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In The Pipeline: CoStar Development & Construction News for Nov. 11 - 17

News and Notes on Trends, New Projects and Construction In the Commercial Real Estate Development Pipeline Around the U.S.
November 13, 2012
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.

Carlton Arranges $400M Loan for Development of Tallest U.S. Residential Bldg

By Justin Sumner

Manhattan-based Carlton Group has arranged the financing of $400 million for the institutional real estate investment fund developing what will become the tallest residential building in the United States - 432 Park Ave. in New York City.

The condos at 432 Park will average $5,800 per square foot, and about a dozen are in contract or near to closing, said people knowledgeable about the deals. When completed in 2015, the $1.2 billion residential tower will raise 95 stories above Manhattan's Plaza District. By comparison, One World Trade Center topped out in August 2012 at 104 stories, once again becoming the largest building in New York City by beating out the 102-story Empire State Building.

CIM Group LP is leading the project, designed by Rafael Vinoly Architects along with New York-based developer Macklowe Properties.

While foundations rarely make new construction loans, considered one of the riskiest property debts to carry, the borrower was able to reduce the risk to the lender because they have already secured about two-thirds of required capital in equity following recent sales from its portfolio. Most of the Los Angeles-based investor's projects have been largely financed using equity and cash on hand.

The details of this debt deal were not made public, but it is a non-recourse loan with approximately six years to pay off the borrowed amount. The fund stated the terms of the loan are both low-priced and flexible, receiving better terms from the London-based foundation, including a longer loan maturity, compared to offers from banks, hedge funds and private equity firms.

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Hines Tapped By North Carolina For $200M Gateway Station

The North Carolina Department of Transportation (NCDOT) has selected Hines as master developer for the Gateway Station complex in Charlotte’s Uptown District.

Gateway Station, a multi-modal transit center, will anchor transit-oriented and mixed-use development on 20 acres in uptown Charlotte. The landmark project will serve as a central hub for Amtrak, Greyhound bus service, CATS bus and streetcar service, regional commuter rail and Mecklenburg County’s greenway system.

Hines will work with a variety of stakeholders to begin the process of creating a master development plan for the area which will involves the efforts of numerous planners, engineers, architects, contractors, and other developers who will become part of the project as it moves through planning, design and implementation.

The station’s current estimated $200 million project cost could generate more than $1 billion in private investment. The project’s timeframe will be determined as part of the master development plan.

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The goal of the p[project is to become one of Charlotte’s most attractive commercial, entertainment, retail and residential destinations serving as a bridge to reconnect and reenergize some of the city’s most diverse and historically significant communities and resources.

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KBR to Build Mixed-Use High-Rise in Arlington

Houston-based KBR announced today that its building group has been awarded a contract to construct The Acadia at Metropolitan Park, a 411-unit mixed-use residential building in Arlington, VA.

In collaboration with the developer, Kettler, Construction is already under way of the third building to be constructed in the Metropolitan Park development in the area of the Washington, D.C. metro known as Pentagon City.

Designed for LEED Silver certification, the 677,154-square-foot, 19-story building will include three levels of underground parking with ground-floor retail. The Acadia is next to the first two developments built by global engineering, construction and services company KBR, which are The Millennium at Metropolitan Park (completed in 2010) and The Gramercy at Metropolitan (completed in 2008).

KBR's development arm, KBR Building Group, is headquartered in Charlotte, NC. The firm's regional office in Vienna, VA, is leading construction for The Acadia.

HFF Arranges Financing for Houston High-Rise

HFF announced it has arranged a construction-permanent loan for the development of 2929 Weslayan, a 254-unit, 40-story multifamily development in Houston.

HFF worked exclusively on behalf of partners PM Realty Group and the INDURE Fund, a co-mingled real estate fund managed by National Real Estate Advisors, to secure the loan through Pacific Life.

Due for completion in the first quarter of 2015, 2929 Weslayan will include 12,156 square feet of ground floor retail and a 547-space parking garage. Amenities of the property on 1.7 acres at the northeast corner of Weslayan Street and West Alabama Street near the Highland Village shopping area will include a fitness center, pool lounge and club area, cabana, fire pit and room service from the restaurant on-site.

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HQ Delivered for Regal Beloit

By Mark Heschmeyer

Construction has been completed on Regal Beloit Corp.’s regional distribution and logistics headquarters in AllPoints Midwest, a bulk industrial park being developed jointly by Browning/Duke Realty in Indianapolis’ southwest submarket.

"We have officially moved into our new facility and are extremely pleased with the finished product. The building provides us with everything we wanted in a state-of-the-art logistics center," said Linda Shaw, Regal’s vice president of customer care and logistics.

The 376,000-square foot building is LEED New Construction registered. Numerous green practices and features were incorporated into its construction. Sustainable characteristics of Regal’s building include energy management, including high-efficiency heating, ventilation and air-conditioning systems; a construction waste management program to divert more than 75% of waste from the landfill; water-efficient plumbing fixtures; use of regionally manufactured and recycled materials and other eco-friendly features.

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Cohen Arranges JV For Charleston Shopping Center

Cohen Real Estate has arranged for a joint venture to develop The Corners at Wescott, a 167,000-square-foot shopping center in North Charleston, SC.

Michael Cleeman, vice president, of New York City-based Cohen Real Estate represented the new equity investor, North American Development Group (NADG), one of North America's leading shopping center acquisition and development companies. Cohen Real Estate President Helen Putterman represented the developer, Atlanta-based developer Hendon Properties, a long-time client dating back to 1995 with multiple transactions including the largest open-air strip center in Princeton, NJ.

The shopping center on the 22-acre site on Dorchester Road & Wescott Boulevard in North Charleston will be anchored by Harris Teeter and Marshalls and shadow anchored by a recently developed Lowe's Home Improvement store.

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