SL Green Realty Corp. and Jeff Sutton announced that their joint venture has entered into a 70-year leasehold at New York City’s 1560 Broadway, after previously acquiring the fee interest in the adjacent building at 1552 Broadway for $136.55 million.
The transactions enable the joint venture to assemble up to 48,897 square feet of space with direct Times Square frontage space that the joint venture intends to combine, upgrade and reposition as prime retail space.
The result of the repositioning will be a large and visible retail slot in Times Square. A key feature being marketed to selected retailers will be 190 linear feet of ground-level frontage, facing Times Square on Broadway and wrapping around onto 46th Street. 1552 Broadway also includes signage blanketing the façade and rooftop.
These transactions are the latest in a series of transactions jointly executed by SL Green and retail investor/operator Jeff Sutton. Previous collaborations have included the American Eagle and Aeropostale flagships in Times Square, and the Armani and Dolce & Gabbana stores at 717 Fifth, among others.
Andrew Mathias, President of SL Green, commented, “We have enjoyed notable success in our retail joint ventures with Jeff Sutton and believe this transaction has the potential to deliver positive investment results once again. The strategic combination of 1552 Broadway and 1560 Broadway will expand the square footage of a unique Times Square site in a way that dramatically increases the value and visibility of the space for both the retailer and landlord.”
Cypress Equities Secures $187M for Retail Properties
Cypress Equities companies announced that it has closed on loans related to three retail properties: Plantation Point, Rock Hill Galleria and West 7th.
Borrower Plantation Point Development LLC–a partnership with The Carlyle Group and an affiliate of Cypress—refinanced out an existing bank group and secured a $51.2 million loan with a four-year adjustable rate from CIBC Inc. for the 400,000-square-foot power center in Raleigh, N.C. Plantation Point features an assortment of retail and restaurants, including BJ's Wholesale Club, Marshalls, Lifestyle Family Fitness, Petco, On the Border, Mimi's Café, Dollar Tree, The Athlete's Foot, Mattress Warehouse and Big Lots. The power center, which opened in 2006, is presently 86 percent leased.
In another transaction, Bank of the Ozarks worked with borrower JTL Rock Hill LLC also an affiliate of Cypress to structure a three-year loan extension of $38.1 million for Rock Hill Galleria in Rock Hill, S.C. This extension will allow for the expansion and renovation of the existing J.C. Penney department store as well as improvements to an additional anchor space for a new family entertainment destination Superplay USA. The expansion of J.C. Penney will add 31,722 square feet to the scheduled renovation of the department store, while Superplay USA will fill 66,640 square feet, previously occupied by Steve & Barry’s.
Rock Hill Galleria is a 470,316-square-foot single-level enclosed regional shopping mall that opened in 1991 and is anchored by J.C. Penney, Belk, Sears and shadow-anchor Super Wal-Mart (not included in the overall square footage). After the scheduled expansion/renovation of J.C. Penney and the addition of Superplay USA, the mall will be 90 percent leased.
Earlier this summer, borrower Carlyle/Cypress West 7th LLP – another partnership between The Carlyle Group and an affiliate of Cypress, secured a $98 million bridge loan through GE Capital Real Estate for West 7th, a 660,865-square-foot office, retail and multi-housing development in Fort Worth, Texas. Completed in 2009, West 7th has 254,107 square feet of first floor restaurant, entertainment and retail space with tenants including LA Fitness, Movie Tavern, and Lucky Strike; a 103,220-square-foot class-A office building; and 345 fully occupied multi-housing units. Loan proceeds are refinancing existing construction loans from eight different lenders. The three-year, adjustable rate loan was structured with funds available to pay for future tenant improvements and leasing commissions.
DDR and Glimcher Realty Trust announced that the companies have entered into an agreement to swap two assets better aligned with the other's operating platforms and strategies.
DDR will sell Glimcher its open-air mall, Town Center Plaza, in Kansas City, Kansas; and Glimcher will sell DDR its power center, Polaris Towne Center, in Columbus, Ohio. The transaction is expected to close in the fourth quarter of 2011, subject to the satisfaction or waiver of customary closing conditions.
The valuations for both assets were set using consistent cap rates that are in line with the current market. These valuations were adjusted for the debt profiles on each property.
DDR and Glimcher believe the transaction is mutually beneficial given the core competencies of each organization, the proven execution of both companies' operating platforms and the long-term value creation potential of each asset.
Town Center Plaza, which Glimcher will purchase from DDR for approximately $139 million, is a 650,000-square-foot open-air mall anchored by Macy's and Dick's Sporting Goods and features Pottery Barn and Anthropologie. Town Center Plaza's sales productivity of more than $400 per square foot and 95 percent occupancy level will enhance the quality of Glimcher's mall portfolio.
Polaris Towne Center, which DDR will purchase from Glimcher for approximately $80 million, is a 700,000-square-foot asset anchored by Target, Lowe's, Kroger, Best Buy and TJ Maxx. Polaris Towne Center will be the seventh asset owned by DDR in the Columbus MSA. DDR will deploy the additional net proceeds from the sale of Town Center Plaza into prime assets currently under contract.
Regency Closes $600M Credit Facility
Regency Centers Corp. closed on the refinancing of its $600 million credit facility. The facility bears interest at an annual rate of LIBOR plus 125 basis points and is based on the higher of the company’s current corporate credit ratings from Moody's and S&P. The facility will expire in September 2015 and includes one, one-year extension option. In addition, the company has the ability to upsize the facility through an accordion feature to $1 billion.
Wells Fargo Securities LLC and PNC Capital Markets LLC acted as joint lead arrangers and joint book managers for the facility. Wells Fargo Bank N.A. is the administrative agent. PNC Bank N.A. acted as syndication agent and Bank of America N.A., JPMorgan Chase Bank N.A. and SunTrust Bank acted as documentation agents. Comerica Bank, Regions Bank, Royal Bank of Canada, Sumitomo Mitsui Banking Corp. and U.S. Bank N.A. are senior managing agents. Bank of Tokyo – Mitsubishi UFJ Ltd., Chang Hwa Commercial Bank Ltd. and Mizuho Corporate Bank Ltd. are all participants for the transaction.
American Realty Capital Properties Closes IPO
American Realty Capital Properties Inc. completed its “reasonable best efforts” initial public offering at a price of $12.50 per share (subject to certain discounts described in the prospectus).
The board of directors of ARCP further declared an annual dividend of $0.875 per share, payable in cash monthly, beginning in October 2011, on the 15th day of each month to stockholders of record at the close of business on the eighth day of such month. The company sold a total of 5,580,000 shares of common stock for proceeds of $69.75 million. The shares began trading on the Nasdaq Capital Market under the symbol ARCP on September 7, 2011.
The shares were sold through the company’s affiliated broker-dealer, Realty Capital Securities LLC and Ladenburg Thalmann & Co. Inc., a subsidiary of Ladenburg Thalmann Financial Services Inc. as the co-dealer managers of the offering.
ARCP intends to use the net proceeds from the offering to make property acquisitions, payoff property related indebtedness and related fees and expenses, and for general working capital purposes.
American Realty Capital Properties, Inc. is a newly organized Maryland corporation that intends to qualify as a REIT focused on owning and acquiring single tenant freestanding commercial properties subject to net leases with high credit quality tenants.
Johnson Capital Arranges $11M Loan
Johnson Capital, a national real estate investment firm, announced that Greg Richardson, managing director, and Scott Watson, vice president, of the firm’s Irvine, Calif.., office, have arranged $11.0 million in financing for Mandarin Plaza, a 225,808-square-foot retail property in Rowland Heights, Calif. The debt was provided by John Hancock Life Insurance Co.
Mandarin Plaza was built in 1984 on three ground-leased parcels and renovated in 2010. The center is fully leased to a 99-Ranch Market, over 20 inline shops and restaurants, and a 135-room Best Western Hotel.
The borrowers are private investors who are long-term owners of the property. The non-recourse, fixed-rate note has a 15-year amortization schedule and a 15-year term and was used to refinance out of a floating rate loan and lock into current low rates.
Other Notable Deals
GHP Office Realty sold a fully-leased retail and office property, 95 East Putnam Avenue in Greenwich, Conn. The building is 15,000 square feet and the sale price was $4.6 million. The property is fully leased to such tenants as Chatsworth Securities, The Federalist, Gabriel Shimon Hair Salon and Sanguine Inc. The buyers are local Greenwich based investors. Jamie Schwartz of GHP Office procured the buyers. The sellers were represented by Elizabeth Smith of Goldberg Weprin Goldstein LLP.
HFF announced that it has arranged a $3.7 million refinancing for Cullen Crossing, a 34,730-square-foot community retail center in Pearland, Texas. Working on behalf of Cencor Realty Services, HFF placed the 10-year, 5.39 percent, fixed-rate loan with American United Life Insurance Co. Completed in 2000, the property is 94 percent leased to tenants including Hallmark, Comcast Cable, Wingstop and Subway. Cullen Crossing is shadow-anchored by Kroger Signature and includes two pad sites occupied by Wells Fargo and McDonald’s that are not part of the collateral. The HFF team representing Cencor Realty Services was led by director Travis Anderson.
Robert Horvath and Todd Tremblay of Marcus & Millichap Real Estate Investment Services brokered the transaction of Hoxie Crossing, a 6,400-square-foot shopping center in Warwick, R.I. The sales price of $3,080,000 represents $481 per square foot and a cap rate of 7.47 percent. The center was developed by Brian Bucci, a regional developer in New England and North Carolina. Hoxie Crossing was built in 2008 and consists of three tenants: Starbucks, Papa Gino's and Verizon Wireless. Dover Garage II bought the property. All three of the leases are triple-net and offer scheduled rent escalations in the base and option periods.
Feldman Mall Properties Inc. announced the company's subsidiary, Ohio River Valley LLC, has entered into an earnest money contract with Tabani Acquisitions LLC of Dallas for the sale of a fee simple interest in a 9.1-acre parcel of undeveloped real estate adjacent to the Northgate Mall, located in Cincinnati, Ohio. The Purchase Price is $1.5 million payable all in cash at closing. The property was formerly owned by JC Penney Corp. In addition, FMP Northgate Outparcel LLC entered into a real estate purchase and sales agreement with Greer Land Co. Restaurants LLC, of Lexington, Ky., for the sale of FMPO's fee simple interest in a 0.4-acre parcel of undeveloped real estate adjacent to the Northgate Mall for $90,000. Lastly, Stratford Square Mall FMP Stratford LLC a subsidiary of the company, and FMC Stratford Mall Members LLC have modified the agreement for their respective sale and purchase of the Stratford Square Mall to provide for adjustments of the purchase price at the time of settlement based upon post-settlement projected cash flow. Due to the need for securing the lender's consent to transfer of the property, along with local municipal approvals, none of which have as yet been obtained, and the passage of time regarding the satisfaction of other conditions to settlement, the actual purchase price will probably be less than the $2.9 million previously indicated.
Helios Capital Advisors LLC advised HSRE Fund 18 LLC in the purchase of a non-performing note secured by a retail property in the Bronx. The par value of the note was $1.457 million and the transaction closed in 10-business days. The single-level, 9,700-square-foot property features eight retail units and is located on Wythe Place in the Mount Hope section of the Bronx.
The Boulder Group, a net leased investment brokerage firm, has completed the sale of a single tenant net leased Dollar General property located in Grovetown, Ga., for $987,000. The 9,100-square-foot building sits on a 1.32-acre parcel and is 100 percent leased to Dollar General on a long term basis. Randy Blankstein and Jimmy Goodman of The Boulder Group represented the developer in the transaction. The buyer was a private investor based in New Jersey and the seller was a private developer based in Georgia.