Tuesday, January 28, 2014


Jan 21, 2014, 2:26pm HST

Lack of Hawaii apartment inventory ‘stumps’ investors

Hawaii’s lack of apartment inventory “stumped” investors in 2013, according to a market summary report from Apartment Advisors, even as the average price for an apartment jumped 29 percent during the fourth quarter.

The average price per apartment unit topped $207,000 during fourth quarter 2013, the summary said, a 29 percent increase from the fourth quarter of 2012.

In all, 702 units in a total of 62 buildings were sold in 2013, compared to the 729 units sold in 2012.

“For the majority of 2013, a lack of quality inventory remained one of the biggest challenges,” said the report, which was authored by Jared Ikeda, president of Apartment Advisors. “Many investors flush with cash and equipped with historically low interest rates were stumped by the lack of properties available for purchase.”

A “whopping” 87 percent of all transactions were under $3 million, the report said.


Jan 24, 2014, 2:22pm EST

Behind Boston's surging wave of new luxury apartments

Here’s the question developers of luxury apartment buildings in Boston are asking: If we built it, will they come?
Over the next three years, nearly 10,000 upscale apartments and condos are expected to open in Boston, testing the city’s appetite for high-end living with a record level of construction.
Already tenants and buyers are showing a strong demand for high-end living in the Downtown area. For example, The Kensington, the 381-unit tower in Chinatown opened last fall, and it is nearly 50 percent full, while developer Gerding Edlen, has leased one quarter of the 202 units at the “315 on A” high rise. And at the 15-story Millennium Place condos in Downtown Crossing, only five of 256 condos have yet to sell.
Travis D’Amato, a senior vice president atJones Lang LaSalle who sells multifamily properties, said there could be some softness in the market in 2015, given the number of units expected to open that year. But overall, he’s bullish about the demand for luxury units.
“There will be some scratching and clawing for tenants, but we are seeing a significant increase in demand for downtown housing,” D’Amato said. “While it may seem like a very large increase to the luxury stock, it’s not a large increase as a percentage of rental housing in the city of Boston.”
But not everyone is convinced there are enough well-heeled tenants to fill $3,000 per month apartments. If the skeptics are right, it won’t be the first time Boston overbuilt one property type. As Harold Brown, the octogenarian developer and landlord, puts it: “The glut will bring rents down, and some developers and banks will lose money.”

Designer Outlet at YVR

MacArthur Glen designer outlet coming to YVR 2015

Construction on B.C.’s first designer outlet mall has begun on a 12-hectare parcel of land at Vancouver’s airport.

McArthurGlen Designer Outlet Vancouver Airport will be developed into two phases, and it will total 35,000 square meters when it’s completed on Sea Island near the Templeton Canada Line station.

The first phase will be dedicated to about 220 luxury retail stores as well as restaurant and cafes.

The architecture for the two piazzas are inspired by Vancouver sites like the Sinclair Centre Complex, the Vancouver Rowing Club and historic Gastown.

This will be McArthurGlen’s first designer outlet in North America, set to open in Spring 2015. The company’s outlets in Europe are known for brands such as Prada, Armani, Burberry, Gucci and Hugo Boss.

Many 太太's already know their Outlet Malls outside London.   There are tour buses full of overseas Chinese shoppers!

Wednesday, January 22, 2014

San Francisco

Our astutue business accumen for several decades now playing on three continents - Asia, North America and Europe - was recently vindicated when we negotiated for the purchase of a site in Downtown San Francisco less than 18 months ago on a major site that was recently purchased by an investor from China.     The North American developer would have made $150 million USD on the 'flip' of the site in  a year and a half.    The project is estimated to cost $1.6 bln, when completed.

Asian investment in San Francisco

225 Bush Sale

225 Bush Street in San Francisco brought its owners nearly $140 million in two years.
The former Standard Oil Building at 225 Bush Street in San Francisco changed hands this week for the second time in two years, passing from a German investment fund to Chinese real estate group in a transaction valued at $350 million. The deal values the property at nearly 40 percent more than the last time the building changed hands two years ago.
The deal is said to be the largest office sale in San Francisco since 2012 and marks the impact that cashed-up Chinese investors are having on California’s real estate market.
Kylli Inc, a little known subsidiary of China’s Genzon Group purchased a stake in the 22-storey, 583,000 square foot structure from German investment firm SEB ImmoInvest and minority owners GEM Realty Capital and Flynn Properties. Kylli is owned by Chinese golf course developer Genzon Group together with the company’s principal.
Flynn Properties will retain a stake in the building under the terms of the deal. The transaction shows the rapid rise of San Francisco’s already healthy real estate industry, valuing the property at nearly 40 percent more than the $212 million valuation it received when the current owners acquired it from Goldman Sachs in 2012.
Current tenants of the historic office tower, which is located in an area which has rapidly become popular with US tech firms, include Groupon Inc., Zillow Inc. and RocketSpace, according to real estate consultancy JLL, which brokered the investment deal.   - 2014 May 23  MICHAEL COLE

350 Bush

Gemdale with Lincoln Properties

For the first time in more than a decade, a new office building is coming to the financial district in San Francisco. Lincoln Property Co. just lined up a Chinese investor to start construction on 350 Bush St. and 500 Pine St., a two-building project that will total 428,000 square feet of Class A office space. The project, which had several false starts, will rise on the site of lots that have sat vacant in the middle of the financial district for three decades.

While construction crews hammer away at more than 4 million square feet of office in South of Market, no buildings have risen in the financial district since 150 California was completed in 2000. Technology tenants such as Salesforce.com, Trulia, Dropbox and Macys.com grabbed chunks of space under construction in SoMa, taking about two-thirds of the pipeline. Despite the building boom, demand keeps growing for office space in San Francisco.
"Those empty lots have been eyesores for decades," said Heller Manus Architects who is the lead designer on the buildings. "Empty lots like that create dead zones. Putting the buidlings in there will be transformative."

The 350 Bush project, entitled in 2001, went through a series of owners and roadblocks, but Dallas-based Lincoln Property and partner, Gemdale Corp., plan to begin building during the third quarter of this year.

“Together we are committed to developing an outstanding project that both we and the City of San Francisco will all be very proud of,” said executive vice president of Lincoln Property.

The taller of the two buildings, 350 Bush, consists of 19 stories and 372,000 square feet of Class A, incorporating the historic terra cotta facade and columns of the San Francisco Mining Exchange Building. The shorter building, 500 Pine St., will encompass 56,000 square foot office and retail space in five stories.
The two parcels have been vacant in the middle of a busy commercial zone for more than three decades, but not for a lack of someone trying to develop them. Heller Manus Architects started designing buildings for the sites in the 1990s when they were controlled by a partnership between Shorenstein Properties, the Swig Co. and Weiler & Arnow Management Co.

Because of zoning and shadow ordinances, the developers entitled the sites together so that 350 Bush could have a taller building on it and 500 Pine would have a shorter building with an extension of St. Mary’s park on the roof. Locking in approvals involved the city’s Planning Commission, Parks and Recreation department, historic preservation committees and the Board of Supervisors.
“It was probably the most complicated entitlement I’ve ever worked on in San Francisco,” Heller said.

Then, once developers secured the approval, the dot.com crash trampled the city’s economy and need for office space. A new real estate boom followed a few years later when Lincoln Property, a real estate developer with more than 350 million square feet under management, bought the project from the partnership for $60 million in 2007 with plans to start construction “as soon as possible.” The previous owners thought it would be easier for one owner to build out the project verses a partnership.

At about $150 per square foot, the price was one of the highest a developer paid for entitled land. Lincoln Property’s urgency dissipated, however, when another recession rolled into town leaving the project on hold again. A few years later, in 2009, the Environmental Protection Agency selected the project as a new headquarters office in San Francisco, but backed out of the plan.

“How many false starts have we had?” Heller asked. “I can’t even remember.”
Still, plans lived on and early this year, the city approved a change to the design to move the elevators to the side of the building instead of in the middle of the floors in 350 Bush. That creates a more open floor plan that technology tenants favor, Heller said.

Next, Lincoln Property brought in Gemdale, a publicly-traded, Chinese real estate development and investment firm. This will be company’s first U.S. investment.

“We are delighted with our debut into the United States with leading national developer Lincoln Property Co. in developing such an important and well-located project in San Francisco, a city which is experiencing some of the strongest office market fundamentals in the United States,” said Michael Krupa, president of Gemdale USA, in a statement. “We are delighted to have the ability to help transform the fabric of the north financial district.”

The floor plates in 350 Bush will range from 17,000 to 20,000 square feet. Building amenities include features tenants want such as bicycle parking, showers, a rooftop terrace, open layouts, and proximity to public transportation. 
a broker with CBRE who is handling leasing for the two buildings. Even though SoMa remains the hotspot for tech companies, "to an extent the tenants will follow the space." 

"We have the perfect building for the tech and creative tenant and also very good for the traditional tenant," said

The north financial district could be attractive since space is tightening up in SoMa and about three-quarters of San Francisco’s office market is made up of non-tech tenants, said  an office broker with JLL.

“The north financial district is a vibrant market and has had increasing rental rates and lots of leasing activity,” he said.

Rents tend to be lower in the north financial district than in SoMa, but developers are typically seeking higher rents for new space to make up for development costs.
“With the extraordinary demand and lease up of the some of the new developments in San Francisco, certainly a developer is going to be pretty bullish on this market with good reason.”

“This cycle is an excellent time to build and smartly, (the developers) waited until the right time”

Ping An Joins Pacific Eagle

Pacific Eagle Holdings, the US subsidiary of Hong Kong’s Great Eagle Holdings, received some powerful new backing for its acquisitions of North American properties this week when the real estate investor and operator received $31.4 million from a fund operated by China’s Ping An Trust through a joint venture deal. 

Under the terms of the JV, Pacific Eagle (US) Real Estate Fund sold 49 percent of a company holding properties in San Francisco and Los Angeles to Ping An DeCheng Great Eagle US An Ying Fund, according to a statement from Great Eagle.

Sources familiar with Ping An’s operations say that Ping An DeCheng Great Eagle US An Ying Fund is a special purpose vehicle set up specifically to raise funding for this joint venture. 

In the past two years Pacific Eagle, which is controlled by Hong Kong tycoon Lo Ka-shui, has accelerated its acquisitions properties on the west coast of the US. -- Michael Cole, 2016 March 31

View Larger Map

347,993 sq. ft. Class A office building sold in November 2013 for $181,000,000

  • $520 per sq. ft
  • 3.8% cap
  • Sumitomo to Great Eagle Holdings

101 Second Street 

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388,370 sq ft Class A office building sold January 2014 for $297,000,000

  • $765 per sq ft
  • 3% cap
  • Sumitomo & Hines to Invesco

415 Mission - Salesforce Tower

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The 1,070 foot Transbay Tower now under construction at 415 Mission St., which will be renamed Salesforce Tower after committing to take 714,000 sq. ft.
Salesforce (NYSE: CRM) will be the anchor tenant in the glittering 1.4 million square foot skyscraper, taking nearly half the 61 floors and putting its name around the building about 100 feet above the ground. The lease, which is valued at $560 million over its 15 and a half years, starts in the first quarter of 2017, according to a filing with the Securities and Exchange Commission. Salesforce also expects to pay about $130 million in tenant improvements over time, net of allowances, and it has options to extend the lease for a total of 12 years.   --  2014 April 14  BUSINESS TIMES

San Francisco Condos

San Francisco Condo Prices Rocket as Inventory Scarce

Lack of inventory keeps pushing up condo prices in San Francisco. Condo prices leaped by 19 percent in April compared with last year, to an average of $1,115 per square foot for new condos, according the Mark Co., a condo marketing and research firm.

Inventory was down by 45 percent year-over-year with only 136 units available.

April’s results are “by far its largest single month gain this year, building on an already strong market in San Francisco caused by low inventory and extremely strong demand,” said senior director of research at the Mark Co. “However, a surge of new condominium projects scheduled to come online this year may indicate an easing of the city’s inventory crunch.”

The lack of supply issue has been going on for months. Projects selling units include Brian Spiers’ Linea at 1998 Market St., where the 115 units are close to selling out, and Oyster Development’s 114-unit Vida at 2558 Mission St., where about a third of the units are in contract.

Other developments will be coming on the market later this year including Trumark Urban’s 27-unit Amero, the company’s first San Francisco condo project of eight in its pipeline; Bosa Development’s Arden, a 267-unit building in Mission Bay; and Tishman Speyer’s Lumina, a 656-unit luxury highrise at 201 Folsom St. in Rincon Hill.

For all of 2014, less than 1,500 new condos will hit the market in San Francisco whereas well above 5,000 new apartments will be completed and ready for lease.

The issue isn’t a lack of construction, but more that for years after the recession, it was much easier to finance apartments than condos.  -- 2014 May 23  BUSINESS JOURNAL

Monday, January 20, 2014

New York

Time Warner Centre

Government of Singapore purchase Time Warner Centre 

GIC venture buys space in Time Warner Center
It will lease the 1.1m sq ft of space back to Time Warner till 2019
GIC has sealed a deal to buy office space in New York City's Time Warner Center with two partners, the Abu Dhabi Investment Authority (ADIA) and US real estate firm Related Companies, for US$1.3 billion -

[SINGAPORE] GIC is close to snapping up a part of New York City's Time Warner Center, an iconic, 229m twin-tower mixed-use complex in the south-western corner of the city's famed Central Park.

The Business Times understands that GIC is part of a consortium in the final stage of talks with Time Warner Inc to buy the 1.1 million square feet of office space that the latter owns. The consortium will then lease the space back to Time Warner Inc.
A source close to the deal said that GIC will be forking out US$400 million, which will give it a "substantial stake" of the Grade A office space Time Warner Inc is selling.
The consortium is said to have fought off offers from interested parties, including a sovereign wealth fund.  -- 2013 November 11 

GIC, two others to buy New York office space for $1.65b

Singapore's GIC, and two other companies are buying over one-third of the office space in Time Warner Centre in New York for $1.3 billion (S$1.65 billion), media and entertainment giant and property-owner Time Warner revealed.

Following its recent deal in Europe where the sovereign wealth fund bought 50 percent interest in a London office complex from Blackstone Group, GIC is now partnering with American real estate firm Related Companies and Abu Dhabi Investment Authority (ADIA) to buy the 1.1 million sq ft of office space in the Time Warner Center at Columbus Circle in New York.

Regional Head of Americas at GIC Real Estate Tia Miyamoto said: "Time Warner Center is one of the premier mixed-use projects in the country. We see significant upside in leasing the high quality office space following Time Warner Inc.'s planned relocation to 30 Hudson Yards. We believe strong demand for this first-rate office property will translate into a stable income stream which suits GIC as a long-term investor."

The deal will see the consortium leasing the office space back to Time Warner until early 2019, which will move HBO, CNN and other business units to Hudson Yards, also in New York.

The office space features two dedicated lobbies, ceiling heights ranging from over 13 feet to 27 feet, flexible floor plans as well as terraces with panoramic views of Central Park.  
-- 2014 Jan 21  Yahoo! Finance Singapore