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JUNE 2019

QUANTUM MONTHLY The Official Newsletter of QuantumListing

CRE INDUSTRY NEWS Thank you for checking out the June edition of the Quantum Monthly. Each month our team looks at some of the larger deals that have taken place, as well as a couple of the trending topics in the commercial real estate media. This month, the team had a look at a $1.1 billion multifamily portfolio purchase by Kushner Companies, as well as a $4.7 billion REIT merger. A large multifamily purchase in the Atlanta market also interested them. This month we are looking at the money flowing in to real estate technology and the possible impact that tech will have on the office of the future. IA Capital’s Series B investment in CompStak intrigued them. Unsurprisingly, SoftBank’s new $100 billion Vision Fund caught their eye. Our team also enjoyed CoreNet Global’s recently released Future Forward 2025 study, which emphasized employee experience as a central issue in corporate real estate. The team also focused on green buildings and sustainability. Both articles they highlighted encourage the CRE community to think strategically about how they can devote their capital and human resources in improving their assets’ impact on the environment.

We conclude the Quantum Monthly spotlighting one of our features. This month we are highlighting our Groups feature.

Hope you enjoy! David Perlmutter, QuantumListing Founder and CEO

IN THIS ISSUE Big Deals - 2 Technology - 3

Environment - 4 QuantumListing - 5

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BIG DEALS LAST MONTH Kushner closes $1.1B multifamily buy with financing from Berkadia

Griffin Essential Asset REITs complete $4.7B Merger

With the help from Berkadia Commercial Mortgage, an arm of Warren Buffett’s Berkshire Hathaway, Kushner Companies closed on its purchase of a $1.1 billion portfolio of Mid-Atlantic apartment buildings. The portfolio consists of 6,000 rental apartments in Maryland and Virginia and was previously owned by private-equity firm Lone Star Funds. This transaction marks the firm’s largest acquisition since 2007 when Kushner purchased 666 Fifth Avenue for a record $1.8 billion. In addition to this transaction, Kushner Companies is working on developing a three-phase, $550 million apartment project in a Miami Opportunity Zone with 1,100 units. The company also bought multiple properties in an Opportunity Zone in New Jersey.

Griffin Capital Essential Asset REIT II (GCEAR II) and Griffin Capital Essential Asset REIT (GCEAR) have finally completed their merger. The merger creates a $4.7 billion Real Estate Investment Trust, operating under GCEAR II. Approximately 90% of the shares voted were in favor of the large merger. GCEAR’s portfolio consisted of 76 office and industrial properties totaling 20.1 million rentable square feet in 20 states while GCEAR II’s portfolio consisted of 27 properties encompassing approximately 7.3 million square feet in 17 states. The combined company brings together two complementary portfolios, increasing the size, scale, and diversification of the new entity.

Hudson Capital Buys Atlanta Area Multifamily for Nearly $99M New York City-based Hudson Capital Properties have decided to increase their reach by adding a 498-unit apartment community in Atlanta. Robert B. Cohen II, chief investment officer of HCP states, “ Fewer than 700 rental units have been delivered in the Woodstock area in the past five years. This constraint of rental housing has kept occupancy levels high and rent growth strong.” With this purchase, Hudson Capital owns and operates a portfolio of multifamily properties in the Southeastern United States that currently comprises of more than 6,500 units.

What is driving the big deals in your market?

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TECHNOLOGY CompStak raises $12M in round backed by IA Capital

What Will Corporate Real Estate Look Like in 2025?

Commercial real estate analytics company CompStak has now raised another $12 million, bringing their investment total to $28 million. CompStak, which launched in 2011, recently participated in a Series B round led by the investment firm IA Capital. Co-founder and CEO of CompStak, Michael Mandel, believes this new funding will help expand the sales and client services team, as well as strengthen their presence in all U.S. markets. Released just this year, CompStak’s new analytics platform helps users compare leasing and property information in real time. Many other investors besides IA Capital have also showed interest in real estate analytics and data including Moody’s Analytics and Brookfield Asset Management. Moody’s Analytics, a minority investor in CompStak, is creating a portal called the Reis Network that will offer commercial real estate data services by Compstak and other similar firms. Leasing and asset management software VTS, which has an analytics platform, also recently announced a $90 million funding round.

Some speculate whether the term “corporate real estate” will be obsolete by 2025. Many predict that the term will evolve into “experience managers,” professionals who oversee the overall employee experience including technology, amenities, wellness, and sustainability. This year, CoreNet Global released a global study on the future of corporate real estate. Results of the study, called FutureForward 2025, showed that corporate real estate is shifting away from the objective details about space and more towards the delivery of services including technology. As a result, employee experience is now becoming a focal point (rather than an afterthought) for corporate real estate. Due to an increasingly automated and mobile workforce, the choice of location and amount of space for offices is changing drastically. Within the office sector, people now work from anywhere and everywhere at any given time. Many only come into the office for meetings rather than a full day of work. On top of that, the surge of E-commerce demands highly efficient facilities with a large reliance on automated technology.

Startups, rejoice: SoftBank is planning another $100B Vision Fund Since 2017, Masayoshi Son’s SoftBank has invested $70 billion in technology startups via their Vision Fund, including WeWork and Compass. In addition to their current investments, SoftBank is planning on adding another $100 billion to their Vision Fund, backed by Saudis. Although the fund will approach it’s existing investors, SoftBank will also reach out to a broader group of potential investors. The Vision Fund had a return on its investments of 29 percent as of March, including a return of 62 percent for SoftBank, including performance fees. The success of the fund is creating optimism throughout the fund's investors and SoftBank aims to raise a new $100 billion fund every two or three years.

Will the term 'corporate real estate' become obsolete in coming years?

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ENVIRONMENT: TIPS FOR SUSTAINABILITY Three Steps Toward Going Green in Your Building

Complying with New Green Law Standards

While there is no right answer for how to go green in your building, there are plenty of options regardless of your budget. Alec Manfre, CEO of smart building software company Bractlet, identifies three main categories. First, you can optimize the systems already in place by upgrading systems or putting in new control algorithms. The next option is to invest in capital upgrades such as replacing building features; for example, you can upgrade lighting to LEDs that can save energy drastically. Though this option costs more money upfront, you will see a return in energy cost savings. Lastly, if you have the budget, it is best to completely overhaul your building systems. This may not make sense if you are only a short-term owner, but is ultimately the best decision if you will be holding the property for a long time. With an increase in legislation targeting climate change, these guidelines are a great place to start for building owners.

A new law signed by New York Mayor Bill de Blasio requires medium and large buildings to reduce greenhouse gas emissions by 40% by 2030 and 80% by 2050. Sentient Buildings, a company that helps make buildings greener provided steps companies can take to meet these new requirements. CEO of Sentient Buildings, David Unger, says the best way to approach the new laws “is to not be frightened by this new legislation but look at it as an opportunity to put together a strategic plan around your building's conversion to more renewable sources of energy over time." Unger’s company uses technology to help owners conserve energy and reduce costs. He explains that the first step is to find out if your company is at risk of not meeting the first carbon emission limit deadline in 2024. If you are at risk, you should focus on the most critical problems, whether it be fixes to air conditioning and heating or a transition to LED lighting. It is crucial that companies create a long-term capital budget plan so they can ensure they’re able to meet the requirements for 2030 and on..

What is your company doing to reach new sustainability goals?

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QUANTUM NEWS Featured Feature - QuantumListing Groups


QuantumListing Groups are one of our features that set our service apart from other listing platforms. After you register for QuantumListing, our customer success team assigns you to one or more groups based on where your listings are or where you are located. Your fellow group members are the people with whom you are most likely to do business because of their geographic proximity.

If you missed ICSC RECon or just need a refresher, please check out our RECon RECap coverage. You can read Part 1 and Part 2 of our blog posts summarizing our RECon RECap webinar and experiences at the convention below. You will hear from ICSC veterans as well as a rookie. Reach out to us if you will be heading out to Las Vegas for ICSC RECon next year! And stay tuned for videos and summaries from our #LetsGetSmart speaker series on the last day of the convention.

You access them through the groups menu on the sidebar below your profile photo and contact info. The Groups submenu items include Feeds, which shows recent activity among your group members, Your Groups, identifying the groups to which you’ve been assigned, Group Members, which allows you to drill down on who else is in your group, and Group Listings, which shows your fellow Group Members’ listings. Groups make it easier to look through your colleagues' profiles and listings. Join a group by clicking on Groups in the left hand side bar on your profile page. Then click on My Groups. Search for a group you want to join and then hit the + sign. Click Yes when you are asked if you want to join the group. You can also crowdsource your CRE Wants by sending a chat message to the group, letting them know what you or your customers need. You can start your own group with colleagues that are already on QuantumListing and also invite others to join QuantumListing and be a part of your group. You get to choose whether your group is public or private, and also whether everyone in the group can invite others to join, or just you get to curate your group. If you haven’t explored QuantumListing Groups yet, please do so at your earliest convenience!

Read RECon RECap blog posts here

Coming Soon Our team is really excited about some new QuantumListing features that will be available to you in the coming weeks. We don't want to give away too much, but if you like our new Lead Capture feature, we have a feeling you'll like these ones too! Keep an eye on your email as we introduce the other new features!

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Quantum Monthly - June 2019  

The QuantumListing team looks at some of the larger deals that have occurred recently in the commercial real estate market, recent funding r...

Quantum Monthly - June 2019  

The QuantumListing team looks at some of the larger deals that have occurred recently in the commercial real estate market, recent funding r...