DEALS of the YEAR
The world’s largest industrial REIT,
ProLogis, got even larger last July when it
closed on the $1.9-billion acquisition of a
24.7-million-sf portfolio from DP Industrial,
a joint venture of Dermody Properties and
the CalSTRS. The 114 distribution facilities
are located in Nevada, Pennsylvania, Illinois
and Southern California. The package also
included 1. 2 million sf of construction in
progress and 518 acres of developable land.
Eastdil Secured’s Jay Borzi and Steve Silk
brokered the transaction for both parties,
while Dan Corfee from Preferred Capital
Advisors also advised Dermody. ProLogis
was repped in-house by Melissa Marsden.
The 323,549-sf Birkdale Village in Huntersville, NC is part of the 66-asset Inland portfolio.
Inland Earns $6.2B in Sale
Of 307 Shopping Centers
Inland Retail Real Estate Trust Inc. shed a
massive collection of assets held by one of
its REITs early last year. Developers
Diversified Realty bought the package,
which consists of 44. 2 million sf in 307
shopping centers across 10 states. Valued at
$6.2 billion, the deal at the time was the
second-largest REIT acquisition closed to
date, according to the National Association
of Real Estate Investment Trusts.
The deal, which had a cap rate of
6.5%, came out to about $14 per share.
The buyer initially financed the purchase through a combination of a $3-bil-
lion JV with TIAA-CREF, the issuance
of $1.6 billion of common and preferred
equity and $1.2 billion of new and
The portfolio was 95% occupied and also
included a development pipeline of five
centers and several potential expansion and
redevelopment projects. More than 70% of
the portfolio is located in growth-oriented,
The transaction upped Developers
Diversified’s franchise value and total
gross leasable area by 38%. At the time
the deal was made, Scott A. Wolstein,
chairman and CEO, said the buyout
allowed firm to increase its fund management business and grow the scale and
scope of its operations. Some $5 billion of
the assets gained in the Inland deal, he
indicated, will end up in joint ventures
with private equity sources.
At a time when cap rates were at record lows,
Morgan Stanley Real Estate Fund and
Trinity Investments LLC’s July acquisition of a
Hawaiian lodging property might have set a
record. The $575-million purchase of the 310-
key Maui Prince Hotel Makena from Maui
Prince Hotel LLC and Lokelani Resort Corp.
had a cap rate of just 2.2% (for the hotel component) and a price per key of nearly $1.9 million. The deal reportedly represented the largest
hotel sale ever to take place in Hawaii, the
largest single hotel acquisition in 2007 and the
second-largest hotel sale in history, according
to the seller’s broker, Jones Lang LaSalle
Hotels. CB Richard Ellis advised the buyers.
Seller: Inland Retail Real Estate Trust
(Barry Lazarus, president and CEO)
Buyer: Developers Diversified Realty
(Scott A. Wolstein, chairman and CEO)
Seller’s Representatives: Banc of
America Securities LLC (financial advisor)
and Duane Morris LLP (legal counsel).
Buyer’s Representatives: Macquarie
Capital Partners LLC (financial advisor)
and Baker & Hostetler LLP (legal counsel)
“This transaction strengthens our industry
position through control of some of the
newest and highest quality, market-domi-
nant community centers in the Southeast.
We are excited to add these outstanding
properties to our platform.”
SCOTT A. WOLSTEIN
A JV of Mann Realty Associates and Africa-Israel bought the Apthorp, a 101-year-old
163-unit luxury rental property on Manhattan’s
Upper West Side. The purchase price of $426
million factors out to a per-unit cost of more
than $2.6 million. Eastdil Secured acted for
the seller, 5 Family Consortium. DTZ
Rockwood put together the financing, including a $393-million first mortgage from Anglo
Irish Bank Corp. and a $135-million mezzanine
loan from Arefin.
“We are delighted to be able to offer our
investors an outstanding return on their initial
investments, while delivering our extremely
high quality portfolio to one of the premier
owner/operators in our sector.”
At the beginning of last year, GE Real Estate
closed on its $2.2-billion purchase of a 13-mil-
lion-sf portfolio from Crow Holdings. Located
throughout the US, the 147 assets include 112
industrial facilities, 19 retail centers, eight apartments, six hotels and two office buildings.
Holliday Fenoglio Fowler LP’s Mark D.
Gibson and Joe B. Thornton Jr., along with CB
Richard Ellis’ Jack Fraker, brokered the deal
for Crow Holdings. Concurrent with the purchase, GE flipped the retail properties to
Kimco Realty Corp. for about $920 million.