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Short-term retail leases gaining ground; Brooklyn, NY, project gets $196M loan


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Short-term retail leases gaining ground; Brooklyn, NY, project gets $196M loan

Commercial real estate

* The Wall Street Journal featured a report on New York City landlords' increasing acceptance of short-term rentals. Citing CBRE Group Inc., the publication noted that roughly 20% of all Manhattan, N.Y., retail lease transactions in the third quarter were for terms of under three years, compared with less than 5% in the year-ago period.

Appear Here, a website that provides a platform for tenants seeking short-term space and arranges deals, has been working with the likes of Brookfield Property Partners LP and Simon Property Group Inc. as the landlords look to attract shopping traffic to their properties, the report noted, citing Elizabeth Layne, chief marketing officer for Appear Here.

* The owners of the Industry City redevelopment project in Brooklyn, N.Y., received a two-mortgage loan of $196 million from Bank of China and about $48 million in mezzanine financing, with the overall funding split between Bank of China and SL Green Realty Corp., The Real Deal reported, citing Justin Weiner of Belvedere Capital. The mortgages are of roughly $133 million and $63 million, the report noted, citing property records.

The funds would be used for leasing and redevelopment costs at the $1 billion project that aims to expand the office-and-manufacturing complex to 6.6 million square feet from 5.3 million square feet. The project has been pitched for Inc.'s second headquarters.

The owners of Industry City are Jamestown, Belvedere Capital, Cammeby's International and Angelo Gordon & Co.

* Industrial Property Trust Inc. is proposing to build an 822,473-square-foot business park in Pompano Beach, Fla., with the plan to be considered by the city's Development Review Committee Dec. 6, the South Florida Business Journal reported. The 48.8-acre site at 1250, 1280, 1300 and 1380 NE 48th St. would have four buildings with office space in the front and industrial space and truck bays in the back, along with 641 parking spaces.

An affiliate of the company acquired the former concrete plant site for roughly $28.9 million in July, the report noted.

* Bloomberg News and the Journal carried reports on the New York City Council's vote to limit the height of skyscrapers in the area where the nearly 800-foot tall Sutton 58 tower is under construction. The Journal noted that the City Planning Commission had earlier made a provision allowing the project to continue.

Developer Gamma Real Estate's president, Jonathan Kalikow, said the project's foundation work was 95% complete, the Journal noted, pointing out that city rules allow a building to move forward if the foundation has been completed ahead of a rezoning.

* Lane Partners acquired Brocade Communications Systems' headquarters campus in San Jose, Calif., for $225.5 million, the Silicon Valley Business Journal reported. The property at 110-130 Holger Way spans roughly 600,400 square feet of Class A space in three buildings and also has a five-story parking structure with 1,900 spaces. Lane Partners plans to renovate the 9.72-acre site's landscaping and build a new amenity area between two of the buildings.

The report noted, citing Lane Partners principal Mark Murray, that the four-story building at 110 Holger Way has the infrastructure in place to serve as a data center but can also be kept as office space. The buyer is open to lease the property to multiple tenants, according to the report.

* Curt Gunsbury and Robb Miller are proposing a slender 40-story tower at 33 S. Fifth St. in Minneapolis, Minn., on a 0.33-acre site, the Minneapolis / St. Paul Business Journal reported. The 261-apartment tower would replace two small buildings on the site. The proposal is up for discussion Dec. 7 at a Planning Commission Committee of the Whole meeting. If approved, delivery is expected in spring 2020, the report noted, citing Gunsbury.

* Citing the U.S. Census, Bloomberg News reported that builders spent a total of $2.7 billion on warehouse construction in October, marking the highest figure since the census began keeping track in 1993. Citing a CBRE Group report, the news outlet noted that at 188,000 square feet, the size of the average warehouse completed in 2017 was more than double the size in 2001, adding that ceiling heights have increased 21% during the period.

Increasing automation in warehouse operations is also driving up costs, with CBRE managing director Joe Dunlap expecting warehouses to continue to grow both in size and cost, according to the report.

After the bell

* Blackstone Group LP affiliates refinanced three hotels that the firm purchased in 2015 through a pair of commercial mortgage-backed securities transactions worth a total of roughly $1.05 billion, according to presale reports.


* Hedge fund Solus Alternative Asset Management said in a letter to Hovnanian Enterprises Inc.'s board that the potential financing offer from Blackstone unit GSO Capital Partners LP "amounts to a thinly veiled attempt to manufacture profits on credit default swap deals," the Journal reported, citing a copy of the letter reviewed by the publication.

Citing people familiar with the matter, the report noted that no financing deal with GSO has been finalized. The hedge fund is an investor in Hovnanian.

* Lennar Corp. plans to build 337 homes in Miramar, Fla., on a 117.7-acre Univision-owned site that it has under contract and is seeking rezoning for the project, the South Florida Business Journal reported. The Broward County Commission is due to consider the plan Dec. 5.

Earth Advisors and Save Miramar Wildlife submitted an alternative plan calling for the forested site to become a nature preserve and wetland mitigation bank, the report noted.


* Macau's gross gaming revenue for November came in at $2.9 billion, marking the second-highest figure for the year, the Las Vegas Review-Journal reported. The report noted that the 23% jump boosts the year's total so far to $30.4 billion, marking the first time the year-to-date total has crossed the $30 billion mark since 2014.

The day ahead

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

In Asia, the Hang Seng was up 0.22% at 29,138.28. The Nikkei 225 slid 0.49% to 22,707.16.

In Europe as of midday, the FTSE 100 gained 0.53% to 7,338.92, and the Euronext 100 was up 1.04% at 1,041.13.

On the macro front

The factory orders report and the TD Ameritrade Investor Movement Index are due out today.

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