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Amazon to open bookstore at Vornado property; Cousins, Hines sign Atlanta lease

Commercial real estate

* Cousins Properties Inc. and Hines Real Estate Investment Trust Inc. signed up Regus' flexible workspace concept Spaces for a 34,000-square-foot, 11-year lease at the 8000 Avalon class A office development in Atlanta. The $73 million, 224,000-square-foot joint venture project is now 40% leased with the Spaces contract, according to a release.

* Inc. is planning to open a bookstore at Vornado Realty Trust's 7 W. 34th St. property across from the Empire State Building in Manhattan, N.Y., that will be its second brick-and-mortar bookstore in the city, the New York Post reported, citing signs at the location indicating a spring opening. The other Amazon bookstore is under development at Time Warner Center.

* Kite Realty Group Trust signed up Hobby Lobby for 50,000 square feet at its Parkside Town Commons project near Raleigh, N.C., bringing the second phase of the project to 90% occupancy, according to a release. Hobby Lobby will join Target, Petco, Guitar Center and others as anchor tenants at the location.

* A joint venture between Ceruzzi Holdings LLC and Kuafu Properties landed a $290 million financing for their luxury mixed-use residential and retail development at 151 E. 86th St. in Manhattan's Upper East Side neighborhood, according to Holliday Fenoglio Fowler LP, which said it arranged the loan with a foreign capital source.

The 18-story project, slated to complete in the first quarter of 2019, features 151,500 square feet of luxury residential space in 61 condominium units and 30,600 square feet of retail space.

* Macmillan Publishers is mulling a move from the landmarked Flatiron Building to Silverstein Properties' Equitable Life Building at 120 Broadway, both in Manhattan, The Real Deal reported, citing unnamed sources. If the publisher moves out, the Flatiron Building would be empty for the first time since it was built more than 100 years ago, the report noted.

Macmillan was on the market for up to 150,000 square feet, and if the deal is successful, it would take a part of the space being vacated by the state Attorney General's office, which will occupy 345,000 square feet at Fosun International's 28 Liberty building, according to the report.

* The average asking rents for Manhattan office space hit a record high in the first quarter amid low unemployment and "robust" demand, Reuters reported, citing brokerage Colliers International. Asking rents for the borough increased to $73.92 per square foot from $72.24 per square foot in the fourth quarter of 2016.

Leasing activity during the period was down 4.6% year over year but still remained 27% above the 10-year average, the news outlet noted.

* U.S. mall vacancies stayed flat at 9.9% during the first quarter of 2017, compared to the fourth quarter of 2016, owing to a six-year low in new construction activity, Reuters reported, citing real estate research firm Reis Inc. Only 796,000 square feet of new space was delivered during the period, reflecting a more than two-thirds decline, while net absorption more than halved to 1.25 million square feet, the news outlet said.

* LaSalle Investment Management said it acquired the 222,000-square-foot Mayo Clinic Square class A mixed-use complex in downtown Minneapolis' Warehouse District. LaSalle reportedly paid $98 million to Camelot LLC for the property, according to the Minneapolis/St. Paul Business Journal, citing sources familiar with the transaction but who were unauthorized to discuss the deal's terms. The four-floor property features medical office, traditional office, specialty and ground-level retail space, and underwent a $50 million redevelopment in 2015. It is 96% leased.

* The Bascom Group LLC snapped up the 406-unit Villas at Tustin Apartments community in Orange County, Calif., for $94.0 million, according to a release. A $66.5 million loan from California Bank & Trust was also part of the deal.

* Industrial leasing in the Dallas-Fort Worth area soared by about 60% in the first quarter with net leasing in North Texas totaling more than 6.5 million square feet, compared to 3.9 million square feet in the first quarter of 2016, The Dallas Morning News reported, citing JLL.

Overall vacancies in the area were down to just over 6% at the end of March. There were about 21 million square feet of industrial and warehouse developments underway in the area, down from more than 24 million square feet in the year-ago period, the report noted.

After the bell

* Essex Property Trust Inc. announced that its unit, Essex Portfolio LP, priced its offering of $350 million of senior unsecured notes due 2027, at an interest rate per annum of 3.625%.


* High levels of student debt are responsible for a "significant minority" of borrowers' inability to buy homes, The Wall Street Journal reported, citing a Federal Reserve Bank of New York assessment of the effects of student debt on the economy.

* Fitch Ratings noted in its quarterly U.S. RMBS sustainable home price report that home prices in most of Texas and parts of the Northwest are increasing "far ahead of" sustainable economic fundamentals. The rating agency noted that home prices in the cities of Dallas, Fort Worth and Arlington are overvalued by as much as 10% to 14%.

The day ahead

Early morning futures indicators pointed to a lower opening for the U.S. market.

In Asia, the Nikkei 225 fell 0.91% to 18,810.25.

In Europe, around midday, the FTSE 100 climbed 0.43% to 7,314.34, and the Euronext 100 lifted 0.03% to 980.99.

On the macro front

The international trade report, the Gallup U.S. ECI, the Redbook and the factory orders report are due out today.

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