Bernstein Cos. launches $100 million investment fund Washington, D.C.-based The Bernstein Cos. (TBC) has subscribed to a $100 million Consortium Capital equity fund designed to attract acquisition and joint venture partners. The company's previous $30 million fund, Consortium One, is fully invested in eight projects in the Washington, D.C. metropolitan area.
In its latest venture, Consortium Two, the commercial real estate firm seeks to expand into a region that includes Philadelphia and Richmond, Va. The company has invested in two major projects with Consortium Two - a 261,000 sq. ft. office building in Richmond, and The Manhattan, a loft-style condominium project in Washington, D.C.
In 1998, TBC formed a joint venture with Union Realty Partners for a $15 million project in Washington, D.C. The conversion of the 249,000 sq. ft. warehouse facility into high-tech office space garnered the Washington Business Journal's "Best Real Estate Deal of the Year" award.
Grubb & Ellis boosts its profile in the heartland Northbrook, Ill.-based Grubb & Ellis Co. has reached an affiliation agreement with Wichita, Kan.-based The Martens Cos. (TMC), a partnership designed to help both companies expand services.
Grubb & Ellis plans to expand its industrial portfolio in the heartland through the partnership, while Martens expects to increase the number of clients that use its appraisal, management, consulting and brokerage services.
TMC handled $400 million in transactions in 1999. Grubb & Ellis now has affiliation agreements with 34 affiliates in 36 markets.
CNL Properties aligns with Bank of America Orlando, Fla.-based CNL American Properties Fund Inc. has entered into an alliance with Bank of America to provide financial and real estate services to operators of national restaurant chains. The alliance - which will do business as CNL Franchise Network LP, an alliance with Bank of America - will provide CNL with credit lines and warehouse financing facilities worth more than $1 billion.
Bank of America also will securitize net-lease real estate and mortgage loans, which will enable CNL to provide additional triple-net lease and mortgage financing. CNL, a real estate investment trust specializing in financial services for the restaurant industry, plans to provide more capital and services through the alliance, including debt financing, construction and equipment financing, and build-to-suit development.
Charles E. Smith receives $300 million line of credit With the recent closing of a $300 million secured line of credit from McLean, Va.-based Freddie Mac, Charles E. Smith Residential Realty, Arlington, Va., plans to reduce short-term borrowing costs. The credit line also supplies Charles E. Smith, one of the nation's largest multifamily residential REITs, with an alternative source of revolving debt.
Initial availability under the agreement is approximately $125 million, but can increase to $300 million with the appreciation of property values in collaterilized borrowings or with the addition of properties to the collateral pool. The company will use $60 million of the credit line to pay outstanding debt on its bank credit facility.
U.S./U.K. alliance creates global research network Boston-based Property & Portfolio Research Inc. (PPR) has formed an alliance with London-based Property Market Analysis (PMA) that will allow clients to use each firm's research and advisory services. Under the alliance, the two firms will provide real estate research and portfolio strategy services in more than 300 locations worldwide.
Both firms will remain independent. PMA plans to expand services in Europe, and PPR is eyeing the Asian market.
In another expansion to PPR's services, the firm is now using forecasts from New York-based Trepp LLC to help its clients analyze the CMBS market. A joint arrangement between the two companies allows PPR to use Trepp's CMBS Analytics on Bloomberg to study how market cycles affect cash flow sources. The system allows clients to perform loan-by-loan, credit-based studies to determine when to buy and sell.
The Trepp program is designed to help investors analyze default, prepayment and extension risks; conduct stress tests on bonds under different economic scenarios; differentiate bonds; and exploit mispricing opportunities.
A new way to insure CMBS transactions All four Wall Street agencies now approve the use of environmental insurance to underwrite CMBS transactions. The insurance is an alternative to the traditional Phase One environmental engineer's assessment report typically used to protect against losses.
According to New Hartford, Conn.-based Environmental Warranty Inc., environmental insurance provides protection against future environmental risks, a benefit not included in Phase One assessment reports. Environmental insurance protects CMBS transactions from losses when environmental problems jeopardize collateral value from a loan pool or conduit.
Pacific Capital Group invests in Colony Capital Pacific Capital Group (PCG) has acquired an equity interest in Colony Capital Inc., a move designed to expand the global investment capabilities of the two Los Angeles-based private equity firms. In the joint private equity venture, PCG will become a major investor in all future Colony Capital funds, as well as in Colony IV, a discretionary fund. It also will be a general partner in all future investments.
According to PCG founder Gary Winnick, the joint venture will create "one of the dominant international investment firms. Together, PCG and Colony will take advantage of market inefficiencies to build and grow strategies on a global basis." The two firms plan to provide capital for high-tech, media, insurance, real estate, health care and financial services operations.
Boston Properties enters joint venture with retirement fund Boston Properties Inc. has access to $270 million in equity under a joint venture agreement with the New York State Common Retirement Fund (NYSCRF). Under terms of the agreement, NYSCRF will provide equity for up to three years or until its equity commitment of $270 million is met. NYSCRF, in turn, has the right to participate in acquisition and development opportunities that the Boston-based company pursues with an institutional partner.
Boston Properties has received cash proceeds of $47 million and NYSCRF has assumed $126 million in debt in two recent projects developed under the joint agreement. NYSCRF acquired 49% interest in Metropolitan Square, a 582,194 sq. ft. Class-A office building in Washington, D.C., and a 75% interest in a 381,000 sq. ft. build-to-suit development in Needham, Mass.
CIGNA Corp. introduces institutional investment branch Hartford, Conn.-based CIGNA Corp. has formed TimesSquare Real Estate Investors to serve pension plan and other institutional investors. TimesSquare Real Estate Investors, a division of New York-based TimesSquare Capital Management Inc., will pursue "core" and "value creation" equity strategies.
The core strategy seeks consistent returns by investing in real estate portfolios with a variety of product types and geographic locations. The value creation strategy seeks higher, risk-adjusted returns through properties that are developed, rehabilitated or repositioned with moderate leverage.
TimesSquare Real Estate Investors was formerly known as CIGNA Real Estate Investors. TimesSquare Capital Management, formed earlier this year to develop competitive investment products for the institutional market, manages $40 billion for pension plans, retirement plans and other institutional investors.
PricewaterhouseCoopers boosts North American services PricewaterhouseCoopers has formed an alliance with Marietta, Ga.-based Service Resources Inc. to expand its real estate outsourcing services in North America. Service Resources, which manages more than $2 billion in facility costs through its integrated facility management system, will help New York-based PricewaterhouseCoopers develop Internet and integrated technology .
systems to handle various real estate management functions. PricewaterhouseCoopers manages more than 150 million sq. ft. in real estate assets for clients around the world.
New York-based the Realm has selected Intelisys Electronic Commerce Inc. as a principal technology partner for the real estate website it plans to launch this summer. New York-based Intelisys will provide the Realm its ConnectTrade service, which enables customers to buy and sell goods on-line. The company also will help the Realm market its new e-commerce website.
In addition to the interactive e-marketplace to be developed by Intelisys, the Realm also will enable the real estate industry to conduct other day-to-day business on-line, including rent collection, bill payment and commercial mortgage debt origination. The Realm initially plans to launch procurement services focusing on maintenance, repair and operations, and later provide procurement services for new construction and building renovations.
The Realm was formed in May following a $140 million investment from several investors. To form the new service, the Realm acquired Houston-based ARGUS Financial Software, New York-based B.J. Murray Inc., Toronto-based Newstar Solutions and Dallas-based CTI Ltd. By consolidating back-office financial, accounting and operational systems, the Realm will provide routine transactions through a common technology platform. Intelisys also provides e-commerce sites for First Union Corp.'s online business exchange, Chase Manhattan Bank's purchasing and Intuit's QuickBooks Purchasing Service.
FINOVA Realty Capital, a commercial real estate lending division of Scottsdale, Ariz.-based FINOVA Group Inc., has pulled out of the CMBS origination and sales market and ended the preferred partner program it entered into with New York-based J.P. Morgan. The company now will focus on its bridge and mezzanine debt financing programs.
"The CMBS market has contracted, and we do not see a bright future in this business for smaller players like FINOVA," says Matt Breyne FINOVA Realty Capital's president and CEO. "Our Realty Capital division will now focus solely on its more profitable on-balance sheet real estate products, helping to make FINOVA's financial results more predictable by eliminating the company's exposure to the volatile CMBS market."
The firm has reduced its sales force and is retaining regional offices in San Francisco, Chicago, New York and Irvine, Calif. In 1999, FINOVA Realty Capital closed $430 million in bridge loans.