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Simon boosts Houston mall revamp; NYC luxury project fetches low auction price

Commercial real estate

* As part of its ongoing $250 million renovation and expansion efforts at the Galleria mall in Houston, Simon Property Group Inc. is planning to revamp the former Saks Fifth Avenue store at the location into 110,000 square feet of new restaurant and retail space, the Houston Business Journal reported.

The latest transformation project has a $30 million price tag and will feature two floors of luxury retail with 35 retailers, the report said. Simon also plans to develop a luxury hotel and residential tower at The Galleria, as reported report.

* Gamma Real Estate won the court-ordered auction for the 3 Sutton Place development site on Manhattan, N.Y.'s Upper East Side, The Real Deal reported. The company, which was the original lender on the project, paid around $86 million for the site in addition to $12 million for additional air rights.

The report noted that the winning bid indicates that the land market for luxury condos has "plummeted," as insiders had expected an up to $187 million price tag for the property.

Bauhouse Group had assembled the site with $147 million in loans from Gamma for a 950-foot tall condo project, which has just over 260,000 buildable square feet, but defaulted in January and later filed for bankruptcy, the report said.

Bloomberg News also reported on the auction.

* Tommy Hilfiger is planning to move his company headquarters to RFR Realty's 285 Madison Ave. in Manhattan's Midtown East, The Real Deal reported, citing unnamed sources. Hilfiger's parent company Phillip Van Heusen is in late stage negotiations to lease roughly 150,000 square feet at the 23-story building. The company would be moving its headquarters from the West Chelsea district, according to the report.

* Japanese retail chain Uniqlo is in talks to lease around 100,000 square feet at the 23 Wall St. retail building in Manhattan's Financial District, unnamed sources told The Real Deal.

Developer Jack Terzi's JTRE Holdings signed a contract in August to buy the 160,000-square-foot long-vacant landmark building for about $140 million, the report noted, citing sources.

* The Real Deal reported that the controversial EB-5 visa program was granted a short-term extension by Congress until April 28, 2017, as it was slated to lapse Dec. 16. The program offers foreign investors green cards after they make the minimum required investment in job-producing ventures. The program's minimum investment requirements may be raised and targeted employment areas could be redefined under a new bill, the report said.

It was recently reported that experts expect the program to "thrive" under Donald Trump's presidency.

* Bloomberg News and The New York Times featured reports on the stalled multibillion American Dream mall project in New Jersey that is now expected to complete in fall 2018, according to developer Triple Five Group. If the roughly 2.5 million-square-foot retail and entertainment center does open in 2018, it will have a total expense tag of $5 billion and a 15-year development timeline, according to Bloomberg News.

* The Wall Street Journal featured a report on mall landlords' strategy of adding tenants that engage customers to keep them coming back regularly at a time when e-commerce is causing retailers to revise their physical presence. Mall landlords are increasingly turning to education providers, such as providers of culinary and crafts classes, as well as child-focused tenants, the publication said.

* Citigroup Inc. said it bought the 3800 Citibank Center property in Tampa, Fla., from an affiliate of Zurich Alternative Asset Management. Reporting on the acquisition, the Tampa Bay Business Journal said the suburban office park property spans 672,500 square feet and is solely occupied by Citigroup's Citibank division.

Citigroup was believed to be looking for one million square feet of office space in downtown Tampa for an expansion, but the present acquisition may have put an end to the plans, the report said. However, the company could still expand on its own property, if needed.

Financial terms of the deal were not disclosed.

* The Writer Square property in downtown Denver was sold by Unico Properties for approximately $95.3 million, the Colorado Real Estate Journal reported. The asset comprises a 123,285-square-foot office tower and 58,146 square feet of retail space, along with parking spaces. Kroenke Group affiliate GKT Writer Square LLC was the buyer.

* Gemini Rosemont LLC partnered with Hong Kong-listed Gemini Investments to acquire the One Twelfth @ Twelfth office campus in the Seattle submarket of Bellevue, Wash., according to a release. The three-building class A asset comprises 480,389 rentable square feet and is fully leased.

The campus was sold by Principal Financial Group's real estate arm Principal Global Investors, the Puget Sound Business Journal said. Principal had acquired the property 12 years ago for $134.1 million.

* Moody's expects the fundamental credit conditions driving the U.S. REIT industry to remain stable across all property types in 2017 and that REITs are "well positioned" for rising U.S. interest rates.


* Lawmakers in an upper house committee in Japan's parliament approved a bill to legalize casinos in the country, Reuters reported. The approval "essentially assures" the bill's enactment into law. The bill had failed in previous parliaments to come up for a vote, the news outlet said.

The report said local and international gaming companies, including MGM Resorts International, stand to benefit from the legalization of gambling in the country.

The day ahead

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

In Asia, the Hang Seng was up 0.04% to 22,456.62. The Nikkei 225 rose 0.02% to 19,253.61.

In Europe as of midday, the FTSE 100 had dropped 0.13% to 6,959.43, and the Euronext 100 had fallen 0.55% to 916.61.

On the macro front

Mortgage applications decreased 4% from a week ago on a seasonally adjusted basis for the week ended Dec. 9, according to the Mortgage Bankers Association's weekly survey. The refinance index also decreased 4% from the previous week.

The producer price index for final demand, the retail sales report, the industrial production report, the business inventories report, the EIA petroleum status report, the FOMC meeting announcement and the FOMC forecasts are due out today. The Fed chair press conference will also be held today.

Now featured on S&P Global Market Intelligence

Data Dispatch: US real estate companies pay 21 special dividends YTD: Eighteen SNL-covered publicly traded U.S. real estate companies made special dividend payments year-to-date as of Dec. 6. Diversified REIT Gyrodyne made the largest single per-share payment among the group.

Data Dispatch: Multifamily lending keeps towering: Multifamily loans continued their brisk double-digit growth in the third quarter of 2016, even as industry participants prepare for some softening in the space.

Data Dispatch: Mortgage rate spike shutters refinance boom: Higher mortgage rates since the election of Donald Trump have hurt refinancing activity, but researchers expect home prices to be largely unaffected. An increase in the fed funds rate is unlikely to change the landscape.

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.