In a partnership between one of Russia’s largest privately-owned financial-industrialconglomerates with one of New York’s most experienced private real estate developers, Alfa Group has formed a venture with Rosen Partners LLC to invest in commercial and residential real estate primarily in cities throughout the Northeast to Southeast of the United States. The venture will target assets in the $100 million-plus price range and focus primarily on multifamily, hospitality and office properties, as well as investing in debt, in major metropolitan markets.
The announcement of the venture was made jointly by Mikhail Fridman, Chairman of Alfa Group, and Jack Rosen, Chairman of Rosen Partners.
“Alfa looks forward to working with our long-time partners, the Rosens to take advantage of current market opportunities to acquire and manage a solid portfolio of properties,” Alfa Group Chairman Mikhail Fridman said in a statement. The entity counts Alfa-Bank (one of Russia’s largest privately-owned banks), TNK-BP (a Russian oil and gas company), Altimo (a wireless and fixed-line telecommunications company), X5 Retail Group (a large Russian food retailer) and Alfa Capital Partners (a private equity management firm) among its many holdings.
“We are aggressively pursuing investment opportunities where our entrepreneurial approach and hands-on, value-enhancement experience can make the most of the strong capital we have at the ready,” Rosen Partners Chairman Jack Rosen said in a statement. “We have a terrific relationship of trust and success with our partners from Alfa Group, and share a clear vision for the future of this venture.”
Hudson Realty Capital LLC, a New York City-based real estate opportunity fund, recently held the final close of its fifth fund targeting middle market debt transactions including new originations, note acquisition financing, DPO financing and existing loan purchases. Hudson Realty Capital Fund V and its related vehicles raised a total of $250 million earmarked for middle-market investments generally in the $5 to $35 million per-asset range.
“Fund V’s debt strategy specifically targets an underserved market segment that has been Hudson’s niche since our inception,” said Spencer Garfield, managing director who oversees the firm’s new loan originations. “We had established a fundraising goal of between $200 million and $250 million and are pleased to have met the high-end of our expectation.”
Through Fund V, Hudson has closed approximately $120 million in new originations and purchased approximately $450 million in sub- and non-performing loans. Highlights include a $14.15 million first-mortgage loan secured by a multi-story industrial building in Bronx, N.Y.; $13.1 million in note acquisition financing ultimately secured by a power retail center in central Mississippi; and a $10.2 million multi-trancheloan for a 23,306-sq.-ft. mixed-use building in Manhattan’s SoHo District.
In addition, Hudson is active in large loan-portfolio acquisitions and asset management activities. As part of its Fund V investment strategy, the company recently acquired two FDIC pools. These include a $139 million Colorado portfolio of 97 acquisition,and construction loans and southeastern pool of 109 commercial real estate assets with an unpaid principal balance valued in excess of $102 million.
Affiliates of Blackstone and DDR Corp. formed a joint venture to acquire a portfolio of 46 shopping centers currently owned by EPN Group.
The joint venture has executed a purchase and sale agreement to acquire the majority of the EDT Retail Portfolio in a transaction valued at $1.43 billion, including assumed debt of $640 million and at least $305 million of new financings. Blackstone Real Estate Partners VII, a real estate fund managed by Blackstone on behalf of its investors, will own 95 percent of the common equity of the joint venture and an affiliate of DDR will own the remaining 5 percent. DDR will also invest $150 million in preferred equity in the venture with a fixed dividend rate of 10 percent, and will continue to provide leasing and management services. In addition, DDR will have the right of first offer to acquire 10 of the assets under specified conditions.
The 46 shopping centers being acquired by the joint venture are open-air, value-oriented power centers located in 20 states, representing 10.6 million sq. ft. and are currently 90 percent leased. The top ten tenants by base rent include the TJX companies, Kohl's, PetSmart, Dick's Sporting Goods, Best Buy, Bed Bath & Beyond, JoAnn's, Old Navy, Walmart and Home Depot. More than 94 percent of the net operating income (NOI) is generated from prime assets, with 50 percent of such NOI derived from properties in the top 25 MSAs. The portfolio features average household income of approximately $88,000 and average population of over 300,000 people in a seven-mile trade area.
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Phillips Edison – ARC Shopping Center REIT Inc. has completed the seeding of the recently announced PECO-ARC Institutional Joint Venture I with the contribution of theBurwood Village Center to the joint venture. The joint venture also directly acquired an additional property, Cureton Town Center. The two transactions were added to the fund at an aggregate gross asset value of $30.9 million.
In the first transaction, completed December 21, 2011, Phillips Edison – ARC contributed its ownership interest in the Burwood Village Center, a grocery-anchored shopping center located in Glen Burnie, Md. The contribution value of Burwood Village Center (defined as the property’s gross asset value) was $17.0 million.
The joint venture then acquired Cureton Town Center, a 74,557-sq.-ft. grocery-anchored shopping center located in Waxhaw, N.C., for $13.9 million. The shopping center is anchored by Harris Teeter on a long-term lease through March 2027. Other key tenants include Fifth Third Bank, SunTrust Bank, Great Clips, Papa John’s, and Moe’s Southwest Grill. Cureton Town Center is 91.9 percent occupied.
Under the terms of the joint venture agreement, Phillips Edison – ARC and its partners will contribute approximately $109 million of equity capital, of which Phillips Edison – ARC will contribute approximately $59 million and its partners will contribute $50 million. The Joint Venture plans to leverage this capital with 50 percent debt financing to reach an approximate $218 million in acquisition capacity in order to purchase well-located grocery-anchored shopping centers.
UDR, a leading multifamily REIT, has formed a new real estate joint venture with MetLife, UDR/MetLife II, wherein each party owns a 50 percent interest in a $1.3 billion portfolio of 12 operating communities containing 2,528 apartment homes.
The 12 communities in the joint venture include seven from Denver-based UDR’s first joint venture with MetLife (UDR/MetLife I), which was formed on November 8, 2010, and five which have been newly acquired by UDR/MetLife II. The newly acquired communities, collectively known as Columbus Square, are all recently developed, high-rise apartment buildings located on Manhattan’s Upper West Side, and were purchased for $630 million.
The acquisition of Columbus Square was partially funded through a combination of 10-year, fixed- and floating-rate debt totaling $302.3 million at an average rate of 3.8 percent from Fannie Mae. Approximately 88 percent of this amount is fixed at a rate of 3.9 percent. The new joint venture also assumed $363 million of debt associated with the seven communities contributed from the UDR/MetLife I joint venture. In total, the debt associated with the UDR/MetLife II joint venture carries a weighted average of 4.2 percent and a term of nine years.
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Grosvenor Fund Management(GFM) has appointed Dietrich Heidtmann as managing director, client services, EMEA (Europe, the Middle East, and Africa) and Asia Pacific.
Heidtmann will be based in GFM’s Paris office and will be responsible for GFM’s capital raising and investor relations activity in these regions. He will work closely with GFM’s Alexia Gottschalch, who is based in Philadelphia, and whose executive leadership responsibilities include GFM’s client services and capital markets activities in North America.
Heidtmann joins GFM after nearly 20 years at Morgan Stanley within the capital markets and real estate investment banking area. Most recently he was managing director, head of real estate private capital markets, EMEA, where he was responsible for all third party capital advisory and capital raising activities in the EMEA region and parts of Asia.
Office REIT Brandywine Realty Trust formed a joint venture with Current Creek Investments LLC, a wholly owned subsidiary of Allstate Insurance Co., for the ownership and operation of three office properties in metropolitan Washington, D.C. area. The joint venture partners will also allocate $75 million each to pursue additional acquisitions of office properties in targeted submarkets in D.C.
Brandywine provided the initial three assets to the joint venture for $156 million. They include 3130 Fairview Park Drive, a 180,645-sq.-ft. office buildings in Falls Church, Va. with an occupancy rate of 84.5 percent; 3141 Fairview Park Drive, a 183,618-sq.-ft. office building in Falls Church, Va. with an occupancy rate of 82.4 percent; and 7101 Wisconsin Ave., a 223,054-sq.-ft. office building in Bethesda, Md. with an occupancy rate of 99.4 percent.
Brandywine received $120 million from the sale, after $2.9 million in transaction and joint venture formation costs had been taking out. The REIT will use the money to repay outstanding debt under its unsecured revolving credit facility and for general corporate purposes. Brandywine and Current Creek Investments will now each own 50 percent in the three assets.
For more information on the deal, go here.
Prudential Real Estate Investors, in a new joint venture with Lodging Capital Partners, has acquired the Austin Four Seasons, a 291-room luxury hotel located in downtown Austin, Texas. PREI, acting on behalf of institutional investors in its core real estate fund, is the real estate investment management and advisory business of Prudential Financial Inc.
The nine-story hotel contains 291 guest rooms, including 28 suites. Rooms contain high-end classical furnishings, with select rooms offering balconies or patios with lake views. Originally built in 1987, it features a lakeside spa and recreational area, pool, lounge and fitness center. TRIO, a steakhouse featuring a contemporary Texas grill menu, is also on site.