This Week's LA Deal Sheet
Long Beach continues to gain fans in the investment community. Consider SARES REGIS Group's purchase of Pine@Sixth, a 158-unit apartment community in the City's North Pine district. Sares plans a complete makeover to better compete with newer properties in the submarket.
Pine@Sixth is the ninth and final acquisition in the $114M SARES REGIS Multifamily Fund I. Fund co-chief investment officer Bill Montgomery told us yesterday the re-gentrification of downtown Long Beach was a strong attraction. Sares views the property as a diamond in the rough or a blank sheet of paper. The new owner plans a whole slew of improvements, including mechanical system repairs, an exterior facelift, and unit interior upgrades, creating an upscale living environment that's affordable, Bill says. The property was purchased from UDR and was 96% occupied. Over the past 18 months, the fund has bought nine properties in California, Seattle, Denver, Portland and Phoenix, with a total capitalization in excess of $329M.
Pine@Sixth includes a large central courtyard that will be re-made with multiple spaces where residents can gather with friends, with a fire pit, fountain and expanded outdoor kitchen space. One of the community's laundry rooms will be converted to a dog-washing station. Bill notes the Long Beach apartment market boasts a solid job base and strong demand. The property includes 8,600 SF of retail space, of which 4,400 SF is available.
SALES
Rexford Industrial bought a vacant 203k SF industrial building in Van Nuys (7900 Nelson Rd) from RPM Investments for $24.3M. According to Delphi Business Properties' Jeff Puffer, who repped Rexford, the Class-A property was a build-to-suit for a company called Ricon, the sole occupant since construction. After Ricon vacated, the building sat empty for over a year. The seller found an exchange and sold the building off market, with multiple offers from institutional buyers. Jeff's colleague at Delphi, Ross Thomas, repped the seller.
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Unison Investment Co bought a 16-unit, fully occupied multifamily property in Santa Monica (1901 Sixth St) for $6M with a closing cap rate of 3.7%. Located six blocks from the ocean, the 1969-vintage building consists of all one-bedroom units and was recently renovated. Charles Dunn's Kimberly Roberts Stepp repped the seller, 1626 North Fuller LLC. New Life Properties' John Chu repped the buyer.
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A JV of Palisades Capital Realty Advisors' Joaquin de Monet and Mexican real estate investor Sergio Argüelles, president of Monterrey-based FINSA, acquired 4141 N Scottsdale Rd in Scottsdale, AZ from Westport Capital Partners for $34.5M. This is Palisades Mexico Partners' second acquisition in three weeks and its third acquisition in Arizona since July. The three-story, 147k SF Class-A office building is 91% leased. JLL's Dennis Desmond and Brian Ackerman repped both sides, with financing arranged by JLL's Chris Casey. The JV made the purchase through its $50M Palisades Private Capital Fund I, which is doubling to $100M in the first part of 2015.
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The New Home Co bought Arantine Hills, one of the last master-planned community sites in Corona, and formed a JV with Tricon Capital Group to develop the project. The 276-acre site, which boasts direct access to I-15 at Cajalco Road, is approved for 1,621 residential units and nearly 80 acres of commercial and industrial land. Land Advisors Organization's Mackey O’Donnell, R. Jeffrey Spindler, and F. Brian Carricaburu repped the seller, Bluestone Communities.
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A 3.5-acre industrial site traded in San Bernardino (2323 W Baseline) for just over $1.8M and a 6% cap. The property, which includes a 7,420 SF warehouse, is occupied by United Sites Services on a 10-year absolute triple net lease. Lee & Associates' Ryan Barr, Ryan Bennett and Greg Pieratt repped seller 2323 Baseline SB LLC. Commerce Equity Brokers repped the buyer, R & H Investments.
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Land Advisors Organization's Matt Power and Jason Hepp closed the sale of Arbor Ridge, approved for 23 detached condos in Paso Robles.
LEASES
Ideation, a creative services agency, signed a long-term lease for 2,660 SF at the Topaz office tower in San Pedro, in a relocation from El Segundo. Gateway Properties' Dan Matsumoto repped the tenant, while CBRE's Dave Smith, Tim Vaughan and Mike Harry represented owner Jupiter Holdings. Other new leases at Topaz include the Guidance Center, a family and children health services org, and two retail tenants: Hertz Rent-a-Car and Hojas Tea House and Café. The Wixted Group's Laurie Wixted repped the Guidance Center and NAI Capital's Sheri Messerlian repped Hertz. Avison Young's Derrick Moore repped Jupiter in the Hojas transaction.
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King Buffet signed a lease for more than 11k SF at Hawaiian Gardens Town Center in Hawaiian Gardens. Colliers' Michael Bohorquez and James Rodriguez repped the landlord in the deal, which is valued at $1.7M. Blake Fogel of Fogel Real Estate repped the tenant.
CONSTRUCTION/DEVELOPMENT
The Strand Offices, a three-story, 10k SF creative office development, opened in Playa del Rey (311 and 315 Culver Blvd). One of the project's two 5k SF buildings is fully leased to Craft Brew Alliance. According to developer Kim Macy of Cove Spring Partners, this is the first new commercial office building completed in Playa del Rey in more than 20 years. The project is three blocks from the beach and boasts lockable paddleboard, surfboard and bike racks, as well as views of the marina and Ballona Wetlands. Kim says sustainable building practices and materials were used throughout The Strand’s construction, including LEED certified steel foundation piles.
EXECUTIVE NEWS
Gregory Motschenbacher joined C.W. Driver as director of project development throughout California, based in the company's Pasadena HQ. He'll be responsible for building the C.W. Driver professional network and pursuing new project opportunities for all the C.W. Driver Companies. Previous senior management stints include The Brickman Group and his own firm, Trade Link Partners, as well as The Koll Co and ValleyCrest Landscape Development.
