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In The Pipeline: CoStar Development & Construction News for Jan. 21 - 26

UPDATED: News and Notes on Trends, New Projects and Construction In the Commercial Real Estate Development Pipeline Around the U.S.
January 18, 2013
In The Pipeline is a column on significant acquisitions of commercial land for sale, and other transactions and trends affecting office, industrial, flex, multifamily, mixed-use, hotel and public works developers. Send us news leads about your new commercial real estate project -- and sign up to be added to our distribution list to receive future In the Pipeline columns by e-mail.

Amazon Formally Announces Third California Warehouse


After several years of bypassing California in favor of siting fulfillment and distribution centers in other states, Amazon is now on track to occupy its third 1 million-square-foot facility in the Golden State.

The Internet retailer this week confirmed plans to open a new fulfillment to be built in Tracy, CA, about 60 miles east of San Francisco and a main transportation waypoint for the Bay Area. The retailer signed a lease agreement with Prologis, Inc. (NYSE: PLD) to build the center on nearly 90 acres at Prologis Park Tracy Phase II.

Amazon opened its first fulfillment center in California, along with 700 jobs, in the Inland Empire city of San Bernardino in October. The company is also building a site in Patterson, CA, expected to open next summer.
Upon completion of Amazon's facility, Prologis Park Tracy Phase II will be at full occupancy, with three distribution facilities totaling about 2.2 million square feet, Prologis said in a release.

"We place tremendous value on our global customer relationships, and are pleased to provide Amazon with strategic distribution space in eight markets across the globe," said Scott Lamson, president, northwest region, Prologis Americas. "The growth of e-commerce is driving strong demand for large facilities, not only from our online retail customers, but with traditional brick and mortars as well."

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Not Spec For Long: McDermott To Anchor Hines' New 45-Story River Point Office Tower



By Tim Trainor

Law firm McDermott Will & Emery confirmed it signed a letter of intent with development partners Hines and Ivanhoé Cambridge to relocate its downtown Chicago office and become the anchor tenant of River Point, a new 45-story West Loop office tower under construction at 444 W. Lake Street. The law firm expects to take occupancy in the new riverfront building by the spring of 2017 when its current lease at 227 W. Monroe Street expires.

McDermott will lease approximately 225,000 of the approximately 900,000 square feet in the new building, which was designed by Pickard Chilton Architects and broke ground last week.

The law firm was reported to be considering a number of existing and proposed buildings ahead of its current lease expiration in 2017, a factor that played into its selection of the River Point project.

In addition to being attracted by its signature design and location, as well as the track record and financial strength of the Hines/Ivanhoé Cambridge team, the law firm said another important consideration was the fact that the project was 'shovel-ready.' As the first major new office building to be erected in Chicago since the onset of the financial crisis, under construction project enables the law firm to meet its relocation schedule and still incorporate numerous custom design features for its office space, not to mention securing noteworthy signage on the Chicago skyline.

"River Point has been designed to meet all the needs of a 21st Century law firm and we’re very pleased to become its anchor tenant," said McDermott co-chair Peter J. Sacripanti. "We want to thank Hines and Ivanhoé Cambridge for their outstanding cooperation and flexibility throughout this process. We look forward to working with our partners over the next four years to make this building the best it can be."

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Principle Delivers Manufacturing Facility For WinPak


Principle Construction Corp. announced it has completed construction of a 267,000-square-foot manufacturing facility for Winpak Portion Packaging, Inc. near Mark Collins Drive and LogistiCenter Drive in Sauk Village, IL.

Dermody Properties chose Principle Construction and its owners, Mark E. Augustyn and James A. Brucato, to build the facility for their tenant on a 28.75-acre site. The build-to-suit plastics manufacturing facility includes a warehouse, production area, offices, maintenance area, grinding room, chemical storage room, utilities room and printing area.

The production space includes 700 tons of air conditioning interlocked with specialty exhaust systems and is supported by 8,000 amps of electrical service and distribution, process chilled water, compressed air systems, silo raw material storage and pneumatic delivery systems.

Winpak Ltd., based in Winnipeg, Canada, manufactures and distributes high-quality packaging materials and related packaging machines.

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Century Plaza Hotel Redevelopment Wins Council Approval


The Los Angeles City Council has approved one of the largest projects ever on the Westside of Los Angeles, a plan to redevelop the Hyatt Regency Century Plaza Hotel into a 1.5-million-square-foot, $2 billion mixed-use project with residential towers, retail and open space.

The council this week voted unanimously to approve the environmental impact report and a 15-year development agreement for the project by Next Century Associates on six acres at Avenue of the Stars and Constellation Boulevard in Century City.

The new project includes two 46-story towers designed by renowned architecture firm Pei Cobb Freed; a 100,000-square-foot retail plaza with shops and restaurants, and more than two acres of public space with fountains and courtyards. It also includes restoration of the hotel with 394 rooms and 63 luxury residences.

Next Century Associates, the owners of the Hyatt Regency Century Plaza Hotel, is a partnership between Michael Rosenfeld's Woodridge Capital Partners and funds managed by Oaktree Capital Management L.P.

The firm expects to start construction in early 2014.

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Bernards Begins $140M Redevelopment of Lincoln Place In Venice


Los Angeles-based commercial builder Bernard has started a $140 million redevelopment of Lincoln Place apartments in the Venice district of Los Angeles.

A $190.7 million FHA insured loan from lender and servicer Red Mortgage Capital LLC is funding the project at 1077 Elkgrove Ave. near Abbot Kinney Boulevard.

The apartment complex built between 1949 and 1951, which consists of 45 buildings with 696 existing units, is owned by Denver-based apartment owner Apartment Investment and Management Company (NYSE: AIV), or Aimco.

The complex listed on the National and California Registers of Historic Places was designed by noted Los Angeles architects Heth Wharton and Ralph A. Vaughn and developed by Gerald Bialac, who studied garden-style apartments throughout the Los Angeles region before hiring Vaughn, a devoted Modernist and highly regarded 20th Century African-American architect.

Matthews Southwest Acquires 157 Acres For Mixed-Use Project


Dallas-based development company Matthews Southwest purchased 157 acres on the northwest corner of the Dallas North Tollway and U.S. Highway 380 in the town of Prosper, TX, north of Dallas, where it plans to develop more than 3 million square feet of retail, medical, office, hotel and entertainment space.

The public/private partnership between the town of Prosper and Matthews Southwest is expected to drive more development along the Highway 380 corridor at the intersections of the Dallas North Tollway and Preston Road.

Located 30 miles north of Dallas in Collin and Denton Counties, Prosper is growing rapidly, with a projected build-out population of 70,000 residents.

The land deal is an assemblage of two separate tracts sold by the St. Clair family and Centurion American. Matthews Southwest represented itself in the purchase of the St. Clair land tract, while David Davidson Sr. of Davidson Real Estate Inc. represented Matthews in the purchase of the Centurion American tract.

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