Sonnenblick-Goldman greases East Coast transactions New York-based Sonnenblick-Goldman Co. has arranged financing for a downtown Manhattan property and arranged the sale of one of Florida's most prominent office parks.
Sonnenblick-Goldman's Miami office arranged the sale of Blue Lake Corporate Center in Boca Raton on behalf of locally based Blue Lake Ltd. Locally based Boca Technology Center LLC, an entity backed by Miami-based T-Rex, acquired the development for $142 million. Blue Lake Corporate Center is comprised of 1.77 million sq. ft. of office space, 254 developable acres and more than 1.5 miles of direct frontage along Interstate 95. The office campus served as an IBM research and development facility before Blue Lake Ltd. bought it in 1997 for $46.1 million and converted Blue Lake into a multi-tenant office park.
In Manhattan, Sonnenblick-Goldman arranged a $140 million first mortgage loan to finance the leasehold interest purchase of 120 Broadway on behalf of 120 Broadway Associates LLC, a partnership composed of Larry A. Silverstein, New York-based Blackstone Real Estate Partners III LP and Chicago-based Walton Street Real Estate Fund III LP. A consortium of 12 banks, led by Bank of New York, provided the mortgage.
Built in 1915, 120 Broadway is a 41-story, 1.8 million sq. ft. Class-A office building that is bound by Broadway, Nassau, Cedar and Pine streets. The building is 92% leased.
L.J. Melody hooks up Cousins/Myers Houston-based L.J. Melody & Co. has arranged $90 million in fixed-rate financing for the 101 Second Street office building in San Francisco. NLI Properties West Inc., a subsidiary of Japanese insurance giant Nippon Life Insurance Co., provided the funding on behalf of Cousins/Myers Second Street Partners LLC, a partnership between Atlanta-based Cousins Properties and San Francisco-based Myers Development Co.
The 26-story, 387,000 sq. ft. Class-A tower is at the corner of Second and Mission streets, and is fully leased.
Charlesbank buys another trophy in suburban Detroit Boston-based Charlesbank Capital Partners LLC has acquired the majority interests in the Galleria Officentre, a 1.1 million sq. ft. complex in Southfield, Mich. Charlesbank acquired the office complex from Southfield-based Nemer Equities LLC, reportedly for between $120 and $130 million.
Located 15 miles from downtown Detroit, Galleria Officentre is a four-building, Class-A office campus that is 98% leased.
Westchester County continues to bounce back While corporate relocations savaged the Westchester County, N.Y., office market over the past decade, the suburban New York City county seems to be on the path to recovery. On the leasing/subleasing front, locally based Nine West Group has subleased 203,107 sq. ft. at 1129 Westchester Ave. in White Plains to locally based Starwood Hotels & Resorts Worldwide Inc. The local office of Los Angeles-based CB Richard Ellis represented Nine West Group in the long-term transaction.
Also in White Plains, CB Richard Ellis Investors LLC has acquired the 18-story, 525,000 sq. ft. Gateway I office building on behalf of a separate account investor. CIGNA Investment Management sold Gateway I and an adjacent seven-level garage and office/multifamily development site for an undisclosed amount. Gateway I is 98% leased.
In Purchase, N.Y., the Connecticut office of Northbrook, Ill.-based Grubb & Ellis Co. Investment Services Group sold 100 Manhattanville Road for $47.5 million to BfG/LaSalle Investment Advisors, a venture between a German pension fund adviser and the Chicago-based real estate giant. Grubb & Ellis marketed the 280,000 sq. ft. building for former owner Nestle USA Inc., which relocated its corporate headquarters from Purchase to Glendale, Calif. Located at the Manhattanville Road interchange of Interstate 684, 100 Manhattanville Road is fully leased.
D.C. and suburbs set the pace for new development Washington, D.C., and its suburbs continue to set an astounding pace on the new development and acquisitions front, each month more active than the previous one. Some highlights:
* Herndon, Va.-based Cambridge has structured the acquisition of 901 E. St. on behalf of locally based A&A Associates. A&A acquired the Class-A, East End property from 901 E Delaware Inc. for $63 million. A 10-story, 249,769 sq. ft. building with a 159-space underground parking garage, 901 E St. is 96% leased. Cambridge has been retained to handle long-term leasing and asset management for 901 E St.
The same players - Cambridge and A&A - also teamed up on the acquisition of 1101 Vermont Ave. from NLI Properties East Inc., a subsidiary of Nippon Life Insurance Co. A&A acquired the 12-story, 162,355 sq. ft. building for $35 million. Located four blocks from the White House, 1101 Vermont Ave. was renovated in 1995 and 1996 and is 95% leased.
* In downtown Chevy Chase, Md., Washington, D.C.-based JER Partners and The JBG Cos., Bethesda, Md., will build Chase Tower, a 250,000 sq. ft. Class-A office and retail speculative development. The partnership plans to deliver the mixed-use complex in mid-2001. The Maryland and D.C. offices of New York-based Insignia/ESG have been retained as leasing agents. With an overall first-quarter vacancy rate of 4%, JER and JBG are jumping into an already tight market that can only constrict. The Montgomery County, Md., Council has imposed a building moratorium while the county's planning commission conducts a regional traffic and land use study.
* In Herndon, Va., Boston-based Boston Properties has leased an entire, 244,000 sq. ft. building at New Dominion Technology Park to the General Services Administration for 20 years. The building is currently under construction and will be completed in January 2001. Insignia/ESG represented Boston Properties.
* In the Reston/Herndon corridor of Fairfax County, Va., locally based Cassidy & Pinkard has arranged the sale of The Campus at Dulles Technology Center on behalf of Dulles Tech I LP, a private development partnership. New York-based Clarion Partners acquired The Campus for $59.15 million. The newly constructed, seven-building office park on Dulles Toll Road totals 349,839 sq. ft. The Campus is 100% leased to 14 tenants.
* In Alexandria, Va., the D.C. office of New York-based Julien J. Studley represented The Institute for Defense Analyses in its 222,159 sq. ft. build-to-suit transaction with local developer Mark Winkler Co. The Institute for Defense Analyses will occupy eight floors and part of the ninth in the $60 million, 260,000 sq. ft. building.
* Also in Herndon, the local office of Dallas-based Trammell Crow Co. arranged the sale of two buildings at Herndon Square II to subsidiaries of Los Angeles-based Farmers Insurance Group. Farmers paid $22.1 million for the 62,275 sq. ft. 510 Spring St. building and the 60,421 sq. ft. 535 Huntmar Park Drive building.
Trammell Crow represented Herndon Square II LLC, a joint venture of Crow Holdings and New York-based Westbrook Partners.
And what about the Big Apple? Colliers ABR keeps rolling Must Colliers ABR have its hand in every transaction along The Great White Way? So it seems, as the New York-based Colliers' partner has negotiated two 100,000 sq. ft.-plus leases for Broadway office towers.
At 1440 Broadway, Colliers ABR represented locally based building owner Max Capital in its lease of 107,000 sq. ft. to locally based Conde Nast, which was represented by Insignia/ESG. The lease leaves 1440 Broadway 95% occupied. Since Max Capital acquired 1440 Broadway earlier this year, the Colliers ABR team has leased more than 400,000 sq. ft. and brought in four major tenants. The lease represents an expansion for Conde Nast, which outgrew its space at 4 Times Square.
At 1633 Broadway, Colliers ABR negotiated a nearly 100,000 sq. ft. lease for Morgan Stanley & Co. Inc. in less than three weeks. Morgan Stanley will take the 25th and 26th floors, expanding from the 39th floor.
Dorchester buys home-town trophy LSQ Investors LLC, an affiliate of Oklahoma City-based Dorchester Capital, has acquired Leadership Square in Oklahoma City for $45 million. New York-based Metropolitan Life Insurance Co., which had owned the building since its 1984 completion, sold Leadership Square.
The property contains 735,000 sq. ft. and a two-level, 340 car garage. The building is 78% leased.
The transaction marks Dorchester Capital's second Oklahoma City acquisition. The company purchased the 600,000 sq. ft., 31-story Oklahoma Tower office building from Teachers Insurance and Annuity Association of New York in 1998.
Higgins says, "Yahoo!" From the sign of the times department: Let's say a prospective, top-tier high-tech tenant needs a new headquarters in Northern California, and it needs to put together the project - an 800,000-plus sq. ft. campus - in a little more than a year. Not an easy task, but Chicago-based Higgins Development Partners took Yahoo!'s challenge to develop the Internet portal's Sunnyvale, Calif., headquarters. In doing so, Higgins placed its foot in the door when it comes to Yahoo!'s expansion needs.
Overlooking the San Francisco Bay and a series of greenbelt trails and levies, Yahoo!'s campus will consist of five buildings totaling 820,000 sq. ft. The first phase - three office buildings and a 1,000-space parking structure - will be completed in February 2001, and phase two - 200,000 sq. ft. of office and related parking - will deliver in June 2001. To its credit - and what municipality wouldn't want Yahoo!'s headquarters - the city of Sunnyvale fast-tracked the project through the public hearing and entitlements process, reducing a six- to eight-month process to six or eight weeks. At the same time, Higgins took the risk of ordering steel and designing the project before final approval from the city.
Part of the first phase, a commons building, includes a health club and restaurants, while the campus will be surrounded by athletic fields and basketball courts. Yahoo! also demands uninterrupted power and backup power generation as well as multiple fiber optic sources.
"The thing that's unique about Yahoo! is not so much the nuts-and-bolts technology but the type of headquarters the company wanted to develop," says Tom Prescott, regional vice president for Higgins. "A lot of employee amenities were built into the campus to serve employees and make it - I don't want to say a home away from home - but an inviting place to work and establish relationships. Because their employees work so hard and put in so many hours, not only are the amenities there to attract employees, but they also serve as a stress reliever."
Of course, Yahoo! is an Internet leader, but actual profitability is another key factor that sets the company apart from many of its dot.com brethren. With Yahoo!'s solid financial track record, underwriting was not an issue. Showing further financial savvy, Yahoo! is taking a synthetic lease, leaving the company's capital unencumbered.
"Yahoo! has an image of being very creative and very forward-thinking and fast reacting, and, in many respects, it is," says Prescott. "But from a corporate financing perspective, it's a structured, highly sophisticated organization. It's the best of both worlds."
With the Sunnyvale project in hand, Higgins also will develop 280,000 sq. ft. of loft-style office space for Yahoo! in Dallas' Deep Ellum area, as well as redevelop an existing 80,000 sq. ft. structure on the same site. Again, Yahoo! signed synthetic leases for the development. The Deep Ellum project will be home to Yahoo! Broadcast Services.
"We have an amazing trust level between the two organizations where they appreciated the fact that we were willing to go out on a limb [with the Sunnyvale development]," says Prescott. "I think they appreciated our honesty and the fact that we were able to work with them. There are no secrets; everything is an open book."