X

Thank you for sharing!

Your article was successfully shared with the contacts you provided.

When a portfolio of properties goes on the block carrying a $500-million price tag, it makes news. Such is the case with Starwood Urban’s 1.2-million-sf, mixed-use bundle of commercial, residential and retail properties, which, as GlobeSt.com reported last month, was about to go up for sale. Robert Wennett, president of Washington, DC-based Urban Investments Advisors, is, as the name implies, Starwood Urban’s advisor in the sale, and, not surprisingly, he’s bullish that the properties–sold either as a bundle or parsed out by region–will move fast, well before the presidential elections and expected rise in interest rates changes anyone’s mind. The offerings include properties in six assets in the greater New York City region, including the 67,000-sf 430 W. 14th St. and five other properties in South Norwalk, CT, accounting for 159,300 sf. In Metropolitan Washington, the list features the 93,000-sf office structure at 5225 Wisconsin Ave., and 14 other structures in the district area. In Florida, the venture is marketing 120,000 sf in two Miami Beach buildings and 80,000 sf along Miracle Mile in Coral Gables. The crown jewel of the Miami Beach/Coral Gables collection is an upscale mixed-use development that just reached completion last quarter in the center of activity in Coral Gables. The 305,000-sf property consists of 184 luxury residential units, 25,000 sf of class A boutique office space and 40,000 sf of retail. Wennett sat down with GlobeSt.com immediately after the news broke to talk about his vision for the sale and the other opportunities that UIA is scoping out. (For the record, the assets are being brokered by Eastdil Realty and CB Richard Ellis.)

GlobeSt.com: What exactly is the connection between UIA and Starwood?

Wennett: We’ve been working with Starwood since 1998. Our venture, Urban Investments Advisors, is the exclusive advisor to Starwood Urban LLC, which is a venture between Starwood Opportunity Fund V. That, in turn, is part of Starwood Capital and Wennett Urban Retail LLC, which is a partnership that I control.

GlobeSt.com: What other areas is UIA involved in?

Wennett: We do asset management, leasing, finance, construction management, acquisitions and accounting.

GlobeSt.com: How does your portfolio shape up beyond the Starwood thing?

Wennett: It’s mostly one-off purchases with institutional investors, high-worth individuals or by ourselves. Our most recent acquisition was through an entity that’s an affiliate of UIA called G-town LLC 1. We purchased 1611 Wisconsin Ave. in the Georgetown section of Washington, DC. We’ve leased it to Commerce Bank, their first branch in the District.

GlobeSt.com: So give us a break down of the new deal’s parameters.

Wennett: The minimum asking price is $100 million on the mixed-use asset and $400 million on the portfolio. We expect to close in the third quarter.

GlobeSt.com: Who are your target buyers?

Wennett: These properties are fully leased and stabilized. It’s a portfolio of some of the finest urban retail and mixed-use properties in some of the best markets–Boston, New York, Washington and Miami. So we expect the buyers to be other institutions, foreign investors and high net-worth individuals who want diversity of cash flow in extremely stable markets.

GlobeSt.com: What’s their upside?

Wennett: We believe there’s a lot of upside both in terms of contract rents and future percentage rents–because a majority of the income comes from the retail portion of the portfolio–and the majority of our leases have contractual step-up rents on an annual basis. So there’ll be a continual upside there.

GlobeSt.com: Can you quantify it?

Wennett: For example, in properties we’ve bought since 1998, through our renovations and our re-tenanting program, rents have doubled and in some cases more than doubled. We have some properties now where rents are approaching 150 to 200 per sf. Many of our retail tenants were already reaching their break points, so the growth will come as more tenants reach those break points and they pay their percentage rent. We also have some undeveloped parcels in the portfolio, which provides the opportunity for additional upside.

GlobeSt.com: Where are you now in the process?

Wennett: We’re in the market now, and we’ll be calling for offers at the end of June, early July. We expect to select a purchaser by mid-July and have due-diligence completed by September.

GlobeSt.com: Do you have any fear that the properties won’t move before the election and you-know-what starts to happen with interest rates?

Wennett: There’s no pressure to sell whatsoever, and unless we achieve the price we’re asking, we’ll continue to hold. But these assets will achieve the price. Given these locations, we don’t think these properties are particularly influenced by interest rates. These are not commodity properties.

Want to continue reading?
Become a Free ALM Digital Reader.

Once you are an ALM digital member, you’ll receive:

  • Unlimited access to GlobeSt and other free ALM publications
  • Access to 15 years of GlobeSt archives
  • Your choice of GlobeSt digital newsletters and over 70 others from popular sister publications
  • 3 free articles* across the ALM subscription network every 30 days
  • Exclusive discounts on ALM events and publications

*May exclude premium content
Already have an account?

Dig Deeper

GlobeSt

Join GlobeSt

Don't miss crucial news and insights you need to make informed commercial real estate decisions. Join GlobeSt.com now!

  • Free unlimited access to GlobeSt.com's trusted and independent team of experts who provide commercial real estate owners, investors, developers, brokers and finance professionals with comprehensive coverage, analysis and best practices necessary to innovate and build business.
  • Exclusive discounts on ALM and GlobeSt events.
  • Access to other award-winning ALM websites including ThinkAdvisor.com and Law.com.

Already have an account? Sign In Now
Join GlobeSt

Copyright © 2020 ALM Media Properties, LLC. All Rights Reserved.