Orlando Fashion Square Mall Trades for $35M; Duke Realty Closes Five Notable Leases

By Georgiana Mihaila, Associate Editor

Pennsylvania Real Estate Investment Trust is pursuing its previously announced strategy of improving the quality of its portfolio by selling non-core assets. One of the first non-core assets to trade is Orlando Fashion Square Mall, recently sold in a $35 million cash transaction.

“The sale of Orlando Fashion Square and the previously announced sale of Phillipsburg Mall are further evidence of our commitment to the plan we’ve laid out to elevate the quality of our portfolio and improve our operating metrics. We are pleased with the terms of this transaction and look forward to continuing to achieve our strategic objectives,” said Joseph F. Coradino, CEO of PREIT.

The 1.1 million-square-foot Orlando Fashion Square Mall is anchored by Dillard’s, jcpenney, Macy’s and Sears. According to PREI, sales at the property were $233 per square foot and non-anchor occupancy was 80.7 percent as of December 31, 2012, both of which were below PREIT’s portfolio averages. The property was part of the collateral pool securing the company’s 2010 Credit Facility. The recent sale resulted in a gain of approximately $0.6 million to be recognized in the first quarter of 2013.

In other commercial real estate news, Duke Realty’s Central Florida office closed five leases totaling 435,728 square feet at industrial properties in the Orlando area. The leases included a long-term renewal of 275,000 square feet with Ford Motor Company at Park 27 Distribution Center in Davenport, Fla., southwest of Orlando; new leases of 37,683 square feet with Alstyle Apparel and 19,300 square feet with FM Convention Contractors Inc. at Parksouth Distribution Center; and renewals of 78,295 square feet with Benjamin Moore and 25,450 square feet with Universal Studios.

Duke Realty’s Tim Perry, vice president of leasing in Central Florida, represented the company in the five transactions.

Image: Orlando Fashion Square Mall via Google Maps

Wood Partners Kick-Starts 200-Unit Community in Southwest Orlando

By Georgiana Mihaila, Associate Editor

National multifamily developer Wood Partners will soon be adding 200 units on Spring Lake, at the entrance of Doctor Phillips, one of Orlando’s most desirable residential districts.

The apartment complex, dubbed The Rialto, will rise on a 5.95-acre site set at the northwest corner of Sand Lake Road and Turkey Lake Road in southwest Orlando. Plans include a five-story apartment building and 17,000 square feet of retail space, to be owned by The Wilder Companies—a Boston-based firm that specializes in retail real estate development, management and leasing.

The Rialto will consist of 200 units with one-, two and three-bedrooms, averaging 1,056 square feet. High-quality interiors will include ceramic flooring in kitchens, entries and baths; ceramic tub surrounds; nine-foot ceilings; stainless steel appliances; 42-inch cabinets with granite tops; and sleek, modern lighting. A total of 399 parking spaces will be available in an integrated parking garage, in addition to 59 spaces for retail and five spaces for the leasing office.

The site, with 350 feet of frontage on Sand Lake Road and 750 feet of frontage on Spring Lake, is in the middle of the premier dining and shopping offerings in Doctor Phillips, with major employment hubs such as Walt Disney World, Sea World, Universal Studies, and the Orange County Convention Center within a short distance.

“The site is well served by major transportation routes, major employers, area schools, retail stores and other support services,” said David Thompson, director for Wood Partners in Florida. “The proximity to excellent retail, prestigious Doctor Phillips address, outstanding lake views and superior school district distinguish the project from competitive offerings.”

Real Estate Capital Partners is Wood Partners’ equity partner in the project, with Synovus Bank as lender.

With a completion date set for July 2014, the project is expected to generate more than $20 million in local income, about $1.9 million in local taxes and government revenue, and more than 244 jobs over its 19-month construction period.

Image courtesy of Wood Partners

Highwoods Sells Two Assets for $14.6M; Kite Realty Buys Publix-Anchored Center

By Georgiana Mihaila, Associate Editor

Raleigh-based Highwoods Properties, Inc. has sold two non-core assets in Orlando for $14.6 million in cash. The two office properties—Metrowest Commerce Center and Cambridge in Orlando—encompass 134,000 square feet.

The two properties are reportedly 100 percent leased to a single entity and are expected to generate $1.3 million of cash net operating income in 2013. Highwoods will continue to serve as property manager of these assets in exchange for customary fees.

President and Chief Executive Officer of Highwoods Properties, Ed Fritsch, said, “The sale of these non-core assets, the majority of which is a single-story asset, is in sync with our ongoing work to continuously improve our portfolio. These assets were not strategic to our Orlando holdings, which consist primarily of Class A CBD properties.”

A 69,000-square-foot Publix Supermarket-anchored shopping center also recently traded in Orlando for a purchase price—exclusive of closing costs—of $11.6 million. Kite Realty Group Trust, a full-service, vertically integrated real estate investment trust, acquired the property.

The center is currently 99 percent leased and is located within close proximity to Waterford Lakes Village, another Kite Realty Group-owned property. The retail center draws from the solid trade area surrounding the University of Central Florida as well as the Eastwood, Stoneybrook, and Waterford Lakes master plan communities.

“This property is a well-positioned grocery-anchored center with strong credit. We will continue to selectively acquire well-located assets throughout the Midwest, Southeast, and Texas markets,” said John A. Kite, the Company’s chairman and CEO.

Image courtesy of Highwoods.com

718-Room Radisson Resort Orlando Trades, Prepares for Immediate Renovation

By Georgiana Mihaila, Associate Editor

Radisson Resort Orlando – Celebration is now a member of the Interstate family, as a joint venture between Interstate Hotels & Resorts and Waramaug Hospitality LLC has recently acquired the 718-room hotel for an undisclosed amount.

While the new owners did not want to disclose the price for which the hotel traded, they have expressed their intent of conducting renovation work on the property, effective immediately. The $9 million renovation will consist of upgrades and enhancements to all 718 guest rooms, public areas, meeting space and mechanical systems.

Radisson Resort Orlando – Celebration is located 1.5 miles from Walt Disney World, directly off I-4 at Exit 64A and just 17 miles from the Orlando International Airport, on a 20-acre property. The resort also features 6,800 square feet of meeting and event space, five on-site dining venues, several types of pools, a gaming center, a sand volleyball court and two lighted tennis courts.

“As one of the top tourist destinations in Florida, Orlando was a natural choice for the hotel’s location and the Radisson Resort Orlando is minutes away from the city’s top attractions,” said Paul Nussbaum, Waramaug Hospitality’s chief executive officer. “With the prime setting and the approaching renovations, this hotel will thrive under Interstate’s operating expertise.”

Interstate Hotels & Resorts, Inc.—a subsidiary of a 50/50 joint venture between subsidiaries of Thayer Lodging and Jin Jiang—is at its fifth acquisition with Waramaug Hospitality. The joint venture has been advised in the transaction by Hospitality Funding LLC, a Palm Beach-headquartered boutique investment advisory firm.

The Radisson Resort was not the only Orlando-area hotel to trade hands recently. Summit Hotel Properties, Inc. has closed on the acquisition of both Hyatt Place-Universal and Hyatt Place-Convention Center as part of a $36.1 million deal that included a third property, located in Chicago. The new owner has entered into an agreement with Select Hotels Group, L.L.C., an affiliate of Hyatt, to operate each hotel.

Image via Google Places

Loews & Universal Break Ground on 1,800-Room Cabana Bay Beach Resort

By Georgiana Mihaila, Associate Editor

Loews Hotels & Resorts and joint venture partner Universal Parks & Resorts have broken ground on one of the largest hotels currently under construction in the U.S—the 1800-unit Universal’s Cabana Bay Beach Resort.

The hotel will be built on a 37-acre site within Universal Orlando Resort and adjacent to Universal’s Islands of Adventure—just off Hollywood Way and Turkey Lake Road. Pricing information, opening timeframes and room on-sale dates have not been released, but according to the official announcement, the Loews Hotels & Resorts-operated hotel is scheduled to open in 2014.

The new hotel will be themed differently than anything else currently available at Universal Orlando, by evoking the driving vacations many Americans grew up enjoying with their families. The developers plan on giving it a hip, vintage look, accented with bold design, dramatic, clean lines, bright, period colors and touches of neon.

Universal’s Cabana Bay Beach Resort will offer two distinct experiences within the development’s multiple buildings: 900 family suites, capable of sleeping six, that include kitchen areas; and 900 standard guest rooms offering both moderate- and value-priced accommodations.

When the developers first announced the project, in July 2012, they stated that the new hotel will allow families to choose between value pricing or the higher level of benefits and service that come with staying at other on-site Universal Orlando hotels such as Loews Portofino Bay Hotel, the Hard Rock Hotel and Loews Royal Pacific Resort. It will provide early park admission, proximity to Universal’s Islands of Adventure and Universal Studios and resort-wide charging privileges, but it will not offer complimentary Universal Express Unlimited Access.

Universal’s Cabana Bay Beach Resort is the fourth hotel in partnership with Universal Parks & Resorts.

“Universal’s Cabana Bay Beach Resort project is a key component in our development plans,” said Paul Whetsell, president and CEO of Loews Hotels & Resorts.  “Our partnership with Universal is integral to our growth as we strategically expand Loews Hotels.”

Loews Hotels & Resorts’ new Orlando hotel development groundbreaking news followed the announcement of the company’s most recent hotel acquisition, the 356-room Madison Hotel in the heart of Washington, D.C.

Image Courtesy of Universal Orlando Resort