Reckson Buy Gives Firm Dominant Role In Westchester

Melville, NY—Reckson Associates Realty Corp. became the dominant owner of Class A office space in Westchester County, N.Y., with its $183 million purchase in early April of the 980,000-square-foot Cappelli family portfolio. The transaction included options to build as much as 870,000 square feet of office space on land at Courthouse Square, located next to a 130,000-square-foot building annexed in the portfolio acquisition.



Houston—In early April, Camden Property Trust and Oasis Residential Inc. shareholders approved the merger of the two firms. Camden is now the third-largest apartment REIT, with a $2.6 billion market capitalization and 51,377 multi-family units. The merger became effective April 8. At that time, Oasis shareholders received 0.759 shares of Camden common stock for each share of Oasis common stock owned. Each share of Oasis preferred stock was converted into one preferred share of beneficial interest of Camden.



Miami—In three separate transactions in April, Lennar Corp. added 37 multi-family communities in Southern California and Phoenix to its portfolio for $340 million. The company will buy the ColRich Properties, which includes 12 communities primarily located in San Diego, for $100 million; the Polygon Communities properties for $90 million, most of which will be paid in the form of Lennar common stock; and the Communities Southwest properties for $150 million, 80 percent of which will be paid in the form of Lennar common stock.



Bethesda, MD—Host Marriott Corp. will purchase controlling interests in 13 hotels owned by The Blackstone Group and Blackstone Real Estate Partners. The transaction, valued at $1.8 billion, will close Jan. 1, 1999. The properties comprise Blackstone's entire U.S. portfolio of hotels. Simultaneous with that deal, Host Marriott will form a REIT and spin off its senior living communities into a separate company, Senior Living Communities Co. Blackstone will gain a 19 percent ownership stake in Host Marriott, which already owned 68 hotels. Senior Living Communities will own $700 million in properties, including 31 communities totaling 7,218 units in 12 states.



New York City—Mark Centers Trust and RD Capital Inc. will merge to form Acadia Realty Trust. RD Capital will invest $100 million in the company in exchange for common stock and will take over management of the REIT. The agreement requires the approval of Mark Centers shareholders. If the merger is approved, Acadia Realty's portfolio will consist of 51 retail properties and five multi-family properties in 16 states in the East, Midwest and Southeast.



Chicago—EVEREN Securities Inc. served as underwriter on the $153.7 million offering completed in April for a unit investment trust, which is composed of stocks from several REITs. The trust aims to achieve high current income and capital appreciation via a diversified REIT portfolio. It is sponsored by Nike Securities and has a two-year maturity. The REIT stocks that make up the trust include Burnham Pacific Properties Inc., CenterPoint Properties Trust, Duke Realty Investments, Equity Office Properties Trust, Equity Residential Properties Trust, Health Care REIT Inc., Kilroy Realty Corp., Realty Income Corp., Simon DeBartolo Group Inc. and Spieker Properties Inc.



Chicago—MEPC P.L.C. sold off its American business as part of a move to focus on business in the United Kingdom. General Growth Properties Inc. agreed to purchase MEPC American Properties' 7.7 million-square-foot portfolio of retail properties for $871 million. The acquisition includes all MEPC shares, composed of shares in three holding companies. A consortium comprising Equity Office Properties Trust, Weeks Corp. and Duke Realty Investments will buy MEPC American's 5.3 million-square-foot portfolio of office and industrial properties for $369 million.



Nashville, TN—Corrections Corporation of America and CCA Prison Realty Trust have agreed to merge. CCA Prison will boast a market capitalization of approximately $4 billion if the transaction is completed in January 1999 as expected. Under the terms of the agreement, holders of Corrections Corp. common stock will receive 0.875 shares of CCA Prison common stock for each common share of Corrections Corp. owned. The merger must still be approved by the shareholders of both companies. Corrections Corp. created CCA Prison last year, spinning it off as a REIT; since then, it has managed CCA Prison's properties. In early May, Corrections Corp. shareholders filed a class action suit opposing the merger. They claim the transaction is unfair to the shareholders because they will no longer own shares in a growth company.



Santa Fe, NM—In late April, Security Capital Group Inc. completed the capitalization of its new real estate company, Security Capital Global Realty. Security Capital Group sank $518.3 million into the firm and more than 40 international and U.S. institutional investors committed as much as $100 million each, for a total of $1.5 billion in private equity investment commitments. Security Capital Global Realty was formed to own strategic positions in non-U.S. real estate operating companies that have the capability of becoming recognized as a regional or niche leading within five years.



Atlanta—Hybrid REIT Chastain Capital Corp. went public April 23. The company priced at $15 per share, offering 7.4 million shares. Chastain Capital saw net proceeds of $103 million from its IPO. The REIT was formed by ERE Yarmouth Inc. to invest in commercial and multi-family mortgages as well as other real estate-related assets. ERE Yarmouth will advise Chastain Capital and manage its day-to-day operations. Friedman Billings Ramsey & Co. served as lead manager in the offering; EVEREN Securities Inc. served as co-manager.



Chicago—Equity Office Properties Trust purchased 13 buildings totaling 2.7 million square feet from affiliates of Miller Global Properties L.L.C. and Anshutz Properties Co. for approximately $394 million. The transaction included nine office buildings in the greater Denver area and four office buildings in Albuquerque, N.M. The acquisition also included two development sites in Denver that can accommodate up to 1 million square feet of space. The purchase price includes the assumption of $48 million in debt, $280 million in cash and $66 million in financing payable in Equity Office common shares.



Irving, TX—Felcor Suite Hotels Inc. closed on its acquisition of a portfolio of all-suite hotels, totaling 1,898 suites, in May from Starwood Hotels & Resorts for approximately $245 million. Starwood will use the more than $70 million in proceeds to lower its debt.



Dallas—AMRESCO Inc. took its mortgage REIT, AMRESCO Capital Trust, public on May 6 at $15 per share. Although the company raised $135 million with its IPO, that figure was $165 million less than the REIT expected to raise according to its original prospectus. AMRESCO Capital originally intended to offer 20 million shares to the public, but instead offered just nine million shares. The company intends to make up the difference through the performance if its existing assets. Prudential Securities lead managed the offering; Credit Suisse First Boston, ABN AMRO, J.C. Bradford, NationsBanc Montgomery Securities and Piper Jaffray co-managed the IPO.



Boston—Boston Properties Inc. purchased the six-building, 3.75 million-square-foot Embarcadero Center complex in San Francisco from Prudential Insurance Company of America and David Rockefeller & Associates for $1.2 billion. As part of the purchase price, Rockefeller will take $305 million in convertible preferred operating partnership units in the REIT's operating company; Prudential may acquire $100 million of Boston Properties' stock.



San Diego—In early May, Developers Diversified Realty Corp. and OliverMcMillan L.L.C. formed DDR OliverMcMillan, a private REIT that will acquire, develop and manage urban entertainment and retail projects. The company will initially focus on completing eight OliverMcMillan development projects, totaling $500 million, located in California, Nevada and Washington. Developers Diversified will provide capital for those projects as well as others that fit DDR OliverMcMillan's property focus.



New York City—Excel Realty Trust will merge with New Plan Realty Trust to create New Plan Excel Realty Trust. The transaction, which is scheduled to close in August, would create a community/neighborhood shopping center REIT with a market capitalization of $3.5 billion and nearly 35 million square feet of mostly retail space in 32 states. Through a $1.4 billion swap of New York Stock Exchange-traded stock, Excel will declare a 20 percent dividend and issue a share of Excel for each outstanding New Plan share. Current New Plan shareholders will hold nearly two-thirds of the new firm's common equity.



Rockville, MD—CRIIMI MAE Inc. sold $468 million in investment-grade securities in May created through the resecuritization of subordinated CMBS pools totaling approximately $1.8 billion. The deal resulted in a gain of approximately $55 million for book purposes, $30 million of which was recognized immediately.



Chicago—In May, General Growth Properties Inc. agreed to buy six regional shopping centers from U.S. Prime Property, a private REIT managed by ERE Yarmouth Inc., for $625 million. The properties total 5.9 million square feet.



Columbus, OH—Glimcher Realty Trust purchased five malls, totaling 5 million square feet, in May for an estimated $375 million. The properties are located in major metropolitan markets in Alabama, California, Minnesota, North Carolina and Oregon.



Philadelphia—Corporate Office Properties Trust will merge with Constellation Real Estate Group Inc. As a result of the transaction, Corporate Office Properties will grow its portfolio by 59 percent, reaching 4.3 million square feet of space owned in Pennsylvania, New Jersey, Maryland and suburban Washington, D.C. Constellation will receive $200 million in consideration. Corporate Office Properties will also acquire Constellation's 75 percent ownership of Constellation Realty Management L.L.C., which property and asset manages a portfolio of 15.7 million square feet of space.



Phoenix—Starwood Hotels & Resorts Worldwide formed a partnership in mid-May with The Related Cos. to develop at least 10 luxury hotels for approximately $1 billion. Starwood will operate the properties in exchange for a 25 percent stake; Related, along with another unnamed investor, will own 75 percent of the hotels as well as a greater share of the risk. The first hotel to break ground will be the 531-room Westin, located in the $350 million Meydenbauer Place project in Bellevue, Wash.



Rochester, NY—Hudson Hotels Trust and Hudson Hotels Corp. formed a strategic alliance in late May. The corporation will lease and manage the trust's hotels and will have first right of refusal to lease and manage any hotels the trust purchases in the future.



Guild Hall, OH—In late May, the shareholders of Boykin Lodging Co. and Red Lion Inns L.P. approved the merger of the two firms. Boykin will acquire Red Lion and its 10 Doubletree hotels for $115.4 million, paying $35.3 million in cash and exchanging 3.1 million new common shares for all of the outstanding partnership interests of Red Lion and its subsidiary partnership.



Houston—In early June, Camden Property Trust and Schroder Real Estate Associates formed a $248 million joint venture, Sierra-Nevada Multi-Family Investment L.L.C. The new company will own 19 Nevada apartment communities, totaling 5,119 units, that were part of the assets Camden gained with its acquisition of Oasis Residential. Sierra-Nevada will assume $9.9 million in debt and Camden will arrange an additional $190 million in financing. Schroder will own 80 percent of the new company; Camden will use the proceeds from the transaction to pay down its short-term debt.



Moreland Hills, OH—Developers Diversified Realty Corp. and Sansone Group formed a joint venture in early June. As part of the deal, Developers Diversified will get 15 shopping centers, totaling 1.6 million square feet, and a 50 percent interest in Sansone's operating company. The two companies will also form a joint venture to seek out new development opportunities in the central Midwest as well as complete all of Sansone's current development projects.



Washington, DC—CarrAmerica Realty Corp. entered downtown San Francisco and the Silicon Valley in early June with the purchase of three properties. They include the three-building 272,000-square-foot Golden Gateway Commons office and retail complex in San Francisco, the 271,000-square-foot Silicon Valley Techmart Commerce Center office building in Sunnyvale and the three-building, 178,000-square-foot Leonard Court office and research and development complex in Santa Clara.



Phoenix—Patriot American Hospitality Inc. and Wyndham International Inc. formed a new hotel brand in early June, Grand Bay Hotels and Resorts. The new firm combines 7 existing properties in the Carefree Resorts and Grand Bay Hotels portfolios and the Golden Door Spa. Grand Bay also has four hotels under development: one in Toronto, one in Philadelphia, one in Key Biscayne, Fla., and one in Chicago.



Nashville, TN—Healthcare Realty Trust has agreed to acquire Capstone Capital Corp. for $900 million. The purchase price includes the assumption of $268 million in debt and the issuance of $75 million in preferred stock. Capstone shareholders will receive 0.8518 shares of Healthcare Realty common stock for each share of Capstone common stock; preferred shareholders will swap on a one-for-one basis. The purchase will add 159 health-care-related properties to Healthcare Realty's portfolio of 91 properties. The combine company will have a market capitalization of $1.1 billion.



Boston—Private REIT Beacon Capital Partners Inc. filed a registration form in mid-June to go public. The company registered approximately 20.4 million shares, excluding 579,089 shares of common stock and shares underlying 225,201 operating partnership units sold by the REIT to chairman & CEO Alan Leventhal and president, COO & director Lionel Fortin.



Richmond, VA—United Dominion Realty Trust Inc. formed an opportunity fund in late June. United Dominion Residential Ventures will seek investments that provide a good return and an avenue for enhancing the REIT's apartment operating business. The fund's first purchase was of $2.1 million in convertible preferred stock in National Water & Power Inc., which specializes in utility billing and metering services.



New York City—In late June, Cornerstone Properties Inc. acquired instant development capabilities with its $1.8 billion purchase of William Wilson & Associates. The REIT gets the California developer's operating company, more than 9.1 million square feet of office space on the West Coast and the ability to expand internally in its new market. Until its acquisition of William Wilson, Cornerstone's portfolio of office product was located solely on the East Coast. With the transaction, Cornerstone now has a market capitalization of $4.5 billion. The purchase prices includes $635 million in shares and operating units, an unspecified amount of cash and the assumption or repayment of approximately $780 million of debt.



Chicago—Equity Office Properties Trust acquired the 76-story, 1.55 million-square-foot Columbia Seafirst Center office and retail building, located in downtown Seattle, in late June from Seafirst Bank, a subsidiary of BankAmerica Corp., for $404 million, or about $275 per square foot.

Santa Monica, CA—Ontario Teachers' Pension Plan invested $150 million in The Macerich Co. in late June. The investment was made through a direct placement of just under 5.5 million shares of convertible preferred stock. The transaction helped pay for Macerich's latest acquisition, the 1.1 million-square-foot South Plans Mall in Lubbock, Texas. The REIT bought the property in mid-June for $115.7 million from an unnamed seller.



New York City—In late June, Cornerstone Properties Inc. agreed to purchase the 29-story, 912,000-square-foot Piper Jaffray Center in Minneapolis from Ryan Cos. for $160 million. Ryan is development the facility, which is scheduled for completion in April 2000.



Santa Fe, NM—Effective July 1, Security Capital Industrial Trust changed its name to ProLogis Trust, trading on the New York Stock Exchange under the symbol "PLD." The company changed its name to reflect its customer focus.



Fort Worth, TX—Crescent Real Estate Equities Co. bought four properties for $548 million in two separate transctions in early July. The company purchased the 561,000-square-foot BP Plaza in Houston from an unnamed seller. It also added the six-building Woodfield Corporate Center in Shaumburg, Ill.; the 732,000-square-foot Two Town Center in Orange County, Calif.; and the 6701 Tower in West Los Angeles to its portfolio. Two of the properties were owned by entities that included The Prudential Insurance Company of America; one was purchased directly from the insurer. Prudential acquired $225 million in convertible preferred stock from Crescent.



Santa Monica, CA—In early July The Macerich Co. acquired the 750,000-square-foot Westside Pavilion, located in Los Angeles' Westside market, from pension funds advised by a Heitman Financial affiliate for $170.5 million.