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JMA Ventures said to be buyer of Westfield Downtown Plaza

Sun, 29 Jul 2012 05:25:56 +0000

JMA Ventures, a San Francisco real estate investment firm that’s a managing partner of more than $500 million in properties, is under contract to buy Westfield Downtown Plaza in Sacramento, according to sources in the local real estate market.

JMA, founded in 1986, has interests in hospitality, leisure, residential developments, retail, office and industrial/telecom projects.

JMA’s portfolio includes some of the premier venues in the Bay Area and Lake Tahoe regions, including Alpine Meadows and Homewood Mountain Ski Resort.

It also oversees Fairmont Heritage Place at Ghirardelli Square in San Francisco and the Waterbar and EPIC Roasthouse restaurants on San Francisco’s Embarcadero waterfront.

Todd Chapman, president and CEO of JMA, said early Friday evening that he could not comment on any Sacramento-area transactions that were not finalized.

However, sources familiar with the deal confirmed that JMA was the prospective buyer. Financial terms of the pending purchase are as yet unknown.

The city of Sacramento has long hoped to see a buyer for the plaza, which has substantial vacant space and was hit hard by the recession. City officials have said they hope a new owner will spruce up the shopping complex and create a public draw to the downtown core.

While commercial real estate circles buzzed with anticipation of a plaza buyer for much of the day on Friday, confirmation was hard to come by.

Westfield Group declined to comment. Executives in the area’s commercial real estate industry declined to speak on the record.

However, one real estate official, who insisted on remaining anonymous, offered this: “All I can tell you is that the Westfield deal is done. It’s a good-news story, and Sacramento will love it when they’re ready to make the announcement.”

Michael Ault, executive director of the Downtown Sacramento Partnership, said he had not heard that JMA was the potential buyer, and stressed that it would be “way premature” to say the center is sold, since such deals can fall apart.

The fate of the nearly 1 million-square-foot Downtown Plaza has bounced around the rumor mill for months.

Last spring, Connecticut-based Starwood Capital Group, owner of Starwood Hotels Resorts, was at the top of the prospective plaza buyer list, including in a Wall Street Journal story of a possible multimillion-dollar transaction involving 16 other properties.

In another development at the Downtown Plaza, lenders have foreclosed on the building housing Macy’s men’s and furniture store at 600 K St., though the store remains open and will continue to operate as usual for now, according to people working in the store.

Macy’s, which declined to comment, leases the three-story building. It is separate from a nearby Macy’s store that specializes in women’s merchandise.

As for the Macy’s men’s/furniture store, local real estate sources said the landlord owed more than $5 million and an auction seeking approximately that amount did not draw any takers. Public records show the property was owned by an entity known as Foster Associates.

The primary lender was identified as U.S. Bank, which likewise declined comment on Friday.

The first two floors at 600 K St. are used for Macy’s retail sales; the third floor is used as a storage area.

Article source: http://www.sacbee.com/2012/07/28/4668436/jma-ventures-said-to-be-buyer.html

Sacramento-area office brokers expect turnaround

Sun, 27 May 2012 17:05:39 +0000

By any measure, office vacancy rates in the Sacramento area are high. And in some locales, they’re obscenely high.

Yet most credible experts who track the complex world of office square footage contend that the region’s future looks promising.

How to explain that contradiction?

“I get that question from friends and business folks every day. I can’t get through a day without hearing it,” said John Frisch, regional managing director of commercial real estate brokerage firm Cornish Carey Commercial Newmark Knight Frank.

Last month, Cornish Carey reported that the Sacramento region’s office vacancy rate in this year’s first quarter hit an all-time high of 23.74 percent, equating to nearly 16 million square feet of vacant space. In 2002, the rate for the whole year was 12 percent.

The first-quarter numbers are the echo of the recessionary hammer that smashed the area’s commercial real estate market in 2008.

However, Frisch cheerfully expects “the office market to get better as the year unfolds.”

And Encino-based Marcus Millichap Real Estate Investment Services’ 2012 annual report also projects an office market turnaround in Sacramento this year.

The optimism lies in the ocean of numbers that’s an industry staple and the sometimes agonizingly slow pace of completing office building/leasing deals.

“We have not seen a tangible improvement in the region in years,” Frisch said. “However, the precursor to any changing in the vacancy rate is leasing activity in the market.

“And right now, we’re seeing better activity in the market than we were seeing six or 12 months ago.”

Frisch explained that it’s not unusual for deals to take six to nine months ? a timetable starting with prospective tenants looking around and ending when they finally move in. As a result, the recent bump up in office leasing might not show up on the region’s statistical radar for another year.

While the process is slow, Frisch said: “I don’t know if there is a better indicator for our local economy than office space vacancy. ? It’s pretty basic. When vacancy is high, things are bad. When it’s low, you have almost full employment.”

Local brokers also stress that it’s a mistake to view the Sacramento region as a monolith. Submarkets in the region are seeing widely varying degrees of progress, or disappointment.

Voit Real Estate Services’ first-quarter regional report for 2012 showed an office vacancy rate of 50.2 percent in the Rio Linda/North Highlands submarket. In downtown Sacramento, it was 10.1 percent.

There are also variations within the submarkets.

Robb Osborne, a senior vice president leading a team of brokers in Voit’s Roseville office, noted that the first-quarter vacancy rate in the Roseville/Rocklin market was 27.4 percent, but that number was affected by a 40-percent-plus vacancy rate along the Highway 65 corridor.

Prior to the recession, numerous high-end office buildings were built along Highway 65, reflecting the area’s economic boom. In the recession, much of that office space went empty.

The high percentage of office vacancies is an advantage for businesses looking to lease or buy.

“We have lost (clients) if they are price-sensitive,” Osborne said. “And right now, everybody is price-sensitive. They’re looking for the best deal.”

Cole Sweatt, an assistant vice president and broker in Voit’s Roseville office, said cost now outweighs all other factors: “In downtown Sacramento, parking has long been an issue, but now, everybody is looking for cheaper rent.”

Osborne and Sweatt characterized Roseville as a microcosm of the local office industry’s ups and downs.

The Voit team marketed the recent sale of the Eureka Corporate Center at 1544 Eureka Road in Roseville ? a modern-looking complex of gleaming offices with panoramic views. The complex wanted for tenants and was taken over by its lender.

Expansive second-floor offices that once housed Orange County-based John Laing Homes ? which filed for bankruptcy protection in 2009 ? lie empty. Sweatt expects the new buyer to fill the empty space with attractive lease offerings.

By contrast, a short drive away are twin office buildings at 3721/3741 Douglas Blvd. Of the 90,000 square feet of deals made by real estate firm Hines last year, about 50,000 were in the 3721/3741 buildings. Hines, which has offices at 400 Capitol Mall in Sacramento, owns about 850,000 square feet of space it’s looking to lease on the busy Douglas Boulevard corridor.

In 2011, Osborne’s Voit team completed 20 office sales totaling 186,000 square feet and 31 office lease transactions comprising 110,103 square feet.

Still, Osborne and Sweatt characterized the current environment as tough ? Osborne believes brokers will be swimming uphill for another year or so ? yet both see indicators of improvement.

Sweatt pointed to a rejuvenated San Francisco/Bay Area business/tech market: “We’re hoping that some of those (companies) will expand or relocate here.”

Osborne said a bump up in residential real estate in and around Roseville was a good sign “that if people are buying a home, they’re probably looking to stay in business.”

Osborne said dovetailing trends in the residential real estate and office markets are producing similar results: Buyers are picking up troubled assets for a comparative song, helped by low interest rates. Those picking up office buildings for a low price can better afford to “undercut” the market to lure tenants, charging square-footage rates well under competitors’ rates.

This creates another trend: Tenants being poached from other buildings with attractive offers.

Frisch said it’s all part of the game: “When Class A space drops to Class B levels, it’s a great opportunity to move up. When prices get really, really good, people who want to get into whatever trophy building there is can afford to move up.”

Frisch said attractive pricing is likewise contributing to leasing activity.

“Now for the first time in years, we are seeing people considering expanding instead of just hunkering down for a year or two to see which way the wind blows,” he said.

Frisch said that includes his own Cornish Carey firm.

“For the last four years, we have extended our lease two years at a time,” he said. “Now, we’re seriously considering expanding and relocating next year.”

Cornish Carey has two local offices ? about 7,500 square feet in Sacramento and 4,500 square feet in Roseville.

Call The Bee’s Mark Glover, (916) 321-1184.

? Read more articles by Mark Glover

Article source: http://www.sacbee.com/2012/05/27/4517394/sacramento-area-office-brokers.html

Investcorp acquires $65m US properties

Tue, 13 Mar 2012 09:40:52 +0000

Investcorp acquires $65m US properties

Manama:

Bahrain-based Investcorp, a leading provider and manager of alternative investment products, has acquired a portfolio of mixed-use commercial real estate properties in the Northern San Francisco Bay Area in the US.

In the largest transaction closed in the North Bay area so far this year, Investcorp’s US-based real estate arm acquired the properties for approximately $65 million, said a statement.

The predominately Class A portfolio comprises 14 buildings, including a mix of office, industrial, and retail properties concentrated in Petaluma, also known as Telecom Valley, totaling 840,637 sq ft.

In acquiring the portfolio, Investcorp ventured with PBJ Acquisitions, a San Francisco-based real estate owner and operator. Together Investcorp and PBJ will seek to increase the net operating income of the properties by leasing the currently vacant space and by renewing existing tenants.

Mohammed Al Shroogi, Investcorp’s president for Gulf Business, said: “Investcorp Real Estate has over 16 years of experience and has completed transactions totaling over $10 billion. In the last 12 months alone, Investcorp has deployed more than $200 million of capital in US real estate including two other acquisitions in the greater Los Angeles area.” – TradeArabia News Service

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