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Unico completes $710M sale to Goldman Sachs affiliate; Hines sells DC property

Commercial real estate

* Unico Investment Group LLC completed the sale of a 27-building portfolio to Goldman Sachs Group Inc. affiliate Broad Street Principal Investments LLC for $710 million. The properties are across the Seattle and Denver areas and include Seattle's iconic Smith Tower and the DC Building in Denver.

The deal was agreed in October 2018. Unico added that it will retain a stake in the 1.8 million-square-foot portfolio and continue to operate and manage it.

* A Hines Interests LP affiliate sold the 55 M St. SE building in Washington, D.C., to Spear Street Capital for $135.3 million, the Washington Business Journal reported, citing a deed filed Jan. 17. Hines had paid $140.9 million for the 267,399-square-foot building in December 2013, the publication added, citing property records.

The D.C. Department of Transportation, which takes up 150,000 square feet at the property, is set to move out in 2021.

* Macerich Co. obtained a $300 million refinancing from MetLife for its Fashion Outlets of Chicago in Rosemont, Ill., ahead of a major expansion of the shopping mall, The Real Deal reported, citing Cook County records. The 12-year, fixed-rate loan, which closed Jan. 10, replaced a $200 million floating-rate loan, the publication added, citing Macerich executives.

* The Wall Street Journal featured a report on Extell Development Co. founder Gary Barnett and the company's 95-story luxury project, Central Park Tower, in Manhattan, N.Y., which is set to become the world's tallest residential building upon completion. The 179-unit condominium skyscraper has a projected sellout of more than $4 billion.

Barnett ushered in the recent condo boom in the U.S. with Extell's One57 tower on Manhattan's Billionaire's Row, of which construction began in 2010 during the real estate downturn and essentially opened the floodgates for the high-end market with the success of that property, the Journal noted.

Now, as the luxury residential market is witnessing oversupply, slowing sales and price drops, it remains to be seen how Central Park Tower will fare. Barnett declined to disclose how many units at the tower have been sold but acknowledged that the market is in a slowdown and added that the developer is "priced for that dip," according to the report.

* Goldman Sachs-backed wedding-planning startup Zola Inc. has leased 30,000 square feet, or the full 39th floor, at the 52-story 7 World Trade Center in Manhattan, Bloomberg News reported, citing landlord Silverstein Properties Inc.

* Equity Group Investments founder and prominent real estate investor Sam Zell said in a Bloomberg Television interview that WeWork Cos. Inc. CEO Adam Neumann would not have been able to let properties to the coworking giant if WeWork were public. The remarks come in the wake of the Journal's recent report that Neumann owns stakes in a number of properties that count WeWork as a tenant and has made millions of dollars from the arrangements.

Although WeWork is a private company, it has "become so big that it has public responsibilities, including governance," Bloomberg News quoted Zell as saying.

* Footwear manufacturer Puma signed on as anchor tenant at Federal Realty Investment Trust's 300,000-square-foot, 13-story office at 455 Grand Union Blvd. in Somerville, Mass., which is part of the developer's third phase at the mixed-use Assembly Row project, the Boston Business Journal reported. Puma is moving its North American headquarters to the location from Westford, Mass.

Federal Realty also plans to develop a 500-unit, 24-story apartment building in the Assembly Row development's third phase. The publication added that Federal Realty has approval to develop up to 1.5 million square feet of office or lab space at the site.


* Foreclosure proceedings were initiated on 0.47% of American homes in 2018, marking a 0.4 percentage-point decline from 2017 and a 13-year low, The Real Deal reported, citing ATTOM Data Solutions. Roughly 625,000 homes faced foreclosure in 2018.

The day ahead

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

In Asia, the Hang Seng increased 1.25% to 27,090.81 and the Nikkei 225 rose 1.29% to 20,666.07.

In Europe, around midday, the FTSE 100 was up 1.40% to 6,930.93, and the Euronext 100 was up 1.52% to 949.88.

On the macro front

The industrial production report, consumer sentiment report and Baker-Hughes Rig Count report are due out today.

Click here to read about today's financial markets, setting out the factors driving stocks, bonds and currencies around the world ahead of the New York open.

Now featured on S&P Global Market Intelligence

Conference Chatter: Green Street exec: Public REITs now better opportunity than private real estate: Persistent discounts in public real estate investment trust pricing could portend weakness on the private side of the business, Green Street's Jim Sullivan said at a private real estate conference in California.

Conference Chatter: Investor 'skittishness' slowing industrial real estate deal flow: At a private real estate investment conference in California, panelists hailed industrial property as an area of late-cycle opportunity but said Trump administration policy curveballs have created a lumpy transaction market.

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