McShane, MetLife JV Buys 85 Acres in Redlands Business Center for $45M

A joint venture of the McShane Corp. and MetLife Real Estate Investments has acquired 85 acres of land from the Bixby Land Company at its Redlands Business Center in California's Inland Empire for $45 million. The alliance plans to build over 1.5 million square feet of industrial and office space on the site.

"The Redlands Business Center is one of the most desirable land sites in the Inland Empire and situated in a first-class business park community," John Dobrott, vice president of McShane Corp., said in a release. "Its proximity to the ports and central location along Interstate 10 makes it a highly strategic location for our team and the development we plan to build in our joint venture with MetLife Real Estate Investments. We estimate the property to accommodate multiple free-standing industrial buildings with the first phase breaking ground in the third quarter of 2008."

The property is part of the original 227-acre master planned business center in Redlands acquired by Bixby in 2000. The center is bordered by California Street, San Bernardino Avenue, Mountain View Avenue and Lugonia Avenue, just north of I-10. Current tenants include United States Postal Service, Ashley Furniture and Salton Inc.

"We have realized significant appreciation in this land since our initial acquisition which allows us to move this investment into a cash generating asset," noted Bill Halford, Bixby president and CEO. "Our current portfolio includes over 1 million square feet of industrial space throughout the Inland Empire." Halford added that the company would stay active in the area. Colliers Seeley represented Bixby in the deal.

A private REIT that acquires and develops commercial real estate in California, Bixby has a portfolio of more than 50 assets. Last week, the firm announced it had partnered with the New York-based real estate company Investcorp to acquire a portfolio of office and R&D facilities in Silicon Valley. Its first deal was the $85.4 million recapitalization of Airport Technology Park, a five-structure office property with 300,000 square feet of space on 17 acres in Santa Clara, according to a Dec. 12 CPN report. Bixby had bought the site three months ago for the same amount. Earlier this month, Bixby bought a two-building, 118,400-square-foot office and R&D property, also in Santa Clara, for $36.4 million. Applied Materials Inc. occupies both buildings under a triple net lease.

McShane Corp. is the real estate development and investment arm of The McShane Companies, a Chicago-based firm that builds master-planned industrial and office parks, medical offices, speculative industrial and office developments and build-to-suit properties. McShane and MetLife have teamed up before on at least one project. CPN reported Sept. 27 that the two companies were developing the Eagle Valley Industrial Center in Storey County, Nevada. The 1.2 million-square-foot, two-building industrial development is located within the 6,000-acre Tahoe-Reno Industrial Center. Construction of the first building is expected to be finished by June 2008.

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source: commercialpropertynews.com

Congress Passes Seven-Year TRIA Extension

In an eleventh-hour bipartisan deal, Congress has passed legislation that would extend and slightly expand the Terrorism Risk Insurance Act (TRIA). The move came with the passage yesterday by the House of Representatives, 360-53, of a bill that agreed with the one that the Senate passed last month, thus scraping earlier House-passed versions.

The bill extends TRIA, a federal backstop program for private insurers in the event of a major terrorist attack, for seven years. The earlier House version, supported primarily by the insurance industry and elements of the real estate industry, would have extended the measure by 15 years and provided lower dollar amounts to trigger the federal backstop. But the Senate and the Bush administration were against such major expansions, so the ultimate bill is not so different than the original TRIA. The new bill does, however, now cover acts of terrorism committed by Americans, something the original TRIA did not do.

"It's a very good bill," Clifton E. Rodgers Jr., senior vice president of the Real Estate Roundtable, told CPN this morning. "It was down to the wire, and you never know what's going to happen with legislation at the last minute, but we think it's a good result."

Rodgers cited the looming deadline, and the potential impact on a wobbly US economy that the loss of the federal backstop might have had, as prime motivators to get Congress to agree on an extension. "Given the current economic uncertainty, TRIA was something that Congress couldn't afford not to do," he said.

The measure now goes to President Bush. The president has indicated that he will sign the bill before the end of the year.

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source: commercialpropertynews.com

Younan Properties Continues Houston Office Push

Continuing its move into Houston-area office buildings, Los Angeles-based Younan Properties Inc. acquired three more properties in the Greenspoint/North Belt submarket of Houston for an undisclosed price. This portfolio addition brings its total of Texas properties up to 8 million square feet.

“We started a year ago to strongly acquire office buildings in Houston and all of the submarkets. The strength of the market has spilled into the submarkets and we have bought a lot of assets in a short period of time. I think the momentum in the Houston market is so strong, that this growth will continue for the next three to five years. It is the second hottest economy in the entire United States, generating more jobs than New York City. Those are really strong indicators,” Zaya Younan, chairman & CEO of Younan Properties, told CPN on Dec. 7.

Younan purchased Bridgewood I, Bridgewood II and Greenbriar Place (pictured), all located on North Sam Houston Parkway East in Houston. In Houston, alone, Younan owns almost 2.2 million square feet of office space. Bridgewood I at 654 N. Sam Houston Parkway E. has 135,000 square feet. The four-story office building was built in 1980 and is 87 percent occupied. Also built in 1980, Bridgewood II at 652 N. Sam Houston Parkway E. is four stories with 141,000 rentable square feet, and is 96 percent occupied. Greenbriar Place is a five-floor, 146,000-square-foot building, built in 1982 and recently renovated. It is 96 percent occupied.

These latest gets come on the heels of its Dec. 3 deal, when Younan bought the 19-story 260,000-square-foot 1010 Lamar. At that time, it was the company’s eighth Houston-area acquisition since June. Younan is now the second largest owner of Class A office space in Texas and is the top office landlord in Dallas, with about 12 percent of the city’s Class A assets. Younan is the second largest commercial office owner in Houston.

“We have been following the Houston market for quite some time. We started seeing indicators that this market’s fundamentals were improving and accelerating very quickly,” Younan has previously explained to CPN earlier this month. “We saw a tremendous migration of Fortune 2000 companies coming into this market. It has strong employment and lower unemployment than New York City.”

Younan Properties represented itself in the transactions. Darrell Betts of the Betts/Farber Southwest Regional Investment Team for Grubb & Ellis Inc. represented the seller, KBS Realty Advisors.

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source: commercialpropertynews.com

SL Green Wraps Up JV Acquisition of Citigroup Office Towers in Manhattan

Citigroup's digs at 388 and 390 Greenwich Street are now officially owned by SL Green and joint venture partner SITQ. The banking concern pocketed nearly $1.6 billion in the deal, and walked away with a triple-net lease that allows it to stay put as sole occupant of the 2.6 million square-foot complex for the next 13 years.

Developed in 1989 and 1986 respectively, the premier office buildings at 388 and 390 Greenwich sit between the World Financial Center and Tribeca submarkets. As per terms of the transaction, SL Green is majority owner of the properties, with a 50.6 percent interest, and SITQ holds a 49.4 percent stake. At a purchase price of approximately $598 per square-foot the partners picked up the structures at 50 percent of replacement cost. Cushman & Wakefield Sonnenblick-Goldman L.L.C. orchestrated the mortgage financing, which was provided by Westdeutsche ImmobilienBank AG and PB Capital Corp.

Citigroup's long-term lease agreement calls for the company to pay rent of $37.66 per square-foot for the first year; the figure will increase on an annual basis. Citigroup's likely motivation for selling was "to manage its earnings and find gains to offset coming losses from the credit crunch," Michael Knott, senior analyst with REIT industry research and consulting firm Green Street Advisors Inc., told CPN. "Sad but true."

New York-based SL Green, widely known as the largest office landlord in the city, is a self-managed REIT focusing predominantly on the acquisition, repositioning and management of office properties in Manhattan. The company’s Big Apple portfolio consisted of 31 properties totaling nearly 22.4 million square feet as of the close of the third quarter. Its holdings outside the city include 36 properties totaling approximately 7.9 million square feet in other areas of New York, as well as Connecticut and New Jersey. For SL Green however, the current credit climate is not entirely negative.

"We are a well-capitalized REIT, and we're well-positioned because of how we're capitalized and because we are able to transact quickly," Isaac Zion, managing director with SL Green, told CPN today. "So for us, there should be more opportunities for acquisitions."

SITQ, which is headquartered in Canada, is in an even better position.

"SITQ actually benefits from the subprime crisis in the U.S. as many of our competitors who needed important leverage to complete a deal cannot get the financing they need in the actual circumstances; therefore, we can take advantage of buying opportunities," a company spokesperson shared with CPN today.

Additionally, SL Green has investment interests in 10 retail properties offering an aggregate 393,000 square feet. Headquartered in Montreal, SITQ is a 23-year-old real estate investment, management and development firm with a portfolio of 114 office and business park properties totaling over 35 million square feet in Canada, the U.S., France, the U.K. and Germany.

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source: commercialpropertynews.com

$250M Master Plan for Philly Casino Approved

The Pennsylvania Gaming Control Board yesterday approved a $250 million Phase I master plan for the Philadelphia Park Casino and Racetrack in Bensalem, Penn. The plan was developed by Greenwood Gaming and Entertainment, which owns Philadelphia Park.

The approval came in the nick of time. It allows the facility to begin operating under a permanent license as of today. Pennsylvania’s Gaming Act required Philadelphia Park to operate under a conditional one-year license. “We could not renew the conditional license, which expires today,” a spokesperson for the PGCB told CPN today. “We have been going back and forth about their plans, and the Board didn’t want to grant a permanent license without understanding exactly what Greenwood Gaming was planning.”

In November of 2006, when PGCB issued the conditional license, Greenwood Gaming executives said they planned to spend $500 million on a new casino and entertainment facility adjacent to the existing track. A temporary casino was set up in the grandstands.

In May of this year, Greenwood Gaming decided to make the temporary casino permanent. The Pennsylvania Thoroughbred Horsemen’s Association, the Commonwealth’s Horseracing Commission, criticized the plan, noting that the existing facility had always been considered temporary and accusing the company of backing away from its original commitment.

Following several months of maneuvering by each side, Greenwood Gaming responded with the $250 million plan approved yesterday. The new facility will house 4,000 slot machines, a food court, several restaurants and a poker video bar. One of the restaurants will be adjacent to a multi purpose room expected to provide live entertainment.

“Over the past couple of months, the company really stepped up with the new plan that the Horsemen’s Association approved,” the spokesperson said.

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source: commercialpropertynews.com