Willard Jones To Focus on C Leasing in the CBD

CHICAGO-Jonathan Zimmerman, a former leasing director at locally based Prudential Rubloff, has formed his own firm calledWillard Jones Real Estate LLC. He has brought his leasing stable to his new company, about 1.2 million square feet of class C office space in the Central Business District.

His representation includes 100 W. Monroe, 29 S. LaSalle, 39 S. LaSalle, 205 W. Randolph, 309 W. Washington, 166 W. Washington, 180 W. Washington, 123 W. Madison, 819 S. Wabash, 1300 S. Wabash, 223 W. Erie, 160 E. Grand, 324 N. Michigan, 555 W. Jackson and 910 W. Jackson. The properties range from about 40% occupied to full, Zimmerman tells GlobeSt.com, averaging around 80% leased.

He says the company was named to honor a farmer who had owned the land which comprises the present-day CBD. The firm will concentrate on trying to attract the small and mid-sized tenants, Zimmerman says. “The C market downtown isn’t doing too bad, which is different in this downturn,” he says. “Usually in a bad market, C tenants are trying to leave to trade up. This time around it’s the opposite, a lot of A and B tenants are looking to cut back.”

The sales market for Class C buildings has also been quiet, he says. “The Southfield, MI-basedFarbman Group has been the most active, they were the ones who recently bought 205 W. Randolph,” Zimmerman said. “Outside of that, it’s been pretty quiet.” Farbman bought the 205 W. Randolph building, also known as the Randolph-Wells building, in July for $13 million.

CHICAGO-Marcus & Millichap Real Estate  Investment Services recently brokered the sale of a 16,047-square-foot Walgreens drugstore in Chicago. The sales price of $13 million represents $810 per square foot. Sean Sharko and Austin Weisenbeck represented the seller, Clark Street Development LLC, an affiliate of Mega Realty. Sharko and Weisenbeck also represented the buyer, an overseas-based private capital  investor. Loukas Kozonis provided general counsel services for Clark Street. “Walgreens signed an absolute-net, 75-year lease with zero landlord responsibilities,” said Weisenbeck in a statement. “The building was renovated from the ground up.” The property is located on Chicago’s North Side in the Andersonville neighborhood at 5440 N. Clark St.

CHARLESTON, IL-Solix Inc., a business process outsourcing company serving government and commercial clients, has renewed its call center lease for 23,000 square feet at 700 W. Lincoln Ave. here. Solix was represented by Cushman & Wakefield’s Peter Hamburger, Harlan Hollander, Walter Schoenberg, Robert Rudin, Jan Randall and Nate Brzozowski, and locally by Art Thomawith Coldwell Banker Commercial Devonshire Realty. Owner Latel LLC, an affiliate of Agracel Inc., was represented in-house.

CHICAGO-ARC, a Silicon Valley-based provider of document management technology and services to the architectural, engineering and construction industries, is moving its local office to 640 N. LaSalle St. Melissa Rubenstein and Brian Atkinson with Jones Lang LaSalle completed the lease transaction on behalf of the building’s owner, MAC Management Co. Inc., bringing the overall occupancy rate at the building to more than 95%. ARC will lease 9,025 square feet. The seven-story building sits on one full city block between LaSalle, Ontario, Wells and Erie streets. Jon Milonas and Brad Serot of CBRE represented ARC in the transaction. The company’s former Chicago office was at 200 N. Michigan Ave.

ST. CHARLES, IL-Venture One Real Estate LLC, through its acquisition fund, VK Industrial I LP, has closed on a 146,959-square-foot building at 3940 Stern Rd. here. Venture One purchased the building in a sale-leaseback transaction with Colony Inc. who signed a lease for the entire facility. Colony designs, manufactures and delivers fixtures and point-of-sale products for many retail chains in the United States. The seller was represented by Nick Eboli, John Sharpe and Mike Androwich with Lee & Associates of Illinois. VK was represented by Shaun Burke with H and B Realty.

LOUISVILLE, KY-Brixmor Property Group announced a 2,940 square foot consignment store,What I Found In the Attic, recently opened at Plainview Village here. Brixmor is the owner of the center and was represented by Robin Stanley.

ELIZABETHTOWN, KY-Love Funding has closed on an $8.1 million construction-to-permanent loan for Tunnel Hill Apartments, a 100-unit market-rate apartment under development here. Tammy Tate, a VP, arranged the loan through the Federal Housing Administration’s 221(d) loan insurance program. By utilizing FHA financing, Tate enabled the property’s owner to lock in a low fixed interest rate for the duration of the construction period and 40-year permanent loan term. The project, which is being developed on a 9.5 acre site on Tunnel Hill Road, will consist of 12 two-story buildings containing eight units each, and one two-story building containing four units.

McFARLAND, WI-Mid-America Real Estate Corp.’s  Net Lease Investment Group recently completed the sale of a triple net lease for a 14,550 square-foot freestanding Walgreens building in this a suburb of Madison. The building was purchased by SAS LLC, a local group of investors, for $4 million. The seller was local developer Larson Beach LLC. Terms included an assumable loan, which expires in November 2017. The absolute  NNN lease has 21 years remaining on the initial term.Tom Fritz, Mark Goldberg and Dan Cohen comprised the Mid team representing the seller.

GERMANTOWN, WI-Hartford, WI-based full-service tradeshow contractor Wisconsin Expo Inc. recently purchased a 55,000-square-foot, high-bay warehouse facility here from Harris Bank. James Young and David Barry with Cassidy Turley Barry brokered the transaction. The buyer will expand its operations and relocate to the property from its 15,000-square-foot Hartford location, which CT Barry is  marketing for sale.

SCOTTVILLE, MI-Signature Associates has negotiated the sale of a 24,480-square-foot retail building at 467 US 10 Highway here. Bryan Bench represented the seller, LN Real Estate, and the buyer, Edward Spyker Properties LLC. The buyer intends to lease the building to Paddle Sports Warehouse, a web-based catalog, retail and distribution company for the water sports industry.

 

SOUTHFIELD, MI-Mid-America Real Estate-Michigan Inc. has arranged a 2,700-square-foot lease in Harvard Row at 11 Mile and Lahser roads here. James Hill and William LaKritz represented the landlord, Nationwide, in this transaction. The new  tenant is Joseph’s Deli. Marko Doljevic, the tenant, formerly owned Main Street Deli in Rochester, MI.TRAVERSE CITY, MI-Cherry Republic has received approval from the Michigan Economic Growth Authority for a multi-use brownfield redevelopment project that will support the construction of a retail outlet and food production facility and new residential spaces here. The Grand Traverse Brownfield Redevelopment Authority will use local and school tax capture valued at $2.3 million to demolish two buildings and construct a five-story mixed-use development in the city. The Cherry Republic Center Project will include administrative offices, a primary retail outlet and food production facility for Cherry Republic products. The plan may also include up to 13 residential units with underground parking. The project is expected to create up to 30 permanent full-time jobs, with a total capital investment of approximately $13 million. KANSAS CITY, MO-Hunt Midwest Real Estate Development Inc., in cooperation with the R.H. Johnson Co., has announced that pet specialty retailer PETCO will open a new store at 600 NE Vivion Rd. in the North Oak Village shopping center today. While there are nearly 1,100 PETCOstores across the U.S., this location is the first built using a new prototype store design and it is the first building owned by PETCO corporate. This 13,500-square-foot location optimizes space and replaces the retailer’s oversized 40,000 square foot operation at 2600 Burlington in North Kansas City, MO.OMAHA, NE-Dunkin’ Donuts has signed a multi-unit store development agreement with existing franchisee Savoureux Corp. for 12 new restaurants in North Omaha, Nebraska and Sioux City, IA with the first restaurant planned to open in 2013. Savoureux is led by NFL greats Kris Brown andZach Wiegert, who have teamed up with Jeff Woodbury, a principal of Woodbury Corp., andDavid Scott, CEO of Tetrad Corps., an Omaha-based real estate and investment firm.

BISMARCK, ND-Patrick Minea, SVP and managing director with NorthMarq Capital has arranged first mortgage financing in the amount of $9.4 million for Sunset Ridge Apartments, a 179-unit multifamily property here. Financing was based on a 10-year term and a 30-year amortization schedule and was arranged for the borrower by NorthMarq through its seller-servicer relationship with Freddie Mac.

SISSETON, SD-The Boulder Group, a net-leased investment brokerage firm, has completed the sale of a single tenant net leased Pamida property at 1712 Hwy. 10 here for $2 million. Pamida is the sole occupant of the 32,000-square-foot retail building that was developed in 2008. Sisseton is a city on the Lake Traverse Indian Reservation in Roberts County.  Randy Blankstein and Jimmy Goodman represented both parties in the transaction; the seller was a Midwest based developer and the buyer was a private buyer based in California. Pamida has 12 years of lease term remaining on an original 15-year triple net lease.

Sources: http://www.globest.com/news/12_269/chicago/office/-317814.html

By Robert Carr

 

Berkshire Square Sells for $17M

WYOMISSING, PA- Berkshire Square, a 112,119-square-foot shopping center was a “slightly more complicated transaction,” according to Marcus & Millichap senior director Mark Taylor, thanks to the accompanying nine-parcel condominium project, Berkshire Square Condominiums. On the bright side, the property was 97% occupied at the time of sale. It traded for $16.6 million at $148 per square foot.

But why was the deal a little more complicated than most? Taylor admits, “The condominiums did complicate the process because we were selling condominium units and we were selling different structures which were not attached to each other.” Additionally, “the loan assumption process was the thing that took the longest and stretched the deal out for six months,” but in the end “both the buyer and seller worked well together during that process.”

Owned by WP Realty of Bryn Mawr, PA, Berkshire Square sold to Paramount Realty Services Inc. of Lakewood, NJ. The shopping center is anchored by a Redner’s Warehouse Markets and a 23,144-square foot Staples, a recent statement from Marcus & Millichap expresses. Additional tenants include HobbyTown, Sally Beauty Supply, Subway, and Supercuts.

With a packed occupant list, Taylor explains to GlobeSt.com, “There’s very little upside potential because there was one small vacancy when we closed and you can’t build any more square footage on the property because the property is maxed out for zoning.”

He adds, “The only upside is rent growth. The rents there are market or slightly below market I think as leases come up given the lack of space in that submarket, the new owner will be able to make some rent increases.”

For more thought leadership from Marcus & Millichap Real Estate Investment Services, check out “StreetSmart,” a blog by Hessam Nadji, the firm’s managing director of research and advisory services. The blog provides Thought Leadership positions on a variety of commercial real estate-related issues. Click here to watch Nadji on CNBC’s “Realty Check” program talking about multifamily and the housing crash. For more information on the Thought Leadership program, contact Scott Thompson at sthompson@alm.com.

CVS Sells in Seven Days Despite Odd Lease Terms

PORT ORANGE, FL-Despite an odd lease deal, a CVS Pharmacy has traded hands for $2.78 million. The 10,884-square-foot single-tenant leased property had 18 years left on the triple net lease, but the tenant is only paying base rent for the next 15 years.

Leon Brockmeier and Patrick O’Halloran, retail investment specialists in Marcus & Millichap’s Tampa and Atlanta offices, had the exclusive listing to market the property on behalf of the seller, a Missouri-based private investor. The listing agents also secured the buyer of the property, a limited liability company from New York.

“This was an unusual deal because of the lease terms,” Bryn Merrey, vice president and regional manager of M&M’s Tampa office, tells GlobeSt.com. “If this had been a typical CVS deal it would have traded at about a 7.2 cap rate. This one sold at a 7.65 cap rate. It was also a former zero cash flow that the seller originally purchased from the developer.”

Even with the special circumstances, the vintage 2004 CVS, complete with its drive-through on about three acres of land, sold within seven days of the original listing. The strong credit tenant and the high store sales helped attract an investor. It’s another example of the strong surge in single tenant deals in Central Florida.

“Strong credit single tenant deals are literally flying off the market,” Merrey says. “We listed a single tenant Tuffy Auto Care property last week. It went to contract within a week at 99.5% of list price.”

Although Merrey says he’d be surprised if single tenant sales got any stronger, he doesn’t expect the demand for these assets to slow in 2012. With so many investors getting burned over the past few years, Walgreens, CVS and Rite-Aids are more attractive even with lower returns.

“Strong single tenant properties still represent a flight to safety,” he says. “I wonder if we’ll see people moving down the chain on the quality side just to get into some of these deals next year.”

For more thought leadership from Marcus & Millichap Real Estate Investment Services, check out “StreetSmart,” a blog by Hessam Nadji, the firm’s managing director of research and advisory services. The blog provides Thought Leadership positions on a variety of commercial real estate-related issues. Click here to watch Nadji on CNBC’s “Realty Check” program talking about multifamily and the housing crash. For more information on the Thought Leadership program, contact Scott Thompson at sthompson@alm.com.

Plots & Ploys: Just Add Liquor

Plots & Ploys: Just Add Liquor

Mall owner Pennsylvania Real Estate  Investment Trust is ready to embark on a $15 million redevelopment of the aging Moorestown Mall in tiny Moorestown, N.J., after finally gaining a key component that it coveted for years: booze. Two ballot initiatives championed by PREIT won approval from Moorestown voters Nov. 8 to exclude the one million square-foot mall from the town’s 100-year-old ban on liquor sales.

PREIT now intends to pay the town $4 million for four liquor licenses, which it will use to open four fine-dining restaurants as part of the planned redevelopment.

PREIT, owner of 38 U.S. malls, failed in a 2007 attempt to woo sleepy Moorestown into going wet. This time, PREIT crafted two ballot questions: the first asking voters to allow alcohol sales in Moorestown, and the second asking them to restrict those sales to the mall. The first won 60% of votes cast; The second, 57%. PREIT spent roughly $300,000 on the campaign.

“We conducted ourselves like a candidate running for office,” says Joseph Coradino, president of PREIT’s mall-management division. “We hired a polling company, a strategist, PR group and a local law firm. I was speaking in front of the Rotary, the Moorestown Business Association and doing town-hall calls with 7,000 people on the line.

” Moorestown Mall, built in 1963, has a 30% vacancy rate. The redevelopment plans also call for replacing the mall’s four-screen theater with a 12-screener.

PREIT intends to open the restaurants in late 2012 and the theater in 2013.

—Kris Hudson

http://online.wsj.com/article/SB10001424052970203710704577054644201166880.html

http://www.netsourceadvisors.com/index.php?option=com_content&view=article&id=111:latest-blog&catid=38:frontpage-articles&Itemid=170

 

 

 

 

Reno Mall Gets $125M Refinancing

RENO, NV-Meadowood Mall SPE LLC has secured a 10-year, fixed-rate loan through Goldman Sachs Commercial Mortgage Capital LP on Meadowood Mall, a regional mall here in Reno, NV. Holliday Fenoglio Fowler worked on behalf of the borrower.

The loan is replacing maturing debt on the property. Meadowood Mall, LLC includes entities partially owned by Simon Property Group/the Mills Ltd. Partnership.

Meadowood Mall is located at 5000 #1 Meadowood Mall Circle off Highway 395 in Reno. The property is close to Reno International Airport, the Reno/Sparks Convention Center and the Peppermill and Atlantis Casino Hotels.

Anchors at the mall include Macy’s South, Sports Authority, Macy’s North, JCPenney and Sears. The HFF team representing the borrower included executive managing director John Pelusi, managing director Claudia Steeb and director Tina Derderian.

As GlobeSt.com previously reported, the Mills Corp. purchased the mall as part of its $1-billion acquisition of regional malls from General Motors Asset Management LLC. The deal, gave Mills a 50% interest in nine properties across the country, one of which was Meadowood Mall. Mills, known for its large value megamalls, first started acquiring traditional malls in 2002, when the company bought six properties for $621 million.

 

http://www.globest.com/news/2016_2044/west/315791-1.html

 

By Natalie Dolce

www.globest.com

Natalie Dolce Natalie Dolce, editor of the West Coast region for GlobeSt.com and Real Estate Forum, is responsible for coverage of news and information pertaining to that vital real estate region. Prior to moving out to the Southern California office, Natalie was Northeast bureau chief, covering New York City for GlobeSt.com. Dolce’s background includes a stint at InStyle Magazine, and as managing editor with New York Press, an alternative weekly New York City paper. In her career, she has also covered a variety of beats Arthur Frommer’s Budget Travel magazine, FashionLedge.com, Co-Ed magazine, and has also freelanced for a number of publications including MSNBC.com and Museums New York magazine. Contact Natalie Dolce.

 

CVS Caremark 3Q profit rises 7 percent!!!

WOONSOCKET, R.I. (AP) — CVS Caremark Corp.’s third-quarter earnings climbed 7 percent, as a long-term contract and acquisition boosted the pharmacy network claims it processed.

The Woonsocket, R.I., drugstore operator on Thursday also raised the low end of its full-year profit forecast, saying the Caremark pharmacy benefits business performed better than it expected during the quarter.

CVS CAREMARK REPORTS 3rd QUARTER RESULTS (download)

Shares of CVS Caremark rose $1.25, or 3.5 percent, to $37.02 in morning trading.

CVS Caremark reported net income of $868 million, or 65 cents per share, in the three months that ended Sept. 30. That compares with $809 million, or 59 cents per share, a year ago.

Adjusted earnings, which exclude amortization tied to acquisitions, were 70 cents per share, above analyst expectations for 67 cents, according to FactSet.

Revenue grew 12 percent to $26.67 billion. Analysts expected $26.76 billion.

CVS Caremark runs the second-largest chain of drugstores in the U.S., afterWalgreen Co. CVS had 7,304 stores at the end of the quarter, up from 7,152 a year ago. Its Caremark business is one of the largest pharmacy benefits managers, which handle drug benefits for health plan members and sponsors.

Revenue from its pharmacy services business, which includes Caremark, climbed 26 percent because of a long-term contract with health insurer Aetna Inc. and the acquisition of Universal American Corp.’s Medicare prescription drug business. Pharmacy network claims processed during the quarter rose 40 percent to 179.2 million.

Caremark profits have slumped in the last few years because of lost contracts, but CVS said it still expects profits will grow in 2012.

Pharmacy benefits managers are paid to reduce costs for health plan sponsors and members. CVS Caremark handles hundreds of millions of prescriptions ever year and uses its size to negotiate lower prices with manufacturers. During the third quarter its two largest competitors, Medco Health Solutions Inc. and Express Scripts Inc., agreed to combine. If regulators approve that deal, the resulting company would be about twice the size of Caremark.

Caremark is winning new business. On Jan. 1, CVS began administering Aetna’s retail pharmacy network and managing purchasing and prescription filling for Aetna’s mail-order and specialty pharmacy businesses. The 12-year contract is still ramping up, but it is expected to bring CVS Caremark $8.2 billion in revenue in 2011.

CVS also expanded its Medicare Part D business by acquiring the Universal American unit at the end of April for $1.25 billion, and it said that deal will bring $5.5 billion in additional revenue in 2012.

At the end of the quarter, CVS sold its TheraCom consulting business to AmerisourceBergen Corp. for $250 million. That deal closed Tuesday.

Total revenue from drugstores rose 4 percent to $14.69 billion. Revenue at stores open at least a year, a key measurement of retailer health, grew 2.3 percent. CVS said its business is not being affected by the dispute between Walgreen and Express Scripts, which may stop doing business together at the end of the year. However CVS said that if Walgreen stops participating in Express Scripts networks, it will be in position to benefit.

The company now expects 2011 adjusted earnings of $2.77 to $2.81 per share, compared with its previous forecast of $2.75 to $2.81 per share. Analysts had expected $2.76

 

IRS Extensions for Hurricane Irene Victims

The IRS has provided tax filing extensions, including the 45-day  identification period and 180-day  exchange period on IRC  1031 like kind exchanges, for persons affected by Hurricane Irene. This tax relief is granted on a county-by-county basis for at least some counties in the following states and territories: Connecticut, Massachusetts, New Hampshire, New Jersey, New York, North Carolina, Pennsylvania, Puerto Rico and Vermont.* Please check the IRS disaster website at www.irs.gov for the most current information about which counties are covered as well as for additional details and modifications to the disaster current notice.

Pursuant to Revenue Procedure 2007-56 § 17, in order to qualify for an extension of the 45-day identification period or 180-day exchange period, the following criteria must be met:

(1) The taxpayer resides in the Covered Disaster Area, or the relinquished property or  replacement property is located within the Covered Disaster area, or the taxpayer is otherwise an affected taxpayer as defined in the Notice, or the taxpayer has difficulty meeting the exchange deadlines due to reasons given or similar to examples stated in Revenue Procedure 2007-56, section 17; AND

(2) The relinquished property was transferred (or the parked property was acquired by the  EAT in a  reverse exchange under Revenue Procedure 2000-37) on or before the disaster date listed in the Notice; AND

(3) The deadline to be extended fell on or after the date of the presidentially declared disaster.

If the taxpayer meets these criteria, then the 45-day or 180-day deadline that falls on or after the disaster date is extended to 120 days from that deadline. Note the date may not be extended beyond the earlier of one year from the original deadline date or the due date (including extensions) for the tax return for the year of the disposition of the relinquished property. Typically, if an extension request was filed, the latest extension date is September 15 for calendar year filing corporations and October 15 for non-corporate taxpayers.

Please confirm with your tax advisor if you are entitled to an extension and what your extended deadline dates may be.

Please refer directly to Revenue Procedure 2007-56, and the IRS website for further details.

* As of this writing, the following counties are included in the IRS’s notice:

Connecticut: Fairfield, Hartford, Litchfield, Middlesex, New Haven, New London, Tolland and Windham;

Massachusetts: Berkshire and Franklin;

New Hampshire: Carroll and Grafton;

New Jersey: Atlantic, Bergen, Burlington, Camden, Cape May, Cumberland, Essex, Gloucester, Hudson, Hunterdon, Mercer, Middlesex, Monmouth, Morris, Ocean, Passaic, Salem, Somerset, Sussex, Union and Warren;

New York: Albany, Bronx, Clinton, Columbia, Delaware, Dutchess, Essex, Greene, Herkimer, Kings, Montgomery, Nassau, Orange, Otsego, Putnam, Queens, Rensselaer, Richmond, Rockland, Saratoga, Schenectady, Schoharie, Suffolk, Sullivan, Ulster, Warren, Washington and Westchester;

North Carolina: Beaufort, Bertie, Brunswick, Camden, Carteret, Chowan, Craven, Currituck, Dare, Duplin, Edgecombe, Gates, Greene, Halifax, Hertford, Hyde, Johnston, Jones, Lenoir, Martin, Nash, New Hanover, Northampton, Onslow, Pamlico, Pasquotank, Pender, Perquimans, Pitt, Tyrrell, Vance, Warren, Washington, Wayne and Wilson;

Pennsylvania: Bucks, Chester, Delaware, Lehigh, Luzerne, Monroe, Montgomery, Northampton, Philadelphia, Sullivan and Wyoming

Puerto Rico: Arroyo, Aguas Buenas, Caguas, Canóvanas, Carolina, Cayey, Cidra, Coamo, Comerío, Fajardo, Gurabo, Humacao, Jayuya, Juncos, Las Piedras, Loíza, Luquillo, Naguabo, Naranjito, Orocovis, Patillas, Ponce, Río Grande, San Juan, San Lorenzo, Trujillo Alto, Vega Baja, Vieques, and Villalba.

Vermont: Addison, Bennington, Caledonia, Chittenden, Franklin, Lamoille, Orleans, Orange, Rutland, Washington, Windham and Windsor

http://www.netsourceadvisors.com/index.php?option=com_content&view=article&id=64:irs-extensions-for-hurricane-victims&catid=38:frontpage-articles&Itemid=170

 

RARE Investment Opportunity requiring ‘End-of-Year-Closing’ Schedule.

High Net Worth Individuals and High Taxable Income Earners have a rare opportunity to secure a better tax profile by exercising a purchase opportunity in current  NNN marketplace that ends on 31 December 2011.

Bonus Depreciation

The Economic Stimulus Act of 2008 also temporarily allowed qualifying businesses to recover the costs of capital expenditures faster than the ordinary depreciation schedule would allow by permitting these businesses to immediately write off 50% of the cost of depreciable property purchased in 2008 for domestic use. The Recovery Act extends this temporary benefit for qualifying property purchased and placed into service through December 31, 2009 and extended to December 31, 2011.

Under the tax laws passed in December 2010, bonus depreciation was extended and increased to 100% for qualified investments made after September 8, 2010 through the end of 2011. In addition, 50% bonus depreciation will be available for calendar year 2012.

Investment Grade Tenants who have provided a full corporate guaranty for tenant obligations under a long term lease (+20 years), also, qualify for Bonus Depreciation, if they qualify by being the first owner of this sale-leaseback portfolio and complete the transaction by year end of 2011.

Please take a quick review of the attached generic list. Many are also located in tax-free states regarding income taxes on an ongoing basis. These properties can be acquired with assumable, non-recourse, self-amortizing debt, in place, 11.25% over the debt, with a down payment as low as 10.11%.

Call or email to execute your Confidentiality Agreement.  This portfolio is not on the open market.

http://www.netsourceadvisors.com/index.php?option=com_content&view=article&id=66:end-of-year-closing&catid=38:frontpage-articles&Itemid=170

Sabey Data Acquires Verizon Tower for $120M

NEW YORK CITY-In its first Manhattan acquisition, Seattle-based developer Sabey Data Center Properties decided to go big. The company snatched up the 32-story, one-million-square-foot tower at 375 Pearl St. for $120 million, which will be repurposed into a new, state-of-the-art multi-tenant commercial data center here.

Built in the mid-1970s as a central office for New York Telephone, now known as Verizon, the tower has been a staple of Lower Manhattan’s skyline for more than 30 years. In an interview with GlobeSt.com, Dave Sabey, president of Sabey Corp,, tells us that the building will reemerge as “the next big thing” in the scientific community, as well as contribute to the resurgence of the high-tech market in Lower Manhattan.

“It’s a big splash for us and we have been anticipating this for some time,” Sabey says, explaining that the West Coast-based firm starting looking at properties across the five boroughs 18 months ago. The company purchased the tower from M&T Bank and Taconic Investment Partners. “We are building a national and eventually a global network of data centers with connectivity. New York is so important as a corner of the country because of its confluence of cable, density of population and density of data. This in our network was an absolute must.”

Expected to open in the first quarter of 2012, the building–which will be renamed to “Intergate.Manhattan”–will include 18 megawatts of power already in-place, and Sabey plans to increase its power capacity to 40 megawatts of available, redundant power. The company will provide data center-ready shell space for tenants that choose to design, build, and operate their own centers within the building.

But before the downturn, a joint venture of Taconic Investment Partners and Square Mile Capital bought a condominium interest in 29 floors of the 32-story property from Verizon for $172 million in the fall of 2007, proposing to renovate the building’s limestone façade into a glass curtain wall. Although the plan fell through, Verizon still owns three floors as a condominium interest.

While the timing of Taconic’s investment “was tough,” Sabey says the building would have performed fine as an office rehabilitation, but the tower’s high-ceilings, heavy floor loads and existing power sources make the site a prime location for a new data center. “Because this was an analog switch for Verizon, all the connectivity was there,” he says, describing that access to power, data and fiber were essential criteria for the company. The site is also near the Brooklyn Bridge, One Police Plaza and City Hall. “It’s a perfect rehabilitation and perfect match for redevelopment for what we want to do. It’s one of those serendipitous things.”

And as New York’s Capital Region emerges as the “Silicon Valley of the East,” Sabey predicts that the convergence of data and molecular science will bring jobs back down to the city. “One of the modules that we are bringing to New York is enormous computing power for the research institutions that are here,” Sabey says, who is also a member of the Institute For Systems Biology’s board of directors. It will bring other people from around the world to again center around New York.”

John Sabey, president of Sabey Data Center Properties, says in a statement that the largest areas of growth for data centers are in the financial, internet-based service and networking, insurance, and healthcare sectors, particularly in life sciences research. “For these enterprises and for multi-national companies originating in Europe and looking to establish a North American data center location, New York is typically a prime choice,” he says.

Bill Shanahan and Darcy Stacom of CB Richard Ellis represented the sellers. Cushman & Wakefield’s Jeffrey Heller and Sean Brady represented Sabey in the transaction. Ron Solarz ofEastern Consolidated represented Youngwoo & Associates, who has an interest in the property and is a local partner.

 

Kilroy Buys 174,000-SF Office Building for $33M

SAN DIEGO-Kilroy Realty Corp. of Los Angeles has paid $32.7 million for the 174,000-square-foot Scripps Wateridge office building at 10770 Wateridge Circle in the Sorrento Mesa submarket, where the L.A.-based REIT owns about a dozen other properties. Kilroy did not name the seller or brokers in its announcement of the acquisition, but according to industry sources the seller was MetLife and the sale was brokered by the Cushman & Wakefield team of executive director Jeff Cole from the company’s Orange County office, along with senior director Steve Rowland and director Michael Roberts, both of the C&W San Diego office.

Scripps Wateridge is a two-story building that is 96% leased, was built in 1989 and is close to several other Kilroy Realty properties. Kilroy’s web site lists 12 other properties that it owns in the Sorrento Mesa submarket.

The Scripps Wateridge acquisition is one of two that Kilroy closed recently, including the 488,000-square-foot Key Center office building in Bellevue, WA, a sale that was reported on GlobeSt.com yesterday. Kilroy, which paid $215 million for the Key Center, is in various stages of negotiations on six additional acquisitions that would total approximately $414 million, the company said in its announcement regarding the Scripps Wateridge deal. Four of the projects are in Northern California and two are in Southern California. and all are projected to close in the second half of 2011.