CAPRE’s Commercial Real Estate Headlines for October 1, 2019

Check out the latest deals and developments in commercial real estate for October 1, 2019:

  • Blackstone to Buy U.S. Logistics Assets from Colony Capital for $5.9 Billion USD: Colony Capital, Inc. and Blackstone Real Estate Partners IX, an affiliate of Blackstone have entered into definitive agreements for Blackstone to acquire Colony Industrial, the industrial real estate assets and affiliated industrial operating platform of Colony Capital, for an aggregate purchase price of $5.9 Billion USD. The Colony Industrial last-mile light industrial portfolio represents the substantial majority of the total transaction and comprises approximately 60 million square feet of infill, logistics assets across 465 light industrial buildings in 26 U.S. markets, with significant concentration in Dallas, Atlanta, Florida, northern New Jersey, and California. The transaction also includes Colony’s 51% ownership interest in a 4 million square foot portfolio of bulk distribution assets and the affiliated operating platform which manages the properties of both portfolios.
  • Brookfield Business Partners to Invest in BrandSafway: Brookfield Business Partners will acquire half of CD&R’s ownership interest in Brand Industrial Services. As a result of the investment, Brookfield and funds managed by CD&R will each own approximately 45% of the Company. BrandSafway management will continue to own a minority interest in the business. BrandSafway is a leading provider of infrastructure services to industrial and commercial facilities on a global basis. The Company delivers scaffolding and other work access solutions, forming and shoring equipment, and numerous specialty industrial services to more than 30,000 customers in more than 30 countries worldwide. Its solutions support a wide range of global infrastructure ranging from refineries and petrochemical plants, to commercial buildings, bridges, hydroelectric dams, and other power facilities.
  • Multifamily Lending Jumped 19 Percent to Record High $339.2 Billion in 2018: Favorable market conditions helped spur a 19 percent increase in multifamily lending in 2018 to a new high in dollar volume, according to the Mortgage Bankers Association’s (MBA) annual report of the multifamily lending market. Last year, 2,669 different multifamily lenders provided a record $339.2 billion in new mortgages for apartment buildings with five or more units. Forty-five percent of the active lenders made five or fewer multifamily loans over the course of the year. MBA’s annual multifamily lending report is based on its surveys of multifamily lenders, as well as the Home Mortgage Disclosure Act (HMDA) data, which covers multifamily loans made by many smaller lenders, particularly commercial banks. The $339.2 billion in originated multifamily mortgages went to a variety of investors. By dollar volume, the greatest share went to the Government Sponsored Enterprises (GSEs), Fannie Mae and Freddie Mac (42 percent).= The top five multifamily lenders in 2018 by dollar volume were Wells Fargo, CBRE Capital Markets, Inc., JP Morgan Chase & Company, Berkadia, and Walker & Dunlop.
  • Multifamily Giant Cortland Closes on $1.2 Billion USD, All-Cash Acquisition: Multifamily real estate investment, development and management company Cortland has officially closed on the Pure Multi-Family REIT acquisition for $1.2 billion in cash and become the largest apartment owner in the Dallas-Fort Worth Metroplex. This acquisition of the Canadian-based, publicly traded vehicle represents Cortland’s continued strategy of growth and concentration in its designated focus markets, which Cortland believes share similarly outsized job and population growth qualities with strong affordability characteristics. Since January 2018, Cortland has conducted more than $3.7 billion in multifamily acquisitions, representing 20,639 apartment units. Cortland now owns and manages more than 60,000 apartment homes nationwide. Pure Multi-Family’s assets are strategically positioned within urban or high-density suburban submarkets Cortland believes possess favorable demographics and strong multifamily fundamentals. Pure Multi-Family’s portfolio of 22 apartment communities and 7,085 apartment units are in five of Cortland’s high-growth markets in Texas (Dallas-Fort Worth, Houston, Austin and San Antonio) and Arizona (Phoenix). Cortland works to excel in the living experiences it provides its residents. With this acquisition, Cortland intends to leverage its increased scale and vertically integrated business model in these markets to create operational, leasing and market efficiencies that will deliver excellent service and elevated living experiences to its residents.
  • Gladstone Commercial Announces Industrial Portfolio Acquisition in Temple, TX: Gladstone Commercial Corporation has completed the acquisition of a 211,000 square foot, two building industrial portfolio in Temple, Texas on September 26, 2019. The portfolio, acquired in a sale/leaseback transaction, is 100% leased to Texas Hydraulics, Inc. (“Texas Hydraulics”) with a twenty (20) year lease term. Texas Hydraulics currently uses the two properties for the manufacturing, warehousing, and distribution of hydraulic cylinders. Texas Hydraulics has invested more than $35 million in the facilities. The acquisition of the industrial properties is consistent with Gladstone Commercial’s growth strategy of acquiring high-quality assets in growth regions with credit-worthy tenants. This portfolio consists of two buildings: one located at 3410 Range Road, a 126,000 square foot facility, and one located at 3120 Range Road, an 85,000 square foot facility. Texas Hydraulics plans to continue operating in these facilities for years to come.

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