Global Viewpoints

Chartres Lodging Group of San Francisco Honored with Turnaround Atlas Award for Adam’s Mark Hotel Portfolio Deal

Edited: Jennifer Brenner
Source: Chartres Lodging Group

The Chartres Lodging Group, LLC, of San Francisco continues to get honored within the real estate and financial industries for its 2008 acquisition and ongoing repositioning of the five-property Adam’s Mark hotel portfolio – this time with a prestigious Turnaround Atlas Award presented by the Global M&A Network during ceremonies in Chicago.

Specifically, Chartres received Global M&A Network’s “Real Estate, Lodging and Services Turnaround of the Year” Turnaround Atlas Award for the complicated, high-profile transaction, which was also recognized as a Major Industry Award finalist in the “Special Situation M&A Deal of the Year” (above $100 million) and “Turnaround Atlas Award of the Year” (above $500 million) categories.

Chartres Lodging Group Partner Bruce Blum served as a speaker at the Global M&A Network’s Distressed M&A Summit, held in conjunction with the June 23 awards.

Acting with majority equity stakeholder Goldman Sachs’ Whitehall Street Global Real Estate Fund, Chartres Lodging acquired the five remaining Adam’s Mark hotels in Dallas, Denver, St. Louis, Indianapolis and Buffalo from HBE Corp., of St. Louis, totaling more than 5,000 rooms, and is currently completing more than $220 million to renovate and reposition the properties. The plan includes rebranding partnerships with Sheraton in Dallas and Denver, and with Hyatt Regency in St. Louis.

“We are extremely honored to be recognized for our team’s efforts in repositioning this portfolio of supertanker convention hotels,” said Rob Kline, Chartres Lodging co-partner and founder. “While this is certainly a difficult operating environment, the recession will end and our all-in investment basis will be less than 50 percent of the replacement cost.”

Says Maki Bara, the other Chartres Lodging co-founder and partner: “Investing $220 million in the renovation of these properties at this time may appear to be a bold decision. However, we have been able to achieve pricing that is 10 to 20 percent below expectations. And, upon renovation completion this year, the properties will be positioned as new, exciting places to meet, and right-priced as companies emerge from the recessionary environment.”

Part of the Global M&A Atlas Awards global brand, the Turnaround Atlas Awards honor outstanding leaders, professionals, deals and firms from the distressed, special-situation M&A and turnaround communities. This year’s winners circle included 26 companies in 34 award categories.

Presented by FOX Business News anchor Jeff Flock at the Hotel Allegro Chicago, the Turnaround Atlas Awards represent the third major industry award for Chartres Lodging’s Adam’s Mark portfolio acquisition. Earlier this year, the transaction received “Distressed Deal of the Year” honors at the M&A Advisor 3rd Annual Turnaround Awards and a prestigious 2008 “Deal of the Year” designation by Real Estate Forum magazine.

Brookfield Properties Achieves Substantial Completion on Bay Adelaide Centre West in Toronto

Edited: Jennifer Brenner
Source: Brookfield

Brookfield Properties Corporation (BPO: NYSE, TSX) and its Canadian-based subsidiary, BPO Properties Ltd. (BPP: TSX) announced that Bay Adelaide Centre West – a new, 51-storey, 1.2-million-square-foot office tower in the heart of downtown Toronto’s financial core – has been certified substantially complete. The building is 73% pre-leased to major firms such as KPMG, Heenan Blaikie, Goodmans and Fasken Martineau DuMoulin. Most of these tenants have already commenced work on their new premises.

“We are proud to be the first landlord in 17 years to deliver to the Toronto market a modern, architecturally advanced office building that will provide our tenants with an environmentally friendly and technologically efficient workplace,” said Tom Farley, President & CEO of Canadian Commercial Operations for Brookfield Properties.

Bay Adelaide West, built to achieve the LEED Gold standard (Leadership in Energy and Environmental Design), was designed by WZMH Partners. The 11-storey historic façade of the former National Building has been integrated into the design, rebuilt and restored to its 1926 grandeur. Toronto’s PATH system, 27 kilometers of public walkway and retail located one level below grade, will be completed in September with the connection through Bay Adelaide Centre into Scotia Plaza to the south and to The Bay department store to the north.

Bay Adelaide Centre West is the first significant office development project completed in the city’s financial core since 1992. Bay Adelaide Centre West is the first phase of a 2.6-million-square-foot project; phases two and three of the complex will likely be a mix of office and residential.

“Bay Adelaide Centre represents a major achievement within our development portfolio,” said Ric Clark, Chief Executive Officer of Brookfield Properties. “It is the fifth office building in our North American portfolio to be delivered in the past twelve months, it marks the successful completion of our final active development, and it came in ahead of schedule and under budget.”

One of North America's largest commercial real estate companies, Brookfield Properties owns, develops and manages premier office properties in major U.S. and Canadian cities. The portfolio is comprised of interests in 108 properties totaling 75 million square feet in the downtown cores of New York, Boston, Washington, D.C., Los Angeles, Houston, Toronto, Calgary and Ottawa. Landmark assets include the World Financial Center in Manhattan, Brookfield Place in Toronto, Bank of America Plaza in Los Angeles and Bankers Hall in Calgary.

Cohen & Steers Announces Merger of REIT Closed-End Funds

Edited: Jennifer Brenner
Source: Cohen & Steers

The boards of directors of Cohen & Steers Advantage Income Realty Fund, Inc. ("RLF"), Cohen & Steers Worldwide Realty Income Fund, Inc. ("RWF"), Cohen and Steers Premium Income Realty Fund, Inc. ("RPF") and Cohen & Steers Quality Income Realty Fund, Inc. ("RQI") have approved mergers, subject to approval by the relevant funds' shareholders, in which each of RLF, RWF and RPF would merge with and into RQI. Shareholders of RLF, RWF and RPF will become shareholders of RQI, and will not recognize a gain or loss for federal income tax purposes as a result of the mergers.

In approving the mergers, the directors considered, among other things, each fund's investment objectives, net asset value and stock price performance, income-generating strategy and expenses, and potential cost savings based on operational efficiencies. The mergers will permit fund shareholders to pursue substantially similar investment objectives in a larger fund that has similar investment policies and anticipated lower expenses.

RLF, RWF, RPF and RQI shareholders will be asked to vote to approve the merger of their fund at a special meeting to be held on October 22, 2009. The mergers, if approved, are expected to occur in the fourth quarter of 2009. More information will be contained in the proxy materials RLF, RWF, RPF and RQI will mail to their shareholders.

Cohen & Steers is a manager of income-oriented equity portfolios specializing in U.S. and international real estate securities, large cap value stocks, utilities and listed infrastructure, and preferred securities. The company also offers alternative investment strategies such as hedged real estate securities portfolios and private real estate multimanager strategies. Headquartered in New York City, with offices in London, Brussels, Hong Kong and Seattle, Cohen & Steers serves individual and institutional investors through a broad range of investment vehicles.

Grubb & Ellis Company Names David Susoreny Executive Vice President, Corporate Services Group

Edited: Jennifer Brenner
Source: Grubb & Ellis

Grubb & Ellis Company, a leading real estate services and investment firm, has named David Susoreny executive vice president, Corporate Services Group. The promotion is effective immediately.

Susoreny is a 12-year veteran of the company, having most recently served as managing director, Corporate Services Group, which provides multi market account management for corporate clients to ensure the highest level of integrated real estate services. In this role, he will oversee the company's Corporate Services directors as well as the company's International, Project Management and Strategic Consulting businesses.

"David has shown a tremendous aptitude for assessing a client's real estate needs and applying our service offerings in a way that is strategic and flexible, creating real estate programs specifically tailored to a client's needs both in terms of geographic footprint and service requirements," said Jack Van Berkel, president, Real Estate Services. "In the 12 years he has been with Grubb & Ellis, his ingenuity in servicing clients has gone unmatched."

Most recently, Susoreny was responsible for major corporate relationships totaling in excess of 170 million square feet throughout the globe. Over the past 12 months, he played a key role in several of the company's largest new and expanded client relationships.

He began his real estate career in 1992 as a tenant representative with UGL Equis, and joined Grubb & Ellis in 1997 as an associate director, Corporate Services Group. He was promoted to director in 2000, and to managing director, responsible for the Great Lakes Region, in 2003. In 2009, he received the company's Hal Ellis Achievement Award, created in honor of the company's co-founder who passed away late last year following a long illness. The Hal Ellis Award recognizes an outstanding client-facing individual who exemplifies the attributes that Hal most valued - professional excellence, leadership and high ethical standards.

Susoreny holds a bachelor's degree from Indiana University and is a member of CoreNet Global.

NHI announces $55.5 million purchase/leaseback transaction

Edited: Jennifer Brenner
Source: NHI

National Health Investors, Inc. (NYSE:NHI) announced today a $55.5 million purchase/leaseback transaction involving four Texas skilled nursing facilities with 595 beds owned by affiliates of Legend Healthcare, LLC, a privately-owned company (“Legend”). The average age of the facilities is 5 years. Legend is currently a lease customer of NHI and specializes in the operation of transitional care and skilled nursing facilities.

Three of the four facilities were purchased by NHI on June 30, 2009, for a total of $39.7 million, with the fourth facility expected to be purchased by NHI for $15.8 million no later than August 1, 2009. The purchases are funded from NHI’s accumulated cash liquidity. The four facilities are being leased to Legend over 15 years at an initial lease rate of 10% plus annual increases. Legend has the option after 7 years to purchase the facilities.

“This transaction is representative of the execution of our business strategy which is focused on investing in high-quality real estate assets with a solid return to NHI shareholders,” stated Andy Adams, NHI Chairman and CEO.

Justin Hutchens, NHI President and COO stated, “We are delighted to expand our business relationship with Legend Healthcare. Their operations continue to demonstrate excellent patient care delivery and strong financial performance.”

National Health Investors, Inc. is a health care real estate investment trust that specializes in the financing of healthcare real estate by first mortgage and by purchase and leaseback transactions.

Cracker Barrel Completes $57.6M Sale-Leaseback Transaction

Edited: Jennifer Brenner
Source: Cracker Barrel

Cracker Barrel Old Country Store, Inc. has announced the closing of the sale-leaseback of its retail distribution center and fourteen of its store locations, with a fifteenth expected to close on or before July 31st. The transactions are expected to produce aggregate gross proceeds of approximately $57.6 million, consisting of $12.4 million relating to the distribution center and slightly more than three million dollars for each of the 15 store locations. The sale-leaseback transactions were the result of a competitive bidding process.

Commenting on the transactions, Cracker Barrel Chairman, President and Chief Executive Officer Michael A. Woodhouse said, “We are pleased that these transactions, essentially completed a month ahead of schedule, generated proceeds within the initial estimated range first announced in February, especially considering the recent volatility of the real estate market.” The Company indicated that the net proceeds of the transactions will be used to reduce outstanding debt, as previously announced.

Headquartered in Lebanon, Tennessee, Cracker Barrel Old Country Store, Inc. was established in 1969 and operates 588 company-owned locations in 41 states.

$350 Million Financing Arranged by HFF for World-Class Laboratory/Office Facility in Boston’s Longwood Medical Area

Edited: Jennifer Brenner
Source: HFF

The Boston and San Diego offices of HFF (Holliday Fenoglio Fowler, L.P.) have arranged $350 million in financing for the Center for Life Science | Boston, a 700,000+-square-foot, Class A research facility in Boston’s Longwood Medical Area.

Working exclusively on behalf of BioMed Realty Trust, Inc., HFF senior managing director Tim Wright, executive managing director John Fowler and director Janet Krolman placed the five-year, 7.75% fixed-rate loan with three lenders: John Hancock Life Insurance Company, TIAA-CREF and Westdeutsche ImmobilienBank AG.

Completed in 2008, the Center for Life Science | Boston is located at 3 Blackfan Circle, across from Harvard Medical School and directly connected to Children’s Hospital Boston and Beth Israel Deaconess Medical Center in the Longwood Medical Area of Boston. The property has 18 stories of laboratory and office space that is leased to Beth Israel Deaconess Medical Center, Children’s Hospital Boston, Dana-Farber Cancer Institute, Immune Disease Institute and Kowa Company, Ltd. The property also includes a six-level, 750-space underground parking garage.

“We believe the completion of a loan transaction of this size in the current credit environment reflects the lenders’ recognition of the quality of the property, tenancy and sponsor,” said Wright. “We appreciate the due diligence and support of John Hancock, TIAA-CREF and Westdeutsche ImmobilienBank.”

BioMed Realty Trust, Inc. is a real estate investment trust (REIT) focused on Providing Real Estate to the Life Science Industry®. The company’s tenants primarily include biotechnology and pharmaceutical companies, scientific research institutions, government agencies and other entities involved in the life science industry. BioMed Realty Trust owns or has interests in 69 properties, representing 112 buildings with approximately 10.5 million rentable square feet, including approximately 640,000 square feet of development in progress.

Corio pays € 126.5 m for Príncipe Pío shopping centre in Madrid

Edited: Jennifer Brenner
Source: Corio

Corio has acquired 95% of the shares of Príncipe Pío Gestion S.A. (hereafter: ‘PPG’) from Grupo Riofisa S.A. (owned by Inmobiliaria Colonial S.A.) (hereafter: ‘Riofisa’). PPG is the long term leaseholder of the Príncipe Pío shopping centre. The shopping centre has a GLA of 28,680 m² and is connected to the Príncipe Pío railway station and has 900 underground parking places. The centre is located to the west and close to the city centre of Madrid and has 12.5 million visitors per annum.

The total investment amounts to € 126.5 m (including all acquisition costs), and produces a Net Initial Yield of 7.8%. Corio will take over the favourable loans in PPG leaving € 56.5 m to be financed by Corio, resulting in a net return on equity of around 13%. Corio will own 95% of the shares in PPG. The other 5% are held by Administrador de Infraestructuras Ferroviarias (hereafter: ‘ADIF’). ADIF is the Spanish state owned company that manages the railway infrastructure. The freehold to the land and buildings is owned by ADIF, PPG operates the shopping centre on the basis of a lease agreement with ADIF ending in 2050.

Príncipe Pío is a dominant first class shopping centre in Madrid at a very good location to the west and close to the city centre. It is located on top of a very busy train/metro station and a bus interchange which enhances footfall. In addition, it is located close to and with direct access to the ring road as well as important connection roads from the ring to the city centre. Its location and its retail and entertainment mix results in being one of the favourite meeting places for the inhabitants of Madrid (especially the Western part). This is also supported by the fact that it is one of the only shopping centres in Madrid that is open on every Sunday. Around 4.5 million people reside within a 20 minute drive from the shopping centre and around 1 million people reside within a 10 minutes drive. Consequently, Príncipe Pío has a very high footfall of around 12.5 million people per year.

The shopping centre was opened late 2004. It is linked to the 125 year old Príncipe Pío railway station which has been renovated to suit retail. The shopping centre has been developed by Riofisa. The two parts are joined together by a glass and steel covered entrance hall which gives the shopping centre a modern and light look and feel.

The shopping centre operates on three floors (basement, ground floor and first floor) and three underground parking levels. The basement is fully dedicated to fashion and accessories, the ground floor has a mix of tenants (leisure, restaurants, fashion and a supermarket) and the first floor has a food court and a cinema. The anchor tenants are: Opencor supermarket, H&M, Zara, Bershka, Massimo Dutti, Pull & Bear and Mango. Corio will take over the management of the shopping centre in the first half of 2010.

Corio is positive on the long term outlook of the Spanish retail property market. It has therefore been one of Corio’s objectives to strengthen its position and the quality of the portfolio in Spain. The acquisition also strengthens Corio’s position towards tenants because Príncipe Pío is a preferred shopping centre for tenants. With this acquisition, the value of Corio’s portfolio in Spain (based on the 31 March 2009 valuation) is around € 588 m (excluding the minority share of ADIF) and it increases Corio’s share in Spain from 8 to 10%.

EU: Promotions in CBRE’s Capital Markets and Valuation Team

Edited: Jennifer Brenner
Source: CBRE

CB Richard Ellis (CBRE) Hungary announces that Tim O’Sullivan has been appointed Head of Capital Markets and Graham MacMillan has been promoted to Head of Valuation. Both RICS-qualified experts relocated from the UK within the last year to join the Budapest office of CBRE, reinforcing their respective teams’ leading position on the market.

Tim O’Sullivan has been responsible for investment transactions at CB Richard Ellis since joining in 2008. Before joining CBRE, he worked for Cushman & Wakefield Investors in London where he was responsible for acquisitions across all sectors. Before working in London he was with Cushman & Wakefield in Scotland where he worked in both the Business Space Department and Capital Markets Team focusing on office and industrial transactions. During his time in the United Kingdom he acquired a number of buildings in Newcastle, Manchester and Glasgow. He holds a Degree of Business Science in Estate Management from Heriot Watt University in Edinburgh and during his third year at university he undertook a one year exchange program at Curtin University of Technology in Perth, Western Australia. He became a professional member of the Royal Institution of Chartered Surveyors (RICS) in 2005.

Graham MacMillan, originally from the West Coast of Scotland, has been working at CB Richard Ellis in Budapest for over a year. As Head of Valuation, he prepares single asset, portfolio and development valuations across all market sectors for loan financing, acquisition and internal auditing purposes. Prior to joining CBRE Graham was an Associate Director of Allied Surveyors Scotland based in Glasgow, where he specialised in valuation, acting for a number of private investment companies, individuals and all major lending institutions. He graduated in 2000 with an Honours Degree in Property Management and Development and after passing the Assessment of Professional Competence (APC) gained professional Membership of the Royal Institution of Chartered Surveyors (MRICS) in 2003 as a Chartered Valuation Surveyor.

“We are convinced that with their significant professional experience and property market knowledge, our international Capital Markets and Valuation teams will continue to establish the market leading position of CB Richard Ellis.” – commented Adrienne Konthur, Managing Director of CBRE Hungary. “The promotion of these talented and experienced colleagues is the acknowledgement of their excellent work and reflects our commitment to ensure that our clients always get top quality services from dedicated, highly qualified experts.”

Jones Lang LaSalle Joins BICEP Coalition to Address Global Energy Policy

Edited: Jennifer Brenner
Source: Jones Lang LaSalle

Jones Lang LaSalle, the leading integrated financial and professional services firm specializing in real estate, has signed the Business for Innovative Climate and Energy Policy (BICEP) project developed by Ceres in cooperation with founding members such as Nike, Starbucks and Sun Microsystems.

Jones Lang LaSalle is the first real estate sector firm to sign onto BICEP, described as "a new arena for business involvement in advancing climate and energy policies to counter the far-reaching risks and challenges posed by global climate change." Jones Lang LaSalle is also the sole real estate industry member of Ceres, a national coalition of organizations committed to addressing sustainability challenges.

"In joining BICEP, we at Jones Lang LaSalle are reinforcing our support for collaboration between government policy-makers and business leaders to reduce the environmental impact of business activities on the environment while remaining sensitive to business needs," said Lauralee Martin, Chief Operating and Financial Officer of Jones Lang LaSalle. "We are committed to act responsibly in our operations and to implement innovative energy management and sustainability solutions in the real estate services we deliver to clients."

In April, Jones Lang LaSalle announced its global carbon footprint as well as the total reduction of carbon emissions the firm helped its clients achieve in 2008. The firm reported that in 2008 it was responsible for emitting an estimated 44,000 metric tonnes of CO2 into the atmosphere, equating to 3.2 tonnes per fulltime, non-reimbursable employee. During the same period, the firm helped clients reduce their carbon emissions by nearly 10 times that amount--more than 438,000 tonnes--and generated $95 million in energy savings for them.

Jones Lang LaSalle's Energy and Sustainability Services professionals and management teams eliminated nearly 2.7 trillion British thermal units of energy consumption worldwide. This accomplishment resulted in reduced carbon emissions by an amount equal to the annual emissions of 80,000 cars or 40,000 households. The company also reiterated its support of sustainability in its operations, evidenced by its acquisition of hybrid vehicles for its U.S. maintenance fleet as well as its continued support of ACT: A Cleaner Tomorrow, a firmwide program to educate and engage employees on environmentally conscious actions they can take at work and in their daily lives.

Business for Innovative Climate and Energy Policy (BICEP) was formed by Ceres in 2009 with the goal to work directly with key allies in the business community and with relevant members of Congress to pass meaningful energy and climate change legislation that is consistent with our core principles. BICEP offers a new arena for business involvement in advancing climate and energy policies to counter the far-reaching risks and challenges posed by global climate change. BICEP members believe that climate change will impact all sectors of the economy and that various business perspectives are needed to provide a full spectrum of viewpoints for solving the climate and energy challenges facing America.

Ceres is a leading coalition of investors, environmental groups and other public interest organizations working with companies to address sustainability challenges such as global climate change. Ceres directs the $7 trillion Investor Network on Climate Risk.