Sandy, UT, traded for $93.9 million in the largest multifamily property sale ever in Utah. There was strong investor interest despite the
fact that the property was still under construction and the buyer’s
contract stipulated that development had to be fully complete, and
a specific occupancy level reached, before the deal closed. Marcus
& Millichap’s Daniel Shin and Brock Zylstra handled the sale.
Similarly, the Yard in Portland, OR was only 50% leased at the
time it traded for $126.8 million, the largest multifamily sale to date
in Portland’s urban core. A component of the Portland Development
Commission’s Burnside Bridgehead master plan, the Yard sold to
tor in the
team working on the transaction included Elizabeth Davis, Pete
Shelton, Kim Grant, Stanford Jones, Philip Saglimbeni and Salvatore
Saglimbeni, all of Marcus & Millichap’s Institutional Property
A CREATIVE APPROACH IN AN ARTS DISTRICT
As a catalyst for the transformation of Los Angeles’ Arts District,
One Santa Fe was a groundbreaking mixed-use project. As the subject of an investment sale, the property at 300 S. Santa Fe Ave. in
L.A. was backed by an “incredibly complex” capital structure, in the
words of Moran & Co., which marketed One Santa Fe for sale.
The project was conceived amid the 2008 downturn, by a team
led by Bill McGregor of McGregor Brown and Chuck Cowley of
Cowley Real Estate Partners. Although the Arts District was less
than a mile from L.A.’s civic and financial district, at the time it was
largely an assortment of warehouses virtually unknown to the institutional investment community. In order to capitalize this transformative project during the recession, the development team had to
assemble an “all of the above” financing strategy. The resulting
capital stack included Low Income Housing Tax Credits, New
Market Tax Credits, ground lease financing from L.A.’s
Metropolitan Transportation Authority and a Community
properties during the year, an announcement that
dovetailed with Workspace’s focus. CEO Thomas
Rizk and president and COO Roger Thomas, who
had worked together at Mack-Cali Realty Corp., had
kept a watchful eye on trends in the suburban office
market, knowing that sooner or later there would
be an upswing in interest and value in the space.
“We saw the pressure on the large institutional
owners to shed their suburban holdings,” says
Thomas. “With no one else coming into the space to
pick up the slack, we saw an opportunity.” The
company’s purchases zero in on “well-located
suburbs that aren’t too far from urban centers and
offer an abundance of amenities that rival those of
large metropolitan office spaces. Workspace is a
partnership among Rizk Ventures, Safanad,
Square Mile Capital, Forum Partners, JMP
Group and Everwatch Capital.
Although the acquisition from Liberty gave
Workspace another 2. 1 million sf of suburban
Philadelphia properties, the largest share by state
came from Florida, with nearly three million sf of
office and flex space along with 8. 6 acres of developable land. Another 1. 1 million sf and 18. 1 acres is
in suburban Phoenix, and the remaining 1. 5 million
sf is located in Minnesota’s Twin Cities suburbs.
Early in 2016, Inven Trust Properties Corp.
sold off its student housing platform in order to
become a pure-play multi-tenant retail REIT.
Known as University House Community Group
Inc., the platform traded to a partnership of
Canada Pension Plan Investment Board, GIC
Pte. Ltd. and the Scion Group LLC in a transac-
tion valued at approximately $1.4 billion.
The deal was notable for the entrance of large
institutional investors into the niche student
housing market. While the deal represented an
exit for Oak Brook, IL-based InvenTrust, for
CPPIB and GIC it represented a point of entry into
the US student housing market. Inven Trust’s
adviser in the sale was the Skadden team of
Neil Rock, David Polster, Richard Witzel Jr.,
John Furfaro and Neil Leff.
Meanwhile, Blackstone bought a portfolio of
49 retail properties throughout the Northeast and
Texas from RioCan Real Estate Investment
Trust for $1.9 billion. The deal marked RioCan’s
exit from the US and allowed it implement a hedging strategy, focusing on Canada and specifically
it’s development pipeline, that’s expected to result
in net proceeds of approximately CA$1.2 billion.
Morgan Stanley and RBC Capital Markets acted
as RioCan’s advisors to the transaction, and
Goodmans LLP, Davies Ward Phillips &
Vineberg LLP and Saul Ewing LLP were RioCan’s
Blackstone was behind yet another major purchase when it bought a $1.8-billion portfolio of mixed
assets from Alecta. The Swedish pension fund
manager had hired a JLL team led by international
director Peter Nicoletti to sell a portfolio of 48 insti-tutional-grade office, grocery-anchored and high
street retail, multifamily and industrial properties in
the US and UK, primarily in California, the Southwest
and Northeast US and in and around London.
The private equity giant made a play in the
industrial sector, too, paying $1.5 billion to buy 52
properties from LBA Realty LLC. Eastdil Secured
brokered the sale of the 13-million-sf package,
primarily consisting of logistics facilities in port
and airport markets on the West Coast. The also
deal marked the return of Blackstone to the US
industrial sector, which it departed in 2015 in the
$8-billion sale of its IndCor portfolio to Global
Logistic Properties Ltd.
And that deal closed a few months after
Blackstone sold substantially all of the life-science
and medical properties of Wexford Science &
Technology LLC assets to Ventas Inc. for $1.5
billion in cash. The Chicago-based healthcare REIT
entered the university-affiliated life science real
estate business, gaining 23 operating properties
totaling 4. 1 million sf, and a pair of development
assets totaling 400,000 sf, affiliated with Duke
University and Wake Forest University.
Wexford came under Blackstone ownership as
part of the asset management giant’s $8-billion
acquisition of BioMed Realty Trust earlier in the
year. As part of this deal, Ventas entered into a long-term management and pipeline agreement with
Wexford, in which Ventas will own the existing real
estate portfolio, Ventas will have exclusive rights to
jointly develop future projects with Wexford, and
Wexford will continue to manage the portfolio.
JP Morgan Securities LLC and Kirkland &
Ellis LLP served as financial and legal advisors,
respectively, to Ventas. For Blackstone, Eastdil
Secured acted as financial advisor and Simpson
Thacher & Bartlett LLP was its legal counsel.