June 10, 2014 | ISSUE 372

Western Real Estate Business E-Newsletter
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California Center Office Campus
in Pleasanton Changes Hands
California Center is a six-building, 1 million-square-foot office campus in Pleasanton, Calif.

PLEASANTON, CALIF. -- Swift Realty has acquired California Center, a 1 million-square-foot office campus in Pleasanton. The campus was acquired for approximately $155 million, according to the San Francisco Business Times. The six-building property is located at 4400 Rosewood Drive in the Hacienda Business Park. 

 

California Center features a state-of-the-art conference center, 600-seat cafeteria and fitness center. It also contains an 8.4-acre site that is fully entitled for 305 residential units. 

 

JLL's Rob Hielscher, Michel Seifer and Aaron Herter brokered the transaction. The seller was RREEF.

 

"The sale of California Center allowed the seller to take advantage of a very attractive capital markets environment, while Swift Real Estate Partners was able to obtain a Class A office property in a tightening market at a significant discount to replacement cost," says Hielscher. "California Center's premier location and near-term upside potential led to a very competitive bidding process."


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IPA Arranges $83M Sale of 132-Unit
Bay Area Apartment Complex


Township, an apartment complex in Redwood City, features amenities that include a fitness center, whirlpool spa, business center and outdoor kitchen.

REDWOOD CITY, CALIF. -- Institutional Property Advisors (IPA) has brokered the sale of Township, a 132-unit multifamily complex in the San Francisco suburb of Redwood City, for $83 million. 

 

Completed earlier this year, the community includes one-, two- and three-bedroom apartments averaging 914 square feet, plus amenities such as a fitness center, whirlpool spa, business center and outdoor kitchen. 

 

Located at 333 Main St., the property is in proximity to the major thoroughfares of Veteran's Boulevard and U.S. Route 101, as well as major area employers Oracle Corp., Electronic Arts, Shutterfly, Rocket Fuel, Stanford University, Facebook, Sony Computer Entertainment America LLC and Gilead Sciences. 

 

Stanford Jones, Philip Saglimbeni, Salvatore Saglimbeni of IPA, a division of Marcus & Millichap, represented the seller, a joint venture between Sares Regis Group and J.P. Morgan Asset Management. 

 

"Apartment operations remain very healthy in Redwood City and throughout San Mateo County," says Jones. "Since reaching a cyclical peak in 2009, vacancy has declined at a healthy clip, decreasing 160 basis points. Redwood City currently demonstrates tremendous market fundamentals with approximately 9 percent year-over-year market rent growth and an average occupancy of 96.1 percent reported as of the fourth quarter of 2013."


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D.R. Horton Purchases 622 Lots
in the Inland Empire for $62M

D.R. Horton purchased, among other parcels, 178 lots at Mission Estates in Jurupa Valley, outlined in red.

FONTANA, CALIF. -- D.R. Horton has acquired 622 lots in three separate residential developments throughout the Inland Empire for $62 million. The deal contains a total of 246 finished lots, including 178 lots at Mission Estates in Jurupa Valley and 68 lots at Rosena Ranch in the Lytle Creek area of San Bernardino County. It also includes 376 lots that are fully entitled but undeveloped at Bella Strada in Fontana. 

 

"We acquired these properties several years ago when the land market in the Inland Empire was at a low point," says Steve Cameron, president of Foremost Communities, the seller. "At this point, Foremost has added all the value we can through modified entitlements and cleaned-up development issues. We've seen significant market lift and have sold these properties to achieve our business plan objectives." 

 

Starwood Capital Group Global acted as Foremost's financial partner on two of the transactions. Foremost has nearly 7,800 lots across Southern California under ownership or management. 

 

"We have a great portfolio of residential land and we continue to seek further investment opportunities in Southern California to add to our holdings," says Cameron. "As our properties become ready for homebuilders and market conditions continue to improve, we plan to periodically bring additional lots to the market." 

 

Province West and Land Advisors represented Foremost in the transaction. Tom Dallape and Norm Scheel of The Hoffman Company also assisted on this transaction.


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NorthMarq Capital Arranges $61M Loan
for Merchants Exchange Building

Merchants Exchange Building was one of the only trophy buildings to survive the 1906 earthquake in San Francisco.

SAN FRANCISCO -- NorthMarq Capital has arranged $61 million in financing for the Merchants Exchange Building, a 241,961-square-foot office building in San Francisco. The building is located at 465 California St. 

 

Merchants Exchange Building was built in 1903. It is one of the only trophy buildings to survive the 1906 earthquake in San Francisco. 

 

Jeffrey Weidell and Andrew Slaton of NorthMarq Capital's San Francisco regional office arranged the loan. Weidell and Slaton had initially arranged about $47.5 million in financing before advancing an additional $13.5 million. The advance will mature in 11 years, along with the existing debt. 

 

"For this unique and historically significant asset, we were able to work with one of our correspondent life company lenders to negotiate additional funding on top of the existing loan," says Weidell. "The sponsor, Clint Reilly Cos., is a skilled operator that has invested greatly in maintaining and modernizing the building - and it shows. Moreover, this trophy office building, located in the heart of the San Francisco Financial District, has performed well with rising demand for office space."


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CBRE Brokers Sale of Two Scottsdale Office Buildings for $44.2M
Scottsdale Gateway I was 91 percent leased to five tenants at the time of  sale.

SCOTTSDALE, ARIZ. -- CBRE has brokered the sale of two office buildings in Scottsdale totaling 223,131 square feet for a combined $44.2 million. The properties include the 106,931-square-foot Scottsdale Gateway I, which is located at 9201 E. Mountain View Road; and the 116,200-square-foot 92 Mountain View, which is located at 10001 N. 92nd St. 

 

Constructed in 1998, Scottsdale Gateway I is a two-story, Class A facility that was 91 percent leased to five tenants at the time of the sale. Built in 1996, 92 Mountain View is also a two-story, Class A facility and is fully leased to CVS Caremark. 

 

Barry Gabel, Chris Marchildon, Kevin Shannon, Ken White and Michael Moore of CBRE represented the sellers, TR Scottsdale Gateway I Corp. and TR 92 Mountain View Corp., in the transaction. Jenifer Ratcliffe, Erin Curry and David Krumwiede of LPC Realty Partners Ltd. also assisted in the transaction. 

 

Equus Capital Partners purchased the two assets and has retained CBRE to manage the properties. Bryan Taute of CBRE will lease the buildings. 

 

"Interest in these two assets was exceptionally high given their strong leasing history," says Gabel. "Both properties are located in a dynamic infill location and each has averaged 90 percent occupancy for the past 10 years due to being surrounded by strategic economic engines such as Scottsdale Healthcare's Shea Medical Campus and the CVS Caremark Corporate Campus. In addition, the properties are both in excellent condition, boast exceptional parking and are adjacent to abundant retail services and the Loop 101 Freeway."   


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Johnson Capital Arranges $27.6M Loan
for Metro Seattle Apartments

Funds will be partially used to renovate Bristol I at Southport.

RENTON, WASH. -- Johnson Capital has arranged $27.6 million in permanent financing for Bristol I at Southport, a 188-unit apartment property in the Seattle suburb of Renton. 

 

Completed in 2002, the Class A complex includes studio, one-, two- and three-bedroom residences, as well as 10,037 square feet of commercial space. 

 

Amos Smith and Sean Skelton of Johnson Capital arranged the 15-year loan through an unnamed life insurance company on behalf of the borrower, a privately owned development company. Proceeds from the loan were used to retire existing debt and fund renovations of the property, such as interior refurbishments and a "re-skinning" of the exterior to maintain consistency with the adjacent Bristol II at Southport.


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William Grimm Named New COO  

of Cannery Row Co. in Monterey

 

Grimm climbs ranks to become COO of Cannery Row Co.

 

MONTEREY, CALIF. -- William "Bill" Grimm has been promoted to chief operating officer of the Cannery Row Co., a commercial development firm in the Monterey Peninsula area. 

 

Grimm previously served as executive vice president of real estate leasing and acquisitions. 

 

He joined the company in 2001 from Gloria Jean's Coffees where he was an officer and the vice president of global development. 

 

The Cannery Row Co. also operates in northern California.


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Nellie Day, Editor
Western Real Estate Business 
France Media Inc.
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