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Renovating Existing Property, Key to Outsized Returns

Wed, 21 Nov 2012 09:15:13 +0000

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?Sellers may move money across
the bay in search of higher
yields or park capital in
less management-intensive
single-tenant retail assets,? says
Mishkin.

SAN FRANCISCO-A research report that GlobeSt.com exclusively obtained from Marcus Millichap Real Estate Investment Services shows that for the San Francisco apartment market, renovating existing properties is key to outsized returns. According to the report, the apartment market here is arguably the strongest in the nation, and the impending construction boom will only have a minor impact on operations.

Job growth in the tech industry remains the key driver for occupancy and rent gains, and owners will likely have a strong negotiating position into next year, says the report. However, some early indications are emerging that rent growth will slow to a sustainable pace during the next several quarters, the report says.

Jeffrey Mishkin, first vice president and regional manager of the San Francisco office, notes that “class A vacancy is leveling off, while lower-tier vacancy tightens. As rents in the top-tier have climbed, many tenants are choosing to move down the quality scale rather than spending more of their income on housing,” he says. “Although new demand has been sufficient to offset these losses, new supply could tip the supply-demand balance. Several thousand units will come online during the next two years, creating competition for class A properties. As a result, operators are expected to slow rent gains to maintain occupancy rates until the development cycle wraps up in 2015.”

Investors will remain active in the San Francisco market, though deal flow could be impeded by the number of available listings, he adds. “Sellers may move money across the bay in search of higher yields or park capital in less management-intensive single-tenant retail assets,” he says. “Some owners see the low cap rates and low interest rates as a favorable time to divest. Buyers, meanwhile, remain focused on the spread, which points toward a strong buy stance.”

Many of these investors are seeking older, larger units that can be upgraded, he says. “Changing a large studio to a one bedroom or a large one bedroom into a two bedroom can have a significant impact on asking rents.”

The new owner may have to wait for rent-controlled units to be vacated to execute this strategy, which could tie up capital for an extended period, adds Mishkin. Nonetheless, he explains, “the return could be much more lucrative than the average 5% yield for a class B asset in today’s market.”

Categories:

West,
Multifamily,
Acquisitions/Dispositions,
Development,
San Francisco

Natalie Dolce Natalie Dolce, editor of the West Coast region for GlobeSt.com and Real Estate Forum, is responsible for coverage of news and information pertaining to that vital real estate region. Prior to moving out to the Southern California office, Natalie was Northeast bureau chief, covering New York City for GlobeSt.com. Dolce?s background includes a stint at InStyle Magazine, and as managing editor with New York Press, an alternative weekly New York City paper. In her career, she has also covered a variety of beats Arthur Frommer?s Budget Travel magazine, FashionLedge.com, Co-Ed magazine, and has also freelanced for a number of publications including MSNBC.com and Museums New York magazine. Contact Natalie Dolce.

Article source: http://www.globest.com/news/12_484/sanfrancisco/multifamily/Renovating-Existing-Property-Key-to-Outsized-Returns-327035.html

Richland Cos. Acquires 104000-SF Bay Plaza Office Complex – Daily News Article

Thu, 02 Aug 2012 17:51:47 +0000

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Richland Cos. now owns the
104,000-SF Bay Plaza Office
Complex.

WEBSTER, TX-The Richland Cos. acquired the 104,091-square-foot Bay Plaza Office Complex from its long-time owner, Capital Commercial Investments Inc. of Austin. The Houston-based buyer added the class B office building to its portfolio through a direct commercial real estate transaction with the seller.

The Harris Central Appraisal District, which appraises the asset at 711 W. Bay Area Blvd. for approximately $5.58 million, notes that Capital Commercial Investments’ entity CCI-711 Bay Area Ltd. acquired the office building in April 1998. The office building was developed in the early 1980s and renovated in 2009 following damage sustained by Hurricane Ike. Richland Cos.’ President and CEO Edna Meyer-Nelson would not disclose the price paid for the asset, though did say it was acquired at a significant discount to replacement costs. Derek R. Stokes with San Antonio-based Trinity Real Estate Finance Inc. secured funding for the CRE transaction from American Family Insurance of Madison, WI.

Meyer-Nelson explains there were many benefits with this office building, not the least of which is that it’s located in a fast-growing area of Houston. “NASA is booming, and a lot of developers are building down there,” she says. “The ship channel is also growing by leaps and bounds.”

Adding to the building’s appeal is that it’s a high-rise office asset in a supply constrained submarket. “It’s tough to build right there,” Meyer-Nelson explains. “The land along the Gulf Freeway (Interstate 45) and close by is on 100-year leases.”

Bay Plaza Office Complex is 94% occupied, with tenants including BP, San Jacinto College, Blue Moon Detective Agency, Hometrust Mortgage, Broadpoint, Texan Bank, Evergreen Tank Soultion, MeCor and Select Medical. Meyer-Nelson says roll will be small this year and next year, but in about two years, approximately 30% of the building is anticipated to roll. “Our strategy is to maintain the building, take good care of it, get it leased up, then handle that 30% to 35% roll we’re anticipating in 2.5 years,” she tells GlobeSt.com. “Then we’ll sell it, leaving some meat on the bone for someone else.”

With the market improving, Richland Cos. is becoming more active. The company sold three assets this year, acquired another property through a joint venture and is looking for more. “One of the markets I’m in right now, that hopefully will have earnest money and a contract in the next two to three weeks is Dallas,” Meyer-Nelson says. Another asset in Richland Cos.’ sight is an industrial park in Oklahoma City.

“We anticipate having four more transactions this year,” Meyer-Nelson says. “If we can sell one or two more assets and buy another three or so, that’ll be a good year for us.”

Categories:

Southwest,
Office,
Acquisitions/Dispositions,
Leasing,
Online Exclusive,
Austin,
Dallas/Fort Worth,
Oklahoma City,
Houston

Amy Wolff Sorter brings close to 30 years of reporting and editorial experience to her role as southwest editor for GlobeSt.com; with more than 10 of those years spent reporting on business and real estate trends. In addition to her duties with ALM, Amy is a copyeditor and writer with Texas Jewish Post.
ûContact Amy Wolff Sorter

Article source: http://www.globest.com/news/12_406/houston/acquisitions_dispositions/Richland-Cos-Acquires-104000-SF-Bay-Plaza-Office-Complex-323886.html

Kidder Mathews Gains 7 G&E Brokers

Fri, 01 Jun 2012 23:47:42 +0000

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Bill Kurfess, an office/RD specialist,
is the firm?s SVP in the Redwood
Shores office.

SAN JOSE, CA-Kidder Mathews continues to grow its Bay Area commercial real estate group, adding five brokers to its downtown office and one each to its San Francisco and Redwood Shores offices. The new hires bring the firm’s roster in this region to 73 agents, with all seven brokers hailing from Grubb Ellis.

The local office welcomes veteran brokers Joe Scuncio, an office/RD specialist; Nigel Keep, investment properties; Kristopher Blais, a retail specialist; and James Viso and Shaun Enferadi, both industrial brokers. Mike McCormac, an office specialist, joins the firm’s San Francisco office as VP, and Bill Kurfess, an office/RD specialist, joins the firm’s Redwood Shores office as SVP.

“The agents we’ve hired bring a varied mix of specialties to enrich and expand our service lines in each of our offices,” said Reed Payne, EVP of brokerage services for Kidder Mathews, in a prepared statement. “We are thrilled to have this caliber of brokers join our group.”

Payne tells GlobeSt.com that, while more new hires aren’t imminent, he is always seeking new agents to join the firm. In Northern California, the company is looking to grow its property-management and appraisal divisions, having in the last 60 days hired Nanci Vega as senior property manager, and Brad Paul as head of appraisal.

“The overall vision for the company is to be recognized as the premier provider of commercial real estate services in the Western U.S.,” Payne continues. “With that as the vision, the goal is to have the highest-quality agents we can get, and these hires definitely fit that goal. We’ve hired people in almost every specialty we deal with, and they are all very capable, very strong agents.”

As GlobeSt.com recently reported, earlier this month Kidder Mathews broke ground on Motion Water Sports’ 135,000-square-foot Pacific Northwest corporate headquarters in Snoqualmie, WA. Also, in April, Kidder Mathews and Binswanger were retained by Kimberly-Clark Corp. to sell its exceptionally rare waterfront industrial property in Seattle. Located on the central waterfront at 2600 Federal Ave., the property boasts more than 2,500 linear feet of deep-water industrial shoreline area and a total land area in excess of 66 acres. It is immediately adjacent to Naval Station Everett, home of the USS Nimitz carrier battle group, and the Port of Everett main terminal.

Categories:

West,
Industrial,
Office,
Retail,
Executive Moves,
San Jose

Carrie Rossenfeld Carrie Rossenfeld is a reporter for the West Coast region of GlobeSt.com and Real Estate Forum. She was a trade-magazine and newsletter editor in New York City for 11 years before moving to Southern California in 1997 to become a freelance writer and editor for magazines, books and websites. Rossenfeld has written extensively on topics ranging from intellectual-property licensing and giftware to commercial real estate. She recently edited a book about profiting from distressed real estate in a down market and has ghostwritten a book about starting a home-based business.

Article source: http://www.globest.com/news/12_363/sanjose/office/-322045.html

Investcorp Acquires Mixed-Use Portfolio for $65M – Daily News Article

Thu, 15 Mar 2012 15:52:18 +0000

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Investcorp managing director Herb Myers
calls the acquisition ?a unique opportunity to
generate solid income returns while also
advancing leasing and operating income
over a longer time horizon.?

SAN FRANCISCO-The US-based real estate arm of Investcorp, a multinational provider and manager of alternative investment products, has paid $65 million for a portfolio of mixed-use commercial real estate properties in the Northern San Francisco Bay area—an area consistently ranked by institutional real estate investors as one of the top areas for investment within the US. The deal represents the largest transaction closed in the North Bay area so far this year and, according to the company, and demonstrates the firm’s continued selectivity and focus on high-yielding assets.

The predominantly class-A portfolio comprises 14 buildings, including a mix of office, industrial and retail properties concentrated in Petaluma and totaling 840,637 square feet, with properties currently occupied by a diverse group of tenants. In acquiring the portfolio, Investcorp ventured with PBJ Acquisitions, a San Francisco-based real estate owner and operator. Together, the companies will seek to increase the net operating income of the properties by leasing the currently vacant space and by renewing existing tenants.

“This acquisition of a diverse group of class-A properties presents a unique opportunity to generate solid income returns while also advancing leasing and operating income over a longer time horizon,” says Herb Myers, a managing director in Investcorp’s real estate team. “The multi-assets nature of this portfolio should also enable us to pursue, opportunistically, a number of value-creating options.” Myers could not be reached by GlobeSt.com before deadline to elaborate on the options mentioned, the seller, financing details of the purchase, the age of the properties involved or the company’s long-term plans for the portfolio.

The location of this investment builds on an established Investcorp focus on properties in close proximity to major US markets, but in submarkets where secure investments at attractive valuations are easier to find. In line with this strategy, Investcorp closed two Greater-L.A.-area transactions in 2011: the Park Tower office complex in Long Beach and the Residence Inn Manhattan Beach. These were complemented by additional transactions in Princeton, NJ, and in the corridor between West Palm Beach and Ft. Lauderdale, FL.

Categories:

West,
Industrial,
Office,
Retail,
Acquisitions/Dispositions,
San Francisco

Article source: http://www.globest.com/news/12_307/sanfrancisco/acquisitions_dispositions/Investcorp-Acquires-Mixed-Use-Portfolio-for-65M-319616.html

$87M Renovated Building Gets First 167788-SF Tenant

Tue, 07 Feb 2012 19:04:39 +0000

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Riverbed Technology will relocate
to floors two through six
at 680 Folsom St. with
a 10-year lease term.

(Mark Your Calendars: RealShare REAL ESTATE 2012, March 22^nd in Los Angeles).

SAN FRANCISCO-TMG Partners and financial partner Rockwood Capital LLC have signed a 167,788-square-foot lease to relocate Riverbed Technology to 680 Folsom St., a class A office building in San Francisco’s South of Market District near the Moscone Convention Center. Riverbed, currently at 199 Fremont St., will move into floors two through six at 680 Folsom St. with a 10-year lease term.

David Churton, headquarter practice leader and international director at Jones Lang LaSalle, represented the tenant. He points out that the Riverbed real estate team “took a very strategic approach to their future real estate requirements.” He explains that by being proactive, “they executed a headquarters strategy ahead of today’s constricted market and netted a superb block of quality space offering the flexibility to accommodate growth as well as excellent terms and prominent signage in what will be the finest redevelopment in San Francisco in the last decade.”

According to Mayor Ed Lee of San Francisco, “Riverbed’s long term commitment to keep their worldwide headquarters in San Francisco through 2024 demonstrates once again that we are the location of choice for high tech companies. With dynamic leaders like Riverbed’s Jerry Kennelly, we are making San Francisco the ‘Innovation Capitol of the World.’”

According to a recently tech report from JLL, San Francisco is the top high-tech industry growth market with the most impacted office market. Booming high-tech industry employment growth of more than 15 percent is creating strong demand for office space and has boosted rents 18.5 percent over the past 12 months. Stiff competition between tenants for the best quality space is moving market rents toward pre-recession highs in some buildings and causing high-tech firms that prefer South of Market Street to head north into the CBD. The excitement has drifted into the capital markets space and investors are snapping up properties at rates last seen in 2007. The resurgence in high-tech is electrifying not only San Francisco, but the entire Bay Area.

According to Michael Covarrubias, chairman and CEO of TMG Partners, “Riverbed is the ideal tenant not only for this space, but to complement the increasing tech growth in San Francisco’s SoMa area.” GlobeSt.com could not get further lease terms, like aggregate lease value, asking rent or taking rent by deadline. An unidentified source not involved in the deal says base rent is approximately $50 to $54 per square foot per annum.

According to Riverbed co-founder and CEO Kennelly, “we think the City is the right location to attract the best talent and provide a thriving environment for our current employees. Moving to a state of the art building in the heart of the City will be a great move for our company.”

With construction now underway, the 12-story mid-rise tower at 680 Folsom St. and adjacent three -story building at 50 Hawthorne St. will be fully renovated to Class A standards. The $87-million renovation, supported by TMG and set for completion in late 2013, calls for 680 Folsom St.’s existing 1960′s concrete exterior to be replaced with a clear glass curtain wall skin.

In addition, a two-story vertical addition and several small horizontal additions will also be added to the building, “increasing the gross building area by more than 100,000 square feet for a total of approximately 522,000 square feet,” according to a prepared statement.

All building systems will be replaced and a new public plaza will be built on the corner of Folsom and Third streets, where there eventually will be a new 15,000-square-foot retail or cultural building constructed, says the release. A new glass, steel and granite lobby will have 30-foot ceilings with floor-to-ceiling glass and a floating staircase. The property is pursuing LEED Gold certification.

Pacific Bell owned and occupied the headquarters facility until 2007. In October 2010, TMG recapitalized the development with a new equity partner in Rockwood Capital.

Categories:

West,
Office,
Leasing,
San Francisco

Article source: http://www.globest.com/news/12_280/sanfrancisco/office/87M-Renovated-Building-Gets-First-167788-SF-Tenant-318417.html

CityView Closes on First Asset from $300M Fund

Mon, 06 Feb 2012 07:01:06 +0000

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Potrero Launch is slated to be completed
in the third quarter of 2012.

(Mark Your Calendars: RealShare REAL ESTATE 2012, March 22^nd in Los Angeles).

SAN FRANCISCO-Los Angeles-based CityView, a real estate advisory firm founded by former HUD Secretary Henry Cisneros, has just closed on its first asset from the Bay Area Fund. The new $300-million fund will be used to invest in multifamily housing communities in the Bay Area region.

The class A mixed-use asset, called Potrero Launch, is located in the Mission Bay area of San Francisco’s waterfront and is slated to be completed in the third quarter of 2012 with 196 rental apartment units and 28,000 square feet of office and retail space.

According to Cisneros, executive chairman of CityView, “There is a critical shortage of quality rental properties in the Bay Area. For those who cannot afford the high cost of owning a home in the region, it is imperative that they have access to high quality multifamily housing.”

Tony Cardoza, formerly of Real Estate Capital Partners, has been named as managing director of the Bay Area Fund and David Martin, formerly the founder, chairman and CEO of the Martin Group, and vice chairman of CityView is chairman of the fund’s investment committee. Cardoza and Martin have extensive experience in the Bay Area and collectively have worked on a number of notable projects, such as One Market, 1000 Van Ness, Hamilton Field, EmeryBay, and Downtown Pleasant Hill.

Martin says that “Patrick McNerney, principal of Martin Building Co. and the developer of Potrero Launch, has a long history of building high quality projects in the City.”

McNerney says in a prepared statement that the transaction was “complex” and “took place over a condensed timeframe.”

Cardoza points out that “We’ve raised a significant amount of capital for an area we think is very promising for new construction in the multi-family sector and we intend to continue to seek similar urban, infill development opportunities with strong partners.”

Cisneros adds that “This region is a focus for our equity dollars because of several factors—it’s one of the focal points of the nation’s business and professional services, its artistic and cultural opportunities, its transportation, its educational and scientific talents, and its foreign trade activities. The area is a big draw for people, jobs, and the capital necessary to justify large-scale investments in housing. We certainly hope that more housing options will help ease the high cost of rental housing for Bay Area residents.”

Cardoza tells GlobeSt.com that the amount for Potrero Launch is $437,000 per residential unit. In addition, he says, the project has 20% affordable units reserved for those earning 30% and 50% AMI.

Categories:

West,
Multifamily,
Acquisitions/Dispositions,
San Francisco

Article source: http://www.globest.com/news/12_278/sanfrancisco/multifamily/CityView-Closes-on-First-Asset-from-300M-Fund-318340.html

Digital Realty Buys Data Center for $85M

Thu, 05 Jan 2012 16:45:20 +0000

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New data center for Digital
Realty: 360 Spear, San Francisco

SAN FRANCISCO-Digital Realty Trust Inc. has paid $85 million for a 155,000-square-foot data center in downtown San Francisco. The announcement of the Bay Area deal coincides with the purchase of a similar building in Atlanta, near the Hartsfield-Jackson Atlanta International Airport, for $63 million.

Digital Realty’s new San Francisco building has at least one obvious appeal to the publicly-traded real estate company: The data center, which is a fully leased, multi-tenant building, sits back-to-backwith the company’s existing “server farm” at 365 Main St.

The purchase gives the company a greater “critical mass” in telecommunications and colocator space in San Francisco, according to Digital Realty vice president Pamela Garibaldi. With the purchase of 360 Spear, the company currently has three telecom properties in the city, including 200 Paul. “There’s very limited data center space in San Francico,” she adds.

Although the Spear Street facility is fully leased, “there is the potential for us to convert some of the space for our growing colocation business,” Garibaldi says.

Digital Realty invests primarily in data centers, which provide space for Internet and telecommunications equipment. Typical tenants include information technology companies, Internet-related businesses, manufacturing firms and financial service firms, according to the company.

With the exception of three properties owned in joint ventures, Digital Realty currently owns 100 properties comprised of 17.9 million square feet. This also includes 2.1 million square feet for redevelopment. The company’s property holdings are located in Australia, Europe, North America and Singapore.

Categories:

West,
Industrial,
Acquisitions/Dispositions,
San Francisco

Article source: http://www.globest.com/news/12_257/sanfrancisco/industrial/Digital-Realty-Buys-Data-Center-for-85M-317085.html

AREA Pays $60M for 422-Unit Portfolio

Tue, 13 Sep 2011 16:49:15 +0000

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2080 Gough, one of the properties
in the 95% occupied portfolio.

(Mark Your Calendars: RealShare Apartments 2011, October 20 in Los Angeles).

SAN FRANCISCO-AREA Property Partners has acquired a 422-unit multifamily portfolio here for $59.6 million. “Plans for the properties include AREA’s proven strategy of revitalization, rehabilitation and repositioning of this formerly distressed portfolio,” says AREA partner James H. Simmons.

Simmons points out that the strategy will be accomplished by “implementing building-wide improvement programs that involve working with the City of San Francisco to cure violations and improve the overall physical condition of the assets. It is our primary objective that the residents continue to receive the highest level of service throughout the process.”

The 20-building, 95% occupied portfolio is located predominantly in the Downtown and Tenderloin neighborhoods of San Francisco. A few properties are located in the neighborhoods of Pacific Heights, Russian Hill and Potrero Hill.

The rent-regulated buildings, totaling 278,395 square feet, were built between 1911 and 1965, with the majority constructed in the early 1900’s. The portfolio’s condition is commensurate with rent-regulated properties of similar vintage throughout the greater San Francisco Bay Area, according to a prepared release.

The acquisition presents a unique opportunity to capitalize on improving fundamentals, as San Francisco is one of the top performing multifamily markets in the US, according to the release. The acquisition follows AREA’s long term buy-and-hold strategy of creating high-quality affordable workforce housing alternatives for residents of highly supply constrained markets such as the greater Bay Area, Simmons says.

“We are committed to providing safe and reasonably-priced work force housing for local families,” Simmons says. “This acquisition fits squarely within our strategy of investing in and creating high-quality living alternatives in major metropolitan cities with significant demand for quality affordable housing.”

AREA currently owns or controls over 18,000 units under its domestic emerging markets strategy in major metropolitan areas such as New York, Washington DC and Newark, New Jersey. The brokers on the transaction were Eastdil Secured and Marcus Millichap.

Marcus Millichap did not respond to GlobeSt.com queries by deadline on the seller’s identity. AREA Property Partners tells GlobeSt.com that it cannot disclose the name of the seller due to a confidentially agreement. AREA could not confirm further GlobeSt.com regarding specifics about the properties by deadline.

Categories:

West,
Multifamily,
Acquisitions/Dispositions,
San Francisco

Article source: http://www.globest.com/news/1997_1997/sanfrancisco/313855-1.html

Tribeca Sheds Nine Apartment Buildings

Tue, 21 Jun 2011 18:27:01 +0000

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1845 Franklin St.

(Mark Your Calendars: RealShare Apartments 2011, October 20 in Los Angeles).

SAN FRANCISCO-San Francisco-based private equity real estate investment firm, Tribeca Cos., has sold nine properties comprising 155 apartment units and one retail space in San Francisco and Burlingame. The properties are part of a 12-property portfolio that Tribeca acquired opportunistically through a loan purchase from lender UBS on Dec. 30, 2009 and immediately acquired the fee title through foreclosure of the properties previously owned by the Lembi Group.

The properties are located in areas including Pacific Heights, Cow Hollow, and lower Nob Hill in San Francisco, as well as one in downtown Burlingame just south of San Francisco. The addresses are: 1671 Lombard St., 2642 Gough St., 2648 Gough St., 2654 Gough St., 1845 Franklin St., 2011 Sacramento St., 2380 California St., 621 Taylor St., and 255 El Camino Real in Burlingame.

The properties were sold to a series of single-purpose entities of the Prado Group of San Francisco, a private real estate investment management and development firm. The purchase price was not disclosed, however Tribeca, through an owned affiliate partnership entity Sky Pacific Holdings II LLC, acquired the 12-building Lembi portfolio loans in December 2009 for approximately $31 million, and after acquiring the title, subsequently sold three assets in 2010.

The transaction was financed by Tribeca Holdings and California Property Funding, a San Francisco-based financial services and investment firm.

The aggregate sale price of those first three properties plus the nine properties now closing came to a total in excess of $40 million. Tribeca realized an aggregate return in excess of 35% from its undisclosed original equity investment, according to a prepared statement. “The sale of the remaining properties reflects the healthy return of the San Francisco and Bay Area rental property market from the depths of the recession of the past two years,” says the statement. “Prado’s acquisition comes at a time when San Francisco occupancies have tightened considerably and rental demand is strong, with little to no new competing product opening in the near term.”

According to William Faidi, CEO of Tribeca, “Following the original acquisition in a complex foreclosure process, Tribeca began our value-enhancement program of carefully managing and maximizing values, to prepare the properties for eventual sale. The sale to Prado Group enabled us to quickly achieve our investment objective well ahead of our initial projected time-horizon. Tribeca is continuing on its path of investment in opportunistic real estate, focusing on retail and apartment properties in US markets”.

The acquisition marks the second Lembi Group apartment portfolio acquisition by the Prado Group in the last nine months. In September 2010, Prado Group acquired four buildings totaling 250 units that had been taken back by lender UBS. “The Tribeca acquisition is exactly the type of high quality apartment assets we are focused on acquiring in the infill neighborhoods of San Francisco and the Bay Area,” says Craig Greenwood, a principal at Prado Group. “The recovery has commenced and San Francisco is poised to outperform the nation based on its strong economic base, creative class and little to no new supply.” Prado Group was represented by Toby Costello and Michael Thomas of Wheelhouse Brokerage.

Categories:

West,
Multifamily,
Acquisitions/Dispositions,
San Francisco

Article source: http://www.globest.com/news/1939_1939/sanfrancisco/311318-1.html

Fowler Buys 311 Distressed Units

Sat, 02 Apr 2011 10:43:11 +0000

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The Plaza

Inland Empire

PALM SPRINGS, CA-Fowler Property Acquisitions of San Francisco has acquired two distressed apartment complexes in this week’s roundup of sales, leases and other transactions in the West. The properties are the 156-unit Plaza at 2300-2490 E. Tahquitz Canyon Way and the 155-unit Palm Springs Village at 2700-2786 E. Tahquitz Canyon Way. The Plaza sold for $8.9 million and the Palm Springs Village for $7.6 million. Plaza, built in 1972, includes six studio, 96 one-bedroom, and 50 two-bedroom units. The seller was Tahquitz Plaza Associates LLC of Seattle. Palm Springs Village, also built in 1972, comprises 107 one-bedroom and 49 two-bedroom units. The seller was Palm Springs Desert Park Associates LLC of Seattle. The buyer plans on major interior and exterior renovations at both properties, according to Robin D. Ossenbeck, a partner in the West Los Angeles office of Hendricks Partners, who represented the buyer.

San Diego County

Core Capital Investments of Irvine has secured an $8.9 million refinancing for its 146-pad Lanikai Lane Mobile Home Park at 6550 Point Dr. in Carlsbad. The four-year loan, arranged by an HFF team led by director Tina Derderian, is at 6.55% fixed, interest-only, with ING Investment Management. Loan proceeds are paying off existing debt as well as providing an interest reserve until an existing ground lease expires in two years. The borrower owns the land, which it leases to the unaffiliated owner/operator of the mobile home park. The mobile home park is across the street from the South Carlsbad State Beach and adjacent to the Carlsbad Poinsettia Station of the Coaster rail line providing access into downtown San Diego. The 14.3-acre site is also within walking distance to the new Hilton Carlsbad Oceanfront Resort and Spa.

Douglas Wilson, owner of San Diego-based Douglas Wilson Cos., has been appointed off-panel trustee on GCIC Development Corp. in Oklahoma and the 6,500-acre Sargent Ranch in the San Francisco Bay Area. GCIC Development Corp.’s portfolio includes a variety of commercial and hospitality properties throughout the Southwest. The Sargent Ranch project comprises 6,500 acres of primarily pristine farmland in the town of Gilroy, CA. There is more than $90 million in debt on the property. The assignment of Douglas Wilson as off-panel trustee by the United States Trustee reflects the extraordinary nature of these two bankruptcies, Wilson says. “These are uniquely complex assignments,” said Wilson, whose firm has provided problem resolution services for over 600 projects since 1989. “Both involve big, complicated assets with tremendous upside opportunities.”

FFP Ltd., a limited partnership with Walter and William Fiedler as general partners, has acquired a 7.5-acre parcel with a 72,712-square-foot industrial building at 4370 Jutland Dr. in Clairemont from the Conner Family Trust for $3 million. The deal is “an early sign that real estate developers and investors are positioning for infill spec development projects,” according to associate Deborah Hunkeler of Cushman Wakefield, who?along with Jay Arnett of Colliers International?represented the seller in the transaction. “There appears to be improving demand for infill properties that offer redevelopment opportunities,” Hunkeler continued. Hunkeler noted that the Jutland Drive property, which was originally developed in 1967, was listed for sale with little activity until recently. The property went into escrow with a qualified backup offer on the table. “Seller financing is playing a crucial role in these transactions since the commercial real estate lending market remains largely frozen still for spec developers,” said Hunkeler, who worked with the seller, Richard Conner of Conner Family Trust, throughout the market downturn to position the property and promote the seller’s interest in providing potential buyers with financing. “Both offers on the property were made with the intention of speculative development following the demolishment of the existing facility,” she said. The buyer is a general contracting firm with a 30-year track record in San Diego. Specific plans and timing of redevelopment have not been announced.

Northern California

Fontana Lee Apartments

Leeward Ventures LLC bought the 22-unit Fontana Lee Apartments at 290 Lee St. in Oakland’s Adams Point neighborhood from 290 Lee Street LLC. According to Kevin Turner, a senior vice president in the Oakland office of Marcus Millichap, the property is considered to be one of the top apartment complexes in Adams Point. The complex attracted multiple offers, he said, noting that “The buyer was motivated by the core Adams Point location, the significant barriers to entry, the opportunity for a long-term hold with equity preservation and the realistic exit timeline.” The complex is adjacent to Lake Merritt and Downtown Oakland. It was sold with a TIC survey map in place at the time of sale. A significant number of units have been renovated along with the common area to pre-condo conversion specs. Built in 1968 by Santos Construction, the property is a four-story wood frame and stucco building with a concrete block exterior and a concrete slab foundation. There are 15 one-bedroom/one-bath units, six two-bedroom/two-bath units and one large two-bedroom/two-bath penthouse with a wood-burning fireplace.

101 Redwood Shores Parkway

Kabam, a developer of multiplayer social games, has signed a lease to expand its headquarters for the second time in six months at 101 Redwood Shores Parkway, a four-story class A office property located at the gateway to Redwood Shores. Kabam established its headquarters at 101 Redwood Shores Parkway in March of 2010 in 15,000 square feet of office space, and first expanded in October of 2010 by leasing an additional 10,000 square feet. In March of this year, Kabam agreed to lease 15,000 sf of additional space bringing its total leased space to 40,000 square feet. Jon Mackey of Cornish Carey Commercial Newmark Knight Frank’s San Mateo office, together with Liz Hart of the firm’s San Francisco office, represent Kabam in all of its lease requirements. Kristoph Lodge and Matt Winters of Cornish Carey Commercial Newmark Knight Frank’s Palo Alto office represent landlord Diamond Investment Properties’ Redwood Shores property. In just over a year, Kabam has grown from 25 to 275 employees. The firm continues to hire and plans to add another 225 to 475 employees throughout its three locations over the next year. In early March, Kabam announced a new 25,000-square-foot lease at 405 Howard St. in San Francisco. The firm also has an office in Beijing. Currently, more than 200 Kabam employees work in the Redwood Shores headquarters.

Las Vegas

Boise, ID-based grocer WinCo Foods has acquired 17.25 acres on the southeast corner of Stephanie Street and Wigwam Parkway in Henderson from Insight Holdings for $7.1 million and plans to build a 95,000-square-foot store at the site. This will be WinCo’s first store in Southern Nevada, according to managing partner Jim Zeiter of Insight, which acquired the land in 2009. Micheal Read, spokesperson for WinCo, said the company has been looking at expansion opportunities in Southern Nevada for several years and will be looking for additional development sites at a later date. Zeiter said there was no bank involved in the sale and it is one of the few recent principal-to-principal land deals in the Las Vegas Valley.

Los Angeles

Owner-user Agron Inc. bought a 120,000-square-foot warehouse and manufacturing facility at 2060 E. Via Arado in Rancho Dominguez from 2060 E. Via Arado Property Co. for $8.1 million. The seller was represented by senior vice president Jerry Gillman and senior associate Chuck Berger of Grubb Ellis Co. Constructed in 1973, 2060 E. Via Arado is a freestanding facility situated on approximately five acres. Agron was represented by Brad Levin of DAUM Commercial Real Estate Services.

14255-14317 Lomitas

Colliers International, the second largest global real estate services organization, recently negotiated a five-year lease for a 155,992-square-foot industrial building located at 14255-14317 Lomitas Ave, City of Industry, Calif. The transaction is valued at $3.1 million. Built in 2001, the property offers state-of-the-art building features including 30’ minimum ceiling clearance and a secured concrete yard. It will be used as a warehouse by the new tenant. Steve Bellitti, senior executive vice president, Tom Taylor, senior executive vice president, and Tony Phu, executive vice president, all based in Colliers International’s Inland Empire office represented the landlord, Lomitas LP, a Orange County-based investor. The tenant, HOT Services, was represented by IDS Real Estate Group. “This is one of the few deals done greater than 100,000 SF size range in Industry this year. By tracking movement in the market, Colliers brokers were able to identify the potential tenant whose building recently sold,” said Phu. “By working with the tenant’s broker, Colliers was able to introduce the prospective tenant to the building and consummate a deal.”

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Bob Howard Bob Howard is a Southern California-based reporter for GlobeSt.com who has specialized in the commercial real estate industry for nearly 20 years. Before that, he was a business reporter in Los Angeles. Before specializing in business and real estate, he was a reporter for daily newspapers in California and Pennsylvania. Contact Bob Howard.

Article source: http://www.globest.com/news/1883_1883/inlandempire/308621-1.html