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Blackstone splashes $313M in San Francisco; Duke Realty to build Amazon facility

Commercial real estate

* Blackstone Group LP has agreed to acquire an 18-story San Francisco building from CIM Group for $313 million, the San Francisco Business Times reported, citing real estate sources familiar with the deal. The 417,200-square-foot building, at 211 Main St., serves as the headquarters for financial services firm Charles Schwab Corp. which renewed its lease for the entire building in December 2016, the report noted.

CIM Group had acquired the asset in the city's South Financial District for $113.3 million in 2009, the report said, citing property records.

* Inc. is planning its second Houston-area fulfillment center in Katy, Texas. The one million-square-foot facility will be developed by Duke Realty Corp., and will be the online retail giant's tenth Texas fulfillment center, according to a release.

The Houston Business Journal also reported on the news, noting that Amazon's other Houston-area fulfillment center is being developed in Pinto Business Park at a cost of $136 million.

* Toll Brothers Inc.'s Toll Brothers City Living division is planning a two-building, 162-unit condominium complex in Manhattan, N.Y.'s Hudson Square, The Real Deal reported, citing a representative from the company. The project will comprise two connected 15-story buildings spanning 208,365 square feet at 77 Charlton St.

* Bloomberg News featured a report on the recently collapsed financing deal between China's Anbang Insurance Group Co. Ltd. and Kushner Cos. for the 666 Fifth Ave. marquee tower in Manhattan that has more than $1.2 billion of growing debt. Kushner Cos. is in talks with other potential investors, and Bloomberg Intelligence senior analyst Jeffrey Langbaum noted that the investor pool is likely to include private equity firms due to conflict of interest concerns.

The news outlet also said "a more modest approach to revamping the tower" is a possibility, citing sources close to the Kushners and others who know the Manhattan market, but Kushner Cos. plans to carry out the original $4 billion upgrade plan.

* Extell Development has raised $168 million in EB-5 funds for its Central Park Tower condo project on Manhattan's Billionaires' Row, The Real Deal reported, citing a call to Israeli bondholders by Extell's Gary Barnett. According to TRD, the company's year-end report indicates that the 95-story tower's completion date has been pushed back by a year to November 2020, while the $4.4 billion sellout target remains unchanged.

The company is still seeking a $900 million construction loan to complete the project, the report noted.

* A roughly $145 million deal by Raphael Toledano's Brookhill Properties to off-load a 15-building portfolio in Manhattan's East Village to Joseph Sutton has been called off, The Real Deal reported, citing unnamed sources. An affiliate of Brookhill has filed for Chapter 11 bankruptcy protection on the portfolio, the report said, citing bankruptcy documents filed with the U.S. Bankruptcy Court for the Southern District of New York.

Back in February, Madison Realty Capital had filed to foreclose on the multifamily portfolio just days after the deal with Sutton was signed. The report said the bankruptcy filing would afford Toledano more time to sell the properties and avoid foreclosure.

* Manhattan apartment sales during the first quarter were down 4% from the year-ago period, The Wall Street Journal reported, citing an analysis of public records. The publication termed the results as "unusually" robust as the performance was the second strongest for a first quarter since 2008.

* The Bronx borough of New York City saw a record $3.3 billion of real estate investment in 2016, and logged more than 14.2 million square feet of development in the pipeline, The Real Deal reported, citing Bronx Borough President Ruben Diaz Jr., who was speaking at a real estate panel.

Citing a report released by Diaz's office, The Real Deal said the investment figure marks a 37% annual increase, and the development marks a 41% increase compared to 2015.

* The landmark Providence Towers office complex on the Dallas North Tollway is on the market after being owned by KBS Realty Advisors LLC since 2009, The Dallas Morning News reported. KBS bought the 530,000-square-foot asset for about $62 million during the recession, and the property is expected to sell for more than twice the amount, the report said. The building was built in 1985 for about $85 million, the report noted.

* The San Francisco Business Times reported that the homeowners association of the tilting Millennium Tower has filed a civil lawsuit seeking damages of more than $200 million to pay for the repairs. The 58-story tower in San Francisco's financial district sank 16 inches into the ground and began to tilt slightly northwest since its completion in 2009, and a November report indicated that it may be sinking faster than previously thought.

* The Trump Organization is looking to open a second hotel in Washington, D.C., as part of a planned nationwide expansion, The Washington Post reported. The new hotel would be operated under the comparatively affordable Scion brand.

After the bell

* Pure Multi-Family REIT LP launched a bought-deal offering of 7,870,000 class A units at C$8.90 apiece, aiming to raise about C$70.0 million in gross proceeds.

* Omega Healthcare Investors Inc. plans to fully redeem the outstanding $400.0 million of its 5.875% senior notes due 2024.

* HCP Inc. wrapped up the roughly $1.13 billion sale of a 64-community portfolio, saying it expects to book a gain of about $165 million on the sale.

* Westfield Corp. priced an offering of US$500 million of 3.150% guaranteed senior fixed-rate notes due April 2022.


* According to ATTOM Data Solutions, 95 counties out of 379 counties analyzed, or 25%, had lower than historic average housing affordability in the first quarter of 2017 based on its affordability index. This marks the highest share of markets with a below-normal affordability rate since the fourth quarter of 2009.

The day ahead

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

In Asia, the Hang Seng fell 0.37% to 24,301.09, and the Nikkei 225 was down 0.80% to 19,063.22.

In Europe, as of midday, the FTSE 100 was down 0.26% to 7,354.75, and the Euronext 100 fell 0.06% to 976.76.

On the macro front

The GDP report, the jobless claims report, the EIA natural gas report, the Fed balance sheet and the money supply report are due out today.

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The Daily Dose is updated as of 7:30 a.m. ET. Some external links may require a subscription. Articles and links are correct as of publication time.