SL Green, Vornado teamwork pays off at 280 Park Avenue

280 Park Avenue in Midtown (inset, from left: Marc Holliday and Steven Roth)

They may be rivals as two of the city’s largest office landlords, but SL Green Realty and Vornado Realty Trust worked together to make the $150 million renovation of 280 Park Avenue pay off.

The real estate investment trusts, which jointly own the 43-story office tower, have signed Medley Capital to a new eight-year lease while substantially expanding existing leases for PJT Partners and Harvest Partners at the 1.2 million-square-foot property.

Medley Capital is leaving the nearby Seagram Building, at 375 Park Avenue, for 22,000 square feet on 280 Park Avenue’s seventh floor. Asking rent for the space was $105 per square foot, according to Crain’s, with a JLL team representing the tenant and a CBRE team working with Vornado executive Andrew Ackerman on behalf of the landlords.

SL Green and Vornado also secured investment banker Paul Taubman’s PJT Partners to an extension at 280 Park – adding 50,000 square feet on 17th floor to the firm’s existing 100,000 square feet on the 15th and 16th floors. The REITs also doubled private equity firm Harvest Partners’ space in the building to 38,000 square feet in the western spire of the building’s two towers.

Asking rent for both expansions was $120 per square foot. Savills Studley represented PJT Partners while Newmark Grubb Knight Frank represented Harvest Partners.

The deals indicate how SL Green and Vornado’s $150 million renovation of the office tower has paid off, with the building now almost fully leased. The landlords, who entered a joint venture at the property in 2011, gut-renovated the building’s lobby while making a host of other improvements, installing new elevators and upgrading systems.

Mutual fund giant Franklin Templeton signed a 15-year lease for 126,000 square feet at 280 Park Avenue earlier this year, while Singaporean government-owned fund manager GIC agreed to take 50,000 square feet at the building in June.

The Four Seasons Restaurant, meanwhile, could follow Medley Capital out of the Seagram Building with a move of its own to 280 Park Avenue. [Crain’s] — Rey Mashayekhi


New York City apartment towers on record-setting pace

For more than 50 years, New York City's tallest residential building was a mere 632 feet. But supertall spires will set a new standard five times this decade.

Bill de Blasio

Photo: Courtesy of The Skyscraper Museum
Illustration of the consecutive towers that claimed the record for New York’s tallest residential building.


By Erik Engquist and Crains

Four years after the Sherry-Netherland impressed New Yorkers in 1927 with a spire reaching 560 feet above the ground, the Waldorf Astoria topped it. For more than a half-century, the 632-foot luxury hotel-apartment combination on Park Avenue endured as the city’s tallest residential structure.

These days, the once-towering Waldorf could be considered quaint, not to mention squat. At least five buildings this decade will set a new standard for height among New York City residential structures, according to researchreleased this week by the Skyscraper Museum.

The tallest of them all will be the Central Park Tower, which is to reach its 1,775-foot peak in 2019, ending the projected one-year reign of 111 W. 57th St. Both buildings will have retail space on the lower floors and hotel rooms above, but most of their height will be devoted to apartments.

The current record holder, One57, last year became the city’s first residential tower to break the 1,000-foot barrier. The supertall 432 Park Ave., however, will smash that mark when it opens this year with a 1,396-foot peak. From 2011 through 2014, 8 Spruce St. claimed the top spot, but the Frank Gehry-designed rental building will increasingly find itself looking up at condominiums across Manhattan.

The Waldorf’s 51-year record stood until 1982, when Harry Macklowe’s Metropolitan Tower crossed the 700-foot plateau. CitySpire blew by the 800-foot mark in 1987. Both had offices on their lower levels, but most of their floors were apartments. Donald Trump erased any doubts about what qualified as the city’s tallest residential building in 2001 with his monolithic Trump World Tower.

The spate of supertall spires is being powered by improvements in building techniques and by the stratospheric prices being paid for large dwellings with commanding views. Many of the buyers are foreigners who perceive Manhattan real estate to be a safe long-term investment.

The rapidly changing skyline has raised the hackles of neighbors of Central Park because of the lengthy (if thin) shadows the towers will cast over the city’s premier green space at certain times of the year. Community Board 5, the Municipal Art Society and a cadre of Manhattan elected officials have been particularly vocal. But the Department of City Planning said this month it has no plans to change the zoning to prevent more tall, slender buildings from going up—and up, and up.

Ceruzzi, Chinese partner plan $1B condo project at 520 Fifth

Developer pays Sitt’s Thor $325M for site; Town will market pads

August 19, 2015 08:00AM
By  E.B. Solomont


Ceruzzi Properties and Chinese partner SMI USA are planning a condominium project at 520 Fifth Avenue with a total projected sellout of $1 billion, The Real Deal has learned. Town Residential will be marketing the condos, through its Town New Development division.

Ceruzzi and SMI, otherwise known as Shanghai Municipal Investment, paid Joseph Sitt’s Thor Equities $325 million for the property and another 60,000 square feet of air rights in a deal that closed late Tuesday, CEO Lou Ceruzzi told TRD. Sitt bought the site, located between 43rd and 44th streets, for $150 million in 2011.

Ceruzzi said 520 Fifth will have three levels of retail at the base, topped with 180,000 square feet of luxury condominiums that could fetch north of $1 billion. He declined to say how many condos the building would have, but he said the top floors would be combined into “larger penthouse apartments.” Ceruzzi said “in all probability” the building would also include a hotel with 150 to 180 rooms.

The property is currently vacant, after Sitt demolished two prewar buildings on the site when he bought it from developer Aby Rosen and Tahl-Propp Equities. In December, Thor filed an application for permits for the mixed-use building. Ceruzzi and SMI are now following through with those plans.

Sitt put the property up for sale earlier this year through HFF, asking $350 million. Thor is marketing the retail space at the base of 520 Fifth, including 85 feet of frontage on Fifth. “We are hoping to achieve $1,000 per square foot on the first floor,” Ceruzzi said.

520 Fifth is the second joint venture between Ceruzzi and SMI, which entered the New York market 10 months ago. Ceruzzi and SMI are also developing a 52-story hotel tower at 138 East 50th Street that is slated to have 764 rooms. “New York is the best market in the United States,” said Tom Tao, president of SMI USA. The two firms are actively looking for a third, large-scale investment to make together, Ceruzzi said.

In addition to its investments with SMI, Ceruzzi is also partnering with Kuafu Properties and Stillman Development on a $340 million, mixed-use development on the corner of 86th Street and Lexington Avenue. The project will include 50 new luxury condos.

The builder who bets on a market that will always leave him the winner

Kevin Maloney will deliver 60 uber-expensive apartments to the market at a time when even he predicts it will be over-saturated. However, the veteran developer is hedging his bets with projects throughout the outer boroughs.

By Konrad Putzier

“Ziel is a pain in the ass, I want you to print that,” said Kevin Maloney, sitting in his windowless office in the Flatiron District.

Then he laughed. For those who don’t know: the developer has a good relationship with his former business partner, Ziel Feldman, who now heads the rival firm, HFZ Development.

Maloney’s relationship with his current partner on a number of projects, Michael Stern of JDS Development, is more troubled.

The two developers reportedly fell out earlier this year — Maloney cryptically speaks of “different philosophies” — and will no longer work together on any projects in the future, following completion of the luxury tower 111 West 57th Street.

The high-profile divorce leaves Maloney’s Property Markets Group in a state of uncertainty. Few real estate investors have been more successful over the past few years. But the firm’s success has been built on two factors it can no longer count on: its partnership with JDS and the strength of the luxury condo market.

The former will soon be a thing of the past, and the latter might well be, too — at least according to a growing number of researchers and developers.

This means Maloney may have to reinvent his business once more if he wants to stay relevant. For better or worse, Property Markets Group’s future may lie in the outer boroughs.

Maloney has been a prominent real estate developer in New York for decades, but his latest string of successes really began in 2009, when a young and still largely unknown Michael Stern approached him.

Stern had gone under contract for a building on West 19th Street, used by Verizon as storage space, with plans of turning it into condos and needed money to close the deal. Maloney, who had sold three hotels just before the market crashed in 2007, happened to be one of the very few real estate investors with money to spend.

Kevin Maloney

The two men partnered up and bought the building for $25 million. It turned out to be a “slam dunk”, in the words of broker Bob Knakal. In a market starved of new development, the Walker Tower (as the former Verizon building became known) was one of the few new luxury condos at a time when foreign and domestic demand for them picked up dramatically. “We underwrote it for 60 percent of what it sold out for,” Maloney recalled.

Stern and Maloney then repeated their success at another former Verizon building at 435 West 50th Street, which they bought for $45 million in January 2013 and christened Stella Tower. The condo conversion is now sold out, according to Maloney. He said the last available unit sold two weeks ago for $41 million. The building’s most expensive condo went for a staggering $51 million.

Flush with money from the Walker Tower and with luxury sales booming across the city, it made perfect sense for Stern and Maloney to take their strategy to the next level.

In March 2013, the developers bought the Steinway Building at 109 West 57th Street for $46 million. They already owned the adjacent parcel at 105 West 57th Street, and the combined lot offered enough width and air rights to build one of the city’s tallest residential towers.

This February, the developers broke ground on a 1,350-foot hotel and condo tower designed by SHoP architects. They are currently looking for a $500 million construction loan, with Maloney saying they have “a couple of offers” from banks.

But whether the project will be even remotely as successful as the Walker and Stella Towers is far from certain. In the months since 111 West 57th Street broke ground, the luxury condo market has slowed significantly.

Extell’s tower One57 has only sold one unit in the third quarter — a pace at which it would take the building six years to sell out. Sales at Harry Macklowe’s 432 Park Avenue have reportedly also slowed.

With several more condo towers set to hit the market in the coming years, some observers already predict a crisis.
“If real estate was a publicly traded company and I could short its stock, I would very happily short 57th Street,” Stonehenge Partners’ CEO Ofer Yardeni said recently. “The market there has stopped. It hasn’t just declined five percent or 10 percent. It’s just stopped.”

Maloney himself is surprisingly pessimistic about the luxury condo market — at least for someone who is investing millions in it.

“Citywide, when you get into apartments above $25 million, the air gets very thin very quickly,” he said. “At any one time there are maybe a half dozen people in the city looking for a $50 million plus apartment, and there’s now probably 60-70 of those apartments on the market.”

He added that if he could redesign his luxury condo project 10 Sullivan, he would probably break its $44 million penthouse up into two or three units.

“There’s going to be some downward pressure at the very high end,” he said.

Maloney reckons it is a “mistake” that developers on 57th Street are primarily putting apartments above $25 million on the market.

Ironically, he is about to do just that. 111 West 57th Street’s full-floor apartments will span roughly 4,000 s/f, and Maloney hopes to sell them for more than $7,000 per s/f. In other words: he is about to unload roughly 60 apartments with an asking price of more than $25 million onto a market that he already considers to be oversaturated.

Maloney is not one to miss the contradiction between the likely asking prices at 111 West 57th Street and his own pessimistic prognosis.

“It’s contrary to what I just said,” he admitted. But he sees reason for optimism in what he calls the low basis cost of the project. He explained that, if need be, he could still make money if he sold each unit for $3,000 per s/f.

Such a buffer between cost and target asking price is a luxury not all developers enjoy. More importantly, Maloney has been hedging his bets across the city and asset classes, buying up land in Brooklyn and Queens. While he is taking a wait-and-see approach to Manhattan’s luxury condo market and hasn’t ruled out developing more such projects in the future, his investments in the outer boroughs allow him to plan for a future beyond Michael Stern and $25 million condos.

In Long Island City, Property Markets Group is developing the 44-story rental tower Queens Plaza South with 400 rental units, which Maloney expects to top out in six months. In November, the firm also bought Long Island City’s clock tower building and an adjacent site in two separate deals for a combined $77 million. Maloney declined to say what his plans for the site are.

Property Markets Group has invested even more heavily in Brooklyn’s Gowanus neighborhood, where it has bought up around about a million square feet (under current zoning) of commercial space over the past four years. “We’re probably trying to do half a dozen buildings there” once the neighborhood gets rezoned, Maloney explained. He added that the planned residential buildings will likely have affordable units and an “arts component.”

Dan Marks, a broker with TerraCRG who specializes in Gowanus, said Property Markets Group got many of its properties for a bargain because it entered the market early.

“These guys were investing in the Gowanus area even before a lot of other companies were,” he said, adding that growing demand for commercial space means the investments will be profitable even if the neighborhood doesn’t get rezoned. A rezoning of Gowanus for residential development is currently under review.

Rental development in Gowanus and Long Island City may not be as flashy as building a Midtown luxury skyscraper, but in a way it seems more in line with Property Markets Group’s culture. The firm occupies a modest space on West 17th Street, whose tiny lobby and windowless offices surrounded by makeshift walls are a world away from the glassy Midtown headquarters of some of its competitors. This is not exactly where you would expect a firm that once counted Gary Barnett and Ziel Feldman as its partners to be based.

The three developers founded Property Markets Group in the early 1990s, when Barnett was still a diamonds trader based in Belgium. “Gary was really the money guy”, Maloney recalled. Barnett was the first to leave the firm, becoming the founder of Extell, and Feldman left in 2005. A framed newspaper clipping on Maloney’s wall shows a Crain’s article from 1994 on their purchase of the Belnord, an apartment building on the Upper West Side.

Although Maloney hasn’t spoken to Barnett in about a year, he said the two are on good terms. He has more regular contact with Ziel Feldman.

“We spent 80 hours a week together for 15 years, so we know each other very, very well,” he said. “When he buys a site, he still writes me and says ‘I just got this great deal’, and I say ‘Yeah, sure you did’”.


City shows support for supertall Midtown towers

Rendering of Midtown Manhattan skyline in 2030 (credit: VisualHouse) (inset: Carl Weisbrod)

The de Blasio administration expressed its support for the slew of supertall skyscrapers rising in Midtown Manhattan, responding to elected officials who have criticized the developments and called for measures like height limits and a moratorium on new towers.

The city has “no immediate plans to reduce the as-of-right density or bulk requirements” for such supertall developments, Carl Weisbrod, the director of the Department of City Planning, wrote in an August 12 letter.

Buildings exceeding or planning to exceed 1,000 feet in height — like Extell Development’s One57 condo and hotel tower and JDS Development and Property Markets Group’s 111 West 57th Street — have alarmed groups like the Municipal Art Society and Community Board 5’s Central Park Sunshine Task Force.

Concerns have even prompted a City Council bill that would create a task force to address shadows caused by the developments that are creeping deeper in Central Park, according to Crain’s.

While acknowledging concerns about the shadows and noting his department would continue to monitor the effects of supertall buildings, Weisbrod pointed to “the important role Midtown Manhattan plays in the city’s economy.”

He noted that the towers comply with laws governing density, with such developments distributing their square footage vertically instead of over the block – a move that can actually help preserve older buildings and lead to “a more interesting streetscape and pedestrian experience.” [Crains] – Rey Mashayekh


NYC’s Tallest Tower Outside of Manhattan Gets New Renders

queensplazapark.jpg[Queens Plaza Park. Rendering via 6sqft.]

Monday, August 17, 2015, by Evan Bindelglass


It’s been known for months that the new tallest building in New York City outside of Manhattan was being planned for right behind the now-landmarked Long Island City clock tower. Now, new renderings published by 6sqft give a better look at the design of the 915-foot-tall tower, known as Queens Plaza Park, that will be sandwiched between Bridge Plaza North and Northern Boulevard on 41st Avenue.

The residential building at 29-37 41st Avenue will encircle the 1927 clock tower, and will be at least 70 stories tall. The tower’s being developed by Property Markets Group and the Hakim Organization , and is designed by SLCE Architects (like just about everything else.) The building is slated to have 800 units and open in 2019.

Developer of huge Red Hook office complex seeks a partner with at least $100M

Milan-based Est4te Four is developing a 1.2 million-square-foot commercial project along the Brooklyn waterfront.

Photo: NBBJ
Rendering of Red Hook Innovation Studios.

The Italian company that has plans to develop a sprawling office complex along the Red Hook, Brooklyn, waterfront is seeking a partner willing to invest $100 million or more in the project.

Milan-based Est4te Four has hired Cushman & Wakefield, led by Bob Knakal, Cushman’s chairman of investment sales, to market a 49% stake in the development, called Red Hook Innovation Studios. When completed, the project would be the biggest block of newly constructed office space outside Manhattan to be available for rent. According to previous reports, Est4te Four plans to spend $400 million to create the five-building complex, which would total nearly 1.2 million square feet. The project likely will be built in phases over five years and could break ground next year, when leases at the existing properties on the site expire.

The developer, which also has projects in Los Angeles, London and Milan, spent about $61 million over the past three years assembling six adjacent properties located west of Ferris Street, from Coffey to Sullivan streets, in Red Hook. The sites are occupied by either warehouse properties or parking lots.

Est4te Four plans to preserve and restore 202 Coffey St., a two-story, approximately 170,000-square-foot warehouse that’s over 100 years old. The rest of the site would largely be rebuilt. The company is expected to erect four office buildings of up to seven stories. Est4te Four would also create park space, a promenade along the water and retail space at the base of the buildings.

Red Hook Innovation Studios will be designed to appeal to creative, fashion and tech businesses, which increasingly are calling Brooklyn home. Similar commercial destinations in the borough have been successful in drawing tenants. Just south of Red Hook, for instance, Industry City, a 6 million-square-foot collection of former industrial buildings in Sunset Park, has attracted big names like Time Inc.  Meanwhile, the owner of Dumbo Heights, a group of contiguous buildings joined by sky bridges in Dumbo, has nearly filled the complex with several tenants in recent months.

Near its big office project, the Italian company is in the process of converting a former six-story warehouse at 160 Imlay St. into a 70-unit luxury condominium. Patty LaRocco, a broker with Douglas Elliman who is handling sales for that project, said that more than 60 of the building’s units are in contract, with prices averaging more than $1,100 a square foot–among the highest ever netted for residential space in the neighborhood.

3 reasons why China had to devalue: Deutsche

3 reasons why China had to devalue: Deutsche

3 reasons why China had to devalue: Deutsche

Why Shake Shack is eating its rivals' lunch

Bad economic news just prior may be part of the reason why China took the steps it did on its currency, the renminbi. On August 8, China reported its exports fell 8.3% in July. Three days later, China loosened its hold on the currency, causing the yuan’s value to drop immediately.

At the start of the week, the price of a Chinese yuan (CNY/USD) was $0.161. By Friday, it was priced at $0.156, a drop of 3% to where it was trading three years ago.

According to Luke Oliver, U.S. Head of Capital Markets at Deutsche X-trackers, there are three reasons why China needed to devalue its currency.

“One might be the fact that its exports have become less competitive,” said Oliver. “Over the last year, we’ve seen that… China against a basket of currencies has actually strengthened 12% over the last year. That’s a pretty big headwind for Chinese exports.”

While goods are having a tougher time leaving China, it’s a different story with money, notes Oliver, whose team is responsible for three China ETFs in the U.S. with a combined $790 million in assets.

“Secondly, the strong Chinese renminbi seems to encourage outflows from China,” Oliver said. “We’ve seen capital outflows estimated to be about $35 billion per month this year. So perhaps weakening the renminbi will stem that outflow.”

A third reason for devaluation may also have to do with giving China a leading place among global currencies.

China wants the yuan to be part of the International Monetary Fund’s Special Drawing Rights (SDR) basket. Right now, just the U.S. dollar, the euro, the British pound and Japanese yen are in the SDR basket. Adding the yuan to the SDR basket would make China’s renminbi a global reserve currency. But the IMF wants China’s yuan to be more in line with the supply and demand forces of the markets.

“China is trying to work towards the liberalization of its currency that the IMF is looking for as it starts to consider whether China should be part of the SDR,” said Oliver.

He sees the devaluation benefiting Chinese equities in the long-term. In the past week, the Shanghai Composite Index (000001.SS) gained nearly 5%, though it is still 23% off from its all-time high of 5,166.35 set two months ago.

Two of the ETFs (ASHR and ASHS) Oliver’s group manages let U.S. investors buy into Chinese “A-shares,” a class of equities generally restricted to foreigners. A third one (CN) also includes Hong Kong “H-shares.”

“Anything that moves the currency back towards fair market value is a good thing,” said Oliver. “This is all representative of China supporting its economy by taking the action it needs to take. I think for Chinese stocks and Chinese investments this could be a good move.”

Paulson’s hedge fund starts selling land to reap gains in U.S. housing market

Since 2009, the firm’s funds have spent $770 million accumulating 35,000 lots.

Photo: Bloomberg
John Paulson’s firm is selling a bulk of its real estate holdings.

Hedge-fund manager John Paulson, who made billions wagering against subprime mortgages, has started to profit from a U.S. housing bet that took longer to ripen: owning land.

After acquiring about 35,000 lots since 2009, Paulson & Co. shifted toward selling last year and is accelerating its disposition pace, according to Michael Barr, who manages the firm’s real estate. Paulson’s funds had invested $770 million, mostly in lots bought out of bankruptcies or other distressed sales, and acquired two dozen communities in Arizona, California, Colorado, Florida and Nevada.

“The whole thesis here was that land was the best way to play the housing recovery, and that thesis seems to be playing out,” Mr. Barr said in a telephone interview from New York. “In a downturn, land is the hardest-hit real estate asset. Then, in the recovery phase of the cycle, as home prices appreciate, land values appreciate more.”

Paulson—whose lot holdings put the firm almost on par with the 10th-largest U.S. homebuilder—is planning to slowly sell parcels in some projects where prices have rebounded sharply, while holding on to other properties. He’s joining other large land buyers who are selling into a housing market constrained by lot shortages after almost a decade of anemic construction.

Builders replenishing land holdings are finding that prices for finished lots across the U.S. jumped 57% since the bottom in 2009, according to data from John Burns Real Estate Consulting. In some hard-hit markets where distressed properties lured investors, values have more than doubled in the past six years.

Earlier sellers

Paulson is starting to sell relatively late compared with other firms that bought land after the crash, and price gains are now moderating. His firm’s real estate funds have 10 years to return principal to investors after closing, according to a report prepared for California’s Contra Costa County Employees’ Retirement Association, which invested with Paulson.

“Their competitive advantage is their longer-term horizon,” said John Burns, a housing consultant based in Irvine, California, who has done work for Paulson. “They were able to bid on land that most people thought would take a long time to recover, so there were very few bids on it.”

Angelo Gordon & Co., a New York-based firm with $27 billion under management, has sold or optioned about 80% of the 14,000 lots it acquired from 2008 to 2012, according to Louis Friedel, vice president of real estate acquisitions. Starwood Land Ventures, a unit of Barry Sternlicht’s Starwood Capital Group, has sold about half of the 20,000 lots it acquired since 2007 in California, Florida, Arizona and Colorado, Chief Executive Officer Mike Moser said.

Land ‘convexity’

GTIS Partners, which spent about $1 billion since 2009 to buy more than 35,000 lots in 27 markets, has been selling for double or quadruple the price it paid, said CEO Tom Shapiro.

“Land has a lot of convexity to it,” Shapiro said in a telephone interview. “If home prices go up 5 or 10%, land prices can go up 20 or 30%. You have to be careful because it also works on the way down, which is how people got really hurt.”

The housing crash pushed many developers and landowners into bankruptcy, giving investors the opportunity to buy large, unfinished master-planned communities for distressed prices. In 2012, for example, Paulson paid $17 million, or 6% of the outstanding debt, for a post-bankruptcy acquisition of 875 acres (354 hectares) in Lake Las Vegas, Nevada, according to the Contra Costa pension fund report.

That’s less than $20,000 an acre in a market where homebuilders now typically pay $400,000 to $450,000 an acre, said Dennis Smith, CEO of Home Builders Research, a Las Vegas consulting firm. Not all of that increase would turn into profits, because much of the Lake Las Vegas land is set aside for open space and Paulson invested in improvements, such as restoring a golf course.

Slowing gains

Paulson may face risks as prices moderate. Finished lot prices, after jumping as much as 28% in 2013, increased just 2% in the first quarter from a year earlier, according to John Burns Real Estate Consulting. Homebuilders are cutting back on land purchases after “aggressively” spending from 2010 to 2013, Barclays Capital Inc. said in a note this week.

Wheelock Street Capital, which bought 24,000 lots starting around the same time as Paulson, has been a steady seller, said Dan Green, principal at the real estate private equity firm.

“We wanted to get in and buy and enjoy the recovery and not hold until the top” of the market, Mr. Green said.

Builder expansion in locations further from urban areas may fuel demand for the types of lots Paulson owns. The new-home market is expected to grow over the next two years, Susan Maklari, an analyst with UBS Group AG, said in a note to clients Wednesday.

“The housing market is in the process of moving to more volume-based growth, driven by the re-emergence of the entry- level buyer,” Ms. Maklari wrote. “This reflects increasing construction activity further in the periphery, where it is easier for supply to meet demand.”

Master-planned communities can take years to liquidate. Paulson’s first targeted disposition locations include Belmont and Triple Creek in the Tampa, Florida, area; Southshore at Aurora and Crystal Lake outside of Denver; and Lake Las Vegas.

“It’s not because it’s time to get out, but because you’ve got to start to sell these larger, longer-term assets,” Mr. Barr said. “We still think we’re mid-cycle in most of our markets.”