July 3, 2014 | ISSUE 379

Western Real Estate Business E-Newsletter
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Clarion Partners Buys Latitude 34 
Office Campus in Playa Vista
Latitude 34 is a 301,642-square-foot office campus within the master-planned community of Playa Vista.

LOS ANGELES -- Clarion Partners has acquired Latitude 34, a 301,642-square-foot office campus within the master-planned community of Playa Vista, for a reported $132 million. The two-building campus is located along Millennium Drive in the Los Angeles submarket, just minutes from Los Angeles International Airport. 

 

Clarion plans to implement a capital improvement program at the property, in addition to new landscaping and creative speculative suites. The design will be handled by Gensler. 

 

"This premier property will offer tenants a dynamic, high-performance office environment designed for creativity and collaboration, located within a vital 'live/work/play' setting that is attracting prominent media, advertising and high-tech groups," says Khalid Rashid, vice president of Clarion. 

 

The seller was ASB Real Estate Investments. Lincoln Property Company and L.A. Realty Partners will be retained as the leasing and management entities. 

 

"This acquisition gives us a significant position in one of the fastest-growing submarkets in Los Angeles," says Rick Schaupp, Clarion's director and portfolio manager. "Our intention is to create a new breed of workplace, one where ideas become opportunities and people move fluidly between work spaces -- indoors and outdoors -- in order to connect and enjoy a sense of community."


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Silicon Valley Office Campus Sells for $52.1M

Nimble Storage uses the Silicon Valley office campus as its U.S. headquarters.
SAN JOSE, CALIF. -- American Realty Capital has acquired a 165,000-square-foot office campus in San Jose for $52.1 million. The three-building campus is located on River Oaks Parkway at Zanker Road in San Jose. 
 
The seller, Bixby Land Company, originally acquired the campus in 2011 in two separate transactions for a total of $19.5 million. The company redesigned the space before leasing it to Nimble Storage. The property includes a 30,000-square-foot outdoor living room that can be used for collaboration or relaxation. 
 
"We developed a vibrant, collaborative work environment with the image and amenities that today's companies demand," says Bill Halford, Bixby's president and CEO. "This is a fitting time to realize our investment objective following the successful renovation and leasing of the project." 
 
American Realty Capital represented itself in this transaction. Bixby was represented by Mark Penrod and Andy Zighelboim of Eastdil Secured.

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Partners Capital Buys Crossroads at Sunset Shopping Center in Henderson 

Crossroads at Sunset Shopping Center is anchored by Sports Authority, Toys R Us, O'Reilly Auto Parts and Wells Fargo.

LAS VEGAS -- Partners Capital has acquired Crossroads at Sunset Shopping Center, a 165,000-square-foot retail center in the Las Vegas submarket of Henderson, for an undisclosed sum. The center is located at the southwestern intersection of Sunset Road and Stephanie Street. 

 

Crossroads is anchored by Sports Authority, Toys R Us, O'Reilly Auto Parts and Wells Fargo. It is situated near the Galleria at Sunset mall and Sunset Station casino. 

 

Partners Capital and its affiliates took possession of the center after purchasing its debt from a special servicer in an all-cash, 10-day transaction. 

 

"We are pleased to add this shopping center to our growing portfolio," says Bobby Khorshidi, the firm's president and principal. "The deal characteristics checked most of the boxes in our acquisitions criteria, which includes value-added opportunities in dense infill locations with strong demographics at a price that is less than replacement cost. We look forward to continuing to grow our presence in the Las Vegas MSA." 

 

In the past five years, Partners has also acquired Charleston Festival, Stone Canyon Professional Park, Bonita Plaza and Mall Ring, an outparcel of the Galleria at Sunset, all in the Las Vegas area.


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The Springs Apartments in Corona Sells for $43.2M

The Springs Apartments contains 20 buildings that were constructed in 1987.

CORONA, CALIF. -- A joint venture between the Bascom Group and funds managed by Oaktree Capital Management has acquired the Springs Apartments, a 320-unit apartment complex in Corona, for $43.2 million. The garden-style community is located at 650 Ebbcreek Drive. The Springs contains 20 buildings that were constructed in 1987. 

 

"We have seen a steady improvement in the Corona submarket over the past year," says Lee Nguyen, Bascom's senior vice president of operations. "Both rents and occupancies have strengthened. Ultimately, we feel that the Springs is ideally positioned to benefit from a new ownership team that is ready to work hard to improve the tenant experience at the property." 

 

The joint venture is looking to acquire $250 million in value-added multifamily properties throughout the U.S. Debt for the Springs was arranged by CBRE's Brian Eisendrath through OneWest Bank. 

 

"We both see continued investment opportunities in the value-add multifamily sector," says Chad Sanderson, Bascom's principal. "This partnership will have a strong focus on acquiring properties throughout Southern California. The Springs is located adjacent to Orange County and is surrounded by a robust employment base. As fundamentals in the region continue to strengthen, we believe the investment potential of the asset will continue to benefit."


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MacFarlane Partners Buys Park Fifth Development Site in Downtown Los Angeles

 

LOS ANGELES -- MacFarlane Partners has acquired Park Fifth, a 2.2-acre development site in Downtown Los Angeles, for nearly $40 million. The site is located on the corner of Fifth and Olive streets. MacFarlane plans to develop mid- and high-rise residential properties on the site, in addition to retail. 

 

The Fifth and Olive intersection has been a popular one with developers as of late. Aside from Park Fifth, new developments at this juncture include Metropolis, G12 and the Rosslyn Hotel. 

 

The seller of Park Fifth was Africa-Israel USA (AFI-USA). The sale was executed by Jimmy Kuhn, Chris Cooney, Josh Levy and Matt Dobso of Newmark Grubb Knight Frank. 

 

"With patience and determination, we closed on the Park Fifth site at a price nearly 50 percent higher than it was estimated at just two years ago," says Chagit Sofiev-Leviev, CEO of AFI-USA. "MacFarlane Partners is a visionary real estate investor and developer that will no doubt add value to the Downtown Los Angeles community with this project."


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Jackson Properties Buys 

University Office Park in Sacramento 

University Office Park is Jackson's fourth project within the Campus Commons community.

SACRAMENTO, CALIF. -- Jackson Properties has acquired University Office Park, a 130,000-square-foot office campus in Sacramento, for nearly $20 million, according to reports. The six-building campus is located at 777 Campus Commons Drive in the master-planned community of Campus Commons. 

 

"University Office Park is our fourth project in Campus Commons," says John Jackson, Jr., president of Jackson Properties. "We are very familiar with the market and the appeal of the area for office users. It's central location and close proximity to desirable neighborhoods and quality amenities is unmatched. University Office Park is an excellent addition to our portfolio." 

 

The campus is situated on 12 acres next to two fully leased office buildings that Jackson recently developed. The transaction includes additional land for future development. The property is flanked by Fair Oaks Boulevard, as well as University and Howe avenues. 

 

"We are thrilled to have this opportunity to acquire additional Class A office product at one of the region's most iconic office addresses," Jackson continues. "The structural integrity of the buildings is excellent. We intend to elevate the project to the standards tenants of newer Class A buildings expect."


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City 15 Apartment Building in Phoenix Sells For $10.8M 

City 15 recently underwent interior and exterior renovations. It was built in 1969.

PHOENIX -- City 15, a 161-unit apartment complex in Phoenix, has sold to Retirement Concepts for $10.8 million. The 26-building complex is located at 4728 N. 15th Street. 

 

The community was built in 1969. It was 96 percent occupied at the time of sale. 

 

The seller, Mica Creek-Sagamore Capital Partners, was represented by Brett Polachek and Jim Crews of Cushman & Wakefield. 

 

"The property attracted a lot of attention given its location," Polachek says. "City 15 has undergone interior and exterior renovations and has captured the demand for urban living."


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NationBuilder Leases 54,780 SF at Millennium Biltmore Hotel Los Angeles 

The second floor of the Millennium Biltmore Hotel Los Angeles hasn't been occupied for several decades.

LOS ANGELES -- NationBuilder has signed a 10-year lease for 54,780 square feet of space in Biltmore Court at the Millennium Biltmore Hotel Los Angeles in Downtown. The property is located at 520 South Grand Ave. 

 

The community-building software technology company will occupy the entire second floor of the historic building, which spans from Grand Avenue to Olive Street, overlooking Pershing Square. 

 

Renovations to convert this space into a creative office will commence immediately. The Biltmore's second floor hasn't been occupied for several decades. 

 

"This is a historic opportunity to expand and rebuild our community in the heart of Los Angeles," says Jim Gilliam, NationBuilder's CEO. "And the Biltmore could not be a more perfect place to do that." 

 

This is the largest lease executed in the Biltmore's history, and the largest office lease by a local technology start-up in Downtown Los Angeles, according to CBRE Research. 

 

NationBuilder was represented by Dennis Smith and Griffin Farriss of Travers Realty. The landlord, WHB Biltmore LLC, was represented by CBRE's Andrew Tashjian. 

 

"NationBuilder is a local, home-grown tech company fully invested in, and loyal to, the community where it was founded," Tashijian says. "They've been bursting at the seams, and are ready to grow into a cutting-edge, collaborative, creative space which matches their personality as a company vested in community innovation. This lease is representative of the overall growth and fundamental changes we're seeing in Downtown LA."


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Nellie Day, Editor
Western Real Estate Business 
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