The Four Food Groups – July 2007

RETAIL
Shopping for pensions
Private shopping center REIT Inland Western Retail Real Estate Trust is teaming up with an unnamed state pension advised by Morgan Stanley Real Estate to acquire and manage retail properties in a $1-billion (€743 million) joint venture.

Initially, the joint venture will start with $500 million worth of existing properties from the REIT’s portfolio; an additional $500 million will be invested in neighborhood, community and power shopping centers, as well as repositioning opportunities. The pension will contribute 80 percent of the capital for the joint venture, with Inland Western supplying the balance.

Properties seeded in the venture could reportedly include the Lincoln Park Shopping Center in Dallas, currently owned by Inland Western. The joint venture will reportedly focus on properties in California, Texas, the Southwest and Mid-Atlantic.

Inland Western has 306 properties in 38 states and one Canadian province, for a total of more than 45 million square feet of retail space. In 2005, the vehicle acquired 50 Mervyn’s properties as the retail chain underwent a restructuring following its acquisition by a consortium of private equity and real estate investors.

The private REIT is sponsored by publicly listed Inland Real Estate, which is based in Oak Brook, Illinois and is headed by Daniel Goodwin. Through its various operating subsidiaries, the company owns more than 100 million square feet of retail properties, making it the fifth-largest shopping center owner in the US.

RESIDENTIAL
Dead Sea living
King Abdullah Bin Hussein of Jordan recently unveiled a model for the Samarah Dead Sea Golf & Beach Resort, a JD354-million ($500 million; €371 million), mixed-use project that will be located along the coast of the Dead Sea. The development will be overseen by the Dead Sea Touristic and Real Estate Investment Company, a consortium that includes Emaar Properties and a number of regional investors. The unveiling was held amid the World Economic Forum Middle East, which took place in Jordan. The project, which is being developed by a subsidiary of Emaar Properties, will include several hundred luxury residences, as well as commercial space, a golf course, clubhouse and entertainment outlets. “The project will lead to faster economic growth by generating employment opportunities for Jordanians, creating several ancillary industries and lending support to the tourism sector,” said Emaar chairman Mohamed Ali Alabbar.

OFFICE
Patriot games
A Dallas office tower is getting a facelift, a new name and a new museum in its lobby. Younan Properties, the Texas city’s largest landlord, has acquired One Dallas Center in a $23-million (€17.7 million) deal—and the firm has a bevy of star-spangled plans for the downtown property. The 613,000-square-foot building will be completely renovated to the tune of $20 million and rechristened the “Patriot Tower.” The new owner is also installing a new museum in the lobby that will honor US soldiers. According to a statement released by Younan: “The transformed property will feature a 10,000-square-foot lobby war museum with exhibits paying tribute to all the men and women who have sacrificed their lives serving their country, from the American Revolution to the present-day Iraq War.” The building, which is only 40 percent occupied, was sold by Colonnade Properties.

INDUSTRIAL
The Inland Empire strikes back
As California’s Inland Empire becomes an increasingly attractive region for investors, warehouse REIT First Industrial Realty is looking to take advantage. The publicly traded company has teamed up with the California State Teachers’ Retirement System to invest in the area. The joint venture is acquiring 205 acres of land in Perris, California with plans to develop 3.3 million square feet of logistics space along the I-215 artery. The project will be branded as the South Perris Distribution Center and be located near air, sea and road transportation. “Southern California is a critical part of the nation’s supply chain, with the Ports of Los Angeles and Long Beach handling 40 percent of the nation’s import traffic for distribution to the West Coast’s population centers and inland through major distribution hubs,” Johannson Yap, First Industrial’s chief investment officer, said in a statement.