NEW YORK—Real estate companies are embracing technology across a range of areas. But these efforts are mainly in the customer-facing arena, such as providing better services to multifamily or office tenants.
But, save for the occasional exception, few companies are able to use tech to make investment decisions for various reasons, such as lack of experience and in some cases a lack of relevant technology.
One investor, though, has figured out a way to use established tech to provide insight into their purchasing decisions. That is Clarion Partners. Its managing director and head of acquisitions, Brian Watkins, recently spoke at a Transwestern Capital Market Symposium for institutional investors and described what the firm is doing.
For the past year to 18 months, he says, the company has been working with a third party provider to apply cell phone data to retail investing, taking advantage of geofencing—namely, to map around the end of a center or a store and understand what customers’ patterns are, where they’re living and where their cell phone ultimately sleeps at night. It can even glean data to help the company understand travel patterns and where people are moving, he says.
Using this data, “we can understand where the residents are moving from or what activity of a certain retail center has increased over the past three years,” he says.
“We’re finding that relative to our underwriting that is a really valuable tool that we are putting increased reliance on as we gain familiarity with it.”
ENGLEWOOD CLIFFS, NJ—Procida Funding reports that thanks to a number of significant financing deals in the month of December, the firm ended 2019 closing approximately $134 million in transactions for a range of asset classes.
The locally-based firm, which exclusively manages the open-ended private real estate trust the 100 Mile Fund, announced that among its year-end transactions included a $10-million loan to finance the reconstruction of Seaside Heights’ historic Belle-Freeman Pier, which was destroyed by Superstorm Sandy and a subsequent fire. The Mabie Group, plans to transform the now vacant lot into the boardwalk’s premier entertainment destination, featuring a 17,500-square-foot, multi-tiered restaurant and bar, a pool club for residents and a proposed concert venue. This is Procida’s second project with The Mabie Group.
In December, Procida funded a $39-million construction loan on behalf of the 100 Mile Fund, to repeat client Forte Real Estate Development. The company financed “The View at Middlesex,” a new multifamily development project in Middlesex. Forte is revitalizing the vacant, under-utilized properties at 220 and 232 Lincoln Blvd. into a 255,000-square-foot, five-story building with 200 amenity-filled apartments and new retail spaces.
Established in October 2011, the 100 Mile Fund provides bridge, construction, mezzanine and preferred equity financing for value-add, distressed and special opportunistic situations within 100 miles of New York City. Since 2012, the net annual dividend has averaged 12.9%.
Also, in December, Procida provided a $6.15-million loan to 404 Church LLC based in King of Prussia, PA. Operating since 1965, Francis Schultz, locally known as “Shorty,” owns industrial and auto salvage facilities in Pennsylvania and South Jersey.
Year-end activity also included 10 payoffs totaling $39,967,500. Deals included a payoff of a $7-million construction loan to The Mabie Group for The Shoppes at Hooper, a mixed-use 60,000-square-foot building in Toms River, NJ that is now over 70% leased.
Procida uses both its own capital and that of its strategic partners, which includes private equity funds and institutional lenders. The firm offers loans from $1 million to $100 million, with a focus on deals from $3 million to $50 million.
In a case of who copied whom, a big-name Miami architectural firm claims copyright infringement for illegal use of its work by another architect, and a developer accused the same firm of duplicating parts of a Surfside project at a nearby building.
Kobi Karp Architecture & Interior Design Inc. and The Surf Club Apartments Inc. entered a $1.46 million agreement in 2018 for the architectural firm to work on the developer’s 11-story Surf Club II hotel-condominium.
The Surf Club Apartments terminated Kobi Karp’s agreement for Surf Club II last year. Shortly after, issues started playing out in court.
Kobi Karp Architecture sued the new architect, O’Donnell Dannwolf & Partners Architects based in Hollywood, and its president Kurt Dannwolf for federal copyright infringement Nov. 5 and filed an amended complaint Jan. 8.
The federal complaint said O’Donnell Dannwolf altered Kobi Karp photos for the project. Kobi Karp argued O’Donnell Dannwolf wasn’t allowed to use its work until the developer paid its bills in full.
“To date, KKAID’s invoice remains unpaid, as a result of which TSAI (The Surf Club Apartments Inc.) and ODP (O’Donnell Dannwolf) are not licensed to use KKAID’s (Kobi Karp Architecture) works,” the complaint said.
The developer claims it shelled out to fix Kobi Karp errors and the architectural firm is asking for over $2 million for work it didn’t do, attending meetings it was supposed to attend without extra compensation and other unsupported charges, according to the Miami-Dade Circuit Court complaint. The developer also claims Kobi Karp is wrongfully seeking another $4 million for the use of its work to obtain the county historic board’s approval for a certificate of appropriateness.
The Surf Club Apartments owner also accused Kobi Karp of copying a Surf Club II element at a project down the street. Kobi Karp used “almost identical” travertine marble cladding for the balconies at Arte Surfside about two blocks south of Surf Club II. This means the Surf Club II developer must redesign its own project to avoid looking like it was copying, according to the complaint.
“Kobi Karp’s actions left our client with no choice but to file suit to protect its rights and to recover its damages,” said Miami attorney Todd Levine, who filed The Surf Club Apartment suit against Kobi Karp. Levine of Kluger, Kaplan, Silverman, Katzen & Levine signed the complaint along with fellow founding member Alan Kluger.
Kobi Karp attorney Dennis Richard of Richard and Richard in Miami said The Surf Club Apartment suit was filed in response to Kobi Karp Architecture’s federal copyright suit.
“Kobi Karp worked tirelessly to preserve the architectural history of the Surf Club and the historic adjacent Seaway. Kobi Karp Architecture filed a federal copyright lawsuit to protect that legacy. This lawsuit seeks to escape the federal court’s resolution of the issues,” Richard said by email.
Kobi Karp’s federal complaint was filed by David Friedland of Friedland Vining in Miami, who didn’t return a request for comment by deadline.
O’Donnell Dannwolf attorneys are Andrew Schindler and Brooks Miller of Gordon & Rees in Miami. Miller declined to comment.
“The complaint does not plausibly allege any act by defendants that violated any of plaintiff’s exclusive rights under the Copyright Act,” according to the motion to dismiss. “The 2019 certificate of appropriateness application identifies owner (The Surf Club Apartments) as the applicant, not” O’Donnell Dannwolf. “In any event, the mere resubmission of the previously approved instrument of service with the 2019 certificate of appropriateness application constitutes fair use.”
The motion also pointed out O’Donnell Dannwolf didn’t profit from submitting the work as they were turned in to a historic board and not a commercial venture.
This motion was denied as moot once Kobi Karp amended its complaint.
Architect of Record
One issue in dispute is whether Kobi Karp Architecture was hired as the architect of record for Surf Club II. The Surf Club Apartments solicited for an architect of record and invited Kobi Karp to participate but said it didn’t select the firm for the job.
Kobi Karp Architecture was hired as a Surf Club II architect — but not an architect of record — to review designs, make sure they complied with building codes and make corrections, according to The Surf Club Apartment’s complaint. Kobi Karp also had to review and correct the work of another project architect, Joseph Dirand Architecture, and make sure Surf Club II conformed to town and other requirements. Kobi Karp was hired to correct mistakes in the plans at no additional cost to the owner. Also, Kobi Karp agreed not to reproduce the building design in any other South Florida project without the building owner’s permission, according to the complaint.
Kobi Karp’s complaint says it was the architect of record and O’Donnell Dannwolf was hired to succeed Kobi Karp for the job, but O’Donnell Dannwolf submitted Kobi Karp’s copyrighted work to the county while Kobi Karp’s agreement was still in effect.
The Surf Club sent Kobi Karp a termination notice last Sept. 19, or after the county historic board approve the Seaway application, but The Surf Club maintained notified Kobi Karp in August by phone that it would terminate its agreement.
Surf Club II, which is to have a 31-key hotel and 48 condominium units, is to rise at 9133 and 9149 Collins Ave. The three-story Seaway Villas on the site will remain and be repurposed.
The project is about a block north of Fort Partner’s completed Surf Club, which includes a Four Seasons hotel and condos next to the historic club used by stars like Frank Sinatra and Elizabeth Taylor as an exclusive hideaway.
PHILADELPHIA—The Board of Directors of the Philadelphia Industrial Development Corp. has appointed current chief strategy and communications officer Anne Bovaird Nevins as the agency’s 11th president.
Nevins, who will be the first woman to serve in the position in the PIDC’s 60-year history, will take on the new post on Jan. 27 and will replace current PIDC president John Grady. Nevins appointment was announced on Wednesday by Philadelphia Mayor Jim Kenney and Rob Wonderling, president and CEO of the Philadelphia Chamber of Commerce.
“During her 13-year tenure at PIDC, Anne Nevins successfully built the partnerships that deliver resources to diverse businesses, non-profits, and development projects,” said Mayor Kenney. “She brings focus and attention to connecting growth to the people and places in our city that need it the most.”
Nevins has served on the Mayor’s Refinery Advisory Group for the City of Philadelphia, co-managed Philadelphia’s Amazon HQ2 bid, and has created and led PIDC and ULI Philadelphia’s partnership advisory committee on the future of work and its impact on industrial and commercial land.
“The city’s recent job and population growth has created momentum and opportunity, but we recognize that too many people and communities are not yet benefiting,” Nevins said. “Our challenge is to accelerate and sustain economic growth and, at the same time, to ensure that the benefits of that growth, including job opportunities and wealth creation, are shared more broadly across our city.”
Prior to her current role, Nevins served as PIDC’s SVP for marketing and business development for six years where she led a team that transformed PIDC’s brand identity, developed new lending products, and generated 360 loans to small, diverse, and growing businesses that invested more than $117 million located in 94% of Philadelphia’s zip codes.
Newmark Knight Frank vice chairman Edward Maher, executive managing directors Matthew Pullen and James Tribble and director Samantha Hallowell of NKF’s Boston Capital Markets team oversaw the transaction of the office/retail asset in conjunction with NKF executive managing director Jim Brady and senior managing director Jason Cameron.
The 184,643 square-foot complex is presently 94% leased to a 38-tenant roster and has recently benefitted from common area upgrades and building improvements totaling nearly $5 million, according to Newmark Knight Frank.
Investcorp’s India Fund Raise
In an unrelated matter, Bahrain-based Investcorp announced on Wednesday it has raised $130 million in anchor commitments, which will primarily provide last mile funding in India, a market currently going through a liquidity crunch.
BAe Systems Pension Funds Investment Management Limited is the cornerstone investor for this initiative, which will focus on projects in the affordable and mid-market housing segment in the top seven cities in India and is subject to regulatory approvals and registrations.
Vikram Aggarwal, head of Private Markets, BAe Systems Pensions said, “We believe that the Indian affordable housing segment represents a sizable and attractive market opportunity catalyzed by urbanization and structural reforms. BAe Systems is pleased to make a positive contribution to the development of affordable housing in India, where there is significant demand, but a lack of institutional quality capital to fund projects.”
Investcorp manages more than $28 billion globally and at its core is a mid-market specialist. The firm is an active investor in the US and European real estate markets, targeting properties that generate current cash flow and have potential for capital appreciation through value-add initiatives, with annual transaction volumes of approximately $2.5 billion per year. Since inception, Investcorp has invested in more than 765 properties totaling in excess of US $18 billion.
In India, the company’s real estate business has deployed more than $200 million through two funds across 27 residential projects located in the top tier cities.
Port Ventura Harbor has officially debuted its first apartment units. The mixed-use project is the largest waterfront development in Ventura and is on the last remaining development site in the port district. As such, it is highly anticipated. While the project will officially open in April 2020, the developer has delivered the first 56 units and the first residents have already moved in.
“This is going to be the destination in Ventura,” David Kaplan of the development team, tells GlobeSt.com. “There is no gate or fence. This is going to be a place for the public and for human interaction. There are more than 1,000 people at Portside, and then the community at large will be able to be involved too. I think the synergy is going to be great when it is all finished. This will have a great communal focus.”
The project has been two decades in the making, overcoming several entitlement issues that came with its portside location. Once completed, it will include 270 apartment homes, 30 live/work units and 22,000 square feet of retail. It is located on 27 acres on the waterfront on Ventura Harbor. “This is the last remaining piece of land in the port district here in Ventura,” says Kaplan. “When all is finished it is going to be amazing. It is going to appeal to the lifestyle here, not just with boats, but also to the outdoors people and because of its proximity to so many activities.”
The response from prospective renters has been positive, especially considering the January launch. “We have had close to 400 people tour the property and view the units,” says Kaplan. “We signed six leases, and we have already had four people move onto the site. In our first tours, people are coming from around Southern California. We have had people sign leases from Pasadena and Newport Beach. We aren’t only drawing from Ventura County. We are drawing from all over the place.”
Kaplan expects leasing activity to pick-up as they hit more construction milestones and closer to the end of the first quarter. “The prime leasing time is middle of March to middle of October,” says Kaplan. “Right now, we see the momentum picking up, and we feel like we are going to have a good response to the first 56 units.”
Next month, the developer will deliver three more buildings for a total of nearly 100 units available for lease.
GRAPEVINE, TX—The original operator of the building at 2505 E. Grapevine Mills Circle was the Trail Dust followed by Love & War in Texas of Grapevine. The space sits on more than 2 acres on the ring road of Grapevine Mills Mall that attracts more than 10 million visitors a year.
Daylight Golf recently inked a 14,713-square-foot lease in the space. The new tenant will have a unique entertainment offering of virtual golf simulators in a high-end sports bar setting with a full restaurant menu. The venue will cater to golfers, sports fans and families, and attract corporate events and private parties.
“Daylight Golf has been searching for the right location to launch this new concept for over a year and we feel this is the ideal property in a great location for our premiere,” says Jeff Dill, owner of Daylight Golf.
Daylight Golf plans to open in mid-2020. Along with the virtual golf simulators, there will be more than 40 video displays for sports viewing and a large patio for outside dining.
“It’s a perfect fit that is unique, but broad enough for mass appeal,” says landlord Cary Kopczynski.
The lease agreement is between CJK Grapevine Properties and Daylight Golf LLC. Derek Anthony, the transaction’s lead broker with The Woodmont Company, along with Woodmont brokers Grant Gary and David Adams represented the landlord, and Andy Anderson with Restaurant Property Group at Henry S. Miller represented Daylight Golf LLC.
“The city of Grapevine has been very supportive of this new concept along with Simon, the owner of Grapevine Mills Mall,” said Anthony. “Given the newfound energy in one of the most successful Mills properties, we feel this usage and concept will do well with traffic counts, new multifamily moving in, and a unique experience for mall shoppers and surrounding communities to enjoy. With PayCom, Kubota, Great Wolf Lodge, Gaylord by Marriott and many other companies based in Grapevine, the private party and corporate bookings will be a targeted client base as well.”
The spread of small-format “eatertainment” concepts were recently featured in CBRE’s report highlighting eight retail trends. Restaurants now account for 17% of US retail sales, more than any other retail sector, and restaurant sales growth has outpaced overall US retail sales gains in recent years, says the report. Anthony points to that eatertainment component as a significant factor in the Daylight Golf concept.
“Entertainment eateries are the newest craze in big-box operators. What better place than outside the most successful Mills product in the country than Grapevine?” Anthony tells GlobeSt.com. “With over 10 million visitors at Grapevine Mills Mall, we feel this usage and concept will be very strong for years to come. In addition to the local community and residents, this area bodes well for out of town guests, corporate travelers and private events. With over 5,000 hotel rooms within 5 square miles, there are plenty of cross-marketing opportunities throughout the area.”
AUSTIN, TX—Recent studies have concluded that more than 25% of traffic congestion incidences around the world can be attributed to the scarcity of parking spaces, according to TrafficTechnologyToday.com. The cloud-based parking industry is growing more rapidly with the assistance of capital partners.
In fact, today, FlashParking received a $60 million strategic investment from private equity firm L Catterton Growth Fund. The investment will be used to scale FlashParking’s cloud-based parking system that promotes the evolution of isolated parking assets into connected mobility hubs.
“We are pleased to partner with the FlashParking leadership team to accelerate the company’s growth and facilitate the delivery of mobility services to consumers and businesses,” said Michael Farello, managing partner, L Catterton Growth Fund.
Launched in 2011 as the industry’s first cloud-born parking technology, FlashParking has real-time data visibility and actionable intelligence, including supply data and dynamic pricing. Its operating system is the connective layer that transforms parking assets into multi-purpose mobility hubs where parking, transportation and logistics intersect within a smart city environment. FlashParking’s operating system allows real estate owners, parking operators and cities to tackle complex mobility issues such as congestion, lack of visibility into supply and demand, and fragmented consumer experiences.
“Over the last nine years, we have built the FlashParking platform with quality and adaptability in mind by making it cloud based, mobile first and future ready. This unique platform has allowed us to configure an operating system that’s not only the best solution for parking infrastructure today but also a model that’s ready for tomorrow,” said Juan Rodriguez, co-founder of FlashParking. “With this funding from L Catterton, we’ll be able to quickly scale our mobility hub operating system and become the only company that can turn customers’ parking assets into facilities that enable every facet of mobility, including mobile-enabled parking and valet, staging for TNCs, charging for electric vehicles, cleaning and servicing, drone launching and landing, and points for delivering.”
The mobility industry is facing a paradigm shift that is moving the conversation toward systems that can support today’s and tomorrow’s mobility services rather than typical to and from mobility technologies. To get ahead of this evolution in the coming months, FlashParking intends to announce new partnerships with transportation, logistics and mobility companies that are leveraging its platform.
“While many parking vendors are playing catch up to retrofit old solutions and cobble together cloud-based offerings, FlashParking purpose-built solutions from the ground up with a cloud-first approach,” Rodriguez tells GlobeSt.com. “We’ve essentially taken the cloud computing success seen in other industries and applied it to the parking industry to enable a better way to run parking operations and improve the bottom line. FlashParking’s cloud-based software platform, built using Microsoft Azure Cloud Services, allows clients to capitalize on a dynamic future-proof system, that will expand and support new capabilities as technology and customer demand evolves.”
FlashParking’s ability to innovate the parking experience is evident through its partnership with Texas Medical Center, the world’s largest medical city. In May 2018, the medical center chose FlashParking to help modernize its facilities and better respond to the evolving mobility ecosystem. FlashParking’s mobility platform currently controls 30,000 parking spaces via 230 lanes across 34 facilities while simplifying parking, reducing congestion, improving traffic flow and enhancing the experience for the more than 10 million patients, visitors, staff and students who visit the medical center annually.
In addition to the Texas Medical Center, FlashParking is delivering at an enterprise scale of more than 6 million parkers per month and processing $1 billion in transactions at more than 1,300 locations worldwide.
“L Catterton has an unparalleled track record of building leading brands and rapidly scaling operations, which makes them the ideal partner for us as we grow and expand our business,” Rodriguez continues. “We look forward to leveraging L Catterton’s expertise and experience scaling multi-sided marketplaces as we work together to build out connected mobile hubs that deliver value to all stakeholders.”
L Catterton has significant experience in investing in technology-enabled international marketplaces and businesses. Current and past investments include ClassPass, Artsy, Vroom, Get Your Guide and Enjoy.
BofA Securities served as financial advisor to FlashParking.
MONROE TOWNSHIP, NJ—A joint venture of New York City-based DRA Advisors and KPR has acquired the 135,900-square-foot grocery-anchored Concordia Shopping Center here from $32.3 million.
JLL Capital Markets, which announced the sale transaction, marketed the property on behalf of the seller, Concordia Shopping Manager Corp.
The shopping center, which is anchored by grocer Stop & Shop, is located on 14.4 acres at 1600 Perrineville Road. The Concordia Shopping Center features the only grocery store within a seven-mile radius; the nearest store is a ShopRite location in East Windsor.
Currently 95% leased, the center is also home to UPS, Hair Crafters, Monroe Physical Therapy, Monroe Wine and Spirits and more.
The property’s location in the southern part of Middlesex County, an affluent central New Jersey submarket, offers a market area with more than 52,000 residents earning an average annual household income of $106,052.
“We’re excited to complete our second acquisition in New Jersey and look forward to the opportunity to maintain the historically strong performance of this shopping center,” KPR Managing Director of Acquisitions Eric Wolf said. “The Mid-Atlantic continues to be a focal point of our portfolio, and this acquisition deepens our ties to the region.”
KPR is formerly known as Katz Properties.
The JLL Retail Capital Markets team representing the seller was led by senior managing directors Chris Munley, Jose Cruz and James Galbally; senior director Steve Simonelli and SVP Colin Behr.
“Concordia Shopping Center is representative of retail product that we have witnessed continual interest and cap rate compression,” JLL’s Munley says “As capital allocation for grocery-anchored retail continues to expand, we anticipate continued high demand, along with aggressive pricing metrics for the product in 2020.”
SAN JOSE—The 18-story Hilton San Jose is connected by a skybridge to the 550,000-square-foot San Jose McEnery Convention Center. The hotel’s downtown location at 300 Almaden Blvd. places it in the heart of Silicon Valley and near multiple demand drivers, including the San Jose Performing Arts Center, San Jose State University, SAP Center and Levi’s Stadium, along with more than 10 million square feet of office space.
“Hilton San Jose is proximate to a plethora of Fortune 1000 corporations, including some of the most recognizable names in technology today,” says John Strauss, JLL managing director. “Moreover, San Jose is in the midst of an urban renaissance with millions of square feet of new office space in the pipeline.”
The 353-room hotel recently sold for $117.5 million. The Hilton sold unencumbered of an existing management agreement to an undisclosed buyer.
JLL Hotels and Hospitality closed the sale on behalf of the seller, Han’s Holdings Group Ltd. Strauss and executive vice president Mark Fraioli led the JLL team on the transaction. Fraioli echoed the current appeal of San Jose for numerous reasons.
“To hear Adobe announce that their headquarters expansion would nearly double their headcount and to see Jay Paul get underway with the construction of their 875,000-square-foot tower at 200 Park Avenue simply underscores the vitality of this market and the fact that the transformation of San Jose is only beginning,” Fraioli tells GlobeSt.com.
The hotel features 18,375 square feet of meeting and event space, an outdoor pool, 24-hour fitness center, business lounge, and a restaurant and bar.
“Hotel development opportunities in Silicon Valley are limited and challenging due to the general lack of available sites, lengthy entitlement process, extremely high labor costs and competition from other commercial real estate uses,” Fraioli adds. “This hotel represented a rare opportunity for an investor to acquire a high-profile full-service property in the heart of Silicon Valley.”
Indeed, peak levels of new hotel rooms were evident last year with volume stabilizing thereafter. Due to labor shortages and rising costs that are plaguing the entire construction industry, high costs are leading to a forecast decline in new hotel supply in 2020, according to JLL’s recent hotel report.
New US hotel projects are focusing on specialization to fit a particular location and target market. This can include much smaller room sizes, lobbies with integrated bars and restaurants, and more outdoor space, all of which impact the cost to build and type of materials needed for a project, says the report.
DISCLAIMER: Commercial Property For Sale is not a commercial realtor. CPFS is a publishing company that posts listing information on behalf of sponsor companies, commercial realtors, banks and other interested parties. Our posted listings include compensatory and non-compensatory studies to appeal to the widest variety of potential candidates. This information is designed to help people find commercial property of interest and contact the commercial real estate agent representing the listing.