Brookfield Properties joined a wave of investors banking on an impending resurgence in apartment demand with an $845M purchase of multifamily properties in Nevada, North Carolina, Arizona and Ohio.

Brookfield Properties bought eight multifamily properties from Blackstone REIT, including Monaco Park in Las Vegas.

The company picked up the eight-property portfolio from Blackstone REIT earlier this month, CoStar News reported. Four of the properties are in Las Vegas, while the remaining four are in Phoenix; Columbus, Ohio; and Charlotte and Chapel Hill, North Carolina. 

As a subsidiary of Brookfield Asset Management, Brookfield Properties has holdings in the hospitality, industrial, office and retail sectors in addition to multifamily. Its newly acquired properties are:

• The 1,064-unit The Gardens in Columbus, Ohio.
• The 604-unit San Valiente in Phoenix.
• The 480-unit Xander 3900 in Las Vegas
• The 480-unit The Met in Las Vegas.
• The 452-unit Ashford Place in Charlotte, North Carolina.
• The 411-unit Crosstown at Chapel Hill in Chapel Hill, North Carolina.
• The 368-unit Vintage Pointe in Las Vegas.
• The 284-unit Monaco Park in Las Vegas.

Simpson Thacher & Bartlett and Maynard Nexsen served as legal counsel for the sales.

“This transaction represents a terrific outcome for our investors and demonstrates the strong institutional demand for well-located, quality assets,” Blackstone said in an emailed statement. “Rental housing remains one of our highest-conviction themes, and we continue to see strong fundamentals in attractive markets.”

The acquisitions come as multifamily executives bet big that an oversupply issue that hit apartment rents is on its way to resolution amid a national falloff in construction starts. ECI Group announced plans to grow its multifamily presence in Texas and the southeast U.S. following an influx of capital and the formation of a new debt platform. 

“Timing is everything in the real estate business, and we feel like, particularly on the acquisition side, it’s been one of the better fundamental times to buy in a while,” ECI Group Chief Acquisitions Officer Scott Levitt told Bisnow earlier this month.

AvalonBay Communities, Mid-America Apartment Communities and Thompson Thrift are also expected to grow their portfolios this year following calls for capital and other commitments of more than $1.7B.

“We … remain convinced that the spring leasing season will usher in the start of a recovery cycle with more favorable leasing conditions as demand and absorption trends across our markets remain strong and the volume of new supply deliveries steadily declines,” Mid-America Apartment Communities CEO Eric Bolton said on the company’s Q3 earnings call last month.

Like Mid-America Apartment Communities, UDR and Equity Residential invested in development pipelines and significant outlays for acquisitions in Q3. Equity spent nearly $1.3B on 14 acquisitions, according to its Q3 earnings call last month.

FRIDAY, NOV. 22, 3:55 P.M. CT:  This story has been updated to include an emailed statement from Blackstone.

Vornado Realty Trust said its 52% owned street retail joint venture has entered into an agreement to sell Japanese apparel brand Uniqlo the portion of its U.S. flagship store at 666 Fifth Ave. owned by the retail JV for $350 million. Separately, Uniqlo will acquire the remainder of the store from Brookfield Properties, the owner of an office condominium branded as 660 Fifth Ave.

The JV owns the fee condo interest in 17,295 square feet of Uniqlo’s 90,732-square-foot store. In conjunction with the closing of the sale of both portions of the store, which is expected to occur in the first quarter of 2025, the pass-through leases between the office condo owner and the retail JV will be terminated.

Eastdil Secured acted as an advisor to Vornado’s street retail JV. Vornado said the JV will continue to own 23,832 square feet of retail space at 666 Fifth Ave., consisting of the Abercrombie & Fitch and Tissot stores.

A joint venture between The Scion Group and Brookfield Asset Management has acquired Reflection, a 741-bed, 247-unit student housing community in Atlanta. The tower is a block away from Georgia State’s main campus.

Commercial Edge reports as part of the transaction, the duo assumed an $87.3 million loan issued by The Development Authority of Fulton County in 2020. Additionally, the owner took out a $65 million note originated by Forethought Life Insurance Co.

Atlantic Capital Properties and Gateway Ventures were the previous owners. The partners completed the 25-story tower in 2022 using funds from a $65 million construction note originated by Arvest Bank in October 2020.

The Scion Group touts that it is currently the largest owner and operator of off-campus student communities. The company’s U.S. portfolio consists of 84,000 beds across 127 communities in 33 markets, with assets under management totaling more than $9 billion.

South Korean investment manager Consus Asset Management has agreed to pay $145 million, or $145 per square foot, for the one-million-square-foot office tower at 777 S. Figueroa St. in Downtown Los Angeles, reported Bloomberg News. The company is buying the 52-story building at a deep discount from a Brookfield Properties affiliate that had assumed it through its 2013 acquisition of MPG Office Trust Inc. 

Trepp reported that the Brookfield affiliate had defaulted on the property’s $318.6 million of debt in 2022. Late last year, Eastdil Secured was hired to find a buyer. 

A $268.6-million piece of the debt is held by a group of banks led by Wells Fargo Bank and pays a coupon pegged to Libor plus 180 basis points, according to Trepp. The remaining debt is held by Mesa West Core Lending Fund. The entire debt package is scheduled to mature in October. 

The 52-story building, which opened in 1991, is now 52% leased, down from 73.1% a year ago. 

Stream Realty Partners’ Washington, D.C. team has secured the leasing assignment for four Brookfield Properties office buildings in the Central Business District.  

The buildings, totaling 814,469 square feet, will be overseen by Stream’s Kyle Luby, John Klinke, Tim McCarty, and Josh McDonald. The properties include 2001 M Street, 1220 19th Street, 2000 M Street, and 1140 Connecticut Avenue, offering office space with amenities such as rooftop terraces, fitness centers, and on-site conference facilities.  

“This assignment is a testament to Stream’s growth and continued success across the region. We feel like their team understands the value proposition of our amenitized office assets and unique tenant engagement program, Activated,” said Bobby Swennes, EVP and head of the Mid-Atlantic and Southeast Region, Brookfield Properties. 

Bisnow/Jon Banister

WashREIT’s office building at 1775 Eye St. NW

The picture of how much commodity office buildings in D.C. are selling for post-pandemic is getting clearer now that the prices Brookfield Asset Management paid for a chunk of WashREIT’s office portfolio have become public.

The D.C.-based REIT announced last week it closed on the 12-building, $766M portfolio sale, which was the culmination of a major restructuring effort, and documents were posted Tuesday in the D.C. Recorder of Deeds showing the individual sale prices for five D.C. office buildings. 

• The office building at 1775 Eye St. NW sold for $80.5M, deed records show. The building, constructed in 1964, is 87% occupied and totals 188K SF, according to WashREIT’s Q2 earnings supplement, meaning the sale came out to $428/SF. 
• The Army-Navy Building at 1627 Eye St. NW sold for $64M, deed records show. According to WashREIT’s Q2 earnings, the building was 97% leased and totals 108K SF, putting the deal at $593/SF. 
• The 1901 Pennsylvania Ave. NW office building sold for $40.3M, deed records show. It was 81% leased as of Q2 and totals 101K SF, putting the deal at $399/SF. 
• The 1140 Connecticut Ave. NW office building sold for $38.8M, deed records show. It was 82% leased as of Q2 and totals 184K SF, putting the sale at $211/SF. 
• The building at 1220 19th St. NW sold for $24.25M, deed records show. Built in 1976, it was 85% occupied as of Q2 and totaled 103K SF, putting the deal at $235/SF. 

The sixth D.C. building sale it announced it was selling to Brookfield, 2000 M St. NW, appears to be owned under a ground-lease structure and the latest sale wasn’t recorded Tuesday. The six other office buildings in the 12-property portfolio were in Northern Virginia, with three in Arlington, two in Alexandria and one in Tysons. 

WashREIT still owns one office building, 600 Watergate, which it said in June it plans to sell separately “when practicable.” WashREIT CEO Paul McDermott said on the firm’s Q2 earnings call last week it expects to hold onto the property at least for the rest of this year, calling it the “best office asset that we had owned,” according to a Motley Fool transcript. 

The REIT also said in June it had signed a letter of intent to sell its eight remaining retail assets, as it shifts to becoming a multifamily-only REIT. WashREIT also said it plans to expand its multifamily portfolio to new Southeast markets including Atlanta, Charlotte and Raleigh-Durham, and it plans to focus on middle-income renters. 

On the earnings call, McDermott said WashREIT sees strong growth drivers in the multifamily sector, a stark contrast to what it was seeing in the office market. 

“In office, we were facing challenging and increasing headwinds, including increase in capital requirements, and we expect those headwinds to continue,” McDermott said. “This contrast in growth prospects boosts our confidence that will create more values for our investors going forward through our portfolio recalibration.”

The company said in June that it aims to transfer the majority of its office personnel to Brookfield, and on the earnings call McDermott said he is grateful to the departing staff and will miss them. 

“I’ll be blunt, it’s been an emotional week here, saying goodbye to colleagues that we’ve had the privilege to work with as we work up to this transformation,” McDermott said, according to the transcript. “But what that has left us with is an outstanding multifamily team to build a platform off of.” 

The owner of the one-time crown jewel of North Fulton County retail has given up on the property.

The Von Maur anchor at North Point Mall in the affluent North Fulton County community in Atlanta.

Brookfield Property Partners has transferred the deed to the 1.3M SF North Point Mall to its lender, New York Life Insurance Co. New York Life has tapped Trademark Property Co. to manage and operate the mall and take over plans to redevelop it.

“This is a new beginning for this property,” Trademark Property Co. Chief Investment Officer Tommy Miller told Bisnow. “North Point is a last-generation enclosed mall. But great fundamental real estate.”

Brookfield acquired the mall when it purchased mall owner General Growth Properties in 2018. A spokesperson for New York Life confirmed that it had taken back the title to the mall, but declined to comment further.

Brookfield handed back the property as part of a deed-in-lieu-of-foreclosure transaction, according to Databank, an Atlanta firm that tracks real estate transactions. The loan was valued at $202M at the time of transfer, Databank’s records show.

Brookfield didn’t immediately respond to requests for comment. It is unclear what the property’s last appraised value was.

Brookfield, the second-largest owner of malls in the U.S., is evaluating its vast mall holdings and has previously stated it will hand back certain underperforming properties to lenders and special servicers. In September, Brookfield turned over its $90M CMBS loan on a mall in Florence, Kentucky, a Cincinnati suburb, to its special servicer.

“As we look at each of these loans and their maturity relative to the value of the assets, to the extent that we think that the equity is impaired or underwater, we will certainly look at handing back some of those assets to the lenders,” Brookfield Property Partners CEO Brian Kingston said during a Nov. 6 earnings call. “I don’t want to handicap how many will end up being in that situation, but it’s a relatively small number of assets where we think the debt is in excess of the value of the asset, and the lenders may elect to take the asset back rather than restructure the loan.”

Brookfield had been approved to redevelop the mall, mainly focusing on the shuttered Sears anchor. The other three anchors at North Point Mall, Dillard’s, Macy’s and Von Maul, are still open.

Brookfield proposed razing the Sears and replacing it with 328 apartments and 30K SF of retail and restaurant space, as well as a 2.5-acre plaza that would connect to a planned pedestrian trail system along North Point Parkway.

“We enjoyed working with Brookfield Properties to assist in creating a dynamic mixed-use plan for a portion of the mall that brought value to our community, we wish them the best moving forward,” Alpharetta Economic Development Manager Matthew Thomas said in a statement. “We also look forward to working with Trademark to bring the plan to fruition. The North Point redevelopment plan previously approved is still a good plan supported by the City.”

Miller said Trademark plans to take a more “holistic view” on redeveloping the entire mall to address a “post-COVID retail paradigm shift.” He said that likely will mean less retail than Brookfield had planned.

“We’re going to look at all of the options for all the stakeholders and come up with a plan we think fits best for current ownership. But it definitely includes multifamily, residential, office and hopefully hotel, a lot of uses that really weren’t addressed in the Brookfield plan,” Miller said. “We still think it’s a viable retail location, but we want to bring a variety of uses to a property that we believe is very strategic in the market and can become a very vibrant mixed-use community that is amenitized by retail, not dominated by retail.”

North Point Mall, at 1000 North Point Circle on the east side of Georgia 400, was developed in 1993 by Homart Development Co., a subsidiary of Sears that was acquired by GGP in 1995. It rapidly became the retail juggernaut of Alpharetta, a city 25 miles north of Downtown Atlanta.

But North Point has suffered the same fate as many of its peers around the country, as shopping has increasingly moved away from enclosed malls and either onto the internet or toward walkable, mixed-use properties. Miller declined to comment on the reasoning of Brookfield’s decision to give the mall back to New York Life. 

Over the past decade, the momentum in Alpharetta has shifted west of Georgia 400 as a result of the success of Avalon, the 86-acre, high-end development from North American Properties.

“Really there’s a line of demarcation [with GA 400] of the haves and have-nots,” SK Commercial Realty Executive Vice President Tom Parker told Bisnow last year.

This is Trademark’s first foray into Metro Atlanta. The 28-year-old Fort Worth-based company develops, invests and operates shopping centers and mixed-use properties for institutional investors. It operates 10.7M SF of commercial space across the country.

Miller said Atlanta has many of the same dynamics as Dallas-Fort Worth, Charlotte, Austin and Raleigh-Durham, all of which have seen an uptick in population and companies moving from more expensive markets.

“Alpharetta, we feel like, is one of the premier suburban environments in the country and has few parallels,” he said. “People not only just live in Alpharetta, but they work in Alpharetta. And that’s very attractive to us.”