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Cousins Properties to merge with TIER REIT; Steiner sells $253M NYC tower stake

Commercial real estate

* Cousins Properties Inc. and TIER REIT Inc. agreed to merge in a 100% stock-for-stock deal to create a combined company with an equity market capitalization of approximately $5.9 billion and a total market capitalization of roughly $7.8 billion. Cousins will issue 2.98 shares of newly issued common stock in exchange for each share of TIER stock.

* Steiner NYC LLC sold a 62% stake, valued at $253 million, in its 55-story Hub rental tower in downtown Brooklyn, N.Y., The Real Deal reported, citing property records. The property company transferred the stake to a limited liability company with an address at 277 Park Ave., which is home to certain JPMorgan Chase & Co. offices, the publication added.

The stake sale came at the same time as a $330 million refinancing of the 750-unit property at 333 Schermerhorn St., provided by Nuveen Real Estate.

* Savanna is in talks to lease up to 500,000 square feet at its 1.5-million-square-foot One Court Square property in the Long Island City neighborhood of Queens, N.Y., to healthcare company Centene Corp., Crain's New York Business reported, citing several sources familiar with the discussions. The 52-story office tower is where Amazon.com Inc. agreed to occupy about 1 million square feet before it shelved plans to build its roughly $4 billion second headquarters, owing to community and political opposition.

* New York City's multifamily market recorded annual decreases in dollar volume, transaction volume and building volume to 18%, 38% and 51%, respectively, in January, The Real Deal reported, citing a report from Ariel Property Advisors. The report partially credited the decline to uncertainty over possible rent regulation reforms taking place at the state level.

Across the city, the borough of Manhattan led the way, accounting for 61% of dollar volume and 33% of building volume. Its dollar volume equaled $426.7 million across 10 deals and 11 buildings.

* The San Francisco Chronicle reported that Google LLC confirmed the signing of a 140,000-square-foot lease at Clarion Partners LLC's 215 Fremont St. property in San Francisco. Citing real estate brokerage data, the paper added that the tech giant plans to move into the office in late 2019. Clarion paid Jack Resnick & Sons Inc. $335.5 million for the property in February.

The Alphabet Inc. unit has entered into its fourth San Francisco office lease in less than 12 months, according to the report.

* Prison-focused real estate investment trust CoreCivic Inc. is extending its reach to other property types like government-leased office properties in an effort to tap more opportunities, the National Real Estate Investor reported.

With an intention of continuing to do business with the government, the REIT is poised to reduce its net operating income from corrections facilities to 75% from 85% by the end of 2020, the publication noted, citing CoreCivic Executive Vice President and CFO David Garfinkle. Simultaneously, the company will work to increase the collective NOI from government-leased properties and re-entry facilities, such as halfway houses and substance abuse treatment centers, to 25% from 15%.

* The California State Teachers' Retirement System is committing $600 million of fresh capital to the U.S. property sector in a bid to boost its real estate allocation target in April to 13% from 12%, IPE Real Assets reported, citing a board meeting document.

The pension fund's real estate portfolio amounted to $31.4 billion at 2018-end, representing 14.6% of its total assets. It can go three percentage points above or below its target, the report added.

* Florida-based Driftwood Acquisitions and Development LP bought the 353-room Marriott Mission Valley hotel in San Diego for $85.7 million, marking its first foray in California, The Real Deal reported. The hotelier is also looking to build a second 150-room hotel on a 1.75-acre portion of the 7.4-acre site at 8757 Rio San Diego Drive, for which it paid just under $243,000 per room.

* Childress Klein Properties Inc. proposed to construct a mixed-use development in the Steele Creek neighborhood of Charlotte, N.C., which would offer up to 2 million square feet of warehouse or distribution space, 73,000 square feet of office and retail space, a 140-room hotel, and up to 270 residences, the Charlotte Business Journal reported.

The company submitted a rezoning petition for an over 250-acre site under the name Steele Creek 1997. Childress partner Chris Thomas said the project will be completed over 10 to 15 years, according to the publication.

* Sterling Bay Cos. LLC revealed plans for a 47-story mixed-use tower that will comprise 280 hotel rooms and 290 residential units at 300 N. Michigan Ave. in Chicago, Crain's Chicago Business reported, citing a newsletter from Alderman Brendan Reilly to his 42nd Ward constituents. The building will be constructed in place of a vacant four-story brick building that Sterling Bay owns.

Magellan Development Group LLC is also named a partner on the project, which is subject to approval by the Chicago Plan Commission, the City Council Zoning Committee and the full city council.

Sterling Bay is also close to securing the city council's consent for all aspects of its $6 billion Lincoln Yards megaproject, the publication added.

The day ahead

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

In Asia, the Hang Seng Index was down 2.03% to 28,523.35. The Nikkei 225 retreated 3.01% to 20,977.11.

In Europe, around midday, the FTSE 100 was down 0.26% to 7,188.88, and the Euronext 100 fell 0.29% to 1,023.84.

On the macro front

The Federal Reserve Bank of Chicago's National Activity Index and the Dallas Fed's Manufacturing Survey are due out today.

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