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U.S. REAL ESTATE ROUNDUP
- Simon Expected to Close $700M Purchase of Prime Outlets by Year-End.
- General Growth Wins Court OK to Restructure 10.25B of Mortgage Debt.
- Anemic Miami Condo Sales and a Debt Load of About $700M is Forcing Developer Jorge Perez to Turn over His 1,800-unit Icon Brickell Complex to HSBC Holdings and Bank of America.
- Morgan Stanley Faces Loss of 5 Prime Resorts if $1B Mortgage is Not Refinanced.
- Healthcare Trust Pays $16.25M for 108,500-SF Medical Office Building in Spartanburg, SC.
- Chicago Union Trying to Find Funds to Re-Start Construction on North America's Tallest Residential Tower.
Prime Outlets Mobile, AL
Prime Outlets' 22 centers encompass an estimated total 6.6 million square feet, according to Real Estate Channel research. The price equates to about $10.6 per square foot.
The acquisition gives Simon a total 63 outlet properties. The nearest competitor in the outlets market is Greensboro, NC-based Tanger Factory Outlet Centers Inc. with 32 centers.
Simon previously announced it has a $4 billion acquisition chest ready to roll through 2010 and beyond. Simon is focusing on buying financially strapped properties, says Simon CEO David Simon.
The Wall Street Journal reports Simon also is considering acquiring Chicago-based General Growth Properties Inc. which is attempting to exit Chapter 11 bankruptcy protection in 2010. General Growth is the second largest shopping center developer, behind Simon, with 200 U.S. malls.
(CHICAGO, IL) -- Mired in $29 billion of debt and desperately trying to save itself from being sold to a competitor, Chicago-based General Growth Properties is being allowed to find new financing for $10.25 billion of the debt load.
Judge Allan Gropper of U.S. Bankruptcy Court for the Southern District of New York was expected Friday, Dec. 18, to also allow General Growth to restructure another $1.75 million in delinquent mortgage loans.
That would leave General Growth with about $3 billion in secured debt and $7 billion in secured debt remaining to be restructured, according to The Wall Street Journal. The company filed for protection from its creditors in April of this year.
On its $10.25 billion debt portion, General Growth's lenders are allowing the company to extend the delinquent loans' due dates by an average of five years and retaining the interest rates at an average 5 percent.
The deal is costing General Growth about $400 million in fees and past due payments on debt service, according to the WSJ.
Jorge Perez
The estimated price is expected to be no more than $500,000,000 according to some condo industry sources in a position to know. Perez is hoping the new owners will allow Related Group to continue managing the three-tower complex.
Related Cos. of New York City, headed by Miami Dolphins owner Stephen Ross, owns a minority interest in Related Group of Miami.
Perez confirms unpaid loans on the three Icon buildings total about $700 million. Icon Brickell's last tower was completed this year but pre-sales on all three buildings began in 2006.
In an attempt to draw more buyers, Perez slashed the average condo price to $419 per square foot from $650 per square foot. A two-bedroom unit today is priced at about $550,000, down 30 percent from its 2006 asking price.
(NEW YORK CITY, NY) -- Morgan Stanley, the supposed guru company of high finance, is itself in big lending trouble today.
The New York City-based investment bank is trying to restructure a $1 billion securitized mortgage on five resorts it bought in 2007. The payoff on the mortgage is due in February 2011.
Morgan Stanley's trouble started when its $1.75 billion MSREF V U.S. Fund bought eight resorts two years ago from Orlando, FL-based CNL Hotels & Resorts Inc.
Morgan Stanley placed $1.52 billion of debt on five of the eight properties, including a $1 billion first mortgage and a $525 million mezzanine loan, according to The Wall Street Journal.
The servicer on the loans is PNC Financial Services Group Inc.'s Midland Loan Services of Overland Park, KS.
The biggest portion of the debt, 40 percent, is on the 780-room Grand Wailea Resort Hotel & Spa in Maui.
The other resorts in the same loan package are the 796-room La Quinta Resort & Club and PGA West in La Quinta, CA; the 739-room Arizona Biltmore Resort & Spa in Phoenix; the 693-room Doral Golf Resort & Spa in Miami; and the 279-room Claremont Resort & Spa in Berkeley, CA.
(SCOTTSDALE, AZ) -- Healthcare Trust of America Inc. of Scottsdale, AZ, has closed its $16.25 million acquisition of the 108,500-square-foot Mary Black Medical Office Building in Spartanburg, SC.
Mark Engstrom
"In addition to increasing our presence in South Carolina, we are continuing to grow our strategic relationships with quality healthcare systems such as Mary Black Community Health System," says Engstrom.
Mary Black Community Health System has about 209 acute licensed beds and about 386 active staff physicians.
(CHICAGO, IL) -- In an unusual financing maneuver, construction workers in Chicago are trying to put together a $170 million capital program that will restart the construction of what is billed as North America's tallest residential building - the 2,000-foot tall, 150-story Chicago Spire.
The workers have made some progress by convincing a group of union pension funds to lend the money to Shelbourne Development Group of Ireland, according to Tom Villanova, president of the Chicago and Cook County Building and Construction Trades Council.
The Trade Council represents 24 unions with about 100,000 members.
Shelbourne broke ground on the project in 2007 but construction stopped in 2008 when funding dried up. Chicago Spire, when completed, would have 1,200 condos with some unit prices starting at $750,000. However, the bulk of the units are priced from $2 million to $15 million.
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