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Westfield, Forest City plan $75M revamp; Facebook expands at Vornado property

Commercial real estate

* Westfield Corp. and Forest City Realty Trust Inc. are proposing a $75 million renovation of the Westfield San Francisco Centre shopping center in San Francisco, the San Francisco Business Times reported. The landlords are looking to renovate tenant spaces, add a new facade and three new outdoor terraces on the 865 Market St. part of the property, according to the report.

The report noted that the companies also plan to convert existing retail, storage and meeting space into 49,999 square feet of office space on the property's seventh and eighth floors. The building has 33,000 square feet of dedicated office space. The renovation proposal is subject to approval from the City Planning Commission.

The complex, which Westfield and Forest City combined for $440 million in 2006, totals 1.5 million square feet, the report noted.

* Forest City has set targets for reducing directly managed greenhouse gas emissions from its operating portfolio by 27.5% by 2025 from a 2016 baseline as well as a targeted 33% reduction in emissions from sources like tenant and resident spaces and construction activity.

The company said it has become the second U.S. real estate investment trust to set a greenhouse gas emissions target approved by the Science Based Targets initiative.

* Facebook Inc. now occupies more than 880,000 square feet at Vornado Realty Trust's 770 Broadway building in Manhattan, N.Y.'s Midtown South after it leased an additional 370,000 square feet, The Real Deal reported, citing unnamed sources. The "complex deal" will see retailer J. Crew, which had four years remaining on its lease with Vornado, move out of the building to Brookfield Place at 225 Liberty St. Vornado paid $35 million to the retailer to buy out the remaining lease, the report noted, citing sources familiar with the transaction.

J. Crew, which had been looking to move to a less expensive space for some time, will sublease Bank of New York Mellon's 350,000 square feet, according to the report.

* Amazon.com Inc. is still debating whether to sublease the 722,000 square feet of office space that it agreed to lease at the under-construction 58-story Rainier Square tower in downtown Seattle in October 2017, the Puget Sound Business Journal reported, citing a source with knowledge of the deal.

Amazon said it would not occupy the tower and halted work on another 17-story project due to Seattle's new head tax on large businesses to fund homeless services and affordable housing. After the tax was passed by the City Council, Amazon said it would resume work on the 17-story development at 2205 Seventh Ave. but did not indicate its plans for Rainier Square, which is slated for completion in 2020.

* Apple Inc. is considering the Northern Virginia region for its planned new U.S. campus spanning 4 million square feet for 20,000 employees, The Washington Post reported, citing economic development officials and real estate executives familiar with the discussions. A number of sites in the region have been proposed to Apple, the publication noted, citing the officials. Three of the locations were also pitched to Amazon for its second headquarters. Amazon's shortlist also included three sites in the Washington region.

Both companies plan to select sites in 2018 and may end up competing for locations where they can attract top talent, the report noted.

* A 47-story Chicago tower at 1 N. LaSalle St. is up for sale for $125 million by a joint venture between Hilco Real Estate and two MB Real Estate Services executives, Crain's Chicago Business reported, citing a source familiar with the offering. The owners paid $82.5 million for the 493,738-square-foot, 88-year-old tower in March 2016, the report noted, citing Cook County records.

The property is 86.2% leased, Crain's noted, citing CBRE. The owners spent roughly $4 million on upgrading the property with new amenities, according to the report.

* Related Midwest unveiled plans for two towers at the site of the Chicago Spire project near the Chicago River, The Real Deal reported. A 1,100-foot tall tower at 400 N. Lake Shore Drive will have 300 condominium units atop a 175-room boutique hotel, the report noted, citing Related Midwest President Curt Bailey.

The second tower would rise 850 feet and have 550 apartments. The two towers will share a 90-foot podium. Bailey expects foundation work to commence in summer 2019 at the earliest, making way for the four-year construction period, the report noted.

* Playboy Enterprises is subleasing roughly 40,000 square feet at Douglas Emmett Inc.'s 10960 Wilshire Blvd. in Los Angeles, The Real Deal reported, citing CoStar. The new location is three miles from Playboy's current offices at Rockefeller Group's 9346 Civic Center Drive in Beverly Hills, the report noted.

* Fitch Ratings said it now expects growth in U.S. lodging revenue per available room to be in the 2% to 4% range in 2018. The rating agency had a previous growth outlook of between 0% to 2%. Fitch said the increased expectation is due to better than expected corporate transient lodging demand paired with strong and continued leisure demand and moderate supply growth.

After the bell

* U.S. home sales increased by 2.3% year over year and 3.6% month over month in April, according to the April RE/MAX National Housing Report.

Housing

* OfferPad, a tech-enabled direct home buyer and seller with an online platform, said it received $150 million in new equity and debt financing, taking its total debt and equity raised in the past 16 months to more than $410 million.

The recent funding was led by LL Funds LLC, which has previously invested in OfferPad, the Phoenix Business Journal reported.

The company said it expects to buy and sell more than $1.5 billion of single-family homes in the next year based on the current monthly volume.

The day ahead

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

In Asia, the Hang Seng fell 0.54% to 30,942.15, and the Nikkei 225 rose 0.53% to 22,838.37.

In Europe, as of midday, the FTSE 100 was up 0.17% to 7,747.06, and the Euronext 100 was up 0.36% to 1,077.41.

On the macro front

The jobless claims report, the Philadelphia Fed business outlook survey, the E-Commerce retail sales report, the leading indicators report, the EIA natural gas report, the Fed balance sheet and the money supply report are due out today.

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