August 3, 2015

Vista Associates Sells Branford Villa Apts

A private investor acquired the Branford Villa Apartments at 12711 Branford St. in Pacoima, CA from Vista Associates for $17.75 million, or about $178,000 per unit.

Built in 1987, the 100-unit, 79,778-square-foot multifamily community features a pool, spa, balconies or patios, and gated parking.

Jeff Louks with Marcus Millichap represented both the seller and the buyer in the sale.

Please refer to CoStar COMPS #3349031 for further information regarding this transaction.

Article source:

Wage Growth Shocker Pushes Mortgage Rates to 2-Month Lows

Get out your calendar.  Flip, swipe, or glance back at May 29th.  That’s where we have to go to see mortgage rates any lower than they are today.  After a delightful, but incredibly boring streak of mostly good days, rates finally swung for the fences.  Actually, that might be a bit of a stretch depending on your perspective, but consider the following. 

Mortgage rates tend to be broken up in .125% increments.  For the past several weeks (or more, depending on the lender), rates haven’t moved enough for the actual interest rate to change.  Instead, the upfront costs act like fine-tuning adjustments for any given rate.  In other words, you might be quoted 4.125% on two different days, but with $1000 origination one day and only $500 the next.  The rate is the same, but paying less for it means the effective rate is lower (fewer dollars out of your pocket over time).  In that case, we’d say “rates fell” because the effective rate is lower, even though the contract rate (the thing that ends up on Good Faith Estimates and ultimately the Note) remained the same. 

With all that having been said, after multiple weeks of unchanged contract rates, we’ve finally seen lenders move down an eighth (.125).  Sure, they were pretty close before, but today’s solid move left no doubt.  Since July 16th, we haven’t seen the effective rate change more than 0.02%, and that only happened a few times.  Today’s drop was 0.06%–certainly enough for a ‘swung for the fences’ metaphor.

Today’s gains came courtesy of an exceptionally weak reading on wage growth.  It was less than a third the pace of the previous quarter, and way below expectations.  A lack of wage growth is one of the key reasons the Fed could hold off on raising rates.  And although the Fed Funds Rate doesn’t control mortgage rates in the short term, it tends to move the same direction over time.  As such, big news for the Fed’s rate hike plans is usually also big news for rates across the board.  It was certainly a home run for rates today.

As with many home runs, this one didn’t end the game. Next week brings a slew of important data, culminating in Friday’s big jobs report.  That data will have a chance to confirm the alarming shift seen in today’s data, or to offer a counterpoint.  The path of rates should take guidance from that data, which is much more than we’ve been able to hope for.  In fact, until July, we’ve pretty much been moving higher in rate regardless of the data.  Now it feels like we have a fighting chance at more meaningful improvements.  In some ways, they’re already here, considering the average conventional 30yr fixed quote came down to 4.0% today for top tier scenarios.  An increasing number of lenders are back to 3.875%.

Loan Originator Perspective

“If you floated overnight, you should be seeing better lender pricing
today. I never like to advise locking on a Friday, but that is what I
am recommending. Today’s improvement does come on the back of some
significant wage data that was very weak and month end buying of bonds,
but next week we get the payrolls report. It is very common for us to
sell off some heading into that data. I think it is prudent to lock in
todays gains.” –Victor Burek, Churchill Mortgage

“Wow, talk about a Happy Friday! Rates rallied sharply today on the news
that wages are growing far less than expected, which may impact the
Fed’s looming rate hike. Some of the improvement may also be month end
bonds purchases, but stagnant wages mean lower inflation and lower
rates. I’ll float most new applications this weekend, but nothing wrong
with locking on the best rates since early June!” –Ted Rood, Senior Originator

Today’s Best-Execution Rates

  • 30YR FIXED – 4.0%
  • FHA/VA – 3.75%
  • 15 YEAR FIXED – 3.125-3.25%
  • 5 YEAR ARMS –  2.75 – 3.25% depending on the lender

Ongoing Lock/Float Considerations

  • 2015 began with a strong move to the lowest rates seen since May 2013.  The catalyst was Europe and the introduction of European quantitative easing.  The next four bullet points are currently more of a reflection about the first half of the year.  July still has a chance to be the month where rates held their ground against 2015’s initial push higher.

  • It’s a highly uncertain time for global financial markets.  There is much debate over whether or not the global economy is turning a corner (for the better), thus justifying a widespread move to higher rates.  That’s made 2015 significantly more volatile than 2014 for markets.  This means lender rate sheets may change appreciably from day to day, and sometimes even several times in the same day.
    • Bottom line: European Quantitative Easing helped push global rates to all-time lows in April.  Now, the big risk for mortgage rate watchers is that we might have turned a long term corner.  That risk is being compounded by speculation about the Federal Reserve raising rates by the end of 2015.

    • May and June have amounted to the 2nd major move higher bounce so far this year.  Every time this happens, we have to consider the possibility that this will be a big-picture, long-lasting correction.  Until such a thing can be ruled out, Locking makes far more sense.  July has thus far provided an opportunity to consider such a big-picture correction might be on hold. 

    • As always, please keep in mind that the rates discussed generally refer to what we’ve termedbest-execution(that is, the most frequently quoted, conforming, conventional 30yr fixed rate for top tier borrowers, based not only on the outright price, but also ‘bang-for-the-buck.’  Generally speaking, our best-execution rate tends to connote no origination or discount points–though this can vary–and tends to predict Freddie Mac’s weekly survey with high accuracy.  It’s safe to assume that our best-ex rate is the more timely and accurate of the two due to Freddie’s once-a-week polling method). 

    Article source:

    The Honest Co. To Relocate HQs

    The Honest Co., a leading lifestyle brand, signed a lease to move its headquarters offices to the top three floors of 12130 Millennium Drive in Playa Vista, California. The top three floors total 83,000 square feet.

    The company will move from its current location at 2700 Pennsylvania Ave. in Santa Monica, early next year.

    12130 Millennium Drive is part of a two-building, 300,000-square-foot class A office complex known as i|o at Playa Vista, developed by Lincoln Property Co. in 2010 and purchased by Clarion Partners in 2014. Clarion and Lincoln recently completed a renovation of the complex.

    David Toomey and Matthew Miller of Cresa and Marc Bretter of Travers Cresa represented Honest. Rick Buckley of LA Realty Partners and Kent Handleman of Lincoln Property Co. represented Clarion.

    Article source:

    CoStar’s People of Note (July 26

    It’s time to update those contact managers with CoStar’s People of Note, reporting news on significant new CRE hires and promotions. This week’s issue includes the following markets: New York City, San Diego, Phoenix / Tucson, Columbus, Atlanta, Houston, Chicago, Inland Empire, Orange County, South Florida, Dallas / Ft. Worth, Charlotte, Nashville, and Orlando.


    McDevitt to Head Greystone’s New Multifamily Division

    By Chris Ulrich

    Jim McDevitt has joined Greystone as president of the newly-formed multifamily sales advisory services team.

    McDevitt will lead a team of real estate advisors offering expertise to owners of multifamily properties seeking to acquire or divest assets nationwide.

    McDevitt most recently served as president at Berkeley Point Capital, where he was responsible for all operations including originations, underwriting, and closing. His career also includes almost two decades as Wells Fargo Bank, where he served as executive vice president and head of correspondent development, and group heads of mortgage banking, multifamily capital, and CMBS production, in addition to spearheading the acquisition of several mortgage banking companies. Earlier in his real estate career McDevitt served at both CBRE and Colliers.


    Sunroad Taps Dow as President

    By Justin Sumner

    Michael Dow has joined Sunroad Enterprises as president of its multifamily division.

    Dow brings more than 30 years of experience in multifamily housing, including acquisition, development, management, and value-add improvements. He most recently served as senior managing director of asset management at Arenda Capital Management while serving as an advisor for the Loma Linda University Endowment Fund’s multifamily investment platform.

    Before that Dow served as western division president for Riverstone Residential Group, where he managed more than 80,000 multifamily units. His career has included leadership positions at FPI Management, Inc. and Interland Corporation.

    CoStar’s People of Note is published each Friday covering the latest commercial real estate executive level promotions and new hires. Click on the headline of each article to jump to full coverage. Follow the news on Twitter @TheCoStarGroup and @JSumner2.
    Send your new executive hires and promotion announcements to


    Lee Associates Promotes Saulnier to Principal

    By Justin Sumner

    Kurt Saulnier has been promoted to principal with Lee Associates Arizona.

    Saulnier joined the firm in 2012 as an associate, quickly rising through the ranks as a consistent contributor and team player. A specialist in industrial transactions across Metro Phoenix, his most recent transaction was a $6.5 million sale of 21.5 acres which will be developed into a 350,000-square-foot industrial park in late 2016 by Metro Commercial Properties.

    Before Lee Associates, Saulnier was with Newmark Grubb Knight Frank and DAUM Commercial Real Estate Services in Phoenix. He is a graduate of Northern Arizona University, and is active in NAIOP and ULI.


    JLL Promotes Woods to National Director of Property Mgmt

    By Bryce Meyers

    JLL has promoted longtime company veteran Jeremy Woods to national director of property management. Based in the Columbus, OH office, Woods will look to grow the firm’s property management portfolio in the Midwest while overseeing the company’s offices in Cincinnati, Cleveland, Detroit, and Pittsburgh.

    Woods has been with JLL since 2004, originally joining the firm as a general manager. Since 2012 he has served as group manager for a 21-member team that has managed roughly 50 properties totaling nearly 20 million square feet.

    Woods is a licensed real estate salesperson in Ohio and a member in the Columbus Chapter of the BOMA. He graduated from The Ohio State University and earned his MBA in finance from Capital University.

    Cushman Wakefield Boosts Valuation Advisory Group

    Six Professionals Hired in New York, Atlanta, and Houston
    By James Saris


    Parker Promoted to SVP at Marcus Millichap

    By Justin Sumner

    Marcus Millichap has promoted J.D. Parker to senior vice president. Parker will continue to serve as district manager of the firm’s New York Tri-State area, where he oversees five offices and more than 250 investment professionals and staff.

    Parker joined the firm back in 2004 as a salesperson, rising through the ranks and joining the management team in 2006. Most recently he was promoted to first vice president with the firm in 2013.

    A graduate of Pennsylvania State University with a degree in operations and information systems management, Parker is active with the Real Estate Board of New York (REBNY) and ICSC.


    Fogarty Joins Becknell Industrial

    By Eric Mitchell

    Dan Fogarty has been hired as a senior vice president – development at Becknell Industrial, where he will focus on identifying and managing new industrial build-to-suit and speculative developments throughout the United States.

    Fogarty joins the firm from Conor Commercial Real Estate, where he served as a vice president and market officer. A 20-year industry veteran, he was previously a vice president at InSite Real Estate and director of leasing at First Industrial Realty Trust.

    Fogarty graduated from Northern Illinois University and earned his MBA from Benedictine University. He is an associate member of SIOR, AIRE, and the USGBC.


    Ashcraft Joins Bridge Development

    By Justin Sumner

    Bridge Development Partners has hired Tom Ashcraft as a senior vice president in Ontario, CA.

    In his new role, Ashcraft will manage the entitlement and development of the firm’s California assets. He brings more than 13 years of experience in the acquisition, entitlement and development of real estate projects across a variety of asset classes.

    Most recently with the Lewis Group of Companies, where he managed a master-planned, 525-acre development in Rialto, Ashcraft has negotiated sales and due diligence investigations for more than 900 acres in addition to handling the entitlement of more than 1.7 million square feet of industrial projects.


    JLL Hires Sweet

    By Brian Kremer

    Zane Sweet has joined JLL as a senior vice president in the firm’s capital markets group in the Irvine, CA office. Sweet will focus on debt and equity placement for all property types in his new role.

    Sweet brings more than 20 years of financial experience to JLL, including mortgage banking, lending, and joint-venture equity solutions, as well as a vast knowledge of the West Coast commercial real estate markets. He was most recently at Belgravia Capital, and before that served with HFF.

    Zane earned his bachelor’s degree in finance from Chapman University.


    Johannsen Joins NAI / Merin Hunter Codman

    By Esmeralda McKie

    Christian Johannsen, CCIM is relocating from NAI Miami to NAI / Merin Hunter Codman, Inc. as a managing director.

    In his new role, Johannsen will focus on capital advisory services including debt and equity placement, bridge and mezzanine financings, structured finance, and capital markets executions.

    Before NAI Miami, Johannsen served as managing director at Aztec Group, Inc., completing more than $2 billion in placements. His career has spanned four decades, during which time he has overseen institutional sales across all asset types. In 1973 Johannsen started a real estate investment banking firm still in operation today. He holds a lifetime CCIM membership, and an MBA from Rollins College.


    Holthouser Joins CBRE

    By Lyssa Woo

    Nathan Holthouser has joined CBRE retail services team in Orange County as a first vice president, investments.

    Holthouser (pictured) is bringing his team: Ryan Sharpe, Jonathan Ikenna, James Lehigh, and Rebecca Canalez. Based in the firm’s Newport Beach office, they will focus on retail investment sales in Southern California coastal submarkets as well as high-street urban retail in the downtown areas.

    Holthouser, et al. join CBRE from Marcus Millichap, where they were a top-tier, multi-tenant retail group nationally. The team completed the $21.3 million sale of The Lakes Pavilions in Costa Mesa, and many other recent transactions.


    Berkadia Adds Three New Senior Directors in Dallas

    By Jean Bradley

    Berkadia expanded its investment sales team in Dallas with the hiring of William Jarnagin, Michael Ware and Taylor Hill as senior directors.

    They will work closely with managing directors Jay Gunn and Tom Burns as part of the firm’s integrated banking, investment sales and servicing platform. The trio comes from Marcus Millichap, where they closed $350 million in sales.

    JLL Appoints North East UK Resi Head

    Firm Recruits Calvert to Lead Multihousing Team in Leeds
    By Paul Norman

    CBC MECA Promotes Dinkin, Long
    By Monica Robinson

    Coldwell Banker Commercial MECA has promoted Andy Dinkin to vice president of sales and marketing, and Tina Long to head of the retail team as senior brokerage associate…

    Ridge Development Names New VP
    By Landon Cox

    Ridge Development, the industrial development arm of Houston-based Transwestern Development Co., expanded its team in the Midwest with the hiring of Keven Mohoney as vice president in the Chicago office…

    Heflin to Lead StreetLights Expansion
    By Michael Scott

    Marty Heflin will be leading StreetLights Residential’s expansion to Nashville, TN, serving as vice president of the southeast region. In his new role, Heflin will be responsible for multifamily developments…

    Cook Joins Crossman Co
    By Lauren Ashleigh Ayler

    Marc Cook has joined Crossman Company in Orlando, FL. In his new role, Cook will be responsible for new client development. With 15 years of commercial real estate and financial market experience, Cook was…

    Pala Joins Northern Builders
    By Courtney Phillips

    Stephen Pala recently joined Northern Builders as director of development. In this capacity, Pala will handle land acquisitions, due diligence, municipal entitlements and approvals, and pre-construction…

    Send your new executive hires and promotion announcements to
    Follow the news on Twitter @TheCoStarGroup and @JSumner2.
    Check out last week’s edition of People of Note.

    Article source:

    CFPB Hits Servicer for Creating "Loan Modification Purgatory"

    A Texas
    mortgage servicer has run badly afoul of the Consumer Financial Protection
    Bureau (CFPB) for repeated violations of servicing rules.  Residential Credit Solutions has agreed to
    pay $1.5 million in restitution to its victims and a $100,000 civil money penalty
    under a consent agreement announced on Thursday.

    has a laundry list of complaints against the company which bills itself as specializing
    in servicing delinquent and “credit sensitive” mortgages loans.  Since 2009 approximately 75,000 borrowers
    have had loans transferred from other servicers to the company which has about
    $95 million in assets.

    enforcement action covers Residential Credit Solutions’ illegal practices prior
    to the January 2014 effective date of the CFPB’s new mortgage servicing
    rules. CFPB said the company:

    • Failed to honor
      trial loan modifications that consumers had entered into with their prior
      servicers. The company’s practice from at least 2009 to 2013 was to not
      honor those agreements but instead to insist that consumers re-qualify for
      the modifications. “The company treated these consumers as if they were
      still in default, subjecting them to collection calls, late fees, and
      default and delinquency notices. Many consumers had their loans referred to foreclosure,
      and some eventually lost their homes. 
    • Provided consumers with incorrect information on the in-process
      modifications they refused to recognize such as unpaid balances, payment
      due dates, interest rates, monthly payment amounts and delinquency status.
    • Sent required annual escrow account statements to consumers that misrepresented
      the amount of
      any surplus funds which are required to be refunded to a consumer whose
      loan payments are current. Many of the escrow statements that Residential
      Credit Solutions sent to delinquent consumers incorrectly stated that they
      had an escrow surplus of between $80 and $10,000. 
    • When the company
      did offer a payment plans to consumers allowing them to make additional
      payments over a defined period of time to bring their loan current it
      illegally required consumers to surrender certain legal rights in future
      foreclosures and bankruptcy protections as a condition of receiving that

    says the company’s actions put customers in loan modification trials in “loan
    modification purgatory
    ,” confusing them, and effectively setting them back as though
    they had never received a trial modification. In many cases the company delayed
    or deprived borrowers of the opportunity to save or sell their homes. 

    In addition to the civil
    penalty and redress to victims, who are not prevented by the payments from taking
    individual action against Residential Credit Solutions, the company has agreed
    to convert in-process loan modifications into permanent ones and engage in
    outreach efforts to offer borrowers loss mitigation options.  It will also stop foreclosure processes for
    certain borrowers, if those are happening and honor plans put in place by prior
    servicers, continue processing applications for loss mitigation and end all
    mortgage servicing violations.

    Article source:

    Wilbur Medical Plaza Sells for $18.9M

    IRA Realty Capital acquired the Wilbur Medical Plaza building at 5620 Wilbur Ave. in Tarzana, CA for $18.85 million, or about $356 per square foot, from Ethan Christopher LLC and LaSalle Investment Management.

    The three-story, 52,889-square-foot, 4-Star medical office building was constructed in 1986 on seven-tenths of an acre in the Tarzana submarket of Los Angeles County. It was renovated in 2013 and features covered parking, 11-foot slab heights, and two elevators.

    Chris Bodnar, Lee Asher, Matt Heyn, and Troy Pollet with CBRE’s U.S. healthcare capital markets group represented the sellers. The buyer, an institutional investor of medical office assets, handled the acquisition in-house.

    Please see CoStar COMPS #3323434 for more information on this transaction.

    Article source:$189M/173739?ref=/News/Article/Wilbur-Medical-Plaza-Sells-for-$189M/173739&src=rss

    When the Firm Is Wired but the Office Isn’t

    By now, it is a given in New York City that many companies in the tech and advertising sectors prefer older loft buildings in nontraditional office neighborhoods, where they offer millennial workers must-haves such as coffee bars and Ping-Pong tables.

    But finding all that in a building with robust Internet options can be tricky to pull off.

    Article source:

    MBS RECAP: Fed Statement No Big Deal for Bonds

    The Fed made a few token changes to its policy statement today, but as expected, no overtures for an impending rate hike.  At least that wasn’t the case superficially.  If you want to get a bit philosophical with the Fed verbiage, there was an interesting change that might or might not mean something to you.

    The change in question has to do with the Fed’s forward guidance on hiking rates as follows (new words in all caps):

    “The Committee anticipates that it will be appropriate to raise the target range for the federal funds rate when it has seen SOME further improvement in the labor market”

    While this could be an inconsequential and random insertion, the fact is the only word added or removed to the entire statement outside the first paragraph would seem to suggest it has a purpose.  I think the only question is whether someone reading today’s statement was already in tune with the Fed’s recent rhetoric or not. 

    Simply put, this is very likely the Fed’s way of reminding us that we’re not far from the first rate hike, be that September or December.  Adding the word “some” seems like an attempt at metering and quantifying how much labor market improvement is needed to motivate a rate hike.  If it didn’t move markets too much, it was/is because markets already hear the Fed loud and clear on that stance. 

    Ultimately, today’s post-FOMC trading completely disappears in even the shortest-term trends.

    2015-7-29 bonds vs stocks

    Article source:

    Smaller Chinese Cities Miss Housing Recovery

    Home prices in Changchun were down 4.1% in June from a year earlier. The city has lots of empty and half-finished apartment towers.

    CHANGCHUN, China—The name of this city in northeastern China means eternal spring, a misnomer for a place where winter temperatures can reach as low as -30 degrees Celsius (-22 Fahrenheit).

    But while the housing markets in some big Chinese cities are starting to heat up, Changchun’s shows few signs of thawing.

    After a yearlong slump, Chinese home prices started rising in May, with more gains reported in June. Sales volumes were up 18% in June from a year ago, with Shenzhen and Shanghai leading the gains.

    But most of the gains came in the big cities. The smaller cities in China’s interior that make up the bulk of its housing market are still struggling with a buildup of vacant homes and little prospect for improvement as growth weakens and its young people flee.

    In recent months, China has loosened rules on second-home purchases and lowered interest rates, but the changes have disproportionately benefited bigger cities because their local economies and the prospect of price appreciation in these cities are stronger, stoking demand from investors.

    The gated Vanke Whistler compound west of Changchun has respectable occupancy rates, but around it are so many unsold apartments that residents occupying the villas and midrise apartments say vagrants have started to come in. The property-management firm built a barbed-wire fence around a pond last winter to prevent intruders from walking across it as it froze over. It makes the area look like a prison, one resident said.


    Home prices in Changchun, the capital of Jilin province, were down 4.1% in June from a year earlier, and housing inventories reached the equivalent of 21.5 months of sales in June, compared with an average of 13.2 months across 28 Chinese cities, according to data from China Real Estate Information Corp.

    Part of China’s rust belt known for its auto factories, Changchun has attracted migrants from smaller northeastern cities nearby and saw rapid construction activity in the past few years.

    But the pace of growth hasn’t kept up. The result: empty and half-finished apartment towers.

    “Back in 2010, this area was bare,” said Wang Yang, a Changchun-based real-estate consultant. “Now there are more than 30 developers there. Construction is still ongoing, but there are some spots that are overbuilt.”

    Builders with projects outside the country’s major coastal cities are now halting already-started projects to reduce inventory levels. Investment in real-estate development has slowed to 4.6% in the first half this year from the double-digit figures for the past 15 years.

    In the northeast, real-estate investors are also shunning Shenyang, the capital of Heilongjiang province, which is plagued with overbuilding. So-called third- and fourth-tier cities in China account for more than 70% of China’s property market in terms of floor space under construction or completed.

    Another factor in the dimming prospects is China’s aging population, which means that the size of the segment of property buyers—typically aged 25-49—has peaked. That shrinks the pool of potential home buyers in the future.

    “The underlying demand for first-time home purchases might have already peaked,” said David Wong, an economist at Shanghai-based property developer Shui On Land.

    Cities such as Shenzhen and Shanghai, with a big influx of migrants, attractive jobs and good schools, illustrate the widening split in the recovery in China’s property market. The rebound has been fastest in Shenzhen, where housing prices rose 13.7% in June from a year earlier.

    On a recent Thursday morning in a property showroom in Shanghai’s suburbs, potential customers were trying to decide whether to put down a 1,000 yuan ($161) deposit to secure better chances for apartments in the Paradise Walk project a month before they were coming on the market.

    “We have around 500 sign-ups so far, and next week, we’re targeting 2,000,” said Wang Meng, a sales consultant at the showroom.

    Few activities make such direct contribution to economic growth as new home construction, but the excesses in the sector have now become an albatross on growth across the world’s second-largest economy.

    Facing weakened demand from builders, cement and steel producers in China are suffering from bloated inventories and have been cutting prices to get rid of stock. Prices of steel rebar were down 38% at the end of June from a year earlier.

    Industries abroad also are getting hit. South Korean and U.S. exports of machinery and transport equipment to China moderated last year.

    To offset weakness in the real-estate investment sector, China is resorting to building airports, railways and other infrastructure to stabilize growth, including a plan to develop the Beijing-Tianjin-Hebei cluster in the Northeast.

    At Changchun’s Eurasia Shopping Mall, possibly one of the world’s largest, there were more salespeople than shoppers on a floor dedicated to furniture, bathroom and kitchen fixtures. Salespeople said they hadn’t seen any spillover from a small improvement in sales in recent weeks.

    “Nothing has changed. It’s still tough,” said a saleswoman at a shop selling kitchen cabinets.

    Write to Esther Fung at

    Article source:

    GLP to Double U.S. Logistics Presence With $4.55B Warehouse Portfolio Purchase

    The U.S. industrial property market continues to attract unprecedented interest from global investors. In the latest industrial portfolio mega deal since the end of last year, Global Logistic Properties Ltd. has agreed to acquire a 58 million-square-foot logistics portfolio spread across 20 major U.S. markets in an all cash transaction valued at approximately $4.55 billion.

    The acquisition of the Industrial Income Trust portfolio will increase GLP’s U.S. holdings by 50% to 173 million square feet, boosting the Singapore-based company to become the second-largest warehouse and logistics owner and operator behind Prologis (NYSE: PLD) just one year after entering the U.S. market.

    GLP isn’t planning to be a longterm owner after the expected Nov. 16 closing. After planning to increase occupancy to 95%, GLP plans to pare its stake in the protfolio to 10% by next April, transferring the remaining 90% stake into various investment funds it manages and markets to other investors. GLP said it’s in negotiations with several new and existing funds and capital partners attracted by strong demand by major institutional investors for investment in U.S. logistics assets.

    “This is an accretive opportunity for GLP that allows us to strengthen our U.S. market presence and growth prospects with minimal incremental overhead,” said GLP Chief Executive Officer Ming Z. Mei in a statement announcing the agreement.

    GLP said its investors are very bullish on the U.S. logisitics property market. The company said its fund syndication for its first U.S. income fund was significantly oversubscribed, and said it is confident of transferring the bulk of the Industrial Income portfolio into its fund management platform by next spring.

    GLP, which only enetered the U.S. market last year, reigns as the largest logistics provider in China, Japan and Brazil, with a global portfolio encompassing more than 500 million square feet valued at $33 billion after the transaction.

    The company teamed up with GIC, Singapore’s sovereign wealth fund, to enter the U.S. market and buy Blackstone’s IndCor Properties portfolio for $8.1 billion in a transaction that closed in January.

    In another huge deal in April, a joint venture of Prologis and Norges Bank agreed to pay $5.9 billion for KTR Capital Partners and its 60 million square feet of U.S. industrial space,including eight development projects totaling 3.6 million square feet.

    Article source:$455B-Warehouse-Portfolio-Purchase/173909?ref=/News/Article/GLP-to-Double-US-Logistics-Presence-With-$455B-Warehouse-Portfolio-Purchase/173909&src=rss