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Real Estate News & Analysis: May Edition


Starwood Capital refinances NYC project; Blackstone buys Fla. rental community

Commercial real estate

* A 28-story hotel-condominium project on Manhattan, N.Y.'s Lower East Side landed a $173.3 million loan from Starwood Capital Group, The Real Deal reported, citing documents filed with the city. Witkoff Group and hotelier Ian Schrager are building the 370-room hotel and 11 residences, 10 of which have gone into contract.

The refinancing replaces and consolidates three previous loans from Massachusetts Mutual Life Insurance. The residential units have a total target sellout of $118.4 million, the report noted, citing filings with the New York State Attorney General's office.

* Blackstone Group LP snapped up an apartment community in Margate, Fla., from an affiliate of IMT Residential for $69.9 million, The Real Deal reported, citing Real Capital Analytics data. The Pinebrook Pointe rental complex spans 33 acres and comprises about 20 three-story buildings. It was roughly 94% occupied when sold.

IMT had acquired the asset for $51.7 million in 2012.

* The 28-story Priatek Plaza in downtown St. Petersburg, Fla., was sold to Third Lake Capital, an investment fund for the Wanek family, for an undisclosed price, the Tampa Bay Business Journal reported. The report said commercial real estate observers have estimated the price for the tower "in the $60 million range." The property is 76% leased, according to the report.

It has a total area of 309,000 square feet, according to the Tampa Bay Times, which also reported on the sale.

* The Philadelphia Inquirer featured a report on retail property owners' strategy of developing residential space to add to their shopping space. The publication noted that a number of retail center owners are redeveloping their shopping destinations to add housing, including Cedar Realty Trust Inc. and Kimco Realty Corp.

* ASRR Capital is teaming up with two Asian investors for a 1.7-million-square-foot residential, retail and office complex in Miami's Arts & Entertainment District, The Real Deal reported, citing documents filed with the Tel Aviv Stock Exchange. Plans include two towers rising 60 stories and 40 stories, with up to 1,200 rental units, 350,000 square feet of office space and 20,000 square feet of retail space.

ASRR's partners in the project are Chinese construction company CNMB International and Hong Kong-based G-Resources, the report said.

* Kushner Cos. is seeking a $250 million loan to pay off Chinese investors in the Trump Bay Street luxury apartment tower in Jersey City, N.J., Bloomberg News reported, citing a person familiar with the negotiations. The 50-story tower has a development bill of $194 million, a quarter of which was from Chinese investors through the EB-5 visa program.

Some large U.S. banks are "shying away" from the deal because of the property's connection to the Kushner family and the investor visa program, the unnamed source told the news outlet.

The New York Times also reported on the news.

* Citing a Colliers International report, the Houston Business Journal said the city's office market appears to be stabilizing, partly due to a slowdown in overall development activity. Stephen Newbold, Colliers' national director of office research, said "the market is past its worse," and added that he does not expect a significant upward or downward swing over the next 12 months, according to the report.

* The Trump Organization unveiled plans for a new three-star hotel chain called American Idea, The New York Times reported. In a foray outside of luxury, the company had previously introduced its four-star brand called Scion.

The American Idea chain is set to make its debut in lesser-known towns in Mississippi, in contrast with the upscale locations that the company is commonly associated with.

After the bell

* The Norwegian government's global pension fund, Norges Bank Investment Management, and Oxford Properties are set to acquire 900 16th St. NW in Washington, D.C., for $160 million, GlobeSt.com reported, citing an unnamed source.

* Forestar Group Inc acknowledged the receipt of an unsolicited cash bid from D.R. Horton Inc. to buy 75% of its outstanding common shares for $16.25 per share, and said its board will review the proposal. It noted that it stands behind its recommendation to shareholders that they vote in favor of the company's roughly $605 million merger deal with Starwood Capital Group.

* Colony Starwood Homes agreed to acquire a portfolio of 3,106 single-family rental homes for about $815 million and announced the launch of an underwritten public offering of 19,933,187 of its common shares to fund the portfolio acquisition.

* Nexus REIT agreed to acquire a portfolio of assets for roughly C$147 million and launched a C$55 million bought-deal equity offering and a C$15 million private placement with its largest unit holder, RFA Capital Partners Inc., to partially fund the transaction.

Housing

* LGI Homes Inc.'s home closings reached 523 in May, reaching an all-time monthly record. The month's closings reflect a 21.1% year-over-year growth from 432 homes closed in May 2016, the company said in a release.

* The average home price in the Denver area jumped 9.83% year over year in May to a new high of $449,736, according to the Denver Metro Association of Realtors.

The day ahead

Early morning futures indicators pointed to a lower opening for the U.S. market. In Asia, the Hang Seng rose 0.52% to 25,997.14, while the Nikkei 225 fell 0.95% to 19,979.90. In Europe, around midday, the FTSE 100 was down 0.8% at 7,520.78 and the Euronext 100 was 0.32% lower at 1,021.88.

On the macro front

The Gallup US ECI, the Redbook and the JOLTS report are due out today.

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