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Brookfield partners with Convene; Morgan Stanley's HQ search carries 'baggage'


According to Market Intelligence, December 2022


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Brookfield partners with Convene; Morgan Stanley's HQ search carries 'baggage'

Commercial real estate

* Brookfield Property Partners LP is teaming up with meeting space provider Convene to deliver flexible-term workspace and on-demand meeting and event space at its office properties in downtown Los Angeles, Commercial Observer reported. Brookfield owns 8.6 million square feet of office space in the urban area.

The landlord has been an investor in Convene since 2016, the report noted.

* Morgan Stanley, which is seeking 1.9 million square feet of office space in Manhattan, N.Y., for its new headquarters, wants the new landlord to buy its current headquarters at 1585 Broadway and its 522 Fifth Ave. office condominium, The Real Deal reported, citing sources familiar with the search.

Morgan Stanley acquired the 1.3 million-square-foot 1585 Broadway asset in 1993 for $176 million and reportedly paid $468 million for the roughly 570,000-square-foot condo, the report noted.

The report said the requirement could be troublesome for landlords who would have to buy and rent up the empty buildings and may prefer tenants without the "extra baggage." The Real Deal also noted, citing unnamed sources, that Morgan Stanley is in talks with Brookfield Office Properties to become an anchor tenant at the second tower of the Manhattan West development.

* The Wall Street Journal featured a report on the rise of boutique office space, which has begun attracting established companies looking for entire buildings to house their headquarters. The report pointed out Aetna's leasing of Vornado Realty Trust's co-owned development at 61 Ninth Ave. in Manhattan's West Chelsea as an example.

* Citing JLL data, the Journal reported that leasing activity in Manhattan, including new deals and renewals, jumped 35% year over year in the third quarter to 9.85 million square feet. The publication noted that eight of the largest office leases took place in Midtown, and seven of those were on Fifth Avenue, reflecting the ongoing trend of westward movement.

* Jack Resnick & Sons landed a $125 million refinancing for the commercial portion of the Symphony House building at 235 W. 56th St. in Manhattan from a division of Prudential Financial, The Real Deal reported, citing records filed with the city. The 730,000-square-foot building includes 337 residential condos in addition to the retail space. Tenants include TJ Maxx, Duane Reade and Staples.

* The 40-story Union Bank Plaza tower in Los Angeles' Financial District is back on the market after an affiliate of Pacific Reach Properties canceled a $280 million deal, The Real Deal reported, citing sources with knowledge of the talks. The buyer faced trouble securing financing for the acquisition.

The more than 600,000-square-foot building is owned by KBS Real Estate Investment Trust II Inc., and the listing includes a roughly 20,000-square-foot retail building and a 1.8-acre developable parcel, the report noted, citing REAlert. The tower, 82% leased, previously changed hands for $208 million, the report noted, citing property records.

* Inc. has "quietly leased" a new 920,000-square-foot distribution center in Lancaster, Texas, The Dallas Morning News reported. The facility, off Dallas Avenue south of Interstate 20, is still under construction and is the first phase of VanTrust Real Estate's 164-acre logistics park, which will span more than 2.5 million square feet.

* Anchor Line Partners and JLL filed plans for a more than $250 million revamp of the One Post Office Square office tower in Boston's Financial District, The Boston Globe reported. The 41-story building is half-owned by an arm of Morgan Stanley. The re-do would add a new glass facade, 140,000 square feet of office space, new outdoor space and street-level retail space.

Work is expected to commence in 2018 after Putnam Investments vacates roughly 300,000 square feet to move to One Federal St. Anchor Line also plans to add a 10-story office building on top of a neighboring garage on Oliver Street, the report noted.

* Cooper Hotels received roughly $135.8 million in first mortgage refinancing from Sonnenblick-Eichner Co. secured by 11 Hilton-branded hotels, The Real Deal reported. Three of the hotels are in Florida, and the other eight are in Tennessee and the Detroit area, according to the report.

* The Queue Apartments at 817 South East Second Ave. in downtown Fort Lauderdale, Fla., is on the market and expected to sell for up to $60 million, The Real Deal reported, citing a release. The 191-unit property was completed earlier in 2017 by Urban Street Development and Fazio Properties.

* The St. Louis Post-Dispatch reported that Illinois has awarded more than $22.5 million in federal tax credits to fund 20 new affordable housing projects, and the Illinois Housing Development Authority expects the credits to generate roughly $258 million in private capital to finance 1,442 apartments.

* Reuters featured a report on the rise of activist investors in Canada's real estate investment trust sector. With real estate-focused activism gaining traction in the U.S., Canada is now seeing similar campaigns, the report noted, citing Lawrence Elbaum, a leader in Vinson & Elkins LLP's shareholder activism practice.

REIT investors in Canada have been frustrated for a long time, and the level of activism being observed is "unprecedented," the news outlet noted, citing Wes Hall, executive chairman of proxy and M&A services firm Kingsdale Advisors.

After the bell

* Starwood Waypoint Homes scheduled a special shareholder meeting for Nov. 14 to vote on the company's proposed merger with Invitation Homes Inc.


* The median sale price of single-family homes in Southern Nevada jumped 13.5% year over year to $265,000 in September, the Las Vegas Review-Journal reported, citing the Greater Las Vegas Association of Realtors. Sales slipped 0.4% year over year in September and were down 11.3% compared to August.

The number of single-family homes that were listed for sale without offers at the end of September was down 33.1% from the year-ago period.

The day ahead

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

In Asia, the Hang Seng was down 0.46% to 28326.59. The Nikkei 225 climbed 0.30% to 20,690.71.

In Europe as of midday, the FTSE 100 slid 0.21% to 7,507.14, while the Euronext 100 was up 0.06% at 1,043.92.

On the macro front

The TD Ameritrade Investor Movement Index is due out today.

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