See PORTFOLIO on Page 11

As Market Slows, So Does Buy-Side HiringA chill has settled over the hiring landscape for acquisitions professionals, in yet

another signal that the real estate sector’s long upward climb is drawing to a close.In recent months, recruiters say, the pipeline of openings for acquisitions pros

has all but dried up, while demand remains brisk for staffers in other roles, particu-larly asset managers. The change reflects both a shift in the strategies of investment shops and the high cost of hiring mid- and senior-level acquisitions personnel in the later stages of a cycle.

“When the industry is at a point in its cycle when assets are actively trading, there is a correlating demand for acquisitions, development and capital-raising pro-fessionals,” said William Ferguson, who founded search firm Ferguson Partners in 1989 and is now co-chief executive of parent company FPL Advisory. “Conversely, when assets are fully priced, capital flows subside or the economy plateaus, there is more of a focus on driving portfolio value and cashflow, and executives in asset

See MARKET on Page 6

Paramount Shops Stake in Midtown NY TowerParamount Group is marketing a 49% interest in the office building at 900 Third

Avenue in Midtown Manhattan.Bids are expected to value the 596,000-square-foot property as high as $500 mil-

lion, or nearly $839/sf. Eastdil Secured is representing the New York REIT.Paramount has owned the property since 1999, making it one the company’s

longest investments in New York.The 36-story building, at the northwest corner of Third Avenue and East 54th

Street, is 98% occupied. The tenants include merchant bank Carl Marks & Co., investment firm Columbus Nova, Folger Hill Asset Management, Kellner Capital, Shiseido Americas and law firms Littler Mendelson, Tannenbaum Helpern and Thompson & Knight, according to CoStar.

The building was constructed in 1984. Paramount acquired it 15 years later for $164.8 million, or $277/sf, from a JMB Realty partnership. In 2003, Paramount sold

See PARAMOUNT on Page 5

MARCH 22, 2017

Brookfield Snags Stake in LA ComplexBrookfield Property Partners is taking control of Califor-

nia Market Center, the biggest office property in Los Angeles, which is only half-leased.

The New York company has agreed to buy a stake of close to 50% from Jamison Properties, which will retain the remain-ing interest. The transaction values the 2.1 million-square-foot complex at $440 million, or $211/sf.

Newmark Grubb is representing Jamison in the off-market deal, which is expected to close within two weeks. The broker-age declined to comment.

While Brookfield is avoiding the acquisition of a majority stake — evidently for tax reasons — the terms effectively give it control of the property, according to people familiar with the matter. They added that Brookfield’s investment, including capital for a planned renovation, will exceed $150 million.

The property, at 110 East Ninth Street in the Downtown sub-market, has long been a center for the city’s fashion industry. Tenants have included boutiques, small showrooms and out-lets, and design firms related to the fashion business. Brook-field intends to convert the empty space to the type of “creative” office space desired by technology and entertainment busi-nesses, while retaining the apparel tenants.

The rent roll includes office-sharing firm Ignited Spaces (42,000 sf), Apparel News (8,000 sf) and California Marketing Associates (5,000 sf), according to CoStar.

The property’s roughly 50% occupancy rate leaves plenty of potential to boost income. The average occupancy rate in the Downtown submarket is 81.8%.

The complex, between South Main Street and South Los Angeles Street, encompasses two connected buildings. Los Angeles-based Jamison acquired the complex in 2005 for $138 million from Hertz Investment of Santa Monica, Calif.

Office Leasing Play in CambridgeCBRE Global Investors is pitching an office complex in Cam-

bridge, Mass., as an opportunity to lease up empty space and lift rents in a booming market.

The 470,000-square-foot property, at 125-150 Cambridge-park Drive, is expected to command bids of roughly $200 mil-lion, or $426/sf. That would produce a 5.5% initial annual yield. The Los Angeles fund operator has given the listing to affiliate CBRE.

The complex is 85% leased, below the 97% average in the surrounding West Cambridge submarket. The occupancy rate for the overall Cambridge office market, with some 10 million sf, is 98%. Recent years have seen a swell of tenant demand, especially from life-science, pharmaceutical and technology firms. Meanwhile, some older properties have been taken off-line for repositioning. The combination of factors has steadily driven up rents.

The listed property consists of two buildings facing each other across Cambridgepark Drive. The 33 tenants have

a weighted average remaining lease term of just under five years. They include Boston Scientific, Hewlett Packard Enterprise and Intuit. In addition to filling vacant space, a buyer would have the chance to increase rents as leases roll over. The current rents trail the submarket’s average asking rate by 17%.

Since 2011, improvements to the complex have included a new fitness center, updated restrooms and the addition of a 456-space garage. Marketing materials note that a buyer should be able to increase parking revenue.

The surrounding area is experiencing a wave of construc-tion, including 1,000 residential units in the last two years. The Cambridgepark Drive buildings are adjacent to the MBTA’s Alewife Station.

CBRE Global paid Blackstone $163 million for the complex in 2014. The subsequent run-up in occupancy and rents has boosted valuations of Cambridge properties, allowing own-ers to rapidly cash out of investments. For example, also in 2014, Jamestown Properties paid $136 million for the Daven-port Building, a former furniture factory that was converted to offices in the 1980s and underwent a recent round of reno-vations. In February, an Oxford Properties joint venture paid $202.5 million for the 232,000-sf building. Newmark Grubb brokered the sale for Atlanta-based Jamestown.

Brickman Selling NY Offices to RFRRFR Holding has agreed to buy an office building in Manhat-

tan’s West Village from Brickman Associates for roughly $205 million.

The 203,000-square-foot property, at 95 Morton Street in the Hudson Square submarket, is fully leased. CBRE is advis-ing Brickman on the transaction, which values the eight-story building at just over $1,000/sf.

New York-based RFR, led by investors Aby Rosen and Michael Fuchs, is talking to potential partners that would take a preferred-equity stake in the property. It’s unclear if the shop is using a broker in those discussions.

The largest tenant, PayPal, occupies some 95,000 sf across four floors under a 12-year lease that began in late 2015. Other tenants include digital-advertising firm Integral Ad Science and marketing firm VSA Partners, according to CoStar.

The property, at the northeast corner of Washington Street, was built in 1911 and underwent a major renovation in 2000. Lincoln Property of Dallas bought it in 2003 from a partnership between Brack Capital Real Estate of Amsterdam and Stellar Management of New York for $66 million, or $325/sf. New York-based Brickman bought it in 2008 for $96.5 million, or $475/sf.

Hudson Square is a relatively small Manhattan submarket, with only 11.7 million sf of office space. The average occupancy rate was 86.9% at yearend, according to Newmark Grubb. The average asking rent was $82.27/sf, compared to $72.99/sf for the surrounding Midtown South submarket and $76.14/sf for all of Manhattan.

March 22, 2017 2Real EstateALERT

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2017_RealEstateAlert_Final.indd 1 3/16/17 1:44 PM

Spruced-Up Offices Available Near LAA recently renovated office building in the South Bay section

of Los Angeles County is up for grabs.The 307,000-square-foot Pacific Center, in Torrance, is 92%

leased, with Bank of America the lead tenant. Bids are expected to come in around $400/sf, or $123 million. HFF is marketing the Class-A property for Dallas investment shop Stream Realty.

The eight-story building, at 21250 Hawthorne Boulevard, was developed in 1988. Stream bought it in 2015 for $68.5 mil-lion from Bixby Land of Newport Beach, Calif. Stream has spent some $6 million on upgrades, including renovating the lobby and common areas and adding the types of indoor and outdoor meeting spaces favored by “creative” businesses.

The rent roll also includes local newspaper Daily Breeze, online marketplace Living Social, Morgan Stanley and Wells Fargo. In-place rents are around 25% below the market average for Class-A properties.

Pacific Center is at the intersection of Torrance Boulevard, about 15 miles southwest of downtown Los Angeles. Amid an upswing in Greater Los Angeles investment sales, office prop-erties in the South Bay region are expected to draw more atten-tion from buyers as demand outstrips supply in the hot “Silicon Beach” submarkets to the north.

Lifestyle Center on Block in Bay AreaInvestors are getting a crack at a grocery-anchored lifestyle

center that serves an affluent Bay Area community.The 231,000-square-foot Blackhawk Plaza, in Danville,

Calif., could attract bids of up to $80 million. At that price, the capitalization rate would be in the vicinity of 4.5%. JLL is advis-ing the seller, CenterCal Properties of El Segundo, Calif.

The marketing campaign is emphasizing the potential to boost occupancy and rents. The property, which is next to an exclusive community, is 91% leased at rents that are 25% below the market’s average asking rate. That should provide an opportunity to boost rents as leases roll over. What’s more, 6% of the space is leased by temporary tenants. That space could be reconfigured and rented to long-term tenants at much higher rents.

The grocery anchor is Draeger’s Market. Anthropologie and Crunch Fitness are among the other 39 tenants.

The marketing campaign contends that Blackhawk Plaza has features that attract foot traffic, making it “e-commerce resil-ient.” For example, the occupants include a seven-screen Cen-tury Theatres and the Blackhawk Auto Museum, a Smithsonian Institution affiliate. There are also restaurants, a children’s play area, water features, terraces and courtyards. The lifestyle cen-ter, which has a Mediterranean-style architecture with stucco walls and a Spanish-style roof, regularly hosts community events. Blackhawk Golf Resort is next door.

Blackhawk Plaza was completed in 1989 and renovated most recently in 2007. The center, which has 1,552 parking spaces, is at 3380 Blackhawk Plaza Circle, just outside the

Blackhawk master-planned development of gated residential neighborhoods. The community has 9,719 residents with an average household income of $240,000. The average age is 49, and nearly three-quarters of the residents have a bachelor’s degree or higher. The property’s primary trade area, which also includes Danville and other neighboring towns, has 112,000 residents with an average household income of $173,000.

CenterCal, which was founded in 2004 by Fred Bruning and Jean Paul Wardy, now invests via a joint venture with California State Teachers. But it owns Blackhawk Plaza by itself.

Dallas Office and Retail Space for SaleAn Investcorp partnership is marketing two office buildings

in Dallas’ booming Uptown/Turtle Creek submarket that are worth about $53 million combined.

The 170,000-square-foot package, which is 90% leased, includes 27,000 sf of ground-floor retail space in the city’s most prestigious shopping district. HFF is representing Bahrain-based Investcorp and local shop Quadrant Investment Proper-ties. The duo is pitching the buildings as a portfolio, but will entertain separate bids.

The properties are about five blocks apart, at 2811 McKinney Avenue (94,000 sf) and 3400 Carlisle Street (76,000 sf). Most of the retail space is in the larger building, along the vibrant Uptown neighborhood’s main drag.

The marketing campaign is emphasizing that the rents aver-age 31% below the level of recent leases. The weighted average remaining lease term is 3.7 years, which could provide a buyer with the opportunity to raise rents in the relatively near term. Office rents in the submarket have climbed 35% since 2012 to $38.81/sf, the highest average in the Dallas area.

Investors are being told there is an opportunity to upgrade the retail tenants to further capitalize on the “live-work-play” atmosphere of the neighborhood. Local retail rents increased 13% last year, and some recent leases have topped $75/sf on a triple-net basis. Nearby residential growth could add to that trend. The neighborhood’s population has grown 30% since 2010, and there are 3,000 apartments under construction. Some 4,100 businesses in the Uptown area employ 28,000 people.

The McKinney Avenue building is 87% leased, while the Carlisle Street property is 94% occupied. Both were completed in 1985. They have about 550 parking spaces combined.

March 22, 2017 4Real EstateALERT

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.

Look Behind the Scenes

Calif. Entertainment Project PitchedA Silicon Valley site that’s approved for a mixed-use devel-

opment anchored by a golf driving range is expected to attract bids of roughly $70 million.

The 31-acre site, in the Alviso district of San Jose, is valued at roughly $70 million. The local owner, Terra Ventures, has secured approvals to build a TopGolf sports and entertainment complex, along with a 200-room hotel and 110,000 square feet of retail space.

The firm is pitching the property to developers that would take over the project. CBRE has the listing. The site is just north of Highway 237, the Southbay Freeway.

The TopGolf component would be a 71,000-sf, four-story structure with about 120 “hitting bays,” from which customers would hit golf balls onto a 5.2-acre artificial-turf field. Each bay would contain seating and television screens and have food and beverage service. The building would also contain a restaurant, a bar, lounges and corporate and meeting space. It would be one of 34 such complexes in the U.S. operated by Dallas-based TopGolf.

Plans call for the retail and hotel components to face North First Street, on the east side of the property. The four-story, L-shape hotel would include an outdoor lounge area with a pool and spa. The retail portion would consist of 10 one-to two-story buildings of 7,000-18,000 sf apiece. The layout includes pedestrian walkways and a large plaza with seating, plus under-ground garages with 415 spaces.

The site is roughly two miles from the home stadium of the San Francisco 49ers football team and from the California’s Great America amusement park, both in Santa Clara. San Jose has a population topping 1 million, with an average age of 36 and average household income of nearly $102,000.

Savanna Shows Retail Condo in NYSavanna Investment is quietly marketing the fully leased

retail condominium at 10 Madison Square West in Midtown Manhattan.

The roughly 21,000-square-foot block of space could attract bids in the vicinity of $100 million. Cushman & Wakefield has the listing.

The condo is at the base of a building that a Morgan Stanley Real Estate partnership acquired in 2011 for $190.8 million from a joint venture between Lehman Brothers and L&L Holding of New York. At the time, the property had 16 floors and was used as offices. Morgan Stanley and its partners — local developer Steve Witkoff and Howard Lorber’s Miami-based New Valley — then redeveloped it, adding eight floors, converting most of the space into 125 luxury residential condos and carving out the retail condo.

The group sold the retail condo to Savanna in 2014 for $56.5 million. Savanna, a New York fund operator, signed PetSmart to a 16,000-sf lease for 10 years. A Citibank branch occupies the remaining 4,000 sf under a below-market lease that runs for

about another six years.The Morgan Stanley team has sold off most of the residen-

tial condos, including a $35 million penthouse. The property’s website currently lists only one condo as available.

The property, formerly known as 1107 Broadway, is at the juncture of West 24th Street, Broadway and Fifth Avenue. It is across Broadway from Madison Square Park and one block north of the Flatiron Building.

Value-Added Rental Play in ArizonaA Starwood Capital partnership is pitching three Phoenix-

area apartment complexes to value-added investors.The 1,276-unit portfolio is worth about $80,000/unit, or

$102 million. Investors can bid on individual properties or the whole package. CBRE is advising Starwood, an investment shop in Greenwich, Conn., and its partner, Gaia Real Estate Holdings of New York.

The garden-style complexes, which are 95% occupied, were among 34 properties, with more than 9,500 units, that the Star-wood partnership assumed in 2012 via its $445.5 million take-over of a distressed Alliance Holdings joint venture.

The offering encompasses the 440-unit Canyon Creek Vil-lage, at 17617 North 9th Street in Phoenix; the 516-unit Stillwa-ter, at 771 North 51st Street in Glendale, Ariz.; and the 320-unit Off Broadway, at 546 South Country Club Road in Mesa, Ariz.

The complexes were built in the 1980s. A buyer could upgrade the flooring and appliances and then seek to boost rents, while still underpricing newer properties in the area. The complexes have ample amenities, including swimming pools, fitness centers and resident lounges.

Greater Phoenix is expected to be one of the strongest rental markets this year. Employment is up, driven in part by growth in the leisure and hotel sectors. Even though some 7,500 apartments came on line last year, according to Marcus & Millichap, surging tenant demand pushed up the average occupancy rate by 20 bp, to 95.6%. What’s more, the broker-age projects that the occupancy rate will climb another per-centage point this year, even with 7,800 more apartments scheduled to be completed.

Paramount ... From Page 1

a 49% stake to ING Office Fund, an Australian REIT advised by ING Clarion of New York. In 2012, Paramount bought back that interest from the vehicle, then called Investa Office Fund, for $172.7 million. That deal valued the property at $352.5 million, or $591/sf.

Now Paramount is looking to again monetize a portion of its investment while retaining the majority interest. By limit-ing the listed stake to 49%, the company should draw interest from sovereign wealth funds and non-U.S. insurance compa-nies, which avoid majority stakes because of onerous tax impli-cations. Even if a foreign buyer doesn’t end up acquiring the interest, the bigger field of bidders could drive up the price.

March 22, 2017 5Real EstateALERT

Mack-Cali Lists NJ Office BuildingsMack-Cali Realty is offering two adjacent office buildings in

Northern New Jersey that have a combined value of roughly $60 million.

The four-story buildings, encompassing 399,000 square feet, are at 20 Waterview Boulevard and 35 Waterview Boulevard in Parsippany. They are 66.3% occupied by 20 tenants. JLL is representing Mack-Cali, an Edison, N.J., REIT.

Mack-Cali is aiming to sell the buildings together, but will entertain separate bids, a nod to the potential for them to appeal to buyers with different risk profiles.

The 226,000-sf building at 20 Waterview Boulevard is 75% occupied. JLL is pitching it as a value-added play, in part because healthcare-communications company McCann Torre Lazur is set to vacate its roughly 127,000 sf by yearend — which would reduce the occupancy level to 44%. Overall, leases on about two-thirds of the space are scheduled to expire within five years. JLL is telling potential bidders that they could raise rents upon rollover. The weighted average in-place rent is $24.62/sf, compared to asking rates of $27-29/sf for the two listed buildings.

The 172,000-sf building at 35 Waterview Boulevard, which is 95.7% occupied, is described as fitting a core-plus strategy. SunChemical has a lease on 38% of the space until 2024. Its rent is $26.50/sf, with annual bumps. The weighted average rent of

the 14 other tenants is about $2.50/sf less than the asking range.The buildings are just off Route 46, Route 202 and Interstate

287, about one mile north of Interstate 80. They are part of Waterview Corporate Center, which has 1 million sf of office space that is 90% occupied. Some 25% of the park is either owner-occupied or rented to single tenants on long-term net leases.

Market ... From Page 1

management, property management and leasing are more in demand.”

While no one is predicting a market crash, acquisition activ-ity has begun to cool. Overall, sales of large commercial proper-ties totaled $270.9 billion last year, down 3% from the historic high of $278 billion in 2015, according to Real Estate Alert’s Deal Database. Even as property values remain at or near his-toric highs, the pipeline of offerings has thinned and buyers have turned cautious on pricing.

Some firms are “taking the view that at today’s price point, they will stay on the sidelines,” said Anthony LoPinto, global sec-tor leader of real estate at Korn Ferry. Instead, he said, “investors are focused increasingly on working the portfolio and enhanc-ing performance and returns.”

Companies with acquisitions openings can have a hard time filling them.

“The pool of high-quality, unemployed acquisitions profes-sionals is not very deep,” said Kent Elliott, a principal at RETS Associates. “If they are employed, they are doing well.”

That means a firm looking to lure someone from a com-peting shop would have to do more than match or exceed the candidate’s current salary and bonuses. It could also need to buy out the pro’s participating interest in existing investments — which due to the rapid rise in valuations over recent years, could be quite costly. “They may want to leave, but it might be so painful financially,” Elliott said.

For professionals who are looking to move, the most likely destinations could be foreign investment shops that are still building out U.S. platforms as they search for higher yields and stable markets. “For overseas capital, the biggest area of focus on new investments is still the U.S.,” said Steven Littman, presi-dent and managing partner of Rhodes Associates of New York.

Ultimately, recruiters believe that hirings of buysiders will be few and far between for the foreseeable future, as shops continue to focus more on asset management. “It validates the view that we are in the later stage of the cycle,” said LoPinto of Korn Ferry.

March 22, 2017 6Real EstateALERT

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USAA Shows Warehouse Near AtlantaUSAA Real Estate is marketing a suburban Atlanta distribu-

tion center that’s fully leased by Owens Corning.The 1 million-square-foot warehouse, in Palmetto, Ga., is

valued at about $50 million, or $48/sf. At that price, the buyer’s initial annual yield would be 5.8%. Cushman & Wakefield is rep-resenting San Antonio-based USAA.

The bulk-distribution center, in the robust Interstate 85 South industrial submarket, was completed in 1999 and expanded in 2002. It’s adjacent to a plant where Owens Corn-ing manufactures building materials. The plant is near a CSX rail terminal that the company uses to bring in raw materials.

Owens Corning, rated Ba1/BBB by Moody’s and S&P, signed a 10-year lease on the warehouse in 2012. It uses the facility as the sole Southeast distribution center for its primary product, fiberglass insulation.

The current rent is $2.70/sf on a triple-net basis, with 3% annual bumps. The marketing pitch is a buyer could likely boost rents when the lease rolls over, because the rates at recently built warehouses in the submarket are 25% higher.

The center has high-quality features, including 32-foot ceilings and modern sprinkler and lighting systems. The sur-rounding submarket is dominated by bulk-distribution ware-houses that are used by Fortune 500 companies and owned by institutional investors, including Duke Realty of Indianapolis, Exeter Property of Conshohocken, Pa., Gramercy Property of New York and LaSalle Investment of Chicago. Bulk-distribution space in the submarket is fully leased, according to marketing materials.

Northern Virginia Offices on BlockA partnership has listed a Northern Virginia office property

that’s valued at about $30 million.The 108,000-square-foot building, at 1199 North Fairfax

Street in Alexandria’s Old Town district, is 87% leased. By lift-ing the occupancy rate to the 95% level of comparable office space in the market, a buyer would see a stabilized yield of almost 7.8% at the $278/sf valuation.

Newmark Grubb is marketing the property for a joint ven-ture between Stockbridge Capital of San Francisco and Akridge Cos. of Washington. The partners bought the building three years ago from Tishman Speyer of New York for an unknown price. Since then, they put $4.5 million into improvements that included a new lobby, updated restrooms and renovated suites.

The 10-story building, completed in 1982, is beside the Potomac River, about eight miles south of Washington. It’s the tallest building along that stretch of waterfront, offering views of the nation’s capital, and historically tends to outperform the market-average leasing rate of 90%.

The 11 tenants include financial-services, business-services, technology and nonprofit firms. Leases for more than 20% of the space have been signed within the last 12 months.

The surrounding Old Town North neighborhood is under-going a wave of residential and retail development. Plans are in the works for a mixed-use project called River Green, on the site of a former power plant near the listed building, that would encompass 600 residential units, 105,000 sf of retail space, a 99,000-sf office building and a 125-room hotel.

March 22, 2017 8Real EstateALERT

CALENDARCALENDAR Main Events Dates Event Location Organizer Information 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 March 28 Brookfield Properties Manhattan West Tour New York RELA www.rela.org

March 29 New Jersey Gold Coast & Spring Multifamily Summit Jersey City, N.J. CapRate Events cre-events.com

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 Northern California Healthcare Real Estate Summit San Francisco CapRate Events cre-events.com

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

April 4-5 Global Institutional Real Estate Investor Forum New York Markets Group www.marketsgroup.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 REITS in the New World Order New York NYU Schack www.scps.nyu.edu

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

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

March 22, 2017 9Real EstateALERT

ON THE MARKETON THE MARKET

Office Property

Size

Estimated Value

Owner

Broker

Color

200 St. Paul Place, Baltimore

267,000 sf 98% leased

$50 million, $187/sf Yield: 8%

Estate of David Kornblatt

CBRE Class-A, 28-story tower in the Central Business District. Owned and managed by Kornblatt Co. since its completion in the late 1980s. High-end finishes include a marble lobby. Tends to outperform other office properties in the submarket. More than 80% of the space is occupied by government agencies, including U.S. Drug Enforcement Administration. There is a 12-story garage with 927 spaces.

Industrial Property

Size

Estimated Value

Owner

Broker

Color

Interport Business Center, Richmond, Va.

618,000 sf 93% leased

$31 million, $50/sf

Manekin, Columbia, Md.

HFF Three-building complex, one mile from Richmond International Airport. Weighted average remaining lease term is 3.8 years. In-place rents are 5% below the average for the Southeast submarket, which is 95.1% leased.

Power Center Up for Grabs in NJInvestors are getting a crack at a power center in Southern

New Jersey that has an estimated value of $34 million.The 263,000-square-foot Sunrise Plaza, at 232 North Main

Street in the Forked River section of Lacey Township, is 97.3% occupied. At the estimated price, the buyer’s initial annual yield would be 5.5%. HFF is representing owner Shopcore Properties, a San Diego REIT that changed its name from Excel Trust fol-lowing its 2015 purchase by Blackstone.

The anchor tenants are Home Depot (137,000 sf) and Kohl’s (96,000 sf), each with more than 10 years remaining on its lease. Other tenants include Famous Footwear and Staples.

Shopcore is negotiating with a grocer to replace Staples by the time that office-supply retailer’s lease expires in 2019.

North Main Street, a segment of U.S. Route 9, is a busy retail corridor about three miles east of the Garden State Parkway. Some 25,000 vehicles pass the site each day.

Lacey is in Ocean County, which has 25 million sf of retail space with an average occupancy level of 93.5%. Only 115,000 sf was added last year, and there are no retail centers under construction. Rents have been growing amid the tight supply, ending 2016 at $16.45/sf, according to marketing materials.

March 22, 2017 10Real EstateALERT

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Portfolio ... From Page 1

income. Cardinal acquired the Laredo properties last June and negotiated leases that increased the occupancy rates, extended the weighted average lease term and boosted income.

The largest single property, which Cardinal acquired in Sep-tember, is the 1 million-sf Cost Plus World Market Distribu-tion Center, at 12300 Dominion Way in Windsor, Va., about 30 miles west of Norfolk. It generates $4.6 million of net operating income. The tenants are Cost Plus World Market and Bed, Bath & Beyond. Their leases don’t mature until 2029. The property was built between 2001 and 2004, and the tenants spent $7 million on upgrades in 2015 that made it more suitable for e-commerce fulfillment.

Another large property is a 570,000-sf warehouse at 1125

Sycamore Street in Manteno, Ill., about 45 miles south of Chi-cago. That property, completed in 1999, has 41-foot ceilings. It is fully occupied by Mars, and Cardinal is negotiating to extend the candymaker’s lease, which expires in 2019. The property generates $2.8 million of net operating income.

Cardinal, founded in 1985 by president George Hicker, invests on behalf of wealthy individuals, including many pro-fessional athletes and coaches, according to its website. Hicker played basketball for Syracuse University and for a time was a manager for musician Rick James.

Hicker sought to wind down the company from 2012 to 2014, shedding $452 million of properties. But Cardinal then switched back into acquisition mode the following two years, snapping up $279 million of warehouses. The buzz is the company is under no pressure and in no rush to sell the listed portfolio.

March 22, 2017 11Real EstateALERT

MARKET SPOTLIGHT

Los Angeles-Area Office PropertiesThe market posted record sales last year, concentrated in Westside neighborhoods. But volume will have to

pick up in other submarkets, including Downtown, to sustain that level of activity.The average occupancy rate rose 90 bp last year, to 86%, according to Marcus & Millichap, which projects

another 40-bp increase this year. The brokerage expects a strong pace of construction to limit rent growth to 3% this year, down from 5.3%

in 2016.

On the Market Hit SF Estimated ValueProperty Seller Market (000) ($Mil.) (Per SF) BrokerTwo California Plaza, Los Angeles CIM Group January 1,370 $560 $409 CBREOne California Plaza, Los Angeles Beacon Capital January 1,000 460 460 Eastdil SecuredMedia Studios, Burbank Shorenstein, Worthe Real Estate January 928 450 485 Eastdil SecuredUnion Bank Plaza, Los Angeles KBS Realty March 627 315 502 Cushman & WakefieldPacific Center, Torrance Stream Realty March 307 123 400 HFF700 North Brand Boulevard, Glendale Blackstone March 212 85 401 JLLChatsworth Business Park, Chatsworth LNR Partners March 231 40 173 Cushman & Wakefield

Recent Deals SF Sales PriceProperty Buyer Closed (000) ($Mil.) (Per SF) BrokerCalifornia Market, Los Angeles (<50% stake) Brookfield Property Partners (Pending) 2,081 $440 $211 Newmark GrubbLNR Warner Center, Woodland Hills Oaktree Capital February 808 236 291 Eastdil SecuredGlendale Plaza, Glendale DivcoWest Properties March 533 179 336 CBRE800 Corporate Point, Monterey Park (Unidentified) (Pending) 246 150 609 Newmark Grubb1450 North San Pablo, Los Angeles University of Southern California March 150 110 733 Dunn, Kennedy WilsonGlendale Center, Glendale Onni Group March 383 83 217 Eastdil SecuredLos Angeles Corp. Center, Monterey Park Omninet Capital (Pending) 164 82 500 Newmark GrubbArcadia Gateway, Arcadia America Ke Qui International March 156 62 398 Hanley Investment

NOTE: For the sale of a stake, the full value and size of the property are shown.

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March 22, 2017 12Real EstateALERT

behemoth hired Josh Carson last month from L&L Holding of New York, where he was a senior vice president. He reports to U.S. head of asset management Rob Harper and works on Blackstone’s office portfolio nationwide. Carson had earlier stints at New Boston Fund of Boston and New York consulting firm McKinsey & Co.

Andrew Osborne has left Brookfield Property Partners, where he had worked since 2006. He was a senior vice presi-dent in Manhattan, focused on acquisi-tions and dispositions. He departed in the past month or so. His plans are unknown. Before joining Brookfield, he worked at Trammell Crow for about two years and previously spent nearly 14 years at JLL.

Chris Salata returned to DDR this month as a senior vice president of develop-ment in the retail REIT’s headquarters in Beachwood, Ohio. Salata came from Cleveland-based Fairmount Properties, where he was chief investment officer

and general counsel. Prior to his four years at Fairmount, he spent seven years at DDR, where he was a vice presi-dent before departing in 2013. He also had a seven-year stint at Cleveland law firm McDonald Hopkins.

Maverick Commercial Properties has added a vice president to line up equity and debt for its clients. Eric Winter, who joined the New York advisory shop this month, will raise capital for investment across asset classes nationwide. He reports to Maverick founder Adi Chugh. Winter previously was a real estate finance associate at 40 North Properties and had a prior stint at Rockwood Capital, both in New York.

David Todd has joined Wolff Co. as a vice president of development. He started last month, leading the Scottsdale, Ariz., apartment specialist’s efforts to find development opportunities in Southern California and the Southwest. Wolff develops, acquires and takes preferred-equity stakes in multi-family properties nationwide. Todd most recently was a San Diego-based vice president of development at JPI Cos.

of Irving, Texas, where he worked for nearly two years.

Chinese venture capital firm CFLD is looking to round out its real estate staff in San Francisco, following this month’s hiring of former Kilroy Realty executive Mike Sanford to lead its U.S. operation. Sanford and a half-dozen other senior executives are preparing for the firm’s first forays into U.S. real estate. They’re looking for support staffers, including at least one acquisitions analyst, an opera-tions officer and perhaps an associate general counsel. Further hires are likely after the shop makes its first invest-ments. CFLD plans to develop mixed-use properties of up to 2 million square feet, beginning in the Bay Area and later likely in Los Angeles and other West Coast markets.

Coretrust Capital has added an acquisi-tions associate at its Los Angeles head-quarters. Evan Deems started Feb. 28, working with the capital-markets and investment teams under vice president Adam Lurie. Deems previously was an associate in the investment group of American Realty of Glendale, Calif.