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Real Estate Roundup 8.31.20

Real Estate Roundup:

Acquisitions 

  • American Realty Advisors (ARA) has sold its 62-unit Williamsburg luxury rental building at 111 Kent Avenue to Yihai Group North for $45.3 million resulting in a $10.7 million loss. ARA paid Stellar Management and Largo Investments $56 million for the asset in 2012. (CO)

New to the market

  • Richard Ohebshalom’s Pink Stone Capital has scored a total of $87 million in financing for two Washington Street properties, in part to settle a long-running dispute with his father Fred over the 11,255-square-foot site at 111 Washington Street. Pink Stone closed on an $80 million loan from Carmel Partners and Fortress Investment Group and a $7 million loan from CBO Funding and Alwest Funding. The investment and development firm is now shopping for a buyer or a joint venture partner to begin developing the land. (TRD)
  • Pace University is looking to sell part of its Lower Manhattan campus near the Brooklyn Bridge. The school has come to market with One Pace Plaza East, a 462,500-square-foot, 18-story tower that houses dorms, classrooms and a library. The property was built in the late 1960s and is being pitched as a potential development site for a life sciences center. Once it’s torn down, it will allow for a development of approximately 850,000 square feet. If One Pace Plaza East is sold, the university would occupy the building through spring 2023, and the site would be handed over for redevelopment that fall. Real Estate Alert estimated the property will fetch $300 million. Taking rents average $90-100/sf for triple-net-lease life-science space, which compares with a first-quarter average of $81.71/sf for traditional office space. (REA)

Significant national deal 

  • CIM Group bought the 2,311-unit Southern Towers property in Alexandria, Va., for $506 million. The five-building property was sold by Snell Properties and Caruthers Properties in what is said to be the largest deal in the D.C.-area apartment market to date. (PR)

REITs

  • New York City’s Offices Are Empty. How to Gamble on a Recovery: The share prices of three of the city’s biggest commercial landlords— Vornado Realty Trust (VNO), SL Green Realty (SLG), and Empire State Realty Trust (ESRT)—have been hammered this year. Vornado and SL Green stocks are both down about 45%, while Empire State Realty is off more than 50%. Outside of the battered mall sector, these stocks are among the hardest hit real-estate investment trusts this year. Empire State Realty Trust suspended its dividend of 10.5 cents for the third and fourth quarters, noting that observatory attendance was running in the Aug. 23 week at just 4% of the 2019 level. (Barron’s)
  • Tech fever has spread to the once-staid warehousing industry. It is hard to see how European real-estate investment trust Segro can live up to the hype… Warehouses used to be considered the poor cousins of the real-estate family, partly because location was less important than for shops or offices, making it hard to build up a “prime” portfolio able to command steadily rising rents. E-commerce and home working have put both offices and shops out of favor, and burnished the appeal of so-called urban logistics—space near city centers, which is the core of Segro’s portfolio. But it is still easier to create new warehouse hubs than new shopping or working destinations, meaning competition will limit rental growth. (WSJ)

Other news 

  • Gerald D. Hines, a soft-spoken engineer who started out as a builder of small, anonymous warehouses in Houston and went on to transform the business of commercial real estate development by hiring blue-chip architects to build commercial skyscrapers around the globe, has died. (NYTimes)

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