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Lexington Realty sells $726M portfolio; NYC office gets $125M Blackstone loan


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Lexington Realty sells $726M portfolio; NYC office gets $125M Blackstone loan

Commercial real estate

* Lexington Realty Trust sold a 21-property office portfolio to a joint venture between the company and affiliates of Davidson Kempner Capital Management LP for $726 million.

Lexington Realty received net cash proceeds of roughly $565 million at closing. Following the deal, the company's industrial assets based on consolidated revenue are expected to account for 60% of its portfolio, compared to 44% at the end of 2017.

The portfolio spans roughly 3.8 million square feet and is 98.6% leased with a weighted-average remaining lease term of roughly 9.5 years.

* Pearlmark Real Estate Partners landed a $125 million loan from Blackstone Group for its Tower 56 office building in Manhattan, N.Y.'s Plaza District, The Real Deal reported, citing a source with knowledge of the loan. The financing replaces a $92.5 million loan from CIBC from 2013, the report added, citing records.

The 33-story property, spanning 187,000 square feet, was acquired for $158 million in 2008 and has seen $30 million in upgrades and renovations.

* The Wall Street Journal featured a report on the rise of short-term leases in Manhattan as a number of retailers test the market before committing long term. Citing CBRE Group Inc., the publication reported that leases of three years or less for temporary stores have "increased sharply" since 2016. According to CBRE, there were 53 such deals in 2017, compared to 13 in 2016. In 2018, there were at least 28 short-term store deals as of the second quarter.

* Madd Equities has pre-filed permits for a 30-story mixed-use building on a waterside vacant lot in Manhattan's Inwood neighborhood, New York YIMBY reported. The project at 3875 Ninth Ave. would span 600,000 square feet with 614 apartment units.

* Apartment rents in Queens, N.Y., rose at the fastest rate among large cities in the U.S. in August, jumping 8.4% year over year, RENTCafe reported, citing Yardi Matrix data. Phoenix saw the second-fastest rent growth in the month at 6.8%.

* Developer Breaking Ground received a $157 million loan from the New York City Department of Housing Preservation and Development for its $170 million acquisition of a former Jehovah's Witnesses building in downtown Brooklyn, N.Y., Commercial Observer reported, citing property records.

According to The Real Deal, the 90 Sands St. property was sold by RFR Realty, and the buyer, an affordable housing developer, plans to convert it into a low- to moderate-income and supportive housing site. RFR had planned a hotel on the site.

* Liberty Property Trust acquired the 426,302-square-foot I-210 Logistics IV industrial property in Rialto, Calif., and leased the newly developed property to engineering and logistics company CTDI, according to a release from the company.

Commercial Property Executive reported that the asset was acquired for $52 million.

* Lynx Cos. plans to acquire the 3.4-acre site of the City Hall and police station in South Miami, Fla., to build a $185 million mixed-use project and new facilities for the city, the South Florida Business Journal reported. The plans include 312 market-rate apartments, 154 assisted living beds and retail space, along with a 725-space parking garage.

The South Miami City Commission is slated to consider the proposal Sept. 4, according to the report.

* Teachers Insurance & Annuity Association paid $81.1 million for the Fusion 1560 apartment complex in St. Petersburg, Fla., Business Observer reported, citing records. The deal for the five-story asset at 1560 Central Ave. is the biggest apartment transaction in the city since the start of 2018, the report added.

The 326-unit property was completed in 2010 and includes a number of amenities. The seller was an affiliate of Mesirow Financial, which paid $57.5 million for it in 2015, the report noted, citing Pinellas County property records.


* Citing RedFin, CNBC reported that luxury homes on the market have seen $1 billion in cumulative price cuts during the second quarter as foreign deals slow and the new tax law takes effect. The report added that 12% of homes listed for $10 million or higher saw price reductions in 2018, which is double the reduction levels seen in 2015 and 2016.

* Kolter is planning to build 466 homes near Panama City, Fla., The Real Deal reported. The homes are planned at the Watersound property owned by St. Joe Co., with sales expected to commence in 2020.

The day ahead

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

In Asia, Hang Seng gained 0.94% to 27,973.34, while the Nikkei 225 fell 0.05% to 22,696.90.

In Europe, around midday, the FTSE 100 dropped 0.30% to 7,481.73, and the Euronext 100 shed 0.94% to 1,049.48.

On the macro front

The Purchasing Managers' manufacturing index, the Institute For Supply Management's manufacturing index and the construction spending report 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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