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Paramount lands NYC lease; dead malls crossing over to logistics space

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Paramount lands NYC lease; dead malls crossing over to logistics space

Commercial real estate

* Two component companies of Travel Leaders Group Elite Division have leased 106,000 square feet at Paramount Group Inc.'s 1633 Broadway property in what is one of the largest office leases in Midtown Manhattan, N.Y., the New York Post reported. Tzell Travel Group and Protravel International signed the 16.5-year lease for the space.

* The Wall Street Journal featured a report on how demand for warehouse space is prompting landlords to convert dead malls into logistics space. The publication noted examples of Amazon.com Inc. and FedEx Corp. targeting former mall sites for potential fulfillment centers and distribution facilities.

* LaSalle Hotel Properties is looking to sell its leasehold interest in the 162-room Viceroy Santa Monica hotel in Santa Monica, Calif., The Real Deal reported, citing unnamed sources as saying that the property could fetch more than $130 million. LaSalle had acquired the 1819 Ocean Ave. asset for $80.1 million in 2011. The hotel is subject to a ground lease with the City of Santa Monica that expires in 2065.

* Pennsylvania Real Estate Investment Trust is selling the first six floors of 801 Market St. in Philadelphia to Cohen Equities, which already owns the seventh through 13th floors in the building, the Philadelphia Business Journal reported, citing unnamed sources. The floors under contract house the offices of The Philadelphia Inquirer and Daily News, as well as a Century 21 department store.

The company disclosed the deal along with two other sales, which are together expected to net $75 million.

* The New York State Teachers' Retirement System appointed CBRE Global Investors as a separate account manager for the first time to invest in core-plus real estate in the U.S., IPE Real Estate reported.

* A Journal report touched on the second-quarter results of major mall operators, which showed "some resilience" in the face of doom and gloom hype in the retail real estate sector.

* Eden Multifamily proposed a 32-story apartment tower in a $133 million project on a parking lot site in downtown Fort Lauderdale, Fla., according to a report by the Sun Sentinel. The company submitted an application to the city's Development Review Committee for the 374-unit building at 419 SE 2nd St. The project, dubbed Next Las Olas, will also have ground-floor retail and an eight-story parking garage, the report noted, citing the application.

* A former Motorola facility in Broward, Fla., was partially sold for $56.6 million, the South Florida Business Journal reported. An affiliate of Torburn Partners sold the 215,744-square-foot buildings at 7600 to 7700 W Sunrise Blvd. in the Plantation Pointe Office Park to an affiliate of Midtown Capital Partners. The off-loaded property spans 17.44 acres. The seller is retaining ownership of two other buildings in the business park, the report noted.

* A Sequoia Equities arm will pay "a remarkable sum" of $53 million for the Eviva Midtown mixed-use project in Sacramento, Calif., the Sacramento Business Journal reported. The six-story, 118-unit building at 16th and N streets was the first residential project in the region that used modular construction. Its original module builder went out of business after failing to deliver on the project.

The property is being sold by developer Integral Communities.

* Menlo Equities sold a 180,000-square-foot office building in Milpitas, Calif., for $49.8 million to Nazareth Enterprises, Commercial Property Executive reported. The company had bought the property at 510 Cottonwood Drive for $24.1 million in 2010, the report said, citing Yardi Matrix data. The asset is fully let to Johnson & Johnson Vision.

After the bell

* A Gaw Capital Partners-controlled fund is in the late stages of talks to acquire the Standard Hotel along the High Line in New York City for $340 million, the New York Post reported, citing unnamed sources.

* MetLife Inc. is closing in on a deal to buy a preferred equity stake in a 25-story office tower in New York City's Garment District for up to $150 million in investment, The Real Deal reported.

* VEREIT Inc.'s operating partnership priced a $600 million offering of 3.950% senior notes due 2027.

* Allied Properties REIT agreed to issue 6,925,000 units from treasury at C$39.00 apiece for roughly C$270 million in gross proceeds.

* Healthcare Realty Trust Inc. priced its underwritten public offering of 7,250,000 shares of common stock at $30.90 apiece to net about $215.1 million.

The day ahead

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

In Asia, the Hang Seng fell 0.35% to 27,757.09, and the Nikkei 225 was down 1.29% at 19,738.71.

In Europe, as of midday, the FTSE 100 had dropped 0.80% to 7,482.53, while the Euronext 100 had fallen 1.38% to 1,001.33.

On the macro front

Mortgage applications increased 3% on a seasonally adjusted basis in the week ended Aug. 4, the Mortgage Bankers Association reported, citing data from its weekly mortgage applications survey.

The productivity and costs report, the wholesale trade report and the EIA petroleum status report are also due out today.

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Data Dispatch: US REIT capital raising up 33% YTD through July 31: Chart Watch: Year to date as of July 31, publicly traded U.S. equity real estate investment trusts raised $54.49 billion in capital, with $9.01 billion raised during the second half of July.

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