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NYC project gets $430M loan; WeWork in talks with banks for potential $2B loan

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NYC project gets $430M loan; WeWork in talks with banks for potential $2B loan

Commercial real estate

* GFP Real Estate, Northwind Group and TPG Real Estate Partners obtained a $430 million loan to finance the redevelopment of the Guardian Life building in Manhattan, N.Y.'s Financial District, The Real Deal reported, citing the developers. The construction loan was provided by Square Mile Capital.

The building at 7 Hanover Square will be converted into two separate portions with addresses at 100 Pearl St. and 50 Water St. NYC Health + Hospitals has leased more than 525,000 square feet of office space at 50 Water St., the report noted.

* WeWork Cos. Inc. is in talks with banks including JPMorgan and Goldman Sachs for financing to prevent a cash crunch after parent The We Co. postponed the coworking giant's IPO, the New York Post reported, citing a source close to the situation. The publication noted that sources cautioned that the discussions are at an early stage and "are fluid."

One of the sources said the banks could arrange a loan of up to $2 billion or more, the report noted. Japan's SoftBank Group Corp., WeWork's biggest backer, is not expected to participate in the JPMorgan-led financing, one of the sources told the publication.

* Macklowe Properties Inc. received roughly $192 million from Fortress Investment Group for its planned skyscraper in Midtown Manhattan, The Real Deal reported, citing property records. The Tower Fifth project, planned to be about 1,500 tall, is expected to cost more than $1 billion and will total 1 million square feet.

The financing is for three parcels at 17 E. 47th St., 5 E. 51st St. and 12 E. 52nd St. The two parcels on 51st and 52nd streets are part of the assemblage for the planned office tower.

* Acore Capital provided a $190 million construction loan for developer Michael Shvo and his partners' 54-unit condominium project at 9200 Wilshire Blvd. in Beverly Hills, Calif., The Real Deal reported, citing unnamed sources. Shvo and partners paid $130 million for the site in May with a $51 million loan from Acore.

* Toll Brothers Inc.'s soon-to-be-former headquarters building at 250 Gibraltar Road in Horsham, Pa., is up for sale after its owner defaulted on a loan, causing the property to go into foreclosure, the Philadelphia Business Journal reported. After Toll Brothers opted not to renew its lease, owner Buckhead Gibraltar defaulted on the property loan and the 203,000-square-foot office building was returned to lender C-III Capital Partners.

The 18-acre asset previously changed hands for roughly $44 million in February 2007. Toll Brothers, an occupant for 15 years, is preparing to relocate to 163,000 square feet at 1140 Virginia Drive in Fort Washington, less than five miles away, the report noted. Robert Fahey, a broker with CBRE Inc., who is marketing the property, said the property provides the prospective buyer with redevelopment or new development options, the report noted.

* The Wall Street Journal featured a report on the rise in meeting-space companies in New York City, which saw a 5% uptick in people attending meetings and conventions in 2018. U.K.-based etc.venues, which recently leased its second space in the city, plans to expand to between nine and 12 locations in the Big Apple in the next few years.

The conferences market has seen a shift to single-day events after the previous financial recession, and corporate meeting planners are also shifting from big hotels to independent operators, the publication noted, citing a 2019 report from IACC, an organization for meeting-industry professionals and companies. Hotel use by planners dropped from roughly 62% in 2017 to 47% in 2019, the report noted, citing a survey of 250 international planners.

* United Parcel Service Inc., or UPS, has leased 814,901 square feet in the Pacific Commons Industrial Center in Fremont, Calif., in what is the largest speculative industrial building deal in the San Francisco Bay Area, the Silicon Valley Business Journal reported, citing confirmation from three sources. Landlords Conor Commercial Real Estate and American Realty Advisors had announced the lease without naming the tenant.

UPS will open an e-commerce and logistics hub at the 42-acre property in January 2020.

* Capital Health Group affiliate CHH-GD Boca Raton Realty LLC sold the Symphony at Boca Raton senior living facility in Boca Raton, Fla., to Meridian Senior Living LLC affiliate SOMH Boca Raton Holdings LLC for $60.9 million, the South Florida Business Journal reported. The 130,440-square-foot assisted living and memory care facility at 21865 Ponderosa Drive features 154 units, as well as amenities.

* The Greater Los Angeles office market recorded 4 million square feet of leasing activity in the third quarter, marking a 25% decline from the three-year record of 5.3 million square feet in the second quarter, The Real Deal reported, citing Savills. Active projects totaled 4 million square feet during the quarter, of which more than half was preleased.

The overall vacancy rate was 18.6% and overall asking rates were $3.46 per square foot.

* Maltese Diplomat Owner 100 LLC, managed by Ari Pearl of PPG Development Group, received a $100 million construction loan for the first phase of the SLS hotel and condominium project in Hallandale Beach, Fla., the South Florida Business Journal reported, citing county records. The financing was provided by Real Estate Credit Solutions Agent R, which is managed by Related Cos.

The overall project is approved for four towers with 1,188 hotel rooms and condos.

After the bell

* The vacancy rate in the U.S. retail property market fell slightly by 0.1% year over year to 10.1% in the third quarter, while the average rent growth rate slowed to 0.3% from 0.4% in the second quarter, according to Reis Inc.

The day ahead

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

In Asia, the Hang Seng fell 1.11% to 25,821.03, while the Nikkei 225 rose 0.32% to 21,410.20.

In Europe, around midday, the FTSE 100 was up 0.35% to 7,102.21, and the Euronext 100 increased 0.27% to 1,057.94.

On the macro front

The employment situation report, the international trade report and the Baker-Hughes Rig Count 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.

Now featured on S&P Global Market Intelligence

Data Dispatch: US REIT returns continue to soar in Q3, outperforming broader market: The SNL U.S. REIT Equity index finished the quarter with a total return of 7.6%, much higher than the S&P 500's 1.7% return over the same time period. Nearly all REIT property types logged positive market appreciation during the quarter.

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