According to Hutchison of Alcole Capital, “We secured an outstanding 10-year fixed, non-recourse loan on multiple non-contiguous parcels. The loan was closed at a 5.75 percent interest rate amortized over 30 years. This lender offered the most competitive rates and flexibility for our borrower in a very timely manner. Despite the general real estate credit crunch and the severe tightening of underwriting standards by lenders, we have continued to secure large loans for our clients.”

July 14, 2010 - It’s almost a done deal. Toronto, Ont.-based RioCan has waived due diligence conditions and firmed up a contract to acquire eight Texas shopping centers with Oak Brook, Ill.-based Inland Western Retail Real Estate Trust Inc. in an 80/20 joint venture agreement. RioCan will plunk down $123.3 million for its majority stake, leaving Inland Retail to hold on to a minority interest in the assets that it acquired within the last several years.

RioCan and Inland Western announced the formation of their institutional joint venture in May. The eight new format and grocery-anchored assets of which RioCan will now acquire 80 percent account for approximately 1.1 million square feet of retail space in the Houston, Dallas-Fort Worth and Austin markets. The Houston portion of the portfolio includes the 311,300-square-foot Riverpark Shopping Center, the 87,900-square-foot Bear Creek Shopping Center, the 148,000-square-foot New Forest Crossing and the 116,400-square-foot Cypress Mill Plaza. The Dallas-Fort Worth assets encompass Suntree Square, a 96,500-square-foot grocery-anchored shopping center; the 91,400-square-foot Coppell Town Center grocery-anchored property; and Great Southwest Crossing, a 92,300-square-foot new format retail center. Rounding out the portfolio is Southpark Meadows I, a 266,800-square-foot new format retail center in Austin.

The $123.3 million that RioCan will pay for its portion of the joint venture endeavor consists of a $55.1 million net equity investment and the assumption of a $68.2 million portion of existing mortgage debt. For RioCan, the transaction will allow the REIT, Canada’s largest, to continue its quest of acquiring premium quality defensive assets in major markets with growth potential.

For Inland Western’s part, the partnership with RioCan paves the way for the company to make good on one of its 2010 initiatives: execute future accretive asset acquisitions through joint ventures.

The portfolio purchase is on target to close in stages, subject to lender consents, during the third quarter of this year.

Jul 13, 2010 - Denver–National marketing and technology firm Creativity for Rent has acquired online marketing consultancy Multifamily Edge, and combined the two companies to create Denver, Colo.-based Engrain. With the rebranding of the two entities as Engrain, the companies’ offerings will be deftly united under one new umbrella.

The idea to merge Creativity for Rent and Multifamily Edge evolved “as a response to needs in the industry regarding usability,” Jennifer Cyphers, President of Multifamily Edge, tells MHN. Cyphers, who will have an equity stake in Engrain, will step into the role of president at the new company, while Brent Steiner, President of Creativity for Rent, will take on the position of Engrain CEO.

Engrain will meld Creativity For Rent’s esteemed design and custom website development services with Multifamily Edge’s demand generation expertise to provide multifamily companies with a substantially more comprehensive group of services that will include usability consulting, technology audits, user interface design and custom website and software development. “It will allow us to create user experiences that are much more intuitive; they’ll be easier and more engaging,” Cyphers says.

With both Creativity for Rent and Multifamily Edge bringing their coveted capabilities and well-regarded reputations to the proverbial table, there will be an inherent demand for Engrain’s services, and that demand is expected to grow. “A lot of people are engaging us to do usability audits of their websites, to perform facelifts, if you will,” she adds. “They want their users to be more engaged.”

Engrain’s expanded platform will include new offerings as well, Cyphers notes. “We will be releasing new products with emerging technologies throughout the year.”

July 13, 2010 - In Bellevue, Wash., the change in ownership of City Center Plaza, leased in its entirety to Microsoft’s Bing division, is turning heads. Phoenix-based Cole Real Estate Investments’ $310 million all-cash acquisition of the nearly 583,179-square-foot office property from Boston-based Beacon Capital Partners marks one of the largest commercial real estate transactions in the U.S. to date this year.

City Center Plaza, developed by Wright Runstad & Company for Beacon Capital, sits about 10 miles east of Seattle at 555 110th Ave. N.E., in Bellevue’s central business district. Microsoft has been on the tenant roster since the 26-story building opened its doors in May 2009, and the company has a triple net lease agreement to occupy its digs through 2024. City Center Plaza also features approximately 19,800 square feet of fully occupied retail space and a parking facility with over 1,400 spaces. The office tower was developed as a premier asset, but Microsoft has taken the property to an even higher echelon by investing funds beyond the $43 million Beacon Capital had allotted for tenant improvements.

A bevy of City Center Plaza-size transactions in the Seattle area are not on the horizon, however, transaction activity in general is on the upswing, smaller trades have been buoying activity. While the majority of the second quarter’s 29 office transactions were under $20 million, the overall transaction volume rose to $430 million, the highest since the fourth quarter of 2007’s total of $843 million, according to a report by real estate services firm Grubb & Ellis Co. Additionally, the average per-square-foot sales price jumped in the second quarter from $150 to $200, a 25 percent quarter-over-quarter increase.

“There is a lot of capital placed to acquire properties and Seattle is on everyone’s radar screen,” Richard Wieneke, Senior Vice President with Grubb & Ellis, told CPE. “There is still a gap between what sellers want to sell for and what buyers want to pay, but it has narrowed somewhat, and there are a lot of transactions around the corner.”

The investment market, he adds, is a split market; there are two types of buyers. “There are those entities looking for properties with high-level credit tenancy on long-term leases. They’re buying for the cash flow and they’re paying prices that are almost unheard of. They’re buying the assurance of a AAA credit tenant.” And then there are those investors who want to acquire assets to capitalize on the future–the eventual decline in vacancy rates and increase in rents. “They’re willing to take on a substantial amount of risk.”

Of the two investor types, the group of buyers seeking troubled assets will account for the anticipated continued increase in sales activity. “There’s the impending debt maturity problem, so within the next 12 to 36 months, we’ll see more distressed property sales,” Wieneke said.

July 13, 2010 - Newport Beach, Calif.-based KBS Realty Advisors’ KBS Real Estate Investment Trust II fund has acquired the Dallas Cowboys Distribution Facility in Irving, Tex. The 400,100-square-foot warehouse is fully leased to companies related to Dallas Cowboys merchandising activities.

Carrying the address of 2500 Regent Blvd., the Dallas Cowboys Distribution Center occupies a 22-acre parcel within the 500-acre Dallas Fort Worth International Commerce Park, a master-planned business park development endeavor spearheaded by Dallas-Fort Worth International Airport. DFW Airport is larger than the island of Manhattan and DFW Airport officials’ original rationale for developing the park was to land the shuttle. Now the site is being developed to draw in companies seeking premium space near airport transportation and the benefits that come from a location within a foreign trade zone.

Developed by Bandera Ventures Ltd. in 2009, the state-of-the-art two-story building serves as the Cowboys’ merchandising headquarters, with Dallas Cowboys Merchandising Ltd., Dallas Cowboys Pro Shops L.P. and Blue Star Graphics and Design making their home at the site. The tenants lease the space at a cost of $3.86 per square foot, for a total base rent of $1.5 million. KBS shelled out $19 million for the property acquisition, which includes a 40-year ground lease.

Commercial real estate services firm CB Richard Ellis represented the seller in the transaction, while KBS relied on internal representation. “There was a ton of interest in the property,” Josh McArtor, senior vice president with CBRE’s Institutional Group, told CPE. “A lot of people want to have a piece of the Cowboys. They’re buying a piece of the Cowboys enterprise and they’re getting a credit tenant.”

And the facility is much more than an industrial property. It features retail space and, with a full data center, “serves as the technological nerve center that runs and backs up the distribution center, Cowboys Stadium and Valley Ranch [team headquarters],” McArtor said.

KBS’s purchase of the Dallas Cowboys Distribution Facility dovetails with anticipated investment trends in the Dallas-area industrial market. As market conditions begin to stabilize in the second half of the year, institutional investors will have high quality properties with stable tenancy on their radar, and opportunity investors will pursue well-located properties with occupancy challenges or financial issues, according to a second quarter report by commercial real estate research firm Delta Associates.

Jul 12, 2010 – Dallas–At Park 4200, a new 80-unit Dallas apartment property, general contractor Galaxy Builders Ltd. employed a construction method that saved project developer Throckmorton L.P. both money and time. Galaxy switched the conventional concrete for cold-formed steel (CFS) to build part of the project and it made all the financial difference.

Galaxy partnered with Nucon Steel and structural engineer AG&E Associates to configure WDG Architecture Inc.-designed Park 4200’s construction with a combination of CFS and concrete. The company relied on cast-in-place concrete to develop the building’s three-level parking structure, but for the six floors of residential units that sit atop the garage, the contractor turned to CFS.

Characterized by light weight, high strength and a non-combustible composition, CFS has been a favorite for commercial development, but it is not so commonly employed in multi-family projects. “Minimal schedule interruptions in winter weather, termite and mold resistance, and noncombustible construction are some of the reasons why steel framing has come to the forefront as one of the most feasible load-bearing building materials for mid-rise construction,” Don Moody, General Manager, Nucon Steel, tells MHN. “The significant cost savings on the overall project and the competitive position of steel framing against other construction materials was a decisive factor for using steel at Park 4200.”

Utilizing both materials instead of only concrete resulted in a savings of $4.20 per-square-foot for Park 4200’s 99,000 square-foot interior space, or approximately $400,000. “Park 4200 is the perfect example of how steel framing can be used for structural applications on multi-story buildings as high as nine stories,” Mark Nowak, President of the Steel Framing Alliance, tells MHN. “At the Steel Framing Alliance our goal is to continue to provide resources to both owners and builders so that they can explore innovative and cost-effective steel framing solutions for their next project.”

Additionally, incorporating CFS shaved three months off the construction schedule, marking a 16 percent decrease in the original timeline. The delivery of a project under budget and before deadline is every developer’s dream.

July 12, 2010 – The Carlyle Group, acting on behalf of its two-year-old Carlyle European Real Estate Partners III fund, has just snapped up a 1.6 million square-foot chunk of the Central London office market at the bargain price of $1 billion. The international private equity concern acquired six fully leased landmark office properties that had been part of the portfolio that secured the White Tower 2006-3 plc CMBS, which was placed in liquidation.

Each of the properties involved is leased in its entirety to a single corporation, a coveted feature given that the average vacancy rate in the Central London office market is presently 7.7 percent, according to a second quarter report by commercial real estate services firm CB Richard Ellis. Among the assets Washington, D.C.-headquartered Carlyle has snapped up are Alban Gate, a 382,000-square-foot property leased to JP Morgan Chase. The Thames Portfolio accounts for the remaining five assets and includes the 420,000-square-foot complex at 60 Victoria Embankment, also home to JP Morgan Chase; the Ludgate House, a 170,000-square-foot building occupied by United Business Media; the 350,000-square-foot Samson House, home to IBM; the 200,000-square-foot Millennium Bridge House where UBS is the name on the tenant roster; and BSI Tower, a 140,000-square-foot property occupied by BSI Management Systems Ltd. Together, the six assets generate an annual sum exceeding $93.7 million in rent.

“Whilst each property benefits from an existing secure income profile, there are considerable longer term opportunities across the portfolio for active asset management and redevelopment, where we believe we can add significant value,” Robert Hodges, Managing Director, Carlyle European Real Estate, noted in a prepared statement.

Carlyle’s steal of a deal comes as a result of the global financial crisis to which so many commercial real estate owners have fallen victim, including London-based investor Simon Halabi, who defaulted on loans secured by a group of nine assets, including the six that Carlyle just acquired. CBRE Loan Servicing Ltd. was appointed special servicer for the White Tower CMBS in August 2009, at which point the firm noted that the total value of the nine properties was approximately $1.4 billion pounds.

As for financing the mega-purchase, Carlyle pulled off what many investors may view as the impossible, given the current state of the credit market across the globe. To finance its acquisition of the Thames Portfolio, the company secured funds from an international consortium of banks led by Société Générale, which acted as structuring bank and arranger along with BNP Paribas, Crédit Agricole and ING. AXA REIM was also involved. Additionally, Société Générale served as arranger and sole bookrunner for financing for Alban Gate’s financing.

Jul 9, 2010 - Newport Beach, Calif.–Lyon Communities is ready to receive residents at gallery421, the developer’s newly completed luxury apartment community in Long Beach, Calif., just outside of Los Angeles.

Located on West Broadway near Ocean Boulevard, gallery421 sits within a block of downtown and its bevy of amenities, and reached completion without any credit-crunch induced hindrances.

As is currently the case in most multifamily markets across the country, there is no severe shortage of luxury apartment housing, but Lyon did its homework. The company conducted extensive research to assess just what local residences desire most in a property, a move that may very well give the apartment development and management company an edge in its leasing efforts. In addition to gallery421’s 291 upscale residential units–ranging in size from 720 square feet to just over 1,350 square feet–the property presents such unique but highly coveted offerings as a yoga and Pilates studio; a private movie theater; a dog grooming room; and a business and conference center. Additionally, the building features 15,000 square feet of street-level retail space that currently includes an art gallery and will soon include an upscale restaurant and additional service-oriented businesses.

For most apartment owners, bringing a property to full occupancy in the current economic climate can be difficult to accomplish, but Lyon is undaunted. “The demand for luxury apartments in Downtown Long Beach is steady despite the challenges facing the regional and national economy,” Suzanne Maddalon, vice president, sales and marketing, tells MHN. “We also own and operate two other luxury communities–The Lofts at Promenade and 1900 Ocean–and both are virtually full.”

However, Lyon is not blind to the market conditions that could impede it from obtaining its leasing goals sooner rather than later. “It’s difficult to predict where the market is headed,” Maddalon says. “Demand is tied so closely to job growth and job forecasts over the next 12 months in Southern California are mixed. But we believe Downtown Long Beach is an outstanding place to own and operate luxury rental communities. It’s centrally located between Los Angeles and Orange counties, is near the water and offers all the cultural, entertainment and lifestyle options of a robust downtown. We look forward to doing business for a long time here.”

The City of Long Beach is keen on Lyon doing business in the city, too. “Lyon has made yet another important statement about Downtown Long Beach’s appeal as a place to live, work and play,” Mayor Bob Foster said of gallery421 in a prepared statement. “It is opening at an important time and will help generate new business for Downtown merchants.”

July 9, 2010 - Demand for apartment properties is picking up again in Washington, D.C., and with CWCapital having just furnished Archstone with a $151 million construction loan via its FHA platform, there’s nothing standing in the way of the developer’s plan to commence construction of its 469-unit 1st & M project.

With a location at the intersection of 1st and M Streets, NE, Englewood, Colo.-based Archstone’s 13-story Class A apartment tower will sit in the city’s NoMa district near Union Station and the U.S. Capitol. In addition to the residences, 1st & M will feature 2,500 square feet of ground-level retail space, a library, activity studios and a 16,000-square-foot courtyard.

The project financing, which includes a 30-month construction period, comes in the form of a 40-year fully amortizing permanent loan. Boston-based CWCapital asserts that the financing, Archstone’s first FHA loan, is one of the largest HUD-insured construction loans ever facilitated for a multifamily development.

“With strong multifamily demand in select markets, such as Washington D.C., FHA is providing critical new construction capital to borrowers,” Michael Berman, President and CEO of CWCapital, noted in a prepared statement. “While many banks are on the sidelines or have restricted credit criteria, FHA is performing an important counter-cyclical role and attracting high quality sponsors with high quality projects who have rarely, if ever, accessed this capital. The 1st & M loan is a perfect example of this.”

The Washington, D.C., apartment has not escaped the consequences of the economic downturn, but it is, indeed, on the mend. “In numerous submarkets, we’re seeing unsurpassed rental activity,” Drew White, Executive Director with real estate services firm Cushman & Wakefield, told CPE. “We’re seeing declining concessions, some rent growth and a lot more traffic than we had seen in terms of renters looking and signing on for units. Many new Class A construction projects with end-of-summer lease up targets have reached their goals and its only mid-July. People are moving.”

Archstone is on target to compete construction of 1st & M in 2013

The second quarter was a different story with demand for luxury properties apparently fading. “There is a lot of concern about a double-dip recession that’s keeping people on the sidelines, especially at the high end,” says Mark Goldman, a mortgage broker with Cobalt Financial Corp. in San Diego.

Buyers of second homes are being asked to put down as much as 40 percent to get a loan at a time when many of them still don’t feel like their jobs are secure, says David Crowe, chief economist for the National Association of Home Builders.

“It’s discretionary spending,” Crowe says. “It’s something people are only going to do when they feel good about their situations.”