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Howard Hughes' Hawaii tower approved; MIT closes $750M deal in Cambridge, Mass.

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Howard Hughes' Hawaii tower approved; MIT closes $750M deal in Cambridge, Mass.

Commercial real estate

* Howard Hughes Corp. received official approval from the Hawaii Community Development Authority for its 42-story Aalii tower in Honolulu, Hawaii's Ward Village master-planned community, the Pacific Business News reported.

The conditions for the approval include proof of at least 150 reserved housing units in the 751-unit mixed-use condominium tower, as well as the provision of industrial spaces in Ward Village. The developer plans to commence work later in 2017 or in 2018, with completion expected in 24 months, according to the report. Howard Hughes also plans to build another mixed-use tower next to Aalii at a later time, subject to demand, the report said.

* TIER REIT Inc. offloaded a majority interest in an entity that indirectly owns the 1.4 million-square-foot Wanamaker Building in Philadelphia's Center City for approximately $114 million to an unnamed third party, according to a release.

The Philadelphia Inquirer, citing a source, reported that the buyer is Rubenstein Partners. The publication noted that TIER REIT plans to exit Philadelphia to focus on other markets.

Further, the company said it sold the approximately 115,000-square-foot Buena Vista Plaza office building in the Media Business District of Burbank, Calif., to an unrelated third party for $52.5 million. It also said it bought its partner's approximately 51% interest in the Domain 2 and Domain 7 properties in Austin, Texas, for a contract price of $51.2 million and the assumption of debt. The 337,000-square-foot office properties are part of a 300-acre mixed-use development called The Domain.

* The Massachusetts Institute of Technology closed on a $750 million deal to acquire the 14-acre Volpe Center site in Cambridge, Mass.'s Kendall Square from the General Services Administration, The Boston Globe reported. MIT was chosen as the initial preferred developer for the site in November 2016 from a number of bidders.

MIT will build a new federal transportation research facility on the site as part of the deal, and receive the rights to build on the rest of the site, the report said.

* An anonymous buyer paid more than $268.1 million for the 1706-1720 Broadway property in the Hell's Kitchen neighborhood of Midtown Manhattan, N.Y., the New York Business Journal reported. Extell Development recently refinanced the property along with two other parcels through a $143 million loan from Bank of the Ozarks.

* The Fifteen Hudson Yards condo tower in Manhattan's Hudson Yards, which began marketing in September 2016, has leased more than a quarter of its 285 units, with signed deals totaling more than $300 million, Bloomberg News reported, citing developer Related Cos.' senior vice president of sales Sherry Tobak. Related Cos. is developing the $25 billion Hudson Yards commercial and residential project with Oxford Properties Group.

The building set the record for the highest number of sales at a ground-up development in 2016, with 75 deals signed between September 2016 and Dec. 31, 2016, the news outlet noted, citing Ryan Schleis of Corcoran Sunshine Marketing Group, which is the brokerage working with Related to handle sales at the property. The 88-story tower is expected to complete in October 2018.

* The New School snapped up a 180,000-square-foot building in Manhattan's Greenwich Village neighborhood from Samson Associates for $153 million, Commercial Observer reported, citing property records. The five-story property has approximately 25,000 square feet of ground floor retail space, with offices above.

* DTH Capital bagged a $268.7 million loan to refinance the 57-story apartment tower at 20 Exchange Place in Manhattan's Financial District, The Real Deal reported. The financing from Berkadia replaces a $240 million loan from Natixis Real Estate Capital from 2014 and adds a $28.7 million gap mortgage.

The 724,300-square-foot tower was converted to luxury rental apartments in 2014 and holds 350 units, along with 118,000 square feet of retail, the report said.

* New York's commercial real estate market is expected to grow in 2017 and 2018 on account of optimism about the U.S. economy and "resilient" leasing activity, Reuters reported, citing Cushman & Wakefield. The brokerage's outlook "suggests a growth cycle now in its seventh year still has legs," as the state's commercial property market witnessed a better year in 2016 than predicted at the beginning of that year, the report said.

* Meanwhile, The Real Deal reported that New York City's investment sales dropped 25% in 2016 to $57.8 billion, from $77.1 billion in 2015, according to Cushman & Wakefield.

* The New York City Housing Authority is expected to tap private investors and developers to acquire stakes in around 1,700 housing units in the Bronx and Brooklyn boroughs, The Wall Street Journal reported. The buildings are in need of $350 million worth of maintenance work and upgrades.

The measure is being carried out under the Rental Assistance Demonstration program.

* Holliday Fenoglio Fowler LP secured $125 million in financing for the 44-story Eugenie Terrace residential tower in Chicago's Lincoln Park neighborhood on behalf of Eugenie Terrace Associates LLC, according to a release. The 575-unit luxury rental tower is located at 1730 North Clark St.

* A survey of top industry professionals by law firm Berger Singerman indicates that South Florida's real estate community is cautiously optimistic for 2017, The Miami Herald reported.

* In downtown Houston, Bank of America Corp. is in talks to lease between 200,000 square feet and 250,000 square feet at Skanska's speculative Capitol Tower, the Houston Business Journal reported, citing sources close to the deal. The 750,000-square-foot project is predicted to commence if Bank of America signs up as an anchor tenant.

However, the prospective building would result in the addition of some 500,000 square feet to a submarket that is already "inundated with vacant space," along with 424,000 square feet that Bank of America would vacate in several downtown buildings, the report said.

After the bell

* La Quinta Holdings Inc. is looking to spin off its owned real estate assets from its franchise and management businesses, giving rise to two standalone publicly traded companies.

* Pennsylvania Real Estate Investment Trust priced an underwritten offering of 6.0 million of its 7.20% series C cumulative redeemable perpetual preferred stock.

The day ahead

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

In Asia, the Hang Seng fell 0.21% to 23,049.96, while the Nikkei 225 was up 0.94% to 19,072.25.

In Europe, as of midday, the FTSE 100 was down 0.48% to 7,212.65, and the Euronext 100 was up 0.02% to 933.71.

On the macro front

The housing starts report, the jobless claims report, the EIA natural gas report, the EIA petroleum status report, the Fed balance sheet and the money supply report are due out today.

The Daily Dose is updated as of 7:30 a.m. ET. Some external links may require a subscription. Articles and links are correct as of publication time.