News and Notes on Trends, New Projects and Construction In the Commercial Real Estate Development Pipeline Around the U.S.
In The Pipeline
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NYC Developers to Invest $500M In Pension Funds For Sandy Reconstruction
Four of New York City's largest pension funds have voted to invest $500 million in redevelopment of commercial and residential property in areas ravaged by Hurricane Sandy last October.
With leverage, the $500 million investment will result in a $1.5 billion capital infusion for potentially 3,000 housing units and 150,000 to 200,000 square feet of commercial space, according to City Comptroller John C. Liu, who made the announcement last week.
Two newly formed partnerships between Liu’s Bureau of Asset Management (BAM) and Related Companies and the Hudson Companies Inc. will invest $300 million and $200 million, respectively, provided by the pension funds, which are expected to earn a risk-adjusted market rate of return.
Collectively valued at $127.8 billion as of third-quarter 2012, the five New York City pension funds have enormous investment clout. Liu serves as investment advisor and trustee of the funds for New York City teachers, firefighters, police and city administrative employees.
"The $1.5 billion rebuilding program will become the bricks and mortar neighborhoods need to rebuild from Sandy’s wrath," Liu said in a statement. "This investment demonstrates the steadfast commitment of city employees and retirees to pursue opportunities that are not only expected to deliver strong returns, but also to generate collateral benefits for the communities they call home."
The Related Cos. $300 million investment program will focus on the renovation and reconstruction of housing damaged or destroyed by Sandy in the city’s outer boroughs and low-lying areas of Manhattan. Related will also invest across New York City in multifamily housing in order to increase the overall availability of housing units to city residents displaced by the superstorm, with a priority on rental units.
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Majestic to Build Spec Warehouse At Commercenter In Aurora
Majestic Realty Co. confirmed it intends to develop a speculative 500,000-square-foot warehouse in Aurora, CO.
Building #28 is part of the 1,000-acre Majestic Commercenter master-planned development at I-70 and E-470 toll road near Denver International Airport.
Existing buildings range from 50,000 to 280,000 square feet at the Commercenter, totaling nearly 2.5 million square feet, but the park is projected to total 15 million square feet of manufacturing, warehouse and distribution space at build-out.
The new warehouse, scheduled to break ground May 1 and be completed by year end, is the first to be built on spec in the Denver area since the recession and the largest spec warehouse development project ever built in the region.
Biotech Co. Signs Lease For South San Francisco Build to Suit
Onyx Pharmaceuticals, Inc. has executed a 10-year lease with an affiliate of Alexandria Real Estate Equities, Inc. (NYSE: ARE
) for a single-tenant development at 269 East Grand Ave. in South San Francisco, CA.
Alexandria intends to fund the ground-up development on a "leverage-neutral basis," delivering the building at 269 East Grand Ave. in the Alexandria Technology Center in the fourth quarter of 2014.
The life science REIT is negotiating a secured construction loan to fund the project. Alexandria is the largest owner and operator of life science property in the Bay Area, with about 2.9 million rentable square feet, including development and redevelopment assets, in the Mission Bay, South San Francisco, and Peninsula submarkets.
The company has 25 tenants in the South San Francisco submarket and held four leases totaling more than 257,000 square feet with Onyx, a commercial-stage oncology biotech company.
Financing Secured for Apt Developments in MD, VA
Insight Property Group has closed on construction equity and debt financing totaling $129 million for two apartment construction projects, Fenwick Station in Silver Spring, MD; and Huntington Metro in Alexandria, VA.
Cassidy Turley’s Structured Finance team of David Webb, vice chairman, and Jamie Butler, vice president, arranged the financings, by separate equity and debt sources, for the projects totaling 500 units slated to deliver in 2014. The team closed more than $900 million of equity and debt placements representing 13 diverse projects in 2012, including eight ground-up development projects in the D.C. metro area.
Insurance Co. Grows Indiana Headquarters
Property and casualty insurer Baldwin & Lyons, Inc. has announced plans to expand into a larger headquarters near Indianapolis, creating up to 133 new jobs by 2018.
The Hoosier company, which now employs about 350 people, will invest $20-$30 million to purchase and improve a 184,000-square-foot facility at 111 Congressional Blvd., the Meridian Tech Center, in Carmel, IN. Baldwin & Lyons plans to move from Indianapolis into the new location by the end of the year.
The Indiana Economic Development Corp. offered Baldwin & Lyons up to $3.7 million in conditional tax credits and training grants based on the company’s current plans to hire new employees. The city of Carmel is considering additional incentives.
Carter Updates Plans for Outlet Mall In Pooler
Ben Carter Enterprises has filed revised plans with the Georgia Department of Community Affairs for a 173-acre, $200 million outlet shopping mall in Pooler, GA, near Savannah.
The Outlet Mall of Georgia includes development of a 64-acre, 520,000-square-foot outlet mall, along with and a hotel and outparcels on 65 acres. The remainder of the property will be occupied by public rights-of-way and utility and drainage easements.
The property is owned by Savannah-based South Godley Enterprises. Carter said the outlet center is scheduled to open in spring of next year, although the estimated completion date for the full project is January 2017, according to the company's development of regional impact (DRI) application filed with the state.
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