Bisnow Boston Real Estate News |

Boston Gaining On New York, San Francisco As Foreign Investors’ Market Of Choice

While the largest destinations for cross-border capital into the U.S. have lost momentum in recent years, Boston is gaining ground. Bisnow/Cameron Sperance Foreign investment in office, multifamily, industrial, retail and hotel assets have averaged about $2B annually in Boston’s urban core in recent years, but increased to $3.1B in 2018, according to Real Capital Analytics.

In downtown San Francisco, foreign investment fell from more than $3B in 2016 to $1.6B last year. Foreign investment in New York City real estate dropped by 50% between 2015 and 2018.

“On the basis and return side, we’re an even more attractive market than New York or San Francisco right now,” CBRE Executive Vice President Scott Dragos said. “Boston has historically been behind, so that’s a breath of fresh air.”

Chinese capital in U.S. real estate fell 72% between the first quarter of 2018 and Q1 2019, according to RCA, and the pullback from the world’s second-biggest economy is largely responsible for the drop in foreign investment in New York and San Francisco.

But Boston has typically attracted investors from Canada and Europe. There was only about $79M in Chinese investment in Boston between 2014 and 2018, or just 0.14% of all U.S. real estate investment activity involving Chinese buyers.

Foreign investment in U.S. net-lease assets (office, industrial and retail) totaled $1.9B for Q1, up 6.6% from last year, according to CBRE. Boston was third behind New York and San Francisco, respectively, for foreign investment.

Given the size of New York, it is unlikely Boston will ever outrank it in terms of cross-border capital, but Dragos has noticed an increase in foreign capital in the New England city over the last year, especially in deals structured where the offshore investments are paired with local investors.

“Most foreign investors view the U.S. as more stable than most countries,” Dragos said. “People view Boston specifically as an even more stable and a growth-driven economy.”

Canada and Europe have been leading sources for foreign investment in Boston, but for his last three projects put out to bid, Dragos said Asian investors accounted for about 20% of the bidding pool, about 15% came from European countries and 30% had ties to the Middle East. 

Israeli investment interest in Boston is on the rise, including the arrival of Gazit Horizons, a subsidiary of Israel-based Gazit Globe. The Israeli retail investment firm established a Boston office in 2018 and acquired 41 Winter St. in Downtown Crossing and closed in April on an $82M deal for Marketplace Center, a 62K SF retail center by Faneuil Hall. 

“One of the things that is fascinating is all of the neighborhoods that have emerged over the last few years,” Gazit Horizons Chief Investment Officer Alison Lies told Bisnow in 2018. “It’s really consistent with where we see urbanization going and mixed-use environments with access to employment, education and public transportation.”

On a recent $100M deal, four of the five finalists — narrowed down from 16 initial bids — involved foreign capital, Dragos said. He added that the Boston market’s seven- to 10-year growth trajectory is expected to continue to stoke more interest from foreign investors, especially in the industrial, multifamily and office sector.  Wikimedia Commons/Color6dser 500 Boylston St.

More than half of Boston’s Class-A office buildings have traded this economic cycle, and half of those purchases have had a “known” foreign buyer, according to Colliers Managing Director Aaron Jodka. Toronto-based Oxford Properties and Norway’s sovereign wealth fund’s real estate arm, Norges Real Estate Management, are the top foreign investors in Boston’s Class-A office market. 

Oxford’s 4.5M SF Boston portfolio includes 500 Boylston St. and 60 State St. The real estate arm of the Ontario Municipal Employees Retirement System has acquired eight Class-A office buildings in Boston since 2014 and is currently proposing a 24-story Leather District office building.

Norges has an ownership stake in several properties, including 100 Federal St., Atlantic Wharf and 33 Arch St.

Buyers’ interest is driven by factors like “eds and meds” — Boston’s numerous hospitals and universities that treat and educate people from around the world — as well as population growth, urban core changes like the growth of the Seaport, liquidity when needed and a high barrier to entry, which Jodka said foreign buyers are attracted to. 

“Boston has had a higher cap rate than New York over time, and higher than London, Tokyo and Chinese cities,” he said. “There’s certainly recognition across the globe that this is a good place to park your capital.”

Boston Business Journal |

Gazit Horizons Buys Retail Center Near Faneuil Hall for $82M

Gazit Horizons Inc., a subsidiary of Tel Aviv-based Gazit Globe Ltd., is again expanding its Boston portfolio with a purchase outside Faneuil Hall Marketplace.

 

Gazit, which invests in income-producing real estate across the U.S., has acquired Marketplace Center, a 62,000-square-foot retail property featuring shops including Ann Taylor Loft, Banana Republic and Gap, among others, for $81.8 million. The seller was Clarendon Group USA, and the deal closed Wednesday, according to a Gazit representative.

 

“Marketplace Center sits at a highly valued intersection of public space and mass transit, and benefits from tremendous pedestrian traffic and visibility,” said Jeff Mooallem, CEO of Gazit Horizons, in a statement. “We are very excited to be stewards of this prominent location along the Greenway and look forward to continuing to grow our portfolio in Boston.”

 

Gazit Horizons has offices in Miami, New York City and Boston, and is primarily focused on “properties with mixed-use potential” and seeks “unique opportunities to uncover value through diversity of use as well as redevelopment and proactive asset management,” according to a statement from the company.

 

Earlier this year, Gazit acquired 341 Newbury St. in Boston’s Back Bay for $51 million. Its local portfolio includes 467 Washington St., 41 Winter St. and 43 Winter St., three retail properties in Boston’s Downtown Crossing neighborhood.

The New York Post |

New Target to replace Toys ‘R’ Us in Brooklyn

Toy store-deprived parents in south Brooklyn are getting the business: a Target to replace both the former Toys ‘R’ Us and Babies ‘R’ Us spaces at the Caesar’s Bay Shopping Center.

 

Target will move into what is now a 90,000-square-foot, two-story space at the more than 300,000-square-foot outdoor center in Gravesend, joining Kohl’s, Best Buy and Modell’s. There are also food options such as Five Guys, and an Olive Garden will open March 25.

 

The owners and managers of Caesar’s are Gazit Horizons — the North American subsidiary of the Tel Aviv-based Gazit Globe — in partnership with Surrey Equities.

 

“It’s a very unique piece of property because you are talking about 14 acres,” said Jeff Mooallem, president and chief executive of Gazit Horizons.

 

“We made the bet even with Toys going bankrupt, and we were able to lease even faster than we expected,” he added. “Target will have a big store, and with free parking, it will be a suburban-feeling store.”

 

To make the second-floor selling space better, the owners cut a deal with the neighboring Kohl’s to take back around 12,000 square feet of its storage area.

 

Peter Ripka and Jeff Howard of Ripco Real Estate represented both sides of the long-term deal. “It’s a fantastic location in Brooklyn on the water and next to the Belt Parkway and is one of the best shopping centers in New York City,” said Ripka.

 

In the future, the owners expect to add another 6,000 square feet for smaller stores. No asking rents were available but they are considered “affordable” for the tenants.

 

In June 2018, Gazit Globe paid $48.8 million for a 41 percent stake in the ownership venture of the center, which included a 50 percent voting interest. The seller was an entity of Toys ‘R’ Us, which was restructuring as part of its bankruptcy proceedings.

Real Estate Weekly |

RIPCO hired to fill Toys R Us void in South Brooklyn shopping center

When Toys R Us went bankrupt earlier this year, it left a trail of large, vacant retail spaces in its wake, many of them in shopping centers full of otherwise successful tenants.

 

One such strip is South Brooklyn’s 300,000 s/f Ceasar’s Bay Shopping Center in Bensonhurst, which now has 77,000 s/f dual-level, big box retail to fill.

 

Gazit Horizons, Inc. — a subsidiary of the Israeli company Gazit Globe — and CBB Realty Associates, the two companies that own the center through a joint venture, have retained RIPCO Real Estate to lead the leasing effort at the former Toys R Us location.

 

“We invested in Ceasar’s Bay because it’s truly one of the most productive shopping centers in the U.S.,” Gazit Horizons CEO Jeff Mooallem said. “We expect strong demand for this Toys R Us and are looking forward to putting in a retailer that will cater to the day-to-day needs of the Brooklyn customer.”

 

Located on the neighborhood’s Bath Beach waterfront, Ceasar’s Bay featuring other Best Buy, Modell’s Sport Goods and Kohls as its remaining anchor tenants. It also has several smaller, food-based retailers such as Kohl’s, Starbucks and Five Guys. An Olive Garden is slated to open there next year.

 

Peter Ripka, co-founder of RIPCO, said he sees a lot of potential for the space because of its location near the Belt Parkway, free parking lot and the regional demographics. He also praised the “robust tenant roster.”

 

“The opportunity to market this type of space, located in one of the most-visible and highly-trafficked retail destinations in Brooklyn, affords us the ability to identify a tenant that will further position the complex as one of the premier shopping centers in New York City,” Ripka said. “We anticipate a lot of activity, because our selling points are simple: the center performs extremely well and retailers report high volumes of sales year in-and-out.”

 

Last week, RIPCO arranged an 80,000 s/f deal with Food Bazaar Supermarket to fill the vacant Toys R Us space at Bronx Terminal Market.

 

Developed by Related Companies in 2009, Bronx Terminal Market is home to a variety of restaurant and retail tenants, and Food Bazaar — which will be the largest supermarket in the borough when complete — will add a full-service supermarket to the complex when open in the spring of 2019.

 

The family owned and operated supermarket is prominent in the Tri-State region, and operates from 16 locations across Brooklyn, Queens and the Bronx, as well as nine others in New Jersey, Connecticut, Long Island, and Westchester.

 

“In today’s day and age of retail, having your project service day to day needs of the local community will bring traffic to your development and that is exactly what Food Bazaar will do for Bronx Terminal Market,” said Avi Kollenscher, senior vice president at Related Companies.

 

“Bronx Terminal Market has a diverse and powerful group of retailers, so with this space, we wanted to target someone who would be additive to the existing mix. We knew a well-known and respected brand like Food Bazaar would align well with our current tenants and get the community excited,” said Brian Schuster

 

RIPCO Real Estate, who along with Peter Ripka represented Related in the transaction.

Press Release |

Gazit Horizons Names Alison Lies Senior Vice President of Acquisitions

The U.S. subsidiary of Israel based Gazit-Globe expands Its acquisitions team and will establish an office in Boston

MIAMI, FLA. (January 16, 2018)– Gazit-Globe (NYSE; TSX; TASE: GZT), a leading global real estate company focused on the ownership, development and management of shopping centers and mixed-use properties in major urban markets, announced today that its wholly owned subsidiary, Gazit Horizons, Inc., has named Alison Lies as Senior Vice President, Acquisitions.  As part of her new role, Ms. Lies will relocate to Boston, MA and establish an office for the company there.

Ms. Lies, who has been involved in over $3 billion USD in transaction and financing activity in her career, is a 16-year veteran of the commercial real estate industry and has been working with Gazit Horizons in a consulting capacity since May 2017.    Prior to that she was Vice President of Acquisitions at Equity One, Inc. and has also held senior positions at New York City based Olshan Properties and other boutique development and investment firms. Originally from the Boston area, Ms. Lies received her undergraduate degree from Northwestern University.  In addition to Boston, she has lived in Chicago and Columbus, Ohio.

“Alison was here with us as a consultant when we started Gazit Horizons, and she quickly proved herself to be an invaluable part of our team,” said Jeff Mooallem, President & CEO of Gazit Horizons.     “Our desire to grow in the Boston market, coupled with Alison’s familiarity with that market both as a former resident and as an investor, made this a win-win and an easy decision.  Alison will play a critical role for us, not only in our operations in Boston but in our overall acquisition strategy.  I could not be happier to officially welcome her to our executive team.”

“I’m thrilled to continue as part of the Gazit Horizons team,” said Alison Lies. “We look forward to finding more large-scale investment opportunities in Boston’s urban submarkets, as well as our other target markets, and continuing to execute on our long-term investment strategy.”

ABOUT GAZIT HORIZONS, INC.

Gazit Horizons, Inc. was formed in May 2017 and invests in income producing real estate throughout the United States. With existing offices in Miami and New York City, the Company actively pursues assets in targeted markets, focusing on major metro areas and growing urban cores of “gateway” cities. Gazit Horizons invests in larger properties with mixed-use potential and looks for unique opportunities to uncover value through diversity of use as well as redevelopment and proactive asset management.

ABOUT GAZIT-GLOBE LTD.

Gazit-Globe is a global owner developer and operator of retail-based, mixed-use properties in North America, Brazil, Israel, northern, central and Eastern Europe, located in urban growth markets. Gazit-Globe is listed on the New York Stock Exchange (NYSE: GZT), the Toronto Stock Exchange (TSX: GZT) and the Tel Aviv Stock Exchange (TASE: GZT) and is included in the TA-35 index in Israel. As of September30, 2017 Gazit-

 Globe owns and operates 130 properties, with a gross leasable area of approximately 2.7 million square meters and a total value of approximately NIS 37.5 billion. In addition, the Company owns 32.6% of First Capital Realty Inc and 10.9% of Regency Centers Corporation.

FOR ADDITIONAL INFORMATION

A comprehensive copy of the Company’s financial report is available on Gazit-Globe website at www.gazitglobe.com

Investors Contact: IR@gazitgroup.com

Media Contact Israel: PR@gazitgroup.com

Media Contact United States: linda@alexandermktg.com

Gazit-Globe Headquarters, Tel-Aviv, Israel, Tel: +972 3 6948000

Press Release |

Gazit Horizons Acquires 467 Washington Street, Boston, MA from Frazer Capital, Represented by NKF Capital Markets Team

The U.S. subsidiary of Israel based Gazit-Globe expands its portfolio in Boston

BOSTON, MA / MIAMI, FL – Gazit-Globe (NYSE; TSX; TASE: GZT), a leading global real estate company focused on the ownership, development and management of shopping centers and mixed-use properties in major urban markets, announced today that its wholly owned subsidiary, Gazit Horizons, Inc., has acquired 467 Washington Street, in Boston, MA.

NKF Capital Markets’ U.S. head of capital markets Robert Griffin, executive managing director Geoffrey Millerd, associate director Paul Penman, and financial analyst Christopher Peterson oversaw the sale of the 10,500 square foot building on behalf of the Seller, Frazer Capital.

467 Washington Street is a two-story + lower level vacant asset in the Downtown Crossing district of Boston and is Gazit Horizons’ second acquisition in the submarket. Located near two MBTA subway stations and surrounded by some of the city’s newest retail, restaurant, hotel and residential developments, Gazit Horizons is actively engaged in discussions with several retailers to lease up the property.

“This asset is in a location ripe for continued retailer interest given pedestrian foot traffic and access to public transit,” said Paul Penman. “It represents another strategic acquisition for Gazit Horizons in the Downtown Crossing market, and another successful execution for Frazer Capital.”

“We are excited to continue to build our portfolio in Boston and be a part of the continued investment in Downtown Crossing” said Alison Lies, Gazit Horizons’ SVP of Acquisitions, who recently relocated to the Boston area to oversee the portfolio’s growth. “We look forward to finding more opportunities to invest in the city.”

ABOUT GAZIT HORIZONS, INC.
Gazit Horizons, Inc. was formed in May 2017 and invests in income producing real estate throughout the United States. With offices in Miami, New York City, and Boston, the Company actively pursues assets in targeted markets, focusing on major metro areas and growing urban cores of “gateway” cities. Gazit Horizons invests in larger properties with mixed-use potential and looks for unique opportunities to uncover value through diversity of use as well as redevelopment and proactive asset management.

ABOUT GAZIT-GLOBE LTD.
Gazit-Globe is a leading global real estate company focused on the ownership, management and development of retail and mixed use properties in North America, Brazil, Israel, northern, central and Eastern Europe, located in urban growth markets. Gazit-Globe is listed on the New York Stock Exchange (NYSE: GZT), the Toronto Stock Exchange (TSX: GZT) and the Tel Aviv Stock Exchange (TASE: GZT) and is included in the TA-35 index in Israel. As of March 31, 2018 Gazit-Globe owns and operates 104 properties, with a gross leasable area of approximately 2.5 million square meters and a total value of approximately NIS 38.1 billion. In addition, the Company owns 32.5% of First Capital Realty Inc and as of May 28, 2018 4.8% of Regency Centers Corporation.

ABOUT NKF CAPITAL MARKETS.
Newmark Knight Frank (NKF) is one of the world’s leading commercial real estate advisory firms. Together with London-based partner Knight Frank and independently-owned offices, NKF’s 15,000 professionals operate from more than 400 offices in established and emerging property markets on six continents. With roots dating back to 1929, NKF’s strong foundation makes it one of the most trusted names in commercial real estate. NKF’s full-service platform comprises BGC’s real estate services segment, offering commercial real estate tenants, landlords, investors and developers a wide range of services including leasing, corporate advisory services, consulting, project and development management, property and corporate facilities management services, valuation and advisory services, and capital markets services provided through its NKF Capital Markets brand.

Bisnow Boston |

Boston Gaining On New York, San Francisco As Foreign Investors’ Market Of Choice

While the largest destinations for cross-border capital into the U.S. have lost momentum in recent years, Boston is gaining
ground.

Foreign investment in office, multifamily, industrial, retail and hotel assets have averaged
about $2B annually in Boston’s urban core in recent years, but increased to $3.1B in 2018,
according to Real Capital Analytics.
In downtown San Francisco, foreign investment fell from more than $3B in 2016 to $1.6B
last year. Foreign investment in New York City real estate dropped by 50% between 2015
and 2018.

“On the basis and return side, we’re an even more attractive market than New York or San Francisco right now,” CBRE
Executive Vice President Scott Dragos said. “Boston has historically been behind, so that’s a breath of fresh air.”
Chinese capital in U.S. real estate fell 72% between the first quarter of 2018 and Q1 2019, according to RCA, and the
pullback from the world’s second-biggest economy is largely responsible for the drop in foreign investment in New York
and San Francisco.

But Boston has typically attracted investors from Canada and Europe. There was only about $79M in Chinese investment in
Boston between 2014 and 2018, or just 0.14% of all U.S. real estate investment activity involving Chinese buyers.
Foreign investment in U.S. net-lease assets (office, industrial and retail) totaled $1.9B for Q1, up 6.6% from last year,
according to CBRE. Boston was third behind New York and San Francisco, respectively, for foreign investment.
Given the size of New York, it is unlikely Boston will ever outrank it in terms of cross-border capital, but Dragos has noticed
an increase in foreign capital in the New England city over the last year, especially in deals structured where the offshore
investments are paired with local investors.

“Most foreign investors view the U.S. as more stable than most countries,” Dragos said. “People view Boston specifically as
an even more stable and a growth-driven economy.”

Canada and Europe have been leading sources for foreign investment in Boston, but for his last three projects put out to
bid, Dragos said Asian investors accounted for about 20% of the bidding pool, about 15% came from European countries
and 30% had ties to the Middle East.

Israeli investment interest in Boston is on the rise, including the arrival of Gazit Horizons, a subsidiary of Israel-based
Gazit Globe. The Israeli retail investment firm established a Boston office in 2018 and acquired 41 Winter St. in Downtown
Crossing and closed in April on an $82M deal for Marketplace Center, a 62K SF retail center by Faneuil Hall.
“One of the things that is fascinating is all of the neighborhoods that have emerged over the last few years,” Gazit Horizons
Chief Investment Officer Alison Lies told Bisnow in 2018. “It’s really consistent with where we see urbanization going and
mixed-use environments with access to employment, education and public transportation.” On a recent $100M deal, four of the five finalists — narrowed down from 16 initial bids — involved foreign capital, Dragos said. He added that the Boston market’s seven- to 10-year growth trajectory is expected to continue to stoke more interest from foreign investors, especially in the industrial, multifamily and office sector.
Boston Gaining On New York, San Francisco As Foreign Investors’ Market Of Choice More than half of Boston’s Class-A office buildings have traded this economic cycle, and half of those purchases have had a “known” foreign buyer, according to Colliers Managing Director Aaron Jodka. Toronto-based Oxford Properties and Norway’s sovereign wealth fund’s real estate arm, Norges Real Estate Management, are the top foreign investors in Boston’s Class-A office market.

Oxford’s 4.5M SF Boston portfolio includes 500 Boylston St. and 60 State St. The real estate arm of the Ontario Municipal
Employees Retirement System has acquired eight Class-A office buildings in Boston since 2014 and is currently proposing a
24-story Leather District office building.

Norges has an ownership stake in several properties, including 100 Federal St., Atlantic Wharf and 33 Arch St.
Buyers’ interest is driven by factors like “eds and meds” — Boston’s numerous hospitals and universities that treat and
educate people from around the world — as well as population growth, urban core changes like the growth of the Seaport,
liquidity when needed and a high barrier to entry, which Jodka said foreign buyers are attracted to.
“Boston has had a higher cap rate than New York over time, and higher than London, Tokyo and Chinese cities,” he said.
“There’s certainly recognition across the globe that this is a good place to park your capital.”

Recent Posts

Boston Gaining On New York, San Francisco As Foreign Investors’ Market Of Choice

Gazit Horizons Buys Retail Center Near Faneuil Hall for $82M

New Target to replace Toys ‘R’ Us in Brooklyn

RIPCO hired to fill Toys R Us void in South Brooklyn shopping center

Gazit Horizons Names Alison Lies Senior Vice President of Acquisitions

The U.S. subsidiary of Israel based Gazit-Globe expands Its acquisitions team and will establish an office in Boston

Gazit Horizons Acquires 467 Washington Street, Boston, MA from Frazer Capital, Represented by NKF Capital Markets Team

The U.S. subsidiary of Israel based Gazit-Globe expands its portfolio in Boston

Boston Gaining On New York, San Francisco As Foreign Investors’ Market Of Choice