Swiss Insurer Ready to Step Up US Purchases

FEBRUARY 19, 2014
2 Big Industrial Bundle in Mexico Listed
3 Cabot Exceeds Equity Goal for Vehicle
3 Invesco Plans 4th Value-Added Fund
3 Net-Leased Industrial Portfolio Offered
4 Avanti Markets High-Yield Land Fund
4 Duo Sells, Lists DC-Area Apartments
4 Fla. Apartment Portfolio Offers Upside
6 Hoboken Apartment Complex Listed
6 Mariner Solicits Capital for 4th Vehicle
6 Heitman Markets 5th European Fund
6 Minnesota State Offices Up for Grabs
7 Atlanta-Area Rentals Due for Upgrade
8 Maryland Warehouse, Land Offered
8 Value-Added Retail Play Offered in Md.
11 MARKET SPOTLIGHT
THE GRAPEVINE
Co-founder Chuck Purse is stepping
down from placement agent Park Hill
Real Estate, arguably the most wellknown firm raising equity for commercial real estate funds. The New York
advisory shop told clients last week that
the senior managing director was retiring. He’s leaving at the end of March.
Fund pros doubt Purse, based in Manhattan, will be replaced, and expect his
duties to be divided among other top
executives, including senior managing
directors Frank Schmitz and Michael
Stark. Purse, one of the most recognizable names in equity raising, helped
launch Park Hill in 2005 through a joint
See GRAPEVINE on Back Page
Starwood to Buy Retail Building in Manhattan
Starwood Capital has agreed to pay roughly $250 million for a retail building
across the street from Macy’s flagship store in Midtown Manhattan.
The 78,000-square-foot property, at 150 West 34th Street, was quietly marketed
by local developer KLM Construction via Eastdil Secured.
The three-story building has been fully leased by clothing company Old Navy
since it was constructed in 1999. When the store opened, it was the largest of Old
Navy’s 292 shops nationwide. The retailer now has more than 1,000 stores worldwide.
The property is zoned for nearly 300,000 sf of commercial space, according to
PropertyShark. So Starwood, a fund operator in Greenwich, Conn., has the option
of significantly expanding the building or selling the air rights to the owner of a
nearby property.
Old Navy’s below-market lease expires in roughly six years. Starwood could then
See STARWOOD on Page 7
Swiss Insurer Ready to Step Up US Purchases
Zurich Alternative Asset Management, the investment arm of Switzerland’s biggest insurer, plans to ramp up its U.S. property portfolio.
The shop is telling brokers and property owners that it wants to buy $400 million to $450 million of core commercial real estate this year, and roughly the same
amount next year. Even after factoring in planned dispositions as it retunes its holdings, the purchases would significantly boost the company’s U.S. portfolio, which
now has $2.5 billion of assets under management.
“The firm’s appetite for real estate is growing,” said one person familiar with the
game plan.
The buying spree is part of a shift in strategy that Zurich Alternative started a
few years ago. The operation previously emphasized the purchase of properties
leased to a single tenant with an investment-grade rating, using leverage and sometimes teaming up with partners. Those plays were similar to investing in corporate
See SWISS on Page 10
Marriott Golf Resort in Florida Up for Grabs
Lender Goldman Sachs is shopping a high-end golf resort near Jacksonville that’s
expected to trade at a 30% discount to the price it fetched near the top of the market.
The 511-room Sawgrass Marriott Golf Resort & Spa, in Ponte Vedra Beach, Fla.,
could attract bids of around $150 million, or $294,000/room. The former owner, Dublin-based Redquartz, paid $220 million for the property in 2006.
Revenues plummeted during the downturn, and Redquartz put the hotel into
bankruptcy. Goldman, which held a $193 million loan on the resort, took control
in 2011. It completed a substantial renovation last year and now has tapped Eastdil
Secured to find a buyer.
When the property was pitched in 2006, the focus was on core buyers. This time
around, there are opportunities to add value that will likely draw interest from highyield investors.
The resort is being offered unencumbered by a management contract and with a
See GOLF on Page 7
February 19, 2014
Real Estate
2
ALERT
ties as a package.
At the estimated value, a buyer’s initial annual yield would
Brookfield Property Partners is marketing a 5.8 millionbe 7.2%, illustrating the higher yields available in Mexico for
square-foot industrial portfolio in northern Mexico that could
core-quality properties. A buyer also would realize a quick
fetch $300 million.
bounce in the first year, as scheduled rent bumps boost the
The 36 high-quality properties are 90.7% leased. They are
net-operating income to $24.2 million, which would boost the
spread across four manufacturing hubs: Juarez (3.1 million sf),
return to 8.1%.
Tijuana (1.2 million sf), Reynosa (1 million sf) and Chihuahua
The package is expected to draw interest from U.S. and over(485,00 sf). The offering also includes 418 acres of developable
seas buyers, both those that already own Mexican industrial
land. Jones Lang LaSalle is representing Brookfield’s Industrial
properties and those looking to break into the market. Investors
Developments International unit, which is offering the properare being told that northern Mexico, with its many manufacturing facilities and key position in
the U.S. supply chain, is poised for
growth as the two nations’ economies continue to recover.
Trading in the region has been
The Nation’s Leading
on the upswing in recent years.
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U.S., Canadian and Australian
firms have been active buyers,
and European and Middle Eastern
investors are increasingly kicking
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the tires. Well-known names
with large industrial holdings in
Mexico include WP Carey Prologis
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and Macquarie. Also, LaSalle
Investment has been active on
behalf of several U.S. and Canadian
institutional investors.
The portfolio has 43 tenants in
a variety of industries. Several of
the properties were build-to-suit
projects, and most of the tenants
have invested heavily in their
buildings. Major tenants include
Big Industrial Bundle in Mexico Listed
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International Paper, Sumitomo,
Visteon and Welch Allyn.
In Juarez, the portfolio includes
17 properties that are 92% leased
and 192 acres of land. There are
seven fully leased properties
and 98 acres of land in Tijuana.
Reynosa has eight properties that
are 85% leased and 128 acres. The
other four properties are in Chihuahua and are 68% occupied.
Bermuda-based Brookfield
acquired Industrial Developments International of Atlanta
last year. Industrial Developments subsequently acquired
Houston-based Verde Realty, a
company controlled by Brookfield that owned U.S. and Mexican warehouses. The offering
represents all of Verde’s properties in Mexico. 
February 19, 2014
Real Estate
3
ALERT
Cabot Exceeds Equity Goal for Vehicle
Cabot Properties has raised $712 million of equity for its
fourth industrial fund.
The Boston investment manager last week held the final
close for Cabot Industrial Value Fund 4, a value-added vehicle
that seeks a 12-14% return.
The fund will primarily acquire multi-tenant warehouses
in major U.S. markets and seek to boost their performance by
improving the management and leasing up space. About 20%
of the equity can be used for development, and up to 10% can
be spent on properties in Canada, Mexico or Europe.
Cabot, which didn’t use a placement agent, started marketing the fund roughly a year ago with an equity target of $600
million to $700 million. The limited partners include New York
State Teachers, Pennsylvania Public School Employees and
United Methodist Church, according to Preqin.
Cabot has already deployed $100 million of the vehicle’s
equity and expects to invest another $400 million by yearend.
Last year, the investment manager sold Cabot Industrial
Value Fund 3 and its holdings to Liberty Property of Malvern,
Pa., for $1.5 billion, including $230 million of assumed debt.
That fund was capitalized with $680 million of equity. The
transaction was nearly triple the size of the largest industrialportfolio sale last year, according to Real Estate Alert’s Deal
Database.
Cabot, which is among the most-active investors in the
industrial sector, was formed in 2001 by several executives that
had worked together since 1986 at the investment-advisory
affiliate of Cabot, Cabot & Forbes, a national development firm.
It raised $1.6 billion of combined equity for its first three funds.
The shop is led by four principals: Franz Colloredo-Mansfeld,
Robert Patterson, Howard Hodgson and Andrew Ebbott. 
Invesco Plans 4th Value-Added Fund
Invesco Real Estate will soon pass the hat for its fourth
value-added property fund.
The Dallas investment manager, which has begun preliminary discussions with investors, is expected to launch a formal
marketing campaign in late summer or the fall. It hasn’t yet
specified an equity goal. One fund veteran said a target of $300
million to $500 million is likely.
Like its predecessors, Invesco Real Estate Fund 4 would
shoot for a 14% return via purchases of multi-family, industrial, retail and office properties in major metropolitan markets
across the country. The minimum prices would be $20 million
for office purchases and $10 million for acquisitions of other
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property types.
Invesco, which doesn’t use a placement agent, held a final
close for its third fund last year. When the marketing effort
began in 2011, the equity goal was $750 million, but the sponsor ended up raising $343 million. That vehicle is roughly
three-quarters invested.
Investors in the first three funds have included Baylor
University, Boy Scouts of America, Contra Costa County
Employees, North Dakota Investment, San Antonio Fire & Police,
San Bernardino County Employees, San Diego City Employees
and the University of Florida, according to Preqin.
The value-added fund series is overseen by managing director and investment chief Scott Dennis. Others involved include
chief operating officer David Farmer, director of portfolio management Jeff Cavanaugh and head of U.S. asset management
Michael Kirby.
Invesco manages some $50 billion of real estate debt and
equity via multiple lineups of funds, including a large openend vehicle. The first two funds in the value-added series raised
$777 million of total equity. Both are fully invested. 
Net-Leased Industrial Portfolio Offered
A major bakery supplier wants to sell and lease back 2.9 million square feet of industrial properties in North America and
Europe valued at roughly $175 million.
The offering by CSM Bakery Supplies encompasses eight
distribution centers and 10 manufacturing or flex properties. Three properties in Germany account for 1.6 million sf.
Another 1.1 million sf is spread across 10 markets in the U.S.
There are also four properties in Canada totaling 164,000 sf.
The portfolio is being shown to U.S. and foreign net-lease
investors via CBRE. The seller’s preference is to find a single
buyer, but the package could be broken up by country.
The Dutch bakery supplier wants to lease the properties
back under absolute net leases, with initial terms of 10-20
years and annual rent bumps. The proposed rent would provide $13.5 million of net operating income in the first year. If a
buyer sought to sell the properties down the road, CSM would
have a right of first offer.
CSM produces, supplies and distributes ingredients and
baked goods in more than 100 countries. It has 61 facilities and
8,500 employees spread across 28 countries. Rhone Capital, the
New York private equity arm of Rhone Group, acquired CSM
last year.
The listed properties in the U.S. include six distribution
facilities, in Houston, Salt Lake City, North Las Vegas and Reno,
Nev., and Rancho Cordova and Union City, Calif. There are two
manufacturing properties in Tucker, Ga., and one each in the
Salt Lake City suburb of Pleasantview, Utah, and the Buffalo
suburb of Lancaster, N.Y. And there is a manufacturing/distribution facility in Pico Rivera, Calif., near Los Angeles.
The properties in Germany are manufacturing facilities. In
Canada, there are two distribution facilities, along with two
manufacturing/distribution sites. 
February 19, 2014
Real Estate
4
ALERT
Avanti Markets High-Yield Land Fund
Avanti Investment is seeking to raise $350 million of equity
for its eighth land fund.
The Winter Park, Fla., shop is soliciting investors for
Avanti Strategic Land Investors 8, which would continue the
firm’s high-yield strategy of scooping up land tracts in highgrowth markets for residential and commercial development.
The company typically arranges approvals and does some
pre-construction work, such as installing infrastructure,
before selling the parcels to developers. Typical investments
range up to $25 million. Historically, the fund series also has
bought distressed land loans in order to gain control of the
collateral, and has originated mortgages for other investors
that buy land.
The return goal is 16%. The manager generally avoids
leverage. It focuses primarily on the Sunbelt and the West,
but considers investments nationwide.
Avanti, which doesn’t use a placement agent, solicits capital from wealthy individuals and institutional investors, particularly endowments, foundations and pensions. Investors in
previous funds included Church Pension, University of Michigan and University of Washington, according to Preqin.
The shop was founded in the late 1970s and is led by four
principals: Marvin Shapiro and Charles Schwartz are responsible for acquisitions; JoAnn Hanson and Donald Loeb work on
capital raising. Senior vice president Andrew Dubill also works
on acquisitions.
The $137 million Avanti Strategic Land Investors 7 held
a final close in 2012 and is nearly fully invested. Avanti has
raised a total of $1.1 billion of equity for the fund series since
1992. 
Duo Sells, Lists DC-Area Apartments
A partnership between Dune Real Estate and Panzer
Properties has sold one Washington-area apartment complex
and listed another.
Klingbeil Capital, a San Francisco investment shop, acquired
the 467-unit Point at River Ridge complex in Ashburn, Va., last
week for $89.5 million, or $192,000/unit. Jones Lang LaSalle
brokered the deal for Dune and Panzer, both of New York.
Meanwhile, the partnership has started marketing the 134unit Point at Leesburg complex in Leesburg, Va. That property,
built in 1986, is expected to fetch around $25 million, or about
$187,000/unit. Jones Lang also has that assignment.
The complexes were among eight suburban Washington
apartment properties, with 2,058 total units, that the partnership acquired in early 2011 for $410 million, or $199,000/unit,
from advisory firm RREEF, now called Deutsche Asset & Wealth
Management.
That year, the Washington-area apartment sector was
considered the second strongest in the nation, behind New
York, in terms of attractiveness to investors, based on market
fundamentals and projected economic activity. Surging job
growth in the region, coupled with several years of limited
construction, drove the average occupancy rate above 96%
and pushed up rents.
Point at River Ridge and Point at Leesburg are garden-style
properties about two miles apart. The Dune partnership tried
to sell them in late 2012 at roughly the same pricing levels, but
the bids apparently were disappointing, and the offerings were
dropped.
The Washington-area apartment market has cooled a bit. A
development boom in the past three years has pulled the average occupancy rate down to 94.1%. And another 18,000 units
— equal to almost 4% of the market’s total stock — are set to
come on line this year. In its 2014 forecast, Marcus & Millichap
ranks the area 27th among the 44 markets it covers in terms of
attractiveness to investors.
But some market experts think the threat of oversupply
is exaggerated. They point out that developers might convert
some of the complexes into condominiums, to take advantage
of the short supply in that category. 
Fla. Apartment Portfolio Offers Upside
An apartment portfolio in resurgent Central Florida is being
pitched as a value-added opportunity.
The listing consists of three properties with 710 units that
are between Orlando and Tampa. Bids are expected to run as
high as $95 million, or $134,000/unit. At each complex, some
units are commanding higher rents after being upgraded, and
a buyer could continue that program to boost returns. CBRE is
marketing the portfolio for owner Alex. Brown Realty of Baltimore, which will consider bids on individual properties.
The garden-style complexes have occupancy rates in the
mid-90% area. They were developed in 2000 and 2001 and
share a similar design. The one- to three-bedroom apartments
have balconies or patios, washer/dryers and nine-foot ceilings.
Amenities include swimming pools, fitness centers and basketball and tennis courts.
The properties are:
•The 250-unit Village at East Lake, at 600 River Birch Court
in Clermont, about 20 miles west of downtown Orlando.
•The 248-unit Village at Park Road, at 2120 Village Park
Road in Plant City, about 25 miles from downtown Tampa.
•The 212-unit Village at Lake Ned, at 4025 Lake Ned Circle
in Winter Haven, about 50 miles from both Orlando and
Tampa.
Just under 70 of the units at the Clermont property, and a
few dozen at each of the others, have been upgraded including new granite countertops and appliances. The rents on those
units average $75 higher.
The region has been enjoying strong employment growth,
with 31,000 jobs added in Tampa last year and 24,000 in
Orlando. That’s fueled demand for apartments, and rents rose
3-5% last year. However, the improving economy has spurred a
wave of construction, and 2014 could see a slide in the overall
occupancy rate of about 94%. 
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February 19, 2014
Real Estate
6
ALERT
Hoboken Apartment Complex Listed
An apartment complex along New Jersey’s “Gold Coast” is
being pitched as a core investment with some upside potential.
The 240-unit Curling Club, in Hoboken, is expected to
attract bids of about $130 million, or about $542,000/unit.
HFF is shopping the property for AFL-CIO Building Investment
Trust, which invests in commercial real estate projects constructed by unionized labor. The Washington trust is advised
by PNC Realty Investors of Washington.
The complex, at 1130 Grand Street, was developed in 1999.
It encompasses four five-story buildings with elevators. The
occupancy rate is 93%. The units have two bedrooms, hardwood floors, washer/dryers, walk-in closets and balconies or
patios.
The rents average $2,836. That’s 12% less than the $3,209
average for comparable Class-A units, because of the property’s
age. A buyer could close the gap by upgrading the units.
The amenities include a fitness center, storage units and
shuttle service to PATH trains and ferries serving Manhattan
commuters. A light-rail station is within walking distance.
Because of the property’s proximity to Stevens Institute of
Technology, it has been popular with students. 
Mariner Solicits Capital for 4th Vehicle
Mariner Real Estate is seeking to raise $250 million of equity
for its fourth and largest commercial real estate fund.
The vehicle, Mariner Real Estate Partners 4, would target a
16% return by investing in properties and debt.
Mariner, of Leawood, Kan., focuses on retail, office and
multi-family properties. On the debt side, it targets distressed
loans, with an eye toward renegotiating the terms or seizing the
collateral. The fund series can also purchase commercial MBS.
Artis Advisors of Washington is the new vehicle’s placement
agent. With leverage, the fund could have more than $700 million of buying power.
Mariner was an active buyer of distressed loans during the
market downturn. Between 2009 and 2012, it acquired some
1,000 loans with an unpaid balance of more than $1.1 billion. Many of those assets were bought from the FDIC, which
retained an interest.
The third vehicle in the fund series held a final close last
year and has fully invested its $161 million of equity. The first
two funds raised roughly $75 million of combined equity. Last
year, Mariner also set up a vehicle, called Mariner Residential
Recovery Fund, that has fully deployed its $60 million of equity
into residential real estate investments in the Austin area.
The company was founded in 2008 by brothers Ryan and
Terry Anderson, who are co-presidents. It’s backed by Mariner
Holdings, a financial-services firm in Leawood with $13 billion
of assets under management.
In 2010, Mariner Real Estate bought a majority stake in loan
brokerage Cohen Financial of Chicago. Late last year, Cohen was
acquired by Pillar Financial, the multi-family lending affiliate of
Chicago-based Guggenheim Partners. Mariner holds a signifi-
cant ownership interest in the combined Pillar-Cohen operation. 
Heitman Markets 5th European Fund
Heitman is soliciting capital from U.S. and international
investors for its fifth property fund aimed at European commercial real estate.
The Chicago manager is seeking to raise €500 million ($690
million) for the vehicle, Heitman European Property Partners 5.
The fund series seeks a 14-16% return, primarily by acquiring office, industrial, retail and multi-family properties in Central and Eastern Europe. In the past, some capital has also been
invested in Russia and Ukraine. With leverage, the new fund
would have nearly €1.5 billion of buying power if it reaches the
equity target.
U.S. investors in previous funds included Arkansas Teachers
and California State Teachers, according to Preqin. Other investors included ATP Real Estate of Denmark, European Bank for
Reconstruction and Development and Dutch asset management
firm Syntrus Achmea. Heitman doesn’t use a placement agent.
The predecessor fund held a final close in 2009 and has
nearly fully invested its €505 million of equity.
The fund series, which often works with local operating
partners, is sponsored by Heitman’s principals and Old Mutual
of London, a 50% owner of Heitman.
Senior managing director Gordon Black and managing director Rob Reiskin work on acquisitions as co-heads of Heitman’s
European private real estate equity group. Black is a longtime
Heitman executive. Reiskin joined in 2010 from AEW Europe,
where he was head of investments. Senior vice president Ajay
Sharma handles marketing. 
Minnesota State Offices Up for Grabs
A newly listed office complex in St. Paul, Minn., that is fully
leased to the state government is expected to attract bids of
around $70 million.
The anticipated price for the 678,000-square-foot Lafayette
Park would be equivalent to $103/sf. Three of the four buildings
in the complex are owned by NGP Capital of McLean Va. The
fourth is owned by Meritex Enterprises of Minneapolis. Both
owners have given the listing to CBRE, which is marketing the
buildings as a package. 
The offering encompasses the buildings at 443, 444, 500,
and 520 Lafayette Road, eight blocks from the Minnesota State
Capitol building in downtown St. Paul. The complex has been
occupied by various state agencies since the 1980s under multiple leases, with a tenant roster that includes the Minnesota
Department of Labor and Industry, Minnesota Department of
Natural Resources and Minnesota Pollution Control Agency. The
state signed 10-year renewals for three of its leases in 2012. The
weighted average remaining lease term is eight years.
Meritex sold the buildings at 443, 500 and 520 Lafayette
Road to NGP in 2004 for $39.1 million, but kept the 283,000-sf
building at 444 Lafayette Road. 
February 19, 2014
Real Estate
7
ALERT
Atlanta-Area Rentals Due for Upgrade
A suburban Atlanta apartment property that’s ripe for renovation is being marketed to value-added investors.
The 222-unit Carroll at Bethesda Park, in Lawrenceville, Ga.,
was developed in 2001. It’s 94% occupied, exceeding Atlanta’s
92.8% average. Bids are expected to come in around $25 million, or $113,000/unit. Jones Lang LaSalle has the marketing
assignment from Atlanta-based Carroll Organization.
The complex is at 156 Bethesda Church Road, about 25
miles northeast of downtown Atlanta. The units have 1-3 bedrooms, walk-in closets, washer/dryers and patios or balconies. Monthly rents average $937. Investors are being told that
upgrades to the interiors could result in a bump of about $100.
The property has a saltwater pool, tennis courts and a fitness
center.
Atlanta’s rental market bottomed out at an occupancy rate
of about 88% in 2010. Since then, apartments have revived
along with the local economy. Improving fundamentals have
prompted developers to step up their activity. Some 6,300
apartments came on line last year, according to Marcus &
Millichap, and another 6,000 are slated to be completed this
year. 
Golf ... From Page 1
short-term franchise agreement with Marriott, so a buyer could
change the flag and take over operations. A likely strategy
would be to seek more group business.
Finding another luxury flag shouldn’t be difficult, given the
property’s status as one of the top golf resorts in the U.S. It is
part of TPG Sawgrass, a larger complex containing two premier
18-hole courses that host the annual Players Championship, a
stop on the PGA Tour. The clubhouse facilities and the courses
are separately owned by PGA Tour and aren’t part of the offering.
But the hotel controls 85% of tee times at the courses, called
Stadium and Valley.
The resort was completed in 1987. It has 348 guest rooms in
its main building and another 163 rooms in surrounding villas.
There is 56,000 square feet of meeting space, a 25,000-sf spa,
two fitness centers, four pools and a cabana beach club with
private beach access. There’s room to expand the hotel or add
residential units.
Goldman spent $20 million on renovations that included
updates to the event and meeting space, restaurants, bars and
other amenities, in addition to the rooms and villas. A buyer
would likely have to make additional renovations to bring in
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a new flag.
The hotel competes with nine other large golf resorts in Florida and Georgia, such as the PGA National Resort & Spa in Palm
Beach, Fla., and the Omni Amelia Island Plantation on Amelia
Island, Fla. Collectively, they have just begun to emerge from the
downturn, with an average 8% revenue increase last year.
The resort is at 1000 PGA Tour Boulevard, along Route A1A,
about 24 miles from downtown Jacksonville. 
Starwood ... From Page 1
either lease the space to a higher-end retailer or expand the
property into a mix of hotel and retail space. The listing drew
interest from hotel and retail firms, as well as developers.
The site is directly opposite Macy’s store in Herald Square,
on the south side of West 34th Street, between Avenue of the
Americas and Seventh Avenue.
Starwood, led by founder Barry Sternlicht, is expected to
make the purchase via the $4.2 billion Starwood Distressed
Opportunity Fund 9, which held its final close last year.
KLM was started by the late developer Nikos Kefalidis. Kefalidis, a Greek immigrant well known in New York real estate, had
long owned the 20,000-sf parcel. In the late 1990s, after several
false starts, construction began on the store. Kefalidis died in a
plane crash in 1998, before construction was finished. 
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February 19, 2014
Real Estate
8
ALERT
Maryland Warehouse, Land Offered
Goldman Sachs is marketing a warehouse and adjacent land
near Baltimore that could attract bids of $31 million.
The 279,000-sf warehouse at 4801 Hollins Ferry Road in
Halethorpe, Md., has an estimated value of $23 million. At that
price, the buyer’s initial annual yield would be about 6.5%. Also
up for grabs is an adjoining 17-acre lot that is approved for a
346,000-sf distribution center. That portion of the offering is
worth about $9 million.
Cassidy Turley has the listing on the properties, which are
available separately or as a package.
The warehouse is fully occupied, with a weighted average remaining lease term of four years. The tenants are FedEx
(100,000 sf until 2017), Forward Air (100,000 sf until 2016) and
Global Experience Specialists (79,000 sf until 2019).
The property is being pitched as a core-plus play, since a
buyer could take advantage of the improved local leasing market by raising rents upon rollover. The average occupancy level
among industrial facilities in the Baltimore-Washington Corridor submarket is 89%, and rents are projected to rise in the
coming years amid growing demand for space. It helps that
only a few other warehouses in the area can accommodate tenants needing more than 90,000 sf.
The building has modern features including deep truck
courts. It is about eight miles southwest of downtown Baltimore, within three miles of Interstate 95 and five miles of Baltimore Washington International Airport.
With few development sites in the Baltimore-Washington
Corridor available for industrial development, the land could
present an opportunity for a speculative project. 
Value-Added Retail Play Offered in Md.
A grocery-anchored shopping center in a fast-growing section of Maryland is being marketed as a repositioning opportunity.
The 162,000-square-foot Ridgeview Plaza, in Hanover, is
adjacent to the expanding Fort Meade, home of the National
Security Agency. The property is expected to attract bids of
about $25 million, which would translate into an initial annual
yield of roughly 8%. HFF is marketing the center for a partnership between investment manager Buchanan Street Partners of
Newport Beach, Calif., and Altus Realty of Arlington, Va.
Even though the property is 94% leased, the offering is being
shopped to value-added investors. The pitch is that the local
population is growing and increasingly affluent, so a buyer could
upgrade to a more-upscale grocery chain that would produce
higher per-foot sales. The current anchor, Food Lion, has a lease
that runs out of renewal options in 2021. There is also some room
to boost occupancy: Retail space in the consistently strong Baltimore-Washington Corridor is 98.5% leased.
Ridgeview Plaza, which is on 23 acres at 2655 Annapolis
Road, was built in 1985 and renovated in 2004. The property
has approval for a major infrastructure improvement: upgrad-
ing from a well and septic system to water and sewer connections. Investors have been told that would allow a buyer to
bring in new restaurant tenants to draw additional traffic.
The property is just east of the Baltimore-Washington Parkway and adjacent to the north entrance of Fort Meade. The
military base already employs 50,000 people and is expected to
increase its workforce 30% by next year.
There are 135,000 people with an average household income
of $108,000 living within a five-mile radius. That population
has increased 28% since 2000 and is expected to grow another
7% by 2019. 
NEW DEALS
Seattle Office Building
Kilroy Realty agreed to buy a fully leased office building in
Seattle for about $106 million from Vulcan Real Estate, the
real estate platform of Microsoft co-founder Paul Allen. CBRE
is representing Seattle-based Vulcan. The 146,000-square-foot
building, at 401 Terry Avenue North in the tony South Lake
Union neighborhood, is net-leased to the Institute for Systems
Biology, a life-science research and development firm. Los
Angeles-based Kilroy’s $725/sf price is one of the highest in
Seattle in the current cycle. Other bidders included healthcare
REIT HCP of Long Beach, Calif., Houston investment giant Hines
and GLL, a Munich-based fund shop.
New Jersey Office Building
A joint venture between Prudential Real Estate Investors and
Marcus Partners has agreed to buy a Northern New Jersey office
building for roughly $70 million. The 455,000-square-foot
property is at 500 Plaza Drive in Secaucus, within the sprawling
Harmon Meadows mixed-use complex. The occupancy rate
is 78%. CBRE brokered the deal for the seller, locally based
Hartz Mountain Industries, a prominent developer and owner
of Northern New Jersey properties. At the estimated $153/sf
value, the deal is expected to generate an initial annual yield of
roughly 6.5% for Marcus, a Boston fund shop, and Pru, based
in Madison, N.J.
Baltimore Apartment Complex
A Cornerstone Real Estate fund bought a 234-unit apartment
property in Baltimore for about $60 million, or $256,000/unit.
The high-rise building, at 3900 North Charles Street, was thoroughly renovated by the seller, DSF Group of Waltham, Mass.
DSF acquired the property in 2006 for about $42 million, planning to convert it into condominiums. It scrapped those plans
as the economy soured, opting for an upgrade that included a
new fitness center, lobby and lounge and an overhaul of unit
interiors. HFF represented DSF in the sale. 
5 Marine View Plaza,
Suite 400
Hoboken NJ 07030-579
5
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February 19, 2014
10
Real Estate
ALERT
Swiss ... From Page 1
bonds. Now the company is looking for conventional real estate
exposure, focusing on the acquisition of stabilized multi-tenant
properties in top markets. Also, it won’t use leverage or form
joint ventures.
The typical purchase price is $15 million to $50 million, but
deals of up to $100 million will be considered. Zurich Alternative invests in office, retail, multi-family and industrial properties. The geographic focus is 13 top-tier or growing markets,
including New York, Washington, Seattle, Chicago, Denver,
Miami and Philadelphia.
Last year, Zurich Alternative sold about $150 million of
properties that no longer fit its strategy, and it plans to unload
roughly that amount this year. For example, as previously
reported, it wants to sell its 75% stake in the 718,000-sf
Mellon Independence Center in downtown Philadelphia.
That landmark office/retail property is valued at roughly $80
million. Zurich Alternative acquired the stake under its credit-
tenant strategy in 2001 from Brickstone Cos., an El Segundo,
Calif., firm that owns the remaining 25% interest. Cushman &
Wakefield has the listing.
Meanwhile, Zurich Alternative bought $250 million of
properties across the country last year that mesh with the new
strategy. It paid $47.9 million for the 75,000-sf office building
at 410 Townsend Street in San Francisco, $34 million for the
55,000-square-foot office building at 539 Bryant Street in San
Francisco and $27 million for the 94,000-sf office building at
10780 Santa Monica Boulevard in Los Angeles, among other
transactions.
Zurich Alternative, formed in 2006, is a wholly owned subsidiary of Zurich Insurance, which has more than $200 billion
of assets under management. New York-based Zurich Alternative oversees $4.5 billion of investments in hedge funds,
private equity funds and U.S. commercial real estate on behalf
of the insurer’s affiliates. Managing director Sean Bannon is
the head of U.S. real estate, overseeing a team based in New
York. 
Kellogg Conference Center | March 20, 2 014
with Keynote Speaker
Doug Bibby
of the
National Multifamily
Housing Council
ultifamily Housin
Do you Invest in Healthcare and Medical Office Real Estate?
Then There’s Somewhere You Need to be on March 18
Network with over 300 owners, investors, developers,
brokers, operators and lenders at the largest healthcare
& medical office real estate conference on the West Coast
HEAR FROM:
American Healthcare Investors
Pacific Medical Buildings
Healthcare REIT
Ventas
Rendina Companies
mmdcforum.com/register
Healthcare Trust of America
Nexcore Group
Duke Realty
Meridian Property Co.
MedProperties
interfaceconferencegroup.com/hcw2014
February 19, 2014
11
Real Estate
ALERT
MARKET SPOTLIGHT
New Jersey Apartment Properties
 Rents grew 5.9% on average last year, and Marcus & Millichap predicts they will rise another 2.9% this
year, to an average of $1,909.
 The average occupancy rate remains a solid 96%, despite a steady stream of development. Some 2,200
units came on line last year, on top of 1,100 in 2012. Another 3,500 units are likely to be completed this
year.
 Northern New Jersey dominates the sales market, thanks to its proximity to Manhattan. But buyers are
showing more interest in the central part of the state, especially for properties near transit hubs.
On the Market
Property
Curling Club, Hoboken
The Grand, Cherry Hill
Avalon Lyndhurst, Lyndhurst
Avalon Rutherford, East Rutherford
Parkwood Place, Newark
Park Crest, Glassboro
Seller
Clarion Partners
AREA Property
AvalonBay Communities
AvalonBay Communities
Alex. Brown Realty PRP Real Estate
Hit
Market
February
February
January
February
January
January
No. of
Apts.
240
544
328
108
294
385
Estimated Value
($Mil.) (Per Apt.)
$130 $542,000
109
200,000
100
305,000
35
324,000
27
92,000
26
68,000
Broker
HFF
Cushman & Wakefield
HFF
BlueGate Partners
HFF
HFF
Closed
December
November
November
December
No. of
Apts.
217
127
159
200
Sales Price
($Mil.) (Per Apt.)
$108 $496,000
69
540,000
47
292,000
41
206,000
Broker
HFF
Cushman & Wakefield
HFF
BlueGate Partners
Recent Deals
Property
Buyer
800 Madison Street, Hoboken
DSF Group
1100 Jefferson/1330 Grand, Hoboken
LaSalle Investment
Park Square, Rahway
Mack-Cali Realty
Riverwatch/Richmond, New Brunswick
Mack-Cali Realty
CALENDAR
CALENDAR
Main Events
Dates
Mar. 19-20
May 18-20
June 12-13
Oct. 27-29
Nov. 5-7
Event
PREA Spring Conference
RECon
U.S. Real Estate Opportunity & Private Fund Inv. Forum
Development ’14
REIT World
Location
Boston
Las Vegas
New York
Denver
Atlanta
Sponsor
PREA
ICSC
IMN
NAIOP
NAREIT
Information
www.prea.org
www.icsc.org
www.imn.org
www.naiop.org
www.reit.com
Sponsor
Bisnow
YREPNY
Bisnow
Bisnow
Bisnow
Bisnow
N.Y. Law School
Marcus & Millichap
NYU Schack
Real Estate Weekly
CapRate Events
Information
www.bisnow.com
www.yrepny.org
www.bisnow.com
www.bisnow.com
www.bisnow.com
www.bisnow.com
www.nyls.edu
mmlosangelesforum.com
www.scps.nyu.edu
rewomensforum.com
cre-events.com
Events in US
Dates
Event
Location
Feb. 25
Hotel Investment Summit
New York
Feb. 25
Networking Event
New York
Feb. 25
Healthcare Real Estate Summit
Atlanta
Feb. 25
Industrial Summit & Port Update
Baltimore
Feb. 26
Retail Real Estate Summit
Philadelphia
Feb. 26
Senior Housing & Assisted Living Summit
Dallas
Feb. 26
Real Estate Finance 2014
New York
Feb. 27
Commercial Real Estate Summit
Los Angeles
Feb. 27
Sustainable Real Estate
New York
Feb. 27
Women’s Forum
New York
Feb. 27
Greater New York Data Center Summit
New York
To view the complete conference calendar, visit The Marketplace section of REAlert.com
February 19, 2014
12
Real Estate
ALERT
THE GRAPEVINE
... From Page 1
venture with Blackstone, which later
bought the firm outright. Purse previously had stints with Credit Suisse’s
private-fund group and New York fund
manager DRA Advisors.
David Seshens, who left the real estate
group of Avenue Capital last week, will
help open a New York office for Continental Properties of Chatham, N.J., next
month. Seshens was a vice president
at Avenue, sourcing deals for the New
York hedge fund shop, which has $12.6
billion in assets under management. He
was there for about eight years. As an
executive vice president at Continental,
he’ll work on acquisitions, particularly
development projects and value-added
plays on multi-family properties. Continental is led by investor Steven Fisch.
Former Lightstone Group staffer Kasra
Sanandaji has launched his own firm,
Apex Investment of New York. Formed
last month, it will focus on repositioning multi-family and office properties
in Manhattan, Brooklyn and Queens,
with values of at least $50 million. Apex
also will look to do ground-up development projects. Sanandaji plans to build
a staff in the coming months. He spent
the past few years at Lightstone, leaving
as senior vice president of acquisitions
and development. Before that, he had
stints at Waterman Interests and Stellar
Management, both of New York.
Meanwhile, Lightstone Group wants to
add a financial analyst at its New York
headquarters to assist in underwriting
and executing hotel deals. Candidates
should have at least two years of experience with real estate investments and at
least one working on hotel transactions.
Lightstone, led by chief executive David
Lichtenstein and president Mitchell
Hochberg, owns some 30 hotels in addition to multi-family, office and retail
properties.
Veteran broker Patrick Bisceglia is
no longer with Transwestern. He left
this month, and the buzz is he may
be taking a buyside position. He isn’t
expected to be replaced. Bisceglia
joined Transwestern two years ago as a
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managing director in Greenwich, Conn.
He focused on multi-family property
sales, but also handled office, retail and
industrial listings. Bisceglia previously
worked at Grubb & Ellis, Rockwood
Realty and CBRE, and runs his own consulting firm, Bluestone Realty of New
Canaan, Conn.
Virtus Real Estate Capital is seeking a
director of acquisitions to help expand
its investment focus. The Austin firm,
which is primarily active in the Sunbelt,
specializes in what it views as recessionresilient properties: student housing,
self-storage, senior housing and medical offices. But it’s seeking an acquisitions pro to lead a push into other asset
classes. Candidates should have at least
10 years of experience in private equity
real estate investment across the risk
spectrum.
DRA Advisors has an opening for an
acquisitions associate in its New York
headquarters. Candidates should have
at least five years of experience. Responsibilities include market analysis,
financial modeling and due diligence
for potential investments.
www.REAlert.com
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201-234-3979 [email protected]
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