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Owner plans $700M sale of US Bank Tower; Calif. apartment asset trades for $110M

Commercial real estate

* Singapore-based OUE Ltd. is seeking bids close to about $700 million for the U.S. Bank Tower at 633 W. 5th St. in Downtown Los Angeles, The Real Deal reported, citing unnamed sources familiar with the listing. The U.S. Bank Tower, the third-largest building in California, covers 1.4 million square feet of office space across 72 stories. An industry source familiar with the listing said OUE will lease back the Skyspace observation deck at the 70th floor of the property, the report added.

Citing property records, the publication said OUE purchased the property in 2013 for $367.5 million and forked out $50 million on renovations thereafter.

* Tilden Properties Inc. paid approximately $110.3 million to acquire the 238-unit Foundry Commons luxury apartment complex in San Jose, Calif. Cityview was the seller of the property, which was completed in 2016.

* Rubenstein Partners LP may spend upward of $200 million to acquire a block-sized assemblage of land in the Williamsburg neighborhood of Brooklyn, N.Y., where it could build an office-and-light-manufacturing building, The Real Deal reported, citing unidentified sources.

The paper estimated the project to be about 730,000 square feet, based on the information that the proposed building could be 50% larger than Rubenstein's development at 25 Kent Ave. Citing property records, The Real Deal added that the company has four separate "option" contracts with property owners who collectively control the entire block. The contracts expire in September 2023.

* The city of Miramar, Fla., may select The Related Group to develop an over $100 million eight-story building, encompassing 336 apartments and 41,604 square feet of ground-floor retail on the last vacant site in Miramar Town Center, the South Florida Business Journal reported.

The town center houses the city hall, a police station, a performing arts center, an educational center, a library, a retail center, offices and an apartment building. On Jan. 16, the City Commission will resolve whether to begin talks with the developer, which was the sole bidder in the Miramar city's request for proposals for the 3.74-acre site, the publication added, citing a city staff memo.

* Parkland Health & Hospital System is set to begin construction on a $154 million six-story clinic and office building in Dallas, The Dallas Morning News reported.

Groundbreaking on the more than 525,000-square-foot project off Maple Avenue, east of the company's $1.3 billion main campus, is slated for February, with an opening expected in early 2021, the publication added, citing John Raish, Parkland's senior vice president of support services.

* A partnership comprising NCV Capital Partners, Lemor Development Group and nonprofit Mount Hope Housing Co. scored roughly $100 million in debt and equity to renovate the latter's 13 affordable housing apartment buildings in the New York City borough of Bronx, The Real Deal reported, citing a press release.

The project, dubbed the Mount Hope Renaissance, will revamp the 515 units at the properties, covering E. 175th Street and E. Burnside Avenue in Mount Hope.

* Citing Atlas Hospitality Group Inc.'s annual report, the San Francisco Business Times reported that hotel supply in the San Francisco Bay Area is expected to increase from 2019 to 2021, thanks to a rise in hotel proposals and construction projects in 2018.

In 2018, developers proposed to build 254 more hotels, representing 37,000 new rooms and a 25% jump in the region's current room count. So far, the Bay Area has 47 hotels under construction, of which about 50% are in Santa Clara County. Six hotels are being developed in San Francisco, including Marriott SoMa Mission Bay at 1000 Channel St. and Hyatt Place San Francisco at 701 3rd St., the report added.

* Publicly traded real estate investment trusts are of the view that investors remain positive about the future of nontraditional real estate sectors such as self-storage and student housing, as yields for core real estate drop, the National Real Estate Investor reported, citing Tyler Blue, vice president of the advisory and consulting arm of research firm Green Street Advisors.

Over the past nine years, self-storage had the lowest average loan loss severity of 34% of all property types, while retail registered one of the highest average lost severities of 52%, according to data from Trepp. Chris Sonne, national self-storage valuation leader at CBRE, said market sentiment is that cap rates will rise by as much as 25 basis points in 2019.

Citing property management services and software provider RealPage, the publication reported that occupancy across student housing assets rose to 93.4% in 2018, from 93.1% in 2017, while rent increased by 1.5%.

* According to a Financial Times report, a minimum of €72.4 billion of new capital will be injected in real estate in 2019, based on a survey of 144 institutional investors and 10 fund of fund managers by Inrev, Anrev and Prea.

On average, investors in North America are aiming to allocate 8.5% of their total portfolios to property, which is below their desired target of 10%. With the Federal Reserve expected to raise U.S. interest rates further in 2019, approximately 15% of American investors are expected to slash their allocations over the following two years, while 38% plan to increase their exposure to the real estate market.

The day ahead

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

In Asia, the Hang Seng increased 2.02% to 26,830.29, while the Nikkei 225 rose 0.96% to 20,555.29.

In Europe, around midday, the FTSE 100 increased 0.022% to 6,856.51, and the Euronext 100 was up 0.42% to 933.19.

On the macro front

The PPI-FD index, the Empire State manufacturing survey and the Redbook index 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.

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REIT Replay: REIT prices bounce back during week ended Jan. 11: All SNL REIT property sector indexes recorded positive share price growth during the week, with the industrial, hotel and office sectors leading the way.

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