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Brookfield Asset lands $635M refinancing; AvalonBay nets $470M from stake sale

Commercial real estate

* Brookfield Asset Management Inc. will refinance its 42% stake in the New York Times building in Midtown Manhattan, N.Y., using $635 million from four lenders, The Real Deal reported, citing documents filed with the city Dec. 19. FC Eighth Ave. LLC, a former affiliate of Forest City Realty Trust Inc., which the asset manager acquired in a $11.4 billion deal, borrowed the amount from Deutsche Bank, Bank of America, Barclays Capital Real Estate Inc. and Citi Real Estate Funding Inc.

The New York Times developed the property alongside Forest City and holds the remaining 58% stake in the building. The new financing, which includes a $435 million gap mortgage and replaces a previous debt from another former Forest City unit, Whiteacres Loan Acquisition LLC, covers space on the first floor, as well as office condos on floors 28 through 50 at 620 Eighth Ave.

* AvalonBay Communities Inc. closed on the sale of an 80% stake in five apartment communities in Manhattan for net proceeds of approximately $470 million. The company contributed its fee ownership of Avalon Morningside Park, Avalon Bowery Place I and Avalon Bowery Place II, as well as its leasehold interest in Avalon West Chelsea and AVA High Line, to a newly established joint venture with an institutional client of global real estate investment manager Invesco Real Estate Ltd.

The deal was based on a total asset valuation for the contributed assets of about $760 million. AvalonBay will retain a 20% stake and serve as the managing member and property manager for the properties.

* Xenia Hotels & Resorts Inc. sold the Residence Inn Denver City Center in Denver for $92 million, or approximately $404,000 per room. The deal reflected an unlevered internal rate of return of 10.4% for Xenia, which bought the 228-room property for $80 million in 2013.

* Norway's sovereign wealth fund Norges Bank Real Estate Management and TH Real Estate closed the sale of their office property at 470 Park Ave. S in New York to SJP Properties and Prudential Real Estate Investors for $245 million, Commercial Observer reported, citing an announcement from the buyers.

Norges Bank netted $122 million for its 49.9% stake in the 17-story building that spans 301,178 square feet of office and ground-floor retail space.

* Miami-based developer OKO Group LLC and partner Aman Group scored a $284.5 million loan to finance the conversion of a portion of the Crown Building in New York City into apartments and a hotel, The Real Deal reported. U.K.-based real estate investment firm Cain International provided the financing, which replaced a mortgage from Deutsche Bank and Canadian Oxford Properties Group Inc. The partners are looking to convert the upper portion of the 730 Fifth Ave. office building into 20 luxury apartments and an 83-room Aman hotel.

* The Florida Department of Transportation, or FDOT, wants to demolish a 155,597-square-foot shopping center in Lake Buena Vista, Fla., and has offered to acquire the asset for about $146 million from owner TIAA-CREF, an affiliate of TH Real Estate, the Orlando Business Journal reported, citing an emailed response from FDOT.

On State Road 535, Crossroads of Lake Buena Vista is in the way of I-4 Beyond the Ultimate, which will stretch the roughly $2.3 billion, 21-mile, multiyear I-4 Ultimate project by about 40 miles. FDOT will conduct a hearing to take legal possession of the retail center from Jan. 14, 2019, to Jan. 16, 2019. There is no scheduled date to bulldoze the shopping center, and tenants have until June 2021 to stay on the property.

* Highland Capital Management LP acquired a 1.6 million-square-foot office complex comprising two eight-story buildings on Legacy Drive in Plano, Texas, from DXC Technology Co., The Dallas Morning News reported, citing deed records. The campus, which served as the former headquarters of Electronic Data Systems, was expected to sell for about $125 million, the report said.

* Goldman Sachs Group Inc.'s Goldman Sachs Asset Management Private Real Estate and joint venture partner Pendulum Property Partners LLC bought the class A Axis office campus in Anaheim, Calif., for $83.1 million from The Seligman Group, Commercial Property Executive reported, citing Yardi Matrix. The five-building campus spans 301,761 square feet across 2390 E. Orangewood Ave. and 2121, 2150, 2170 and 2190 S. Towne Centre Place in the Platinum Triangle submarket.

* The National Real Estate Investor anticipates retail landlords will fill shopping mall vacancies created by big box retailers like Sears Holdings Corp. and Toys R Us Inc., with mom-and-pop shops. As the traditional big-box era comes to an end, shopping center owners are expected to repurpose large spaces with salons, group fitness tenants, cold-press juice shops, vegan/health-oriented dining establishments, quick service restaurants and more, according to a Dec. 20 report by the magazine.

Many retail giants are opting to repurpose vacated spaces at or around its malls, including real estate investment trust Kimco Realty Corp. and Walmart Inc. Regional-mall focused retail REIT Simon Property Group Inc. intends to spend $1 billion to redevelop or reposition its 33 Sears locations. Local and regional mom-and-pops that provide an experience, which cannot be purchased online in two days, are in heavy demand, the report added.

The day ahead

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

In Asia, the Hang Seng fell 0.94% to 25,623.53, while the Nikkei 225 was down 2.84% to 20,392.58.

In Europe, around midday, the FTSE 100 fell 0.26% to 6,748.23, and the Euronext 100 was down 1.14% to 917.00.

On the macro front

The jobless claims report, the Philadelphia Fed Business Outlook survey, the leading indicators report, the Energy Information Administration natural gas report, the Fed balance sheet and the money supply 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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The past as prologue: Simon Property Group at 25: The dominant mall landlord and second-largest real estate investment trust by market capitalization has gotten most things right over its quarter century as a public company, and likely will be at the top in 25 more years, industry players said.

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