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San Francisco Office Building Located
at 225 Bush St. Sells for $350M
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The Class A building at 225 Bush St. was originally the headquarters for Standard Oil when it was built in 1922.
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SAN FRANCISCO -- Chinese developer Kylli Inc. has acquired the 583,000-square-foot office building at 225 Bush St. in San Francisco's central business district. This is the largest office sale in San Francisco since 2012, according to Flynn Properties and GEM Realty Capital, two of the building's owners.
The Class A building was originally the headquarters for Standard Oil when it was built in 1922. The 22-story tower is currently 99 percent leased. Notable tenants include Lithium Technologies, Groupon, Zillow, Twitch.tv, Meltwater and RocketSpace.
Flynn and GEM originally purchased the building in 2000. The joint venture owned the building with partner Whitehall-Goldman Sachs until 2005. In 2012, the joint venture partnered with SEB ImmoInvest on the building. GEM and SEB sold their entire stakes in 225 Bush St. as part of the sales transaction.
Flynn will remain as an investor in the new joint venture. It will also act as the property manager and leasing agent for 225 Bush St. JLL identified Kylli as Flynn's new joint venture partner. The firm also provided support on this cross-border transaction.
"We've seen increasing interest from Chinese buyers in trophy office buildings in global gateway cities for several years, with a focus on London and New York to date," says Rob Hielscher, a managing director who led the JLL Capital Markets team. "This large, off-market transaction shows that Chinese investors are also aggressively pursuing Class A office buildings on the West Coast of the United States."
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RLJ Lodging Trust Acquires West Coast Hotels in Off-Market Deal for $120M
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 | | The 256-room Courtyard Portland City Center in Portland, Ore., and the 293-room Embassy Suites Irvine Orange County (pictured) in Irvine, Calif., were purchased in an off-market transaction for $120 million. |
PORTLAND, ORE. AND IRVINE, CALIF. -- RLJ Lodging Trust has acquired two hotels on the West Coast, the 256-room Courtyard Portland City Center in Portland, Ore., and the 293-room Embassy Suites Irvine Orange County in Irvine, Calif., in an off-market transaction for $120 million.
The purchase price, which equals about $219,000 per key, represents a 7.4 percent cap rate on the hotels' projected 2015 net operating income.
The custom-designed Courtyard Portland City Center's location in downtown Portland enables the hotel to benefit from corporate, group and leisure demand throughout the city.
According to RLJ, Downtown Portland's relatively high barriers to entry are expected to limit new hotel supply. The all-suite Embassy Suites Irvine Orange County hotel is located less than one mile from the John Wayne Airport. The hotel is located in the largest office submarket in Orange County, with more than 22 million square feet of office space and more than 24 million square feet of industrial space within close proximity.
The hotel's all-suite product is also an option for visitors to destinations including Disneyland, the beaches of Huntington Beach and Laguna Beach and the area's various sporting events.
The purchases were funded with cash available on RLJ's balance sheet and its revolving credit facility. The company expects to use proceeds from the recently announced follow-on offering to repay its revolving credit facility.
With the addition of these two hotels, RLJ Lodging Trust now owns 148 properties in 21 states and Washington, D.C., consisting of 146 hotels with approximately 23,000 rooms and two planned hotel conversions.
Click here to read the rest of Scott Reid's story.
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Prudential Buys One Pacific Plaza
in Huntington Beach for $93.6M
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 | One Pacific Plaza is a Class A office campus that contains a
193,081-square-foot office tower and two mid-rise office buildings in Huntington Beach. |
HUNTINGTON BEACH, CALIF. -- Prudential Real Estate Investors has acquired One Pacific Plaza, a 384,303-square-foot office campus in Huntington Beach, for $93.6 million. The three-building plaza is located at 7755 Center Ave., just off Interstate 405.
Lincoln Property Company and GEM Realty Capital acquired the Class A plaza in October 2011 through a receivership sale. That sale included the 193,081-square-foot office tower and two mid-rise office buildings, in addition to the adjacent 24-Hour Fitness center and Buca Di Beppo restaurant.
The retail assets have since been sold. Many other retail outlets are also nearby, as the Bella Terra shopping center is just steps away from One Pacific Plaza.
The joint venture has made significant upgrades to the property over the past three years. The lobby, elevators and common areas were all remodeled, while new outdoor courtyards with seating areas were added to the exterior.
The plaza's occupancy also increased during this period. It rose from 60 percent in 2011 to a current rate of 80 percent. There are now more than 40 local and national tenants that call the plaza home. Notable tenants include BJ's Restaurants, Health Net of California and Managed Health Network Inc.
Lincoln will stay on as the plaza's property manager. The transaction was executed by Eastdil Secured.
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Pebblebrook Buys Prescott Hotel
in San Francisco for $49M
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SAN FRANCISCO -- Pebblebrook Hotel Trust has acquired the 160-room Prescott Hotel in San Francisco for $49 million. The hotel is located on Post Street, just one block from Union Square. It also enjoys close proximity to the Moscone Convention Center, the Powell & Market cable car turntable and the Westfield San Francisco Centre.
The Prescott Hotel contains two buildings. The 96-room, seven-story building is located at 545 Post St. Pebblebrook will own a fee-simple interest in this property. The company will own a leasehold interest in the second building, which contains 64 rooms on floors three through seven. That building is located at 555 Post St. There is 75 years remaining on that lease, which expires in 2089.
"We're excited about our acquisition of the Prescott Hotel and our opportunity to further expand our already strong presence in the highly desirable San Francisco market," says Jon Bortz, Pebblebrook's chairman and CEO. "This hotel...is central to San Francisco's primary business demand drivers, including the Financial District, the Moscone Convention Center and the Union Square submarket, which has historically outperformed all other submarkets within San Francisco due to its well-balanced, diversified mix of leisure, corporate, group and convention demand."
The former building was originally built in 1913 as the Cecil Hotel, while the latter building was constructed in 1922 for the Union League Club. Both buildings were renovated, repositioned and reopened as the Prescott Hotel in 1989.
Pebblebrook also plans to renovate and reposition the property sometime between 2015 and 2016.
"We are thrilled with the opportunity to creatively reposition the Prescott Hotel," continues Bortz. "We believe a renovated and repositioned product will be positively received in the vibrant Union Square market, and the comprehensive nature of the repositioning will bring a new and unique guest experience to San Francisco."
Dawson Design Associates will oversee the hotel's design. Kimpton will continue to manage the property. This is Pebblebrook's sixth investment in San Francisco.
The Prescott Hotel operated at 88 percent occupancy last year. It posted an average daily rate of $206, and a RevPAR of $181.
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Terra Vida Apartments in Fort Collins Sells for $39M
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 | | Terra Vida is located near Colorado State University, as well as some of the area's major employers based along East Harmony Road. |
FORT COLLINS, COLO. -- Mountain View Capital has acquired the 240-unit Terra Vida apartments in Fort Collins for $39 million. The community was built in 2012 at 3707 Precision Drive. It was 96 percent occupied at the time of closing.
Terra Vida enjoys close proximity to Colorado State University, as well as some of the area's major employers that are located along East Harmony Road. They include Agilent Technologies, HP, Intel, Poudre Valley Health Systems and Wolf Robotics.
ARA Colorado's Doug Andrews, Jeff Hawks, Terrance Hunt and Shane Ozment represented the seller, Milestone Development Group LLC and its partner, Les Kaplan, in this transaction.
"Terra Vida is the newest and most luxurious apartment community in Northern Colorado," says Hunt. "This property is well located to take advantage of the ongoing expansion of Harmony Road and the growing energy market in Northern Colorado."
Hunt and Ozment recently participated in another local transaction as well. Virt� Investments acquired the 112-unit Hillcrest Apartments in Durango for $14.5 million. The community is located at 1000 Goeglein Gulch Road. That property was 92 percent occupied at the time of closing.
The duo represented the seller, Butte Cos., along with the firm's Andy Hellman.
"There was significant interest in Hillcrest due to it being the newest property in the market and over 100 units," says Ozment. "It is virtually impossible to build in the city of Durango, especially a community of this size due to construction costs and the shortage of buildable ground."
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Timberline Village Apartments
in Flagstaff Sells for $22.2M
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 | | Timberline Village's rents range from $875 for a one-bedroom, one-bathroom unit to $1,350 for a three-bedroom, two-bathroom unit. |
FLAGSTAFF, ARIZ. -- Clear Sky Summit LLC has acquired the 168-unit Timberline Village Apartments in Flagstaff for $22.2 million. The community is located at 4255 East Soliere Ave. It sits adjacent to the Continental Country Club's golf course.
The Class A luxury apartment community was built in 1997. Rents range from $875 for a one-bedroom, one-bathroom unit to $1,350 for a three-bedroom, two-bathroom unit.
David Fogler and Steven Nicoluzakis of Cassidy Turley represented Clear Sky Capital, the LLC's affiliate, in this transaction. The seller was Bassham Trust's Timberland Village I & II LLC.
"This is the second multifamily purchase in Flagstaff for Clear Sky Capital this year," says Nicoluzakis. "They recently purchased the adjacent Timberline Place, and with this acquisition, will add value through implementation of a capital improvement program to the common area amenities and by taking advantage of operational efficiencies."
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Spring Valley Town Center Property
in Las Vegas Sells for $11.5M
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 | | Spring Valley Town Center is occupied by tenants like La Bonita Supermarkets, Lee's Discount Liquor, Bank of America, UPS Store, 7 Eleven, GNC and Fatburger. |
LAS VEGAS -- A 60,105-square-foot portion of Spring Valley Town Center in Las Vegas has sold to First Allied Corp. for $11.5 million. The 267,000-square-foot center is located at 6775 and 6847 W. Flamingo Road, and 4122 and 4260 S. Rainbow Blvd.
The center is 92 percent occupied. Notable tenants within the acquired portion of the center include the UPS Store, 7 Eleven, GNC and Fatburger. Additional tenants not involved in the sale include La Bonita Supermarkets, Lee's Discount Liquor and Bank of America.
The all-cash buyer represented itself in this transaction. David Jewkes of Integris Realty Services acted as court-appointed receiver on behalf of the loan servicer, Five Mile Capital. The receivership sale was executed by Robert Moore, Lisa Brady and Katie Brase of Faris Lee Investments' Las Vegas office.
"Investors are screaming for real estate ownership opportunities -- which are scarce in the Las Vegas area -- as the fundamentals are favorable, retail rents are moving upward, and economic recovery is in full force," says Moore, senior managing director with Faris Lee Investments. "Faris Lee garnered 15 solid offers on Spring Valley Town Center, making this a prime example of momentum in the market."
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Walmart Shops at Laveen Village
in Phoenix Sells for $7.1M
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 | | Walmart Shops at Laveen Village is a 47,098-square-foot neighborhood shopping center in Phoenix. |
PHOENIX -- Walmart Shops at Laveen Village, a 47,098-square-foot neighborhood shopping center in Phoenix, has sold to Eleven Investments LLC for $7.1 million. The center is located at 3525 W. Southern Ave.
The property was 77 percent leased at the time of sale. Notable tenants include Walmart Supercenter, Church's Chicken, Sally Beauty Supply and Cricket Wireless.
Ryan Schubert and Michael Hackett of Cassidy Turley's Retail Capital Markets Group represented the seller, Pacific West Land LLC.
"Eleven Investments made an opportunistic purchase of this quality asset, which they anticipate adding substantial value to through lease-up and potential development of the outparcel," says Hackett.
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Contact Us
| Nellie Day, Editor
Western Real Estate Business
France Media Inc.
Main Office: 404-832-8262
nday@francemediainc.com
www.rebusinessonline.com
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