here - Penzance

JANUARY 7, 2015
7 SINGLE-PROPERTY TRANSACTIONS
2 Beacon Shops 2 Seattle-Area Offices
2 Job-Hunters Turning to Social Media
2 Va. Office/Industrial Portfolio Offered
3 New Chicago Shop Seeks Big Listings
4 Clarion Lists New Mass. Power Center
4 Colony Seen Planning Multiple Funds
4 Capital Sought for ‘Green’ Fund
6 Fund Shop Sweetens Terms for LPs
6 Apartment Firm Boosts Fund Goal
6 Value-Added Ariz. Portfolio for Sale
6 Vacant Virginia Offices Up for Grabs
8 Retail Center Listed in Southeast Va.
8 Meridian Shops Suburban DC Offices
8 Buyer Sought for Staten Island Offices
9 ON THE MARKET
THE GRAPEVINE
CBRE has put company veteran Brian
McAuliffe in charge of institutional sales
in the U.S. In the newly created position of executive managing director of
U.S. capital markets, he reports to global
capital-markets chief Chris Ludeman.
In turn, the heads of the various assetclass practices now report to McAuliffe.
He continues as co-head of CBRE’s
multi-family practice, alongside senior
managing director Peter Donovan, who
focuses on financing. McAuliffe is in his
second run at CBRE. From 1984 to 2005,
he was an apartment broker in the firm’s
Chicago office, often winning its annual
top-producer award. He left to work on
See GRAPEVINE on Back Page
Clarion Wins Auction of Gables Residential
A group of investors led by Clarion Partners has agreed to acquire Gables
Residential for roughly $3.2 billion.
The investors, including Allianz Real Estate of America, TIAA-CREF and several
sovereign wealth funds, will put up about $1.6 billion in cash and assume $1.5 billion of debt. They will convert Gables, an apartment REIT that has effectively operated as a closed-end fund, into an open-end vehicle.
Atlanta-based Gables is currently owned by institutional investors and managed
jointly by Clarion and Silverpeak Real Estate, both of New York. Silverpeak is giving
up its management role. Some of the existing investors are remaining in the new
ownership group, but the vast majority of equity is changing hands, according to
people familiar with the transaction.
Gables, which is being advised by Eastdil Secured, put itself up for sale last summer. As previously reported, the other finalists included a joint venture between
See CLARION on Page 9
Penzance Hires Chief for Apartment Initiative
Penzance Cos. has recruited former Archstone executive Sam Fuller to launch an
apartment development platform.
The operation, Penzance Residential Development, is aiming to amass a sizable
portfolio in well-developed East Coast urban markets that are experiencing growing
demand for rental housing, with an initial emphasis on Washington and Connecticut.
Fuller, who starts this month as a partner, will oversee several projects already in
the pipeline and scout out other investments. He spent 16 years at AvalonBay Communities, an Arlington, Va., REIT, where he was in charge of development and construction activity nationwide. In 2005, he moved over to Archstone, an apartment
giant in Englewood, Colo., serving as an executive vice president of development for
the Northeast. He left in 2013, when Archstone was divided and sold.
For Penzance, a Washington development and investment shop launched in
1996 by the husband-and-wife team of Victor Tolkan and Julia Springer, Fuller’s
See PENZANCE on Page 11
Retail/Office Space Up for Grabs in Florida
A Madison Marquette partnership is marketing the retail and office portions of a
mixed-use complex on Florida’s Gulf Coast.
The offering — 456,000 square feet at the Mercato complex in affluent Naples —
could attract bids of about $230 million. At that price, the capitalization rate would
be 5.25%. HFF is representing Washington-based Madison Marquette and its two
local partners, Barron Collier Cos. and Lutgert Cos.
The 13-building Mercato encompasses 321,000 sf of retail space, 135,000 sf of
Class-A office space and 92 separately owned residential condominiums. The retail
space is 93% occupied, and the office space is 90.3% leased. The net operating
income of the listed space is projected to grow by 35% over 10 years, according to
marketing materials.
The retail portion has hefty sales of $530/sf, up 26% since 2010. The anchors are
high-end grocer Whole Foods (53,000 sf), a 12-screen Silverspot Cinema (41,000 sf)
See FLORIDA on Page 10
January 7, 2015
Real Estate
2
ALERT
Beacon Shops 2 Seattle-Area Offices
Beacon Capital is shopping two suburban Seattle office properties with a combined value of close to $250 million.
The properties, with 623,000 total square feet, are both in
Bellevue, Wash., one of Greater Seattle’s strongest markets.
The offering encompasses the 464,000-sf Sunset North complex and the 159,000-sf Plaza East building. Sunset North is
valued at about $165 million, or $355/sf. Plaza North is worth
about $80 million, or $503/sf. Beacon’s broker, CBRE, will accept
bids on either or both.
The two properties were among 40 that New York-based
Blackstone flipped to Beacon in 2007 for $6.4 billion in conjunction with its $39 billion takeover of Equity Office Properties
of Chicago. Beacon, a Boston fund shop, has already sold off a
number of other properties in that portfolio.
The three-building Sunset North, at 3120-3180 139th Street
Southeast, was developed in 1999. Its occupancy rate is 98%.
The tenants include Boeing, AreaNet and Intellectual Ventures.
The nine-story Plaza East, at 11100 Northeast Eighth Street,
is 89% leased to technology and professional-services firms.
The property, developed in 1987, has undergone extensive
renovations that made the floor plans more open, as preferred
by the technology companies driving the Bellevue market. Bellevue is part of the Eastside submarket, which also includes
sections of Seattle.
Greater Seattle’s office occupancy rate climbed one percentage point last year, to 87.8%, even though 925,000 sf of
additional space came on line. That was on top of a 1.2-point
occupancy gain in 2013, when 1.2 million sf of space was completed. 
Job-Hunters Turning to Social Media
Young real estate professionals are increasingly relying on
personal networking and social media, rather than online
ads, when hunting for jobs, according to a survey by executive
recruiter RETS Associates.
RETS polled about 160 “millennials” born in the last two
decades of the 20th Century. It found that during job searches,
68% used social media to contact their personal network or prospective employers, and 61% relied on referrals from friends.
That’s a switch from the past, when job-seekers were more
likely to rely on responding to ads and posting resumes to
employment websites, according to Jana Turner, a RETS principal.
Turner attributes the shift to lessons learned during the
recent downturn, when finding a position required more assertive strategies, such as cold calling. “They understand the value
of a relationship and a personal connection,” she said. “They
understand that it is getting in front of people that is going to
get you to that hiring manager.”
Likewise, she added, employers seeking job candidates
need to reach out directly, by recruiting on college campuses,
using Twitter and LinkedIn, and engaging with professional
organizations.
The Millennials in Real Estate Survey, which the Newport
Beach, Calif., firm plans to conduct annually, also found that
76% of the respondents had joined academic or professional
industry organizations to advance their career development,
and 68% of those seeking a new job engaged a recruiter or
search firm. 
Va. Office/Industrial Portfolio Offered
First Potomac Realty is marketing eight office and industrial
properties in Northern Virginia that have a combined value of
roughly $100 million.
The properties encompass 947,000 square feet in 26 buildings scattered throughout Fairfax and Prince William counties.
HFF, First Potomac’s broker, is targeting value-added investors due to the portfolio’s 78% occupancy rate. The REIT
intends to sell the portfolio intact, so offers for individual properties won’t be considered.
The Bethesda, Md., company has been actively pruning its
portfolio to focus on top-tier office buildings in Washington.
The portfolio encompasses seven office and industrial parks
ranging from 83,000 sf to 189,000 sf, and a 71,000-sf industrial
building in Merrifield that is fully occupied. They are being
marketed as an opportunity to acquire a critical mass of space
in Northern Virginia that is expected to benefit from declining
vacancies and rising rents.
There are 97 tenants. Lease expirations are staggered
through 2029, with a weighted average remaining term of just
over five years. There are annual rent bumps.
The largest property up for grabs is Enterprise Center, a
four-building flex complex in Chantilly that is 87% leased to
four tenants. Others include Windsor at Battlefield Manassas,
encompassing two office and industrial buildings with 155,000
sf, and the three-building Linden Business Center, with 109,000
sf, both in Manassas.
The buildings were completed in the late 1980s through
2004. They are near major highways and public transportation.
The nearby presence of numerous government agencies is an
added attraction.
Office space in Northern Virginia was dealt a heavy blow a
few years ago, when the federal government and its contractors
pulled back on leasing. Since then the 132 million-sf market
has made modest gains. The average occupancy rate is 80%. 
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January 7, 2015
Real Estate
3
ALERT
New Chicago Shop Seeks Big Listings
Kiser Group, a Chicago boutique brokerage focused on midmarket apartment sales, is launching a separate shop aimed at
the institutional market.
The new operation, Kiser Institutional Group, is opening
this month following about a year of preparations. It’s headed
by principals Lee Kiser and Susan Tjarksen. Both firms concentrate on multi-family sales in the greater Chicago area.
Lee Kiser will continue to focus on his responsibilities as
managing broker of Kiser Group, which he founded 10 years
ago. Tjarksen is the institutional
shop’s managing broker. She
joined Kiser Group in early 2014
and immediately began to sketch
out plans for the institutional
group with Lee Kiser. Tjarksen
previously ran Star Resources, a
Chicago property-management
and receivership business, and
had earlier stints at Aries Real
Estate Development of Chicago
and Flagstone Property of Miami
Beach.
Last month, Kiser and Tjarksen hired apartment expert Todd
Stofflet, who most recently worked
at Apartment Realty Advisors.
They’ve brought on seven support
staffers for the institutional operation and expect to be in the market for a chief financial officer in
the coming months. Kiser said the
shop already has a pipeline, with
assignments to market a 530-unit
portfolio in Chicago and a 374unit property in Indiana.
The idea of setting up a separate institutional-oriented shop
was one Lee Kiser had been mulling for years. Before starting his
firm, Kiser worked at Marcus &
Millichap’s Chicago office and
was part of that brokerage’s early
effort to capture large, lucrative
listings. At the time, he said,
Marcus & Millichap’s established
reputation as a mid-market brokerage hampered its efforts to
court big clients. That company
eventually set up a division with
its own identity, Institutional
Property Advisors.
While a smaller broker’s granular knowledge of its market area
is a strength, selling to large insti-
tutions is a different ball game, Kiser said. “For three years I
was trying to figure out how a mid-market boutique could fit
into the institutional arena,” he said. “And I concluded, it simply cannot.” The two platforms must be separate and be seen
that way by clients, he said.
The new firm will benefit from Kiser Group’s market knowledge, however. Kiser said it’s putting together a database of
information on properties and submarkets, designed to help
potential clients look beyond traditional property-performance
indicators such as internal rates of return, capitalization rates
and cashflow to interpret market trends. 
January 7, 2015
4
Real Estate
ALERT
Clarion Lists New Mass. Power Center
A Clarion Partners group is marketing a majority stake in
a grocery-anchored power center in suburban Boston that’s
scheduled to open in March.
The University Station shopping center, in Westwood, Mass.,
encompasses 540,000 square feet, including a 120,000-sf Target
store that is separately owned. The 420,000 sf of offered space is
expected to attract bids of about $200 million. At that price, the
buyer’s initial annual yield would be 5.25%.
Cushman & Wakefield is handling the listing for New Yorkbased Clarion and its partners, New England Development of
Newton, Mass., Eastern Real Estate of Woburn, Mass., and
National Development of Newton Lower Falls, Mass.
The property is expected to be fully leased upon opening.
The grocery anchor, Wegmans, will occupy 125,000 sf. Other
tenants include HomeGoods, Marshalls, Michaels, Nordstrom
Rack, PetSmart and Sports Authority.
University Station is part of a planned 2 million-sf complex
that will also include office, residential and hotel space. The
property is at 100-300 University Avenue, adjacent to the Route
128 rail station. The site is just off Interstate 95 and about 15
miles from downtown Boston.
Some 139,000 vehicles pass the location daily. About 215,000
residents, with an average household income of $121,000, live
within a five-mile radius. 
Colony Seen Planning Multiple Funds
Colony Capital’s pending deal to combine with the publicly
traded REIT it manages will give it the capacity to roll out a
host of new funds in the next few years.
The buzz is that executives at the Santa Monica, Calif.,
investment shop are already discussing a hedge fund, an openend vehicle and a fund of funds, all focused on commercial real
estate. One fund veteran familiar with the shop’s thinking said
separate vehicles for individual asset classes could be launched.
For example, Colony may look to follow up last month’s $1.6
billion acquisition of a huge light-industrial portfolio by raising equity for a property fund focused on that sector. Colony
bought the 30 million-square-foot package from Cobalt Capital
and is retaining that firm’s co-founder, Lew Friedland, to oversee it.
Colony announced in November that it had agreed to merge
with Colony Financial, a mortgage REIT traded on the New
York Stock Exchange. The plan is to use equity raised in the
public market, making the firm less reliant on private capital.
That follows the strategy of fund shops like Blackstone, Carlyle
Group and KKR.
The firm also will commit more equity to its vehicles. In
the past, Colony typically contributed roughly 1% of a fund’s
equity. Investors are hearing that future co-investments likely
will be in the range of 5-10%.
The merger is expected to close before midyear. The resulting company, under the Colony Capital name, would be run by
founder and executive chairman Tom Barrack and chief execu-
tive Richard Saltzman.
Colony’s largest current fund is the $1.2 billion Colony Distressed Credit & Special Situations Fund 3, which had its final
close last year. It is more than half invested. The manager is
expected to start raising equity for a fourth fund this year.
The firm also runs separate accounts and owns a piece of
Boston fund shop Colony Realty Partners, which typically
invests in relatively smaller deals, with an average investment
size of $30 million. 
Capital Sought for ‘Green’ Fund
An investment shop that buys and retrofits commercial
properties is marketing its third opportunity fund.
Gerding Edlen is seeking to raise $350 million of equity for
the vehicle, Gerding Edlen Green Cities 3.
The Portland, Ore., firm acquires properties, upgrades them
to meet LEED energy-efficiency standards and then sells them.
It will also construct energy-efficient buildings, but only if a
partner or the seller of the development rights has already
secured the necessary approvals.
The fund sponsor targets both office and multi-family properties in urban markets, with a preference for Boston, Chicago
and Seattle. Gerding tells investors that its apartment properties, for example, appeal to “millennial generation” urban renters. The company touts low-environmental-impact apartments
that can double as work space, at sites that are convenient to
transportation and recreation.
The vehicle would have some $875 million of buying power,
based on the shop’s typical use of leverage. Fund 2 held a final
close last year and has already fully invested its $234 million
of equity. Investors in that vehicle include Carpenter Funds of
Northern California, Chicago Carpenters Pension, Connecticut
Retirement and Palm Beach (Fla.) Retirement, according to
Preqin.
The $183 million debut fund, which had its final close in
2012, is fully invested and has begun harvesting its investments.
The fund shop is led by chief executive Mark Edlen and president Kelly Saito. 
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January 7, 2015
Real Estate
6
ALERT
Fund Shop Sweetens Terms for LPs
An investment manager has sweetened the terms for limited
partners to help attract capital for its third opportunity fund.
TerraCap Management of Bonita Springs, Fla., originally
planned to offer the more-favorable terms only to the vehicle’s
initial investors, who kicked in $35 million of equity in the past
few months. But then it decided to extend the sweeteners to all
investors. The fund, TerraCap Partners 3, has a $250 million
equity goal.
The management fee is 1.5%, down from 2% in the firm’s
previous funds. And limited partners will receive a 9% preferred return, up from 8%. The profit split after the preferred
return remains the same: TerraCap gets half of the profits until
it amasses 20% of cumulative distributions and then gets 20%
of any additional profits.
The fund operator targets a 15-20% return by acquiring
foreclosed properties or distressed commercial mortgages that
provide a path to seizing the collateral. It pursues apartment,
office, light-industrial, retail, hotel and mixed-use properties,
typically investing $3 million to $25 million of equity at a time
via off-market deals. Most of the real estate is in Florida, but the
firm can invest across the South and in Texas.
The second fund in the series had its final close in 2013 and
has invested almost all of its $102 million of equity, resulting in
some $310 million of assets under management. Investors have
been told the vehicle is generating a gross return of roughly
30% so far.
TerraCap was formed in 2008 by Steve Hagenbuckle, a former
board member of Landmark Bank of Fort Lauderdale, Fla., and
Florida real estate veteran Michael Davis. They were later joined
by Bob Gray, an alumnus of Morgan Stanley and J.P Morgan. All
are managing principals. Hagenbuckle and Gray run the day-today operations. 
Apartment Firm Boosts Fund Goal
Multi-family owner/operator Hamilton Point Investments
has upped the equity target for its fourth value-added fund.
The Old Lyme, Conn., manager will roll out marketing
materials this month for HPI Real Estate Opportunity Fund 4,
seeking to drum up $100 million. The vehicle would seek a 14%
return by investing in apartment properties in the Eastern U.S.
Hamilton Point had informal talks with investors about
launching the campaign last fall, with a $60 million target in
mind. But it decided instead to channel more equity into its
third fund so it could move quickly on some deal opportunities.
Fund 3, which had closed on $40 million of equity in 2013,
ultimately raised $80 million and is nearly fully invested. Investors have been told that, including deals under contract, it will
own roughly $220 million of properties.
With leverage, Fund 4 would acquire some $300 million of
apartment properties. It would focus on acquisitions in secondary markets in the Southeast, where it can avoid competing
with larger institutional investors. The shop’s first three funds
own 29 properties encompassing some 5,500 units. Funds 1
and 2 raised a combined $58 million of equity.
Hamilton Point raises equity from wealthy individuals via
broker-dealers. Founded in 2009, it is led by managing principals David Kelsey and Matthew Sharp. Kelsey’s resume includes
stints at Bear Stearns and Trinity Hotel Investors of New York.
Sharp previously ran a firm called Milton Point Investments,
and before that worked at ABN Amro and S&P. 
Value-Added Ariz. Portfolio for Sale
An investment shop is marketing a value-added portfolio of
Arizona properties worth about $200 million.
The 1.9 million-square-foot package contains 20 properties
— mostly office buildings, with some flex and warehouse space
sprinkled in. Many are poorly leased or have below-market rents.
The properties are divided into three pools, tied to the central Phoenix, Tempe and Scottsdale submarkets. The owner,
Presson Equity of Phoenix, prefers to sell the portfolio intact,
but will consider bids on individual pools. Cushman & Wakefield and DZT, formerly known as Cassidy Turley, are sharing the
listing, one of the biggest in Greater Phoenix since the recovery.
The economy in the Phoenix area is chugging along, and
office pros there are optimistic, despite some dismal fundamentals. The average occupancy rate remains at a depressed
80.4%, although that was up one percentage point last year and
it is projected to rise again in 2015.
Despite the large amount of vacant space, there are few big
blocks of contiguous space available. As a result, some businesses that have moved into the area, including General Motors
Information Technology, Go Daddy and State Farm Insurance,
have opted to build their own properties, rather than acquire
existing ones. 
Vacant Virginia Offices Up for Grabs
A joint venture is pitching a vacant office building in Tysons
Corner, Va., to opportunistic investors.
The 202,000-square-foot building is expected to trade for
$28 million, or $139/sf. The owner, a joint venture between
Walton Street Capital of Chicago and StonebridgeCarras of
Bethesda, Md., has given the listing to Cushman & Wakefield.
Freddie Mac fully occupied the three-story building until its
lease expired last year. A buyer would likely conduct a renovation, possibly making the space suitable for multiple tenants.
Also, the property could be expanded by 250,000 sf.
The building, at 8000 Jones Branch Drive, was completed in
1988 and has been regularly renovated. It has large windows that
allow natural lighting, as well as a cafeteria and meeting rooms.
The 11-acre site is just south of the Dulles Toll Road in a
well-developed area of Fairfax County, near shops, hotels and
residential districts. It is about 13 miles west of downtown
Washington.
The 23 million-sf Tysons Corner office market was 81%
occupied at the end of the third quarter. Asking rents averaged
$33.74/sf. 
January 7, 2015
7
Real Estate
ALERT
Large Single-Property Transactions in the Fourth Quarter
Office Buildings
PricePrice SF
Per SF ($Mil.) (000)
$2,250 $2,250.0 1,000
1,112
322.5
290
1,106
595.0
538
1,074
392.0
365
711
300.0
422
660
307.0
465
658
250.0
380
626
585.0
934
611
715.0 1,170
603
216.5
359
582
260.0
447
395
280.0
708
290
290.0 1,000
246
238.0
968
245
270.0 1,100
227
348.0 1,530
220
369.0 1,680
Property
1095 Avenue of the Americas, New York
9911 Belward Campus Drive, Rockville, Md.
530 Fifth Avenue, New York
PNC Place, Washington
Lincoln Square, Washington
Embarcadero Center West, San Francisco
21 Penn Plaza, New York
Pacific Shores Center, Redwood City, Calif.
353 North Clark Street, Chicago
600 California Street, San Francisco
1400-1500 Seaport, Redwood City, Calif.
1111 Third Ave./Second & Spring, Seattle
Atlanta Lenox Park, Atlanta
Corporate Center 1-3, Tampa
Aon Center, Los Angeles
Northpark Town Center, Atlanta
Normandale Lake, Bloomington, Minn.
Buyer
Ivanhoe Cambridge, Callahan
GI Partners
General Growth, Thor, RXR Realty
TIAA-CREF, Norges Bank
Rockrose Development
Rockpoint
TIAA-CREF
Google
Heitman
Bentall Kennedy
DivcoWest
Ivanhoe Cambridge, Callahan
Fortress Investment Group
Parkway Properties
Shorenstein Properties
Cousins Properties
MetLife
Seller
Blackstone
BioMed Realty
Crown Acquisitions, 3 others
PNC
Ralph Dweck
TIAA-CREF
Feil Organization, Savanna
Starwood Capital, Blackstone
Tishman Speyer
Clarion Partners
Shorenstein Properties
Walton Street Capital
Columbia Property
Carter & Associates
Beacon Capital
AEW Capital, Bank of Ireland
Equity Group, Perennial, GEM
Property
50 Murray/53 Park Place, New York
298-304 Mulberry Street, New York
30 Park Avenue, New York
50 Murray/53 Park, New York (ground lease)
Flats 130 at Constitution Sq., Washington
K2 Apartments, Chicago
Palm Valley, San Jose (50% Stake)
Waena Apartments, Honolulu
Springfield Station, Springfield, Va.
Buyer
Clipper Equity
Broad Street, Crow Holdings
Thor Equities
Sapir Organization
TIAA-CREF
Georgetown Co.
Essex Property
Douglas Emmett, Inc.
CBRE Global Investors
Seller
Sapir Organization
GID Investment Advisors
BlackRock, Calpers
World-Wide Group
StonebridgeCarras, Walton Street
Fifield Cos.
E&S Ring, John Goodman
Carmel Partners
J.P. Morgan Asset Management
Buyer
Vornado, Crown Acquisitions
Goldman, Silverpeak, Pacific Retail
MetLife, M&J Wilkow
Acadia Realty
Excel Trust
Seller
Richemont
Macerich Co.
Menin Development
Julmy, Pacher, Wislow
(Unidentified)
Buyer
Pebblebrook Hotel
Keck Seng Investments
Premier Group
Hyatt Hotels
Chesapeake Lodging
MetLife
DiamondRock Hospitality
Jeff Vinik
Sichuan Xinglida
Seller
Northwood Investors
Archon, GEM, Accor
Highgate, Crown, Carlyle, Tribeca
Anschutz, Woodbine
Thayer Lodging
Ivanhoe Cambridge
Starwood Capital
Marriott International
DiamondRock Hospitality
Multi-Family
PricePrice
Per Apt. ($Mil.) Units
$1,110,516 $559.7
504
980,769 178.5
182
751,037 181.0
241
590,793 231.0
391
458,787 295.0
643
432,056 214.3
496
327,869 180.0 1,098
311,966 146.0
468
260,697 164.5
631
Retail
Price SF
($Mil.) (000) Property
$700.0
25 Two East 55th Street, New York (condo)
205.0
1100 South Towne Center, Sandy, Utah
155.0
468 Magnolia Park, Greenville, S.C.
144.3
87 840 North Michigan, Chicago (88% stake)
141.5
340 Downtown, Palm Beach Gardens, Fla.
Hotel
PricePrice
Per Room ($Mil.) Rooms
$727,374 $260.4
358
665,829 265.0
398
657,895 150.0
228
460,462 208.0
491
436,795 147.2
337
433,735 180.0
415
344,907 149.0
432
208,623 150.0
719
159,363 160.0 1,004
Property
Revere Hotel, Boston
Sofitel New York, New York
Marriott Residence Inn, New York
Hyatt Regency Lost Pines, Austin (92% st.)
JW Marriott Union Square, San Francisco
Fairmont Hotel, Washington
Westin Beach Resort, Fort Lauderdale, Fla.
Tampa Marriott Waterside Hotel, Tampa
Los Angeles Airport Marriott, Los Angeles
January 7, 2015
Real Estate
8
ALERT
Retail Center Listed in Southeast Va.
Investors are getting a crack at a shopping center in a booming section of Williamsburg, Va.
The 239,000-square-foot Settlers Market could fetch up to
$60 million. At that price, the capitalization rate would be 6.5%
The owner, Federal Capital of Chevy Chase, Md., has given the
listing to HFF.
The center, which is 97% occupied, was built in phases
between 2009 and this year. A 12,000-sf Trader Joe’s supermarket is an anchor tenant. A separately owned Wal-Mart Neighborhood Market adjacent to the center effectively serves as a
shadow anchor, attracting shoppers.
Other tenants at the shopping center include Stein Mart
(35,000 sf), HomeGoods (25,000 sf), Cost Plus World Market
(18,000 sf), Michaels (17,000 sf), Petco (13,000 sf) and Ulta
(10,000 sf). There are also restaurants, including Zoes Kitchen
and Noodles & Company.
National retailers lease two-thirds of the space, with about
one-quarter occupied by investment-grade companies. Leases
on less than 25% of the space mature within five years. The top
10 tenants, occupying 70% of the space, have a weighted average remaining lease term of 9.1 years.
Settlers Market is on a 27-acre site at 5020-5225 Settlers
Market Boulevard, near the intersection of Route 199 and Monticello Avenue — the heart of Williamsburg’s retail district. It’s
less than two miles from the College of William & Mary and
is also near tourist attractions such as Colonial Williamsburg.
The Busch Gardens amusement park is within 10 miles.
An estimated 42,000 people with an average household
income of $88,000 live within a three-mile radius. The local
population has grown roughly 50% since 2000, according to
marketing materials. 
Meridian Shops Suburban DC Offices
Meridian Group is pitching a Northern Virginia office building that’s poised to benefit from its proximity to the planned
headquarters of the National Science Foundation.
The 145,000-square-foot Cameron Run, at 3601 Eisenhower
Avenue in Alexandria, is expected to trade for about $37 million, or $255/sf, which would produce an 8% initial annual
yield. Meridian, based in Bethesda, Md., has tapped Cushman
& Wakefield as its broker.
The six-story building is less than two miles from the future
headquarters of the National Science Foundation, slated to
house some 2,400 employees when it opens in 2017. The U.S.
Patent & Trademark Office is also nearby, making the neighborhood convenient for contractors that work with those agencies.
The property is 92% leased by 10 tenants. There is no substantial rollover until 2019, when the largest lease expires.
That’s held by Michael Baker Corp., which occupies 51,000 sf
as its headquarters. Other tenants include Savi Technology and
Tyco Integrated Security. A buyer could work to fill the 12,000 sf
of vacant space and lift rents as leases eventually expire.
Alexandria was the only area in Northern Virginia to see its
occupancy rate increase during the first three quarters of last
year, when some 180,000 sf was leased up, lifting the rate to
77%.
Cameron Run, completed in 1991, underwent renovations
last year that included upgrades to the lobby and rest rooms
and the addition of a fitness center. A cafe is slated to open this
year.
The property is just off the Washington Beltway about 11
miles from downtown Washington.
Meridian acquired the building in June 2012 for $31.3 million. Cushman represented the seller in that deal, TA Associates
Realty of Boston. 
Buyer Sought for Staten Island Offices
A special servicer is shopping an office building on New
York City’s Staten Island that is just two-thirds occupied.
The offering is being pitched to high-yield investors who
could attempt to lease up the property and double the net operating income over five years. The 269,000-square-foot property,
One Edgewater Plaza, is 67.4% leased, mostly to city agencies.
The property comes with about 465 parking spaces.
The seven-story building is controlled by LNR Partners,
which tapped Colliers International to broker a sale. In its role
as special servicer, LNR assumed the property in 2012 from
Behringer of Addison, Texas, which had acquired it in 2007 as
part of its $1.4 billion takeover of IPC US REIT.
Bids are expected to come in at roughly $24 million, or
$89/sf. At that price and a projected first-year net operating income of $1.3 million, the buyer would reap an initial
annual yield of 5.3%. Marketing materials note that by filling
the vacant space, the net operating income could more than
double in five years, significantly boosting the yield.
The offering includes a 4,000-sf warehouse across the street
at 100 Edgewater Plaza that could be repositioned as additional
office space or razed to provide more parking.
The largest tenants in the office building are Staten Island
University Hospital (86,000 sf), City of New York Board of Elections (46,000 sf) and the New York City Police Department
(23,000 sf).
The property was built in 1919 as a warehouse and converted into offices in 1982. It is in the Clifton neighborhood,
about halfway between Interstate 278 and the terminal for the
Staten Island Ferry, which connects the island to Manhattan.
Real Estate Alert’s Deal Database, which tracks sales of at
least $25 million completed since the start of 2001, has just one
recorded deal in Staten Island. In 2008, local developer Nicotra
Group bought two buildings totaling 286,000 sf at 10 Teleport
Drive for $25 million, or $87/sf. The seller was a joint venture
led by Silverstein Properties of New York. 
Need to see the largest property sales that were completed
recently? Go to The Marketplace section of REAlert.com and click
on “Sales Activity.” It’s free.
January 7, 2015
9
Real Estate
ALERT
them recent-vintage, Class-A complexes that are well occupied.
The company oversees about 40,000 apartments and 400,000
square feet of retail space at some 60 properties nationwide.
In 2005, investors led by Clarion — then known as ING
Clarion — teamed up with a Lehman Brothers fund to acquire
Gables for $2.8 billion, taking the company private. Silverpeak
later took over management of the Lehman fund. 
Clarion ... From Page 1
Greystar Real Estate of Charleston, S.C., and Pimco of Newport
Beach, Calif.; Denver REIT AIMCO; the team of Calpers and GID
Investments of Boston; and a partnership between DRA Advisors of New York and Abu Dhabi Investment Authority.
Gables develops, acquires and manages properties — most of
ON THE MARKET
ON THE MARKET
Office
Property
Size
Financial Center at
the Gardens,
3801 PGA Boulevard,
Palm Beach, Fla.
189,000 sf
Estimated
Value
$70 million
Yield: 5.1%
Owner
Broker
Color
J.P. Morgan
Asset
Management
Cushman &
Wakefield
Class-A office building is 92.2% occupied. Major
tenants include J.P. Morgan, UBS, Morgan Stanley and
Fidelity National Title. Annual net operating income:
$3.6 million. The 10-story building was completed in
1997.
Owner
Broker
Color
Somerset
Development,
Lakewood, N.J.
Cushman &
Wakefield
Site-plan approvals in place for two-phase
development to include 390 for-sale homes and
apartments, a 110-room hotel and 75,000 square feet
of retail space.
Land
Property
Size
Glassworks site,
Cliffwood Avenue,
Aberdeen, N.J.
51 acres
approved for
mixed-use
development
Estimated
Value
$30 million
CALENDAR
CALENDAR
Main Events
Dates
Jan. 21-23
Mar. 26-27
June 15-16
Nov. 17-19
Event
Winter Forum on Real Estate Opp. & Private Fund Inv.
PREA Spring Conference
U.S. Real Estate Opportunity & Private Fund Inv. Forum
REIT World
Location
Laguna Beach, Calif.
Washington
New York
Las Vegas
Sponsor
IMN
PREA
IMN
NAREIT
Information
www.imn.org
www.prea.org
www.imn.org
www.reit.com
Sponsor
NMHC
PLI
IMN
RELA
BHN & AHLA
ULI
Marcus & Millichap
IREI
Marcus & Millichap
IMN
Marcus & Millichap
Information
www.nmhc.org
www.pli.edu
www.imn.org
www.rela.org
www.alisconference.com
www.uli.org
mmlosangelesforum.com
www.irei.com
mmfloridaforum.com
www.imn.org
Mmfloridaforum.com
Events in US
Dates
Event
Location
Jan. 20
Apartment Strategies Outlook Conference
Palm Springs, Calif.
Jan. 21
Real Estate M&A and REIT Transactions 2015
New York
Jan. 21-22
Introduction to Capital Raising
Laguna Beach, Calif.
Jan. 22
New Years Networking Event
New York
Jan. 26-28
ALIS 2015
Los Angeles
Jan. 28
Real Estate Outlook
New York
Jan. 28
Southern Calif. CRE Forecast
Los Angeles
Jan. 28-30
Visions, Insights & Perspectives-Americas
Carlsbad, Calif.
Jan. 29
CRE Forum: Florida 2015
Miami
Feb. 11-12
Bank Special Asset Conf. on Real Estate Workouts
Fort Lauderdale, Fla.
Feb. 12
CRE Forum Florida
Miami
To view the complete conference calendar, visit The Marketplace section of REAlert.com
January 7, 2015
10
Real Estate
ALERT
Florida ... From Page 1
and Nordstrom Rack (28,000 sf). Among the other tenants
are 17 restaurants. Seventy percent of the space is leased by
national chains, retailers with investment-grade ratings or tenants that fall into both categories. Those leases have a weighted
average remaining term of eight years. All of the leases have
scheduled rent bumps.
Some 62,000 sf of below-market retail leases mature within
five years, providing the possibility to raise rents and upgrade
tenants. That space is described as suitable for flagship stores
and restaurants. Also, the offering includes a one-acre pad site
that is approved for construction of an 8,000-sf building.
About 60% of the office space is leased by investment-grade
companies. The tenants include three law firms, Akerman, Porter Wright and Wicker Smith, as well as Merrill Lynch and Sabadell Bank. Leases on less than 3% of the office space expire
within four years.
Some 97,000 people with an average household income of
$94,000 live within a five-mile radius. While that income figure
itself is impressive, it doesn’t reflect the fact that Naples has the
second highest per-capita number of millionaires in the nation,
because those residents generate much of their income via cap-
ital gains versus ordinary income. Other notable demographic
data points: 43% of the population has a bachelor’s degree or
higher, and a third of the houses are worth at least $500,000.
The complex, completed in 2007, is on 42 acres at 9115
Strada Place, about eight miles north of downtown Naples. The
site is at the intersection of U.S. Route 41 and Vanderbilt Beach
Road. 
NEW DEALS
New Jersey Office Property
Rugby Realty last month paid roughly $42 million for the
579,000-square-foot office building at Three Gateway Center in
Newark, N.J. The New Rochelle, N.Y., firm bought the building from Tahl Propp Equities of New York. Ackman-Ziff Real
Estate was the broker. The $73/sf valuation reflects the fact that
the property is nearly two-thirds vacant. Prudential previously
leased the entire building but is reducing its space to 160,000 sf.
Rugby plans to spend $20 million on renovations. Tahl Propp
bought Three Gateway in 2000, paying $57 million to a Tishman
Speyer partnership, according to CoStar. 
Don’t Forget To Mention Discount Code “HSP” For 10% Savings
A partial listing of companies already registered for 2015:
Managing Principal,
Walton Street Capital, LLC
CEO, CFO and Chief Investment Officer
Digital Realty
President,
Inland Institutional Capital Partners
Partner and Chief Operating Officer,
GreenOak Real Estate
President, Related California
Managing Director and Co-Head of Investments, NorthStar Realty Finance Corp.
Principal, Walton Street Capital, LLC
Senior Managing Director,
CBRE Global Investors
Managing Director, The Blackstone Group
Managing Director, BlackRock
President and CIO, GTIS Partners
Principal, The Blackstone Group
Principal, Colony Capital LLC
Portfolio Manager - Real Assets, UPS
Co-Head and COO,
Morgan Stanley Alternative Investment
Partners Real Estate Team
President, Teamster Local 237; Trustee,
Board of New York City Employee Retirement System (NYCERS)
Head of Acquisitions, AmCap Inc.
Director, Private Investments,
UNC Management Company
Managing Director and
Head of Asset Management,
Canyon Capital Realty Advisors
Executive Director, Real Estate Investing,
Morgan Stanley Investment Management
Head of Real Estate, Raymond James
President & CEO, The Swig Company
Principal, Westport Capital Partners LLC
Managing Partner, The Milestone Group
Managing Principal,
Parmenter Realty Partners
Managing Principal, AmCap, Inc.
Managing Director, Head of Retail
Rockwood Capital, LLC
Managing Director, Strategy & Research,
Global Real Estate, TIAA-CREF
Managing Director, Clarion Partners
Call: 212 224 3428 | www.imn.org/winteropps2015 | Email: [email protected]
Chairman and CEO,
Reven Housing REIT, Inc.
Chief Financial Officer,
Independence Capital Partners
Senior Research Analyst, Real Estate and
Infrastructure Private Equity, Russell Investments
1st Vice President, Investments CIM Group
Senior Vice President, General Counsel,
Corporate Secretary, Chief Compliance
Officer, Acadia Realty Trust
January 7, 2015
Real Estate
11
ALERT
Penzance ... From Page 1
recruitment is another step toward building out its senior management team.
The firm has also hired Robin McBride, who starts this month
as an executive vice president and head of operations. She was
previously a vice president and chief operating officer in the
Mid-Atlantic region for Federal Realty Investment, a Rockville,
Md., REIT. Fuller and McBride were both recruited by Rhodes
Associates, a New York executive search and consulting firm.
Penzance also added Joseph Margolis in September as a
partner and managing director, and Andrew McIntyre last May
as a senior vice president of development and construction.
The company, which targets value-added and opportunistic returns, has actively developed and acquired office, retail
and residential properties in the Washington area, both independently and via joint ventures with institutional investors. It
stabilizes and sells some properties, while holding others long
term. Its current partners include Invesco Real Estate of Dallas
and Lionstone Investments of Houston.
Penzance has about a dozen projects in the pipeline. Last
month the firm teamed up with Lionstone to pay $56 million
for a 183,000-square-foot office building at 4040 North Fairfax
Don’t Forget To Mention Discount Code
“HSP” For 10% Savings
Call: 1-212-224-3428
www.imn.org/bankersfl15 | Email: [email protected]
Drive in Arlington, Va., which will be expanded and converted
into some 330 residential units. The firm is also working on a
project on Wilson Boulevard in Rosslyn, Va., that could include
office, residential and retail space. 
NEW DEALS
Philadelphia Retail/Apartment Complex
Pearl Properties paid $41 million last month for an
89,000-square-foot retail and apartment building at 1700
Chestnut Street in the upscale Rittenhouse Row shopping
district of Philadelphia. The first four floors of the building,
totaling 39,000 sf, are leased to Nordstrom Rack for the next
10 years. The buyer will convert the vacant upper floors into
luxury residential units. JLL represented the seller, JEMB Realty
of New York, which acquired the 1927-vintage property in 2012
as part of a portfolio. JEMB invested $5 million in renovations
that included modernizing building systems, repositioning the
retail space, gutting the upper floors and creating a separate
entrance for the apartments. 
January 7, 2015
12
Real Estate
ALERT
THE GRAPEVINE
... From Page 1
acquisitions for RREEF, but rejoined
CBRE in 2013 to head multi-family
investment sales.
Acquisitions veteran Brad Takala has
joined JLL as a multi-family broker in
Dallas. Takala started late last month
as an executive vice president, reporting to managing director Jeff Price.
Takala most recently was a managing
director of acquisitions for American
Real Estate Partners at its Herndon, Va.,
headquarters. He had previous stints at
Boston-based Davis Cos., where he ran
the acquisitions team and managed the
investment committee; Taurus Capital
Markets, also of Boston; and Dallasbased Invesco Real Estate.
CBRE Global Investors has hired an
acquisitions director in Boston. The Los
Angeles fund operator brought in Mark
Munroe this week to work on property
deals in the Eastern and Central U.S. He
reports to managing director Gary Jaye,
the acquisitions team leader for CBRE’s
U.S. managed accounts group. Munroe
came from DSF Group of Waltham, Mass.,
where he was head of asset management.
Before that, he spent more than eight
years in BlackRock’s Boston office.
Raphael Licht has left RAIT Financial.
Licht most recently was managing director of business development and general
counsel for the Philadelphia REIT. Before
that, he was chief operating officer. He
joined RAIT in December 2006 when the
firm acquired Taberna Realty Finance,
where he was chief legal officer. Licht’s
next step is unclear.
DiNapoli Capital of San Jose has added
a managing director to lead its seniorhousing platform. Guy Geller joined a
month ago as one of five partners. He’s
based in Chicago, reporting to chief
executive Matt DiNapoli. Geller previously was a London-based managing director at Sunrise Senior Living,
overseeing the McLean, Va., company’s
properties in the U.K. Before that,
he was a senior director at Brookdale
Senior Living of Brentwood, Tenn.
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Richard Quinn
Alison Waldman
John Doherty
Jeff Whelan
DiNapoli Capital buys, develops and
manages hotel, multi-family, seniorhousing and office properties.
Industry pro Mara Glick has launched a
consulting firm in New York. MNG Realty,
which opened last month, assists owners
and lenders with financial analysis and
underwriting for acquisitions, dispositions and financings. Glick was previously a senior vice president at Centerline
Capital for two years. Before that, she
held posts at Freddie Mac and Prudential.
Cityshares, a nascent crowd-sourcing
firm focused on buying New York
apartment properties, has added a
fund-raising staffer. Mike Kim started in
the past few weeks as director of investor relations, the same title he previously held at Castellan Real Estate of
New York. Cityshares was founded last
year by Seth Weissman, who previously
worked at New York hedge fund operator Perry Capital and at Goldman Sachs.
The firm seeks to buy multi-family
and mixed-used properties by pooling
investor contributions into neighborhood-specific funds.
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