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Charter Hill Retail REIT Sells Interest in U.S. Portfolio

Australia-based Charter Hall Retail REIT entered into a conditional agreement to sell its 60 percent interest in a United States portfolio of 32 properties, owned in partnership with Desco Group and Regency Centers.

Parties associated with the Desco Group will acquire the REIT’s interest for a gross sale price of $168 million, representing a yield of 8.5 percent. At the same time, Regency has elected to take a distribution in kind of four assets for its 16 percent interest.

The deal when closed will eliminate $107.0 million of property-level debt, will release approximately $63.91 million of proceeds and will reduce the REIT’s balance sheet gearing by 2.1 percent and look through gearing by 5.1 percent. The price reflects a discount of 4.3 percent on the June 2010 book value. The transaction remains conditional on the purchaser obtaining approval from the principal lender and documentation of the agreement between Regency and Desco for the distribution in kind. Both conditions are expected to be met over the coming months with settlement due to occur by the end of March 2011.

The portfolio sale, which accounts for approximately 53 percent by value of Charter Hall’s remaining U.S. investments, delivers on the REIT’s strategy of re-weighting its portfolio to Australia and will increase the proportion of net tangible assets (NTA) represented by the Australian portfolio to 78 percent.

Vornado Buys Springfield Mall Mortgage

Vornado Realty Trust acquired the mortgage loan secured by the Springfield Mall in Fairfax County, Va., for $115 million. The loan had an outstanding balance of $171.5 million.

In a separate transaction, today Vornado acquired its partner’s interest in the partnership which owns the Springfield Mall in exchange for $25 million of 5 percent preferred units of Vornado Realty L.P.

In connection with these transactions, Vornado will record a financial statement gain of approximately $98 million in the fourth quarter of 2010.

Realty Income Announces New and Expanded $425M Credit Facility

Realty Income Corp. has entered into a new $425 million unsecured acquisition credit facility to replace its existing $355 million acquisition credit facility.

Under the terms of the new credit facility, total funds available were increased by $70 million to $425 million, plus an additional $200 million accordion expansion feature. The initial term of the new facility runs through March 31, 2014 with two, one-year extension options thereafter. The new credit facility features a borrowing rate of LIBOR plus 185 basis points with a facility commitment fee of 35 basis points, for all-in drawn pricing of 220 basis points over LIBOR. Realty Income currently has no borrowings on this new credit facility and has full access to the facility for new property acquisitions.

The sole-lead Arranger and Administrative Agent for the credit facility is Wells Fargo Securities LLC, with Bank of America N.A. and Regions Bank as co-syndication agents, The Bank of New York Mellon as documentation agent, and Union Bank N.A., U.S. Bank N.A., BB&T Capital Markets, Capital One Bank and Raymond James as additional participants in the facility.

Excel Trust Acquires $92.5M Property, Signs Additional Purchase Contract

Excel Trust Inc. acquired a shopping center for $92.5 million and signed a purchase contract to acquire an additional property for approximately $68.5 million. Since its initial public offering, Excel Trust has grown its portfolio to a gross asset value of approximately $414 million, excluding properties under contract.

Excel Trust purchased the 739,234-square-foot Park West Place shopping center in Stockton, Calif., for $92.5 million. Excel Trust estimates that the current annual net operating income is $7.2 million. Built in 2004, the center is anchored by Lowe’s, Target (non-owned), Kohl’s, Sports Authority, Jo-Ann, Ross Dress for Less, and Bed, Bath & Beyond. The property includes thirteen single tenant outparcels including Wells Fargo, Bank of America, Starbucks, Panera, Wendy’s and Sonic. Excel Trust has placed a $55.8 million mortgage on the property at an interest rate of 2.5 percent over 1 month LIBOR and intends to hedge this floating rate exposure by employing a swap or rate cap. The property is currently 99 percent leased.

In addition, Excel Trust has signed a contract to purchase the 473,640-square-foot Gilroy Crossing shopping center in Gilroy, Calif., for $68.5 million. Excel Trust estimates that the current annual net operating income is $5.3 million. The property is anchored by Target (non-owned), Kohl’s, Sports Authority, Ross Dress For Less, Bed Bath & Beyond, Michaels, and PetSmart. Excel Trust intends to assume upon closing the existing mortgage of approximately $48 million at an interest rate of 5.01 percent. The property is currently 99 percent leased.

Equity One Buys Three Centers for $72M

Equity One Inc. reached a contract to purchase three shopping centers in Long Beach, Calif., for $72 million. The company added that two of the properties are unencumbered and one property has a mortgage of around $11.6 million that would be assumed.

The Circle Centers comprise a total of approximately 273,000 square feet and are currently 97 percent leased. The anchor tenants include Vons, Ross, Rite Aid, Ralphs and Marshalls. The centers have been under the same ownership since they were developed between 1972 and 1989.

Regency Centers Purchases Willow Festival Shopping Center for $64M

Regency Centersclosed on the acquisition of the 405,227-square-foot Willow Festival neighborhood shopping center anchored by Lowe's, Whole Foods Market and Best Buy for $64 million as an off-market transaction with the center's original developer Hamilton Partners, a privately owned real estate development firm.

Built in 2007, Willow Festival is a class-A shopping center anchored by a 158,513-square-foot Lowe's, a 60,040-square-foot Whole Foods Market, a 30,000-square-foot Best Buy, along with HomeGoods, REI, DSW and CVS/pharmacy. The 96 percent leased center also features 54,317 square feet of side shop space including Starbucks, Potbelly, Lenscrafters, and Sports Clips.

HFF Closes $31M Sale of Daytona Beach Property

The Miami office of Holliday Fenoglio Fowler L.P. (HFF) closed the sale of a portion of Volusia Square, a 349,544-square-foot retail community center in Daytona Beach, Fla.

The HFF investment sales team was led by managing director Brad Peterson who represented the seller, Retail Planning Corp. of Atlanta. Cole Real Estate Investments purchased the property for $31 million free and clear of debt.

Volusia Square is shadow-anchored by Home Depot, Toys R’ Us and Babies R’ Us. Anchor tenants at the 203,909-square-foot portion of the shopping center that was sold include Hobby Lobby, HH Gregg and TJ Maxx. The portion of Volusia Square that was sold totals 22.4 acres. Renovated in 2010, the property was 97.6 percent leased at the time of sale.

Davis Cos. and Sterling Organization Completed $13.25M Deal

The Davis Cos. and Sterling Organization acquired the 105,000-square-foot LA Fitness Plaza in Palm Beach Gardens, Fla., for $13.25 million. The deal was realized through a partnership between the two companies called DIV Palm Beach Gardens LLC.

Steve Miskew of RJS Realty Group Inc. represented the owner, Fairway Shoppes Joint Venture, a Texas general partnership between a fund advised by Prudential Real Estate Investors and Southeast Centers.

Sterling Organization will oversee daily operations, management and leasing of the 14.75-acre property. The neighborhood shopping center, which is 90 percent leased, is anchored by a 41,255-square-foot LA Fitness Sports Club, under a 15-year lease. LA Fitness Plaza underwent $1.5 million in renovations in 2009, which included a new façade and color scheme, new roof, upgraded landscaping and enhanced signage.

Marcus & Millichap Brokers $1,368 per SF Sale

Marcus & Millichap Real Estate Investment Services brokered the sale of a 7,830-square foot Walgreens drugstore in Hollywood. The sales price of $10.71 million represents $1,368 per square foot, the highest price per square foot for a single-tenant net-leased drugstore in the U.S. in 2010, according to CoStar and Real Capital Analytics.

Mark Thiel, a senior associate in the firm’s San Diego office, represented the buyer, a private investor.

Boulder Group Sells Chicago Walgreens for $9.9M

The Boulder Group completed the sale of a single-tenant net-leased 14,500-squrae-foot Walgreen’s property located in Northbrook, Ill. for $9.93 million.

Randy Blankstein and Jimmy Goodman of The Boulder Group represented the seller, a Chicago based development partnership. The purchaser was a private investor based in San Francisco.

Colliers Completes Recent Deals

Colliers directed the sales of three retail properties in Southern California for a combined $4.23 million and also sold land subject to a long term ground lease with CVS in Florida for $3.5 million.

Jereme Snyder, senior vice president, based in Colliers International’s Irvine office, represented the sellers in the following transactions:

  • Commonwealth Sevenlen LLC, a private investor, acquired a 26,455-square-foot, free-standing retail building in Colton, Calif., for $1.99 million. The single-tenant investment property is occupied by Stater Bros. with an absolute NNN lease. Along with Snyder, Bob Hoyt, senior vice president, based in Colliers International’s Irvine office, represented the seller, Vornado Realty Trust. Hai Luong of Tendwell Realty represented the buyer.
  • Ramsey Real Estate Group acquired a 10,295-square-foot strip retail pad for $1.15 million, adjacent to a Stater Bros Market in Palm Springs, Calif. The transaction was the result of a court-ordered, partnership dissolution. Snyder represented both the seller, L&A Associated LLC and the buyer.
  • Olin LLC acquired a 3,190-square-foot single tenant retail property at 6571 El Cajon Blvd. in San Diego, for $1.09 million. The property is leased to 7-Eleven and is situated within close proximity to San Diego State University. Snyder represented the seller, Summit Realty Advisors LLC and Pacific Commercial Investments represented the buyer.

In Florida, the Colliers’ Milano-Shelton Investment Team recently sold a 2-acre parcel of land subject to a long term ground lease with CVS. The property is located on an outparcel to Target in St. Petersburg. The transaction totaled $3.5 million. CVS will be constructing a 12,900-square-foot drugstore on it, with plans to open in the first half of 2011. Cynthia Shelton, CCIM, CRE and Mike Milano, CCIM, MAI of Colliers International represented the seller in the transaction.

Other Notable Deals

Hanley Investment Group Real Estate Advisors announced today that Jeremy S. McChesney has sold a multi-tenant retail center at a record sales price of $720 per square foot. The sales price of $720 per square foot is the most paid for a multi-tenant retail center located in southern California in 2010, according to CoStar. The purchase price for the 5,789-square-foot Town Square Plaza in Yorba Linda, Calif., was $4.17 million. The property was built in 2005 and was 100 percent occupied at the time of sale. The buyer, Tony Nam, was represented by David Sternberg of Roessler Investment Group based in San Francisco. The seller was Festival Cos. of Los Angeles.

Agree Realty Corp. acquired a retail property ground leased on a long-term basis to Kohl's Department Stores in Tallahassee, Fla., for $2.2 million. Kohl's has approximately 17 years remaining on the base term of the lease.

Marketplace Advisors Inc. recently negotiated the $1.15 million sale of a 1.2-acre commercial outparcel at the Shoppes at Aloma Walk, a Publix-anchored retail center located on Aloma Ave. at S.R. 417 in Seminole County, Fla. David Marks, president of Marketplace Advisors negotiated the transaction representing the seller, Aloma Walk Commercial Venture LLC. SunTrust Bank acquired the property. James Mitchell with CB Richard Ellis represented SunTrust.

Plaza Advisors announced the sale of the 263,356-square-foot Palm Bay West shopping center in Palm Bay, Fla. Major tenants include Winn Dixie, Beall’s Department Store, Ace Hardware, Dollar Tree, and a ten-screen theatre. The asset was constructed in 1989. The property was 91 percent leased at the time of sale. Plaza Advisors represented the seller in the transaction and co-managing partners Jim Michalak and Anthony Blanco, together with senior financial analyst, Lenard Williams were involved in the engagement. The seller and buyer were Edens & Avant and a New York-based limited liability company, respectively.

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