June 26, 2014 | ISSUE 377

Western Real Estate Business E-Newsletter
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Cornerstone Real Estate Acquires 
Motif Seattle Hotel
The recently rebranded Motiff Seattle features Frolik Kitchen + Cocktails restaurant and bar.

SEATTLE -- Cornerstone Real Estate Advisers has acquired the 319-room Motiff Seattle hotel for a reported $130.7 million. The hotel is located at 1415 5th Ave., between Pike and Union streets in downtown Seattle. It was formerly known as The Red Lion. 


The property went through a $20 million, multi-phase renovation in 2011 that added 22 guest rooms and increased meeting space by 50 percent. It was only recently rebranded as Motiff Seattle, making it the largest independent hotel in the downtown area. 


The seller was a joint venture between Lowe Enterprises Investors (LEI), the Guardian Life Insurance Company of America and a subsidiary of Allstate Insurance Co. LEI affiliate Destination Hotels & Resorts will continue to manage the property. 


The joint venture targets well-located, full-service hotels that maintain three-star quality and above that can be repositioned to capitalize on the market's recovery. 


"The transaction is the first disposition on behalf of our venture with Guardian and Allstate and earned significant return on the original investment," says Bradford Howe, LEI's co-CEO. "We continue to seek investment opportunities where we can earn solid returns for our investors by improving the physical condition and/or operations of a hotel."

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Radco Buys Parc Belmar Apartment Community in Lakewood for $95.3M
The 512-unit Parc Belmar sits adjacent to the Downtown Belmar district, a 22-block retail and entertainment destination.
LAKEWOOD, COLO. -- The Radco Companies has acquired the 512-unit Parc Belmar apartment community in Lakewood for $95.3 million. The community is located at 7301 W. Ohio Ave. in the southwestern suburb of Denver. It sits adjacent to the Downtown Belmar district, a 22-block retail and entertainment destination. 
This is the largest multifamily transaction in Colorado so far this year, according to Radco. It is also the real estate opportunistic investment firm's first acquisition in Colorado. 
Radco plans to reposition the property. The efforts will include renovating the 27,000-square-foot clubhouse and leasing center, as well as upgrading the unit interiors with high-end finishes. The company also plans to rebrand the property as Ashford Belmar. 
"While Parc Belmar is already a strong performing Class B+ asset, Radco will implement a $5 million capital improvement plan to bring this asset to a Class A level," says Norman J. Radow, Radco's founder and CEO. "The property is 95 percent occupied, and since new apartment construction has been very limited over the past few years, we know the market will not only appreciate our improvements, but also embrace them. By all accounts, Denver is one of the best markets in the U.S." 
Radco's portfolio now includes more than 6,500 multifamily units in five cities across the Southeast and the Midwest. This latest acquisition was financed through a mixture of Freddie Mac debt, preferred equity from the Related Cos. and Radco's own privately funded equity.

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Carey Watermark Investors Buys Dual-Branded Hotel in Denver for $81.5M 

This dual-branded Hampton Inn & Suites/Homewood Suites by Hilton is located in Denver's CBD.

DENVER -- Carey Watermark Investors Inc. (CWI) has acquired the 302-room, dual-branded Hampton Inn & Suites/Homewood Suites by Hilton at the Denver Downtown-Convention Center for $81.5 million from Englewood, Colo.-based Stonebridge Cos. 


The hotel is located at 550 15th St. in the heart of Denver's central business district (CBD). CWI's total investment in the property is approximately $85 million, which includes the $81.5 million purchase plus acquisition-related costs and planned capital expenditures. 


The acquisition was financed with $53 million of debt. The Hampton Inn & Suites and Homewood Suites brands represent Hilton Worldwide's upper mid-scale select-service and upscale extended-stay brands. 


Opened in 2013, the building is an adaptive re-use redevelopment of a 1960s-era office building. As a result, the dual-branded hotel affords more open expansive lobby areas and larger guestrooms and public spaces compared to the select-service hotel supply in the market, according to CWI officials. 


Primary demand generators include major corporations and businesses within the CBD, the Colorado Convention Center and Denver's major leisure attractions, including the 16th Street Mall, Coors Field and Pepsi Center. 


Since 2003, the CBD has benefited from about $4.6 billion of public and private sector investment. The 302 rooms include 120 Hampton Inn & Suites and 182 Homewood Suites housed in 12 stories. 


Hotel amenities include 7,000 square feet of meeting space, two distinct lobbies and receptions desks, an outdoor patio, fitness and business centers, indoor pool and whirlpool and complimentary wireless Internet access. 


"The acquisition represented the opportunity to invest in a newly redeveloped, quality dual-branded hotel with strong brand affiliations in a strong domestic market," says Michael Medzigian, CEO of New York-based CWI. "Given these attributes, we believe that the investment will be a solid cash flow-generating addition to our growing portfolio." 


The hotel fundamentals in Denver, like much of the country, are strong. In 2013, average hotel revenue per available room (RevPAR) in the greater Denver area increased by 8.6 percent on a year-over-year basis.


Click here to read the rest of Matt Valley's story.

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JV Buys 1.5 Acres in Salt Lake City

for New Multifamily Development


SALT LAKE CITY -- A joint venture between Grey Oak LLC and Wasatch Advantage has acquired six parcels totaling 1.5 acres in downtown Salt Lake City. The purchase price was not disclosed. 


The joint venture will use the land to develop Encore, a 189-unit apartment community. The new Class A community will be located on the north side of 400 South between Denver Street and 500 East. 


The transaction was executed by Mark Jensen and Greg Ratliff of Newmark Grubb ACRES. The seller was not named.

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Buchanan Street Buys Stapley Corporate Center in Mesa for $32.5M

Stapley Corporate Center contains long-term lease tenants like Cigna Healthcare and Wells Fargo.

MESA, ARIZ. -- Buchanan Street Partners has acquired Stapley Corporate Center, a 180,000-square-foot office property in the Phoenix suburb of Mesa, for $32.5 million. The two-building, Class A center is located at 1840 and 1910 South Stapley Drive, near the border of Mesa and Gilbert. 


Stapley is 90 percent occupied. Tenants with long-term leases include Cigna Healthcare and Wells Fargo. 


Chris Toci and Chad Little of Cushman & Wakefield of Arizona represented the seller and original developer, the DESCO Group, in this transaction. Buchanan was self-represented. JLL's Mark Gustin will handle the center's leasing. 


"This property will continue to attract top tenants seeking high-image office space in the East Valley, based both upon the quality of the building and the continued Phoenix recovery," says Brian Payne, Buchanan's vice president. "The project benefits from a location adjacent to executive housing in Gilbert and is in close proximity to more than 2 million square feet of retail services in the immediate area." 


Buchanan is targeting value-add investment properties within the Phoenix market. It currently owns 1.4 million square feet of properties in this market, including Mesa Corporate Center and the 260-unit Vue Park West in Peoria, which closed earlier this year.

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Cabrillo Park Shopping Center  

in Santa Ana Sells for $12.2M 

Anchor tenant Superior Grocers recently exercised its right to purchase Cabrillo Park Shopping Center in Santa Ana.

SANTA ANA, CALIF. -- Superior Grocers has acquired Cabrillo Park Shopping Center, a 72,500-square-foot grocery-anchored development in Santa Ana, for $12.2 million. Superior Grocers is the anchor tenant in the center, located at 1710-1730 E. 17th Street. 


The center is 95 percent occupied. Other tenants include T-Mobile, Sally Beauty Supply, United Dental Care, Little Caesar's and 4G Wireless. 


The buyer, doing business as Palmdale Avenue S LLC, was represented by Randy Ibara of Southern Pacific Investments. The seller, Hector Regner Properties-Cabrillo Park I LLC, was represented by Randy Dalby of Lee & Associates San Diego North. 


"Superior Grocers, which anchors the center, exercised its purchase option," explains Dalby. "The market, which services the Latino community, is highly successful and is strategically located in the heart of Santa Ana."

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New CBRE, Maastricht University Study Lists Top 10 Green U.S. Cities
Click on image above to see a larger version


LOS ANGELES -- The 2014 Green Building Adoption Index, a joint project between CBRE Group Inc. (NYSE: CBG) and Maastricht University, has named Minneapolis as the greenest city in the nation, with 77 percent of the city's commercial real estate certified as green. 


The term green is in reference to buildings that are either certified by the EPA's Energy Star rating or the U.S. Green Building Council's LEED program. 


The West nabbed four of the top 10 spots. Rounding out the top green cities are: 


2. San Francisco (67.2 percent) 


3. Chicago (62.1 percent) 


4. Houston (54.8 percent) 


5. Atlanta (54.1 percent) 


6. Los Angeles (49.7 percent) 


7. Denver (49.3 percent) 


8. Seattle (46.6 percent) 


9. Miami (46 percent) 


10. Washington, D.C. (42.4 percent) 


The study also emphasizes the dramatic increase in the number of green commercial real estate properties in the United States since 2005. 


During that time frame, the amount of Energy Star-labeled buildings has increased 600 percent, and the proportion of buildings that are LEED certified has jumped up 1,000 percent. LEED-certified space now totals 19.4 percent of the total building stock in the 30 office markets reviewed in the study when measured by floor area. 


The study is the first project in CBRE's Real Green Research Challenge (RGRC), the company's $1 million initiative for research and innovation in sustainability. CBRE launched the RGRC in September 2012. 


"We have all seen the rapid growth in the number of green-certified buildings in the markets in which we work. However, we were quite surprised to see how large the numbers actually are. Green is absolutely the new norm," says Dave Pogue, global director of corporate responsibility for CBRE.  


"We wanted to do something in the built environment to help advance the discussion of sustainability. With the RGRC, we have the opportunity to affect the entire real estate industry and have a lasting effect on the way real estate is built, occupied and financed, and in doing so be a force for positive environmental change," adds Pogue. 


Dr. Nils Kok of Maastrict University of the Netherlands leads the Green Adoption Index and works in close collaboration with CBRE and the USGBC. The study reviews more than 34,000 buildings - totaling more than 3.5 billion square feet - in the central business districts (CBDs) of the top 30 U.S. markets, in terms of square footage. 


"This is the first study to quantify the relevance of green building practices in the commercial real estate market," says Dr. Kok, associate professor in finance and real estate at Maastricht University. "While we all know examples of LEED-certified buildings, the results presented here are facts based on robust methodology, not anecdotal evidence. The evidence shows that green has become mainstream in all major U.S. cities." 


-- Staff reports   

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Nellie Day, Editor
Western Real Estate Business 
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