Hines Real Estate Investment Trust Inc

Mark Heschmeyer, Editor In this week's issue:       Hines REIT invests $66.5 mil. in Denver flex portfolio. Speedway Motorsports buys NASCAR venue in Kentucky. Institutional Property Sales. Properties Under Contract. Property Financings. Jan. 25-31, 2009 Plus Loan Maturity Leads on loans in Arizona, California, Florida, Georgia, Illinois, Louisiana, Maryland, Nevada, North Carolina, South Carolina, Texas and Virginia. Hines REIT Invests $66.5 Mil. in Denver Flex Portfolio By: Laurie Forbes Hines Real Estate Investment Trust Inc., a Houston-based office REIT, purchased 10 office/flex buildings in Englewood, CO, from an entity of Irvine, CA-based Sperry Van Ness for $66.5 million, or approximately $137 per square foot. The properties at 345 Inverness Drive South and Arapahoe Business Park total 484,737 square feet. The portfolio is about 9 miles south of downtown Denver in Arapahoe County. The 309,450-square-foot Arapahoe Business Park has seven buildings ranging in size from 44,050 to 48,677 square feet on 25 acres in front of Centennial Airport Center. The buildings are between eight and 11 years old and are fully leased. American Honda Motor Co., ViaWest Internet Service, Vistar Corp. and Pulte Mortgage LLC lead the tenant roster. The 345 Inverness Drive South property includes three buildings measuring 175,287 square feet on 16 acres at the south entrance to Inverness Business Park. The 8-year-old complex is 90% leased to tenants including Honeywell International, Zykronix, Nestlé-USA and Luzenac America Inc. Denver-based Frederick Ross Co. will manage the properties. Both Hines REIT and SVN used in-house representation. Speedway Motorsports Buys NASCAR Venue in Kentucky Speedway Motorsports Inc. added the Kentucky Speedway to its portfolio of motorsports facilities, expanding its geographic reach into the Midwest. Located at 5120 Sparta Pike on approximately 820 acres in Sparta, KY, just south of Cincinnati, Kentucky Speedway features a 1.5-mile tri-oval speedway, with grandstand seating for approximately 66,000 spectators, 50 luxury suites with seats for approximately 2,000, private RV spaces and reserved and unreserved camping spaces. Speedway Motorsports paid $78 million for the facility. CoStar PI 2 The speedway currently plays host to a NASCAR Nationwide Series race, a NASCAR Camping World Truck Series race, two ARCA RE/MAX Series races and an IndyCar Series race. Institutional Property Sales Multifamily  Guardian Life Insurance Co. of America acquired the multifamily property at One Avalon Drive in Weymouth, MA, from Avalon Bay Communities Inc. for $57.5 million, or approximately $189,145 per unit. Avalon Ledges, a four-story, 329,822-square-foot, 304-unit apartment complex, was built in 2002 and is on 57.6 acres in Norfolk County. The property consists of 11 buildings and is in the Route 3 Corridor submarket. Simon Butler and Biria St. John of Cushman & Wakefield Inc. represented the seller. (By: Laura R. Criswell; CoStar COMPS #1628115)  Hartford, CT-based Henderson Global Investors acquired the apartment complex at 40 West St. in Reading, MA, from Archstone for $48.5 million, or approximately $237,745 per unit. The three-story, 232,560square-foot, 204-unit multifamily complex was built in 2006 and is on or 11.55 acres. The property consists of 11 buildings in total, which are comprised of apartments and town homes. The complex is in the Wilmington/Reading submarket. Paul Donahue, Travis D'Amato, William Moylan and Gary Lemire of the CB Richard Ellis-New England team represented the seller. (By: Laura R. Criswell; CoStar COMPS #1621684)  BPG Properties sold Mission at Tanglewood, an Austin apartment complex, to Mission Residential for $20.4 million, or approximately $112,088 per unit. The 256,126-square-foot, 182-unit multifamily was constructed in 1985 on 12.57 acres in Travis County. The complex is comprised of 20 buildings with site amenities including a fitness center, laundry facilities and a swimming pool. The property was 94% occupied at the time of sale. (By: DeAnna Paul; CoStar COMPS #1635949)  Gaines Investment Trust, of La Jolla, CA, purchased The Villas of Timberglen Vail, a 338-unit multifamily complex in Dallas from Kaplan Management based in Houston for approximately $17 million, or about $50,296 per unit. The three-story multifamily complex at 3637 Timberglen Road was constructed in the Upper Tollway/West Plano submarket on 10 acres in Denton County in 2002. The complex includes 24 two-bedroom/one-bath units, 196 one-bedroom/one-bath units and 118 one-bedroom/one-bath lofts and efficiencies. Broker information was not disclosed. (By: Montese Henson; CoStar COMPS #1627343) Office  Franklin Street Properties terminated its deal to acquire the Congress Center property in Chicago for $130 million from affiliates of Grubb & Ellis Realty Investors LLC, which will now continue to market the property for sale.  Separately, Franklin Street Properties purchased the Loudoun Tech Center for $18.5 million. Loudoun Tech Center, immediately off the intersection of Route 28 and Route 7 in the heart of Loudoun County, VA, includes one Class A office building and one flex building totaling 135,888 square feet. The property was a build-to-suit for the German firm Giesecke & Devrient and serves as its US headquarters location with on-site production capabilities. The buildings are 100% NNN-leased to Giesecke & Devrient through February 2015 with two 5-year renewal options. Jones Lang LaSalle acted as exclusive representative for the seller. Leading the Jones Lang LaSalle team were managing directors Collins Ege and John Kevill, and senior vice president Jim Molloy. CoStar Group, Inc. CoStar PI  Northeast Utilities Systems acquired 56 Prospect St. in Hartford, CT, from The Phoenix Cos. Inc. for $8.7 million, or approximately $94 per square foot. Constructed in 1932, the three-story, Class B office building totals 92,710 square feet. The building is on 1.42 acres and has about 108 parking spaces. Thomas York and William Farley of CB Richard Ellis represented Phoenix. (By: Melannie Skinner; CoStar COMPS #1626637) 3 Industrial  Hunter Douglas Inc. sold its industrial building in Poway, CA, at 12400 Stowe Drive for $15 million to DEI LLC. The 133,125-square-foot manufacturing/industrial building is on 2.59 acres. On the heels of the sale, the entire building was leased for a five-year term by a new tenant, Cycle Express LLC, dba National Powersport Auctions. The company is relocating from its current location on Gregg Street in Poway into the larger space due to an expansion.  Barry Hendler, Matty Sundberg and Todd Murphy of Grubb & Ellis|BRE Commercial represented the buyer. Russ Sande and John Brady of CresaPartners represented the seller.  Bay Area Internet Solutions (BAIS) purchased the facility at 2040-2050 Martin Ave. in Santa Clara, CA, from D.R. Stephens & Co. for $13 million, or about $156 per square foot. The 83,055-square-foot industrial building was built in 1976 on about five acres. The buyer plans to occupy the property by the end of the year. Scott Prosser of CB Richard Ellis in San Jose represented the seller, while Paul Schmidt and Jerry Inguagiato of CB Richard Ellis in San Jose represented the buyer. (By: Melanie Tucker; CoStar COMPS #1634966)  Boston-based Cabot Properties Inc. purchased the warehouse distribution building at 2130 Baldwin Ave. in Crofton, MD, from New York City-based Teachers Insurance & Annuity Association of America for $10.35 million, or about $93 per square foot. The single-story, 110,842 -square-feet industrial building was built in 1998 and is in the Interstate 97/Crain Highway Corridor Industrial submarket. It is on 10 acres and is fully leased to FedEx. CB Richard Ellis represented both parties. Robert Cashman and Jonathan Beard represented TIAA-CREF, while Jack Fraker, Josh McAtror and Conor Feeney represented the buyer. (By: Melannie Skinner; CoStar COMPS #1615636) Retail  New York City-based Ashkenazy Acquisition Corp. acquired 663,000 square feet of Northland Center, or a little less than half of the 1.7 million-square-foot enclosed mall in Southfield, MI. The sales price was $30.99 million. Retail tenants currently occupying space in the 120-acre mall at 21500 Northwestern Highway include Champs Sports, Coffee Beanery, Lens Crafters, Lady Footlocker, Payless ShoeSource, Stride Rite, Carlton Cards & Gifts and others. The new owner plans to make significant capital improvements to the mall. Changes to the tenant mix are expected as part of the major repositioning of the property. Northland Center's occupancy rate was 70% at the time of the closing. The portion of the property sold did not include the space occupied by the mall's co-anchors, Macy's and Target. Mark Taylor, vice president investments, and Dean Zang, associate vice president investments, in the Philadelphia office of Marcus & Millichap, represented the seller, Jager Management Inc. of Jenkintown, PA. Taylor and Zang also procured the buyer, Ashkenazy Acquisition Corp. Mike Dillon, a vice president investments in the Chicago office of Marcus & Millichap, and Steve Chaben, first vice president and regional manager of the firm's Detroit office, also assisted. (CoStar COMPs #1626226)  The Jaffe Corp. purchased Ormond Towne Square, a 234,045-square-foot shopping center in Ormond Beach, FL, for approximately $20 million. Developers Diversified Realty was the seller. Located at 1458 CoStar Group, Inc. CoStar PI 4 W. Granada Blvd., the intersection of SR 40 and I-95, Ormond Towne Square is 95% leased. The property is anchored by a high sales volume Publix Super Market, Bealls, Ross Dress for Less and other national tenants including Dollar Tree, GNC, Hallmark Gold Crown and Jackson Hewitt. Michael Cleeman, senior managing director, and Rick Kaiser, senior executive director, of Cohen and Co. represented the buyer. The seller  Cole Credit Property Trust III Inc. purchased 100% of the membership in Cole SC Hoover AL LLC for $12.3 million. SC Hoover owns as its only asset an approximately 115,347-square-foot single-tenant retail building in Hoover, AL, leased to Wal-Mart Stores Inc. On 11.43 acres, the property was constructed in 2000. Cole entered into an approximately $11.1 million loan that has a variable interest rate based on the 3month LIBOR plus 250 basis points per annum with a maturity date of Jan. 14, 2010. Other  California Coastal Communities Inc. sold 17 model homes at its Brightwater community in Huntington Beach, CA, to an investor for $25 million. California Coastal will lease back the models for continued customer display during the next three years with two renewal options for one year each.  W. P. Carey & Co. purchased a cold storage facility in Glendale Heights, IL, leased to Kronos Foods Inc., for $15 million. Over the next nine months, it expects to make an additional investment to renovate the facility into a state-of-the-art food production facility for Kronos. Upon completion, Kronos will consolidate its Chicago operations into the new location.  TLQ Partners purchased the 18-hole Trilogy Golf Club in La Quinta, CA, from Shea Homes for $8.6 million. The course, designed by Gary Panks, was home to the LG Skins Game, a two-day event featuring golf's top professionals, from 2003 to 2006. Senior vice presidents Eric Lambiase and Ken Arimitusu of Grubb & Ellis' Golf Property Group office represented the buyer and the seller. Under Contract Apple REIT Nine Inc. in Richmond, VA, entered into a purchase contract for the potential purchase of 500 acres of land to be used for natural gas production on approximately 115 sites in Texas. The purchase contract is with a subsidiary of Chesapeake Energy Corp. The total purchase price under the contract is approximately $150 million. USA Real Estate Investment Trust agreed to sell 121 acres of land in Wiggins, MS, to Wiggins 49 LLC for $8.5 million. Closing date is set for March 2. The purchaser has the right to extend the closing date to April 1 at a cost of $100,000. The following properties were reported in the last week to CoStar as coming under contract. Property Hunter College School of Social Work, 127129 E. 79th St., New York, NY Property Type Size(SF) Specialty 110,000 Days on Mkt Asking Price Listing Broker 89 $65,000,000 Saml J Silberman Fund Inc. CoStar Group, Inc. CoStar PI 5 Walgreens, 1380 Lexington Ave., Mansfield, OH 1532 S Washington Ave., Piscataway, NJ Caritas Academy, 2495 John F. Kennedy Blvd., Jersey City, NJ Zion Bible College, 27 Middle Hwy, Barrington, RI Berkeley Iceland, 2727 Milvia St., Berkeley, CA Beth El Synagogue, 2901 Chapel Ave. W, Cherry Hill, NJ Church, 3300 W. Magnolia Blvd., Burbank, CA 610 Sawdust Road, Spring, TX Retail Industrial Specialty Specialty Sports & Entertainment Specialty Specialty Retail 14,560 256,000 76,222 176,000 58,920 74,600 18,570 122,914 43,500 110,000 73 133 223 780 1028 1872 215 783 47 126 $5,468,000 NAI Daus $18,432,000 Bussel Realty Corp. $6,500,000 Cupo Realty $13,000,000 CNL Commercial Real Estate Gordon Commercial Real $6,450,000 Estate $6,500,000 Colliers L & A $5,000,000 California Real Estate $5,200,000 CB Richard Ellis $9,550,000 Apartment Realty Advisors NAI Samuel D. Plotkin & $7,500,000 Assoc. Romar Court Apartments, 6-18 Romar Court, Novato, CA Multifamily 66 School St., Granby, MA Specialty Property Financings Great Wolf Resorts Inc., the Madison, WI-based indoor waterpark resorts operator, negotiated an extension of the maturity date to Nov. 30, 2009 on its $76.8 million mortgage loan on its Mason, OH, resort property. During the extension period, the loan will continue to bear interest at a rate of LIBOR plus 425 basis points, with a minimum rate of 6.50 percent per annum. In addition, the company has provided the Mason mortgage loan lenders with a $15 million corporate guaranty and cross-collateralization on the company's Grapevine, TX, resort property. The Grapevine resort's mortgage loan is with the same lenders as the Mason mortgage loan. The corporate guaranty and cross-collateralization on the Grapevine property will remain in place until the company makes a $15 million principal reduction of the Mason loan over the remaining term of the loan. The company will be required to use 50% of the net proceeds toward the $15 million mandatory principal reduction, should there be certain liquidityproducing events, including the sale of majority-owned equity interest in any of the company's existing properties or the refinance of a mortgage loan on an existing property. NorthMarq Capital arranged first mortgage financing of $30 million for Gateway Club Apartments, a 319-unit multifamily property, in Boynton Beach, FL. Financing was based on a 7-year term and a 30-year amortization schedule and was arranged for the borrower with Freddie Mac. William Johnson, senior vice president and managing director of NorthMarq Capital’s Boca Raton regional office, arranged the deal. NorthMarq Capital arranged first mortgage financing of $18.08 million for Webster Manor Apartments, a 308-unit multifamily complex, in Webster, NY. Financing was based on a 7-year term and a 30-year amortization schedule and was arranged for the borrower through AmeriSphere Multifamily Finance, a Fannie Mae DUS lender. Sam CoStar Group, Inc. CoStar PI Berns, senior vice president and managing director of NorthMarq Capital’s Upstate New York regional office, arranged the deal. Thomas D. Wood and Co. secured financing in the amount of $15.335 million,000 for Casa del Toro Student Housing in Tampa, FL. This construction loan consists of two parts: a $3 million revolving loan, at a rate of LIBOR + 300 basis points interest-only, and a $12.335 million non-revolving term facility with a rate of 6% and 25-year amortization on each building as it is stabilized. The loan-to-value is 75% and loan-to-cost is 80%. Casa del Toro Student Housing will be built on 6.92 acres on North 58th Street. Doug Rozzell, principal, along with David Repka of Bison Financial Group, financed Casa del Toro Student Housing arranged the deal. NorthMarq Capital arranged first mortgage financing of $8.9 million for Silvernail Shopping Center, a 116,135square-foot retail property, in Waukesha, WI. Financing was arranged for the borrower through The Prudential Insurance Company of America. Patrick Minea, senior vice president and managing director of NorthMarq Capital’s Minneapolis regional office, arranged the deal. NorthMarq Capital arranged first mortgage financing of $7.12 million for Castlerock Estates, a 165-unit multifamily property, in Billings, Montana. Financing was arranged for the borrower through Freddie Mac. Patrick Minea, senior vice president and managing director of NorthMarq Capital’s Minneapolis regional office, arranged the deal. 6 Loan Maturity Leads Current Scheduled Ending Balance $10,692,418 $1,599,116 Property Property Type Maturity Date 8/1/2009 5/1/2009 Note Rate CMBS 8.01% BofA 2000-1 7.64% BofA 2000-1 256 Worth Avenue, 256 Worth Ave., Palm Beach, FL Retail 5400 Live Oak Apartments, 5400 Live Oak St., Dallas, TX American Store & Lock #1, 13304 E. Independence Blvd. and 101 SeaboaRoad Dr., Stallings (Indian Trail), NC Buffalo Avenue Apartments, 5914 Buffalo Ave. and 13545 Califa St., Van Nuys, CA Centre Stage at Jonestown Shopping Center, 381 Jonestown Road, Winston-Salem, NC Cox Communications Building, 5651 Copley Dr., San Diego, CA Creekwood Care Center, 830 Tamalpais Ave., Novato, CA Desert Classic Mobile Home Park, 5250 South Campbell Ave., Tucson, AZ Edwards Megaplex Theater, 4900 East 4th St., Ontario, CA Multifamily Mini Storage Multifamily Retail Industrial Health Care Mobile Home Retail $963,065 $1,558,292 $1,421,606 $10,414,028 $1,716,276 $1,397,325 $19,898,662 10/1/2009 7/1/2009 5/1/2009 8/1/2009 7/1/2009 10/1/2009 11/1/2009 8.15% BofA 2000-1 7.83% BofA 2000-1 8.09% BofA 2000-1 8.11% BofA 2000-1 8.44% BofA 2000-1 7.80% BofA 2000-1 8.43% BofA 2000-1 CoStar Group, Inc. CoStar PI 7 Franconia Center, 6110-6122 Franconia Road, Alexandria, VA Huffines Plaza, 229 Huffines Plaza, Lewisville, TX I-40 Bell, 6015 Plains Blvd., 6101 Lawrence Blvd., & 2501 Britain Drive, Amarillo, TX Lord Calvert Mobile Home Park, 21165 Great Mills Road, Lexington Park, MD Retail Retail Mini Storage Mobile Home $2,987,007 $1,427,933 $4,651,306 $3,167,259 $5,706,603 $2,427,306 $3,922,843 $2,151,728 $8,732,758 $7,430,784 $2,378,598 $3,631,711 $2,213,026 $958,376 $2,084,586 9/1/2009 9/1/2009 7/1/2009 9/1/2009 10/1/2009 8/1/2009 9/1/2009 7/1/2009 11/1/2009 11/1/2009 8/1/2009 10/1/2009 8/1/2009 5/1/2009 8/1/2009 8.33% BofA 2000-1 8.65% BofA 2000-1 8.49% BofA 2000-1 8.45% BofA 2000-1 7.80% BofA 2000-1 8.25% BofA 2000-1 7.81% BofA 2000-1 8.02% BofA 2000-1 8.89% BofA 2000-1 8.89% BofA 2000-1 8.07% BofA 2000-1 7.50% BofA 2000-1 8.36% BofA 2000-1 7.98% BofA 2000-1 8.07% BofA 2000-1 Meadows Mobile Home Park, 1515 Polaris Drive, Pittsburg, CA Mobile Home Mt. Paran Shopping Center, 5290 Roswell Road, Atlanta, GA Retail Orange Village Shopping Center, 541-591 North Madison Road (U.S. Route 15), Orange, VA Pecos Wigwam Commercial, 2599 Wigwam Parkway, Henderson, NV Retail Retail Rosewood Care Center - Moline, 7300 34th Ave., Moline, IL Health Care Rosewood Care Center - Peoria, 1500 West Northmoor Road, Peoria, IL Health Care Southside Commons, 2108 S. Irby St., Florence, SC Retail Southside Shopping Center, 32 Mill Creek Drive and Avon St. Extended, Charlottesville, VA Town Center Mall Shoppes, 390 Ernest W. Barrett Parkway, Kennesaw, GA Town East Center, 1100 Homer Road, Minden, LA Retail Retail Retail White Horse Commons, 6134 White Horse Road, Greenville, SC Retail CoStar Group, Inc.