This Week's LA Deal Sheet

A Nevada family with a long-term perspective sold Rancho Plaza, a retail center originally developed in the 1980s as a Bob's Big Boy restaurant, to a private family out of LA for $6.8M. Progressive Real Estate Partners president Brad Umansky tells us he can't recall another time in his career where the same family built a property, held it for 30-plus years, then demolished it to build a new center.

Brad (still looking festive after the company's luau last week) and investment property specialist Frank Vora repped both sides. Brad says the Nevada family developed the property (8678 19th St) for the burger chain, which operated the site for years before subleasing it to an independent restaurant. The family ultimately took back the property and knocked down the Bob's Big Boy building to develop the nearly 12k Rancho Plaza in Rancho Cucamonga. This was the seller's last asset in California. The buyer takes a long-term view, too, having owned a shopping center in Claremont for 25 years.

Located in the northern part of Rancho Cucamonga, adjacent to the 210 Freeway, Rancho Plaza is 100% leased; tenants include Starbucks, Juice It Up, Flame Broiler and Western Dental. Brad says buyers will pay a higher price/SF and a lower cap rate in select Inland Empire marketplaces when they know they're buying quality real estate. He says Rancho Cucamonga is similar to south Orange County—the community is master planned, so you know exactly where your competition will be. In addition, everything along the 210 corridor is built out.

Rancho Cucamonga-based Progressive has the core of its business within a 30-mile radius of Ontario International Airport. Brad's also the Western regional director for Retail Brokers Network, composed of 65 Independent offices throughout the US and Canada. Progressive partner Paul Galmarini recently repped the landlord in two restaurant leases, Oggi’s Pizza & Brewing Co and California Fish Grill, at the Colonies Crossroads shopping center in Upland. Pacific Development out of Newport Beach is developing the retail portion of the 1.1M SF Colonies.

Regarding the IE restaurant scene, Brad notes it's following the same pattern as the rest of the Western US—there's incredibly high demand in properties that are attractive gathering places (like the Colonies (above); Mountain Grove in Redlands—Majestic Realty's under-construction next phase of Citrus Plaza; and the Rancho Cucamonga juggernaut, Victoria Gardens). That said, Brad's seeing a rollover in some of the older concepts that were exciting when they first opened, such as the Elephant Bar closing its San Bernardino location. The challenge for restaurants is that "they sign these very long-term leases, but it's almost impossible for a concept to remain relevant for the length of the lease."

SALES

In a pair of major transactions, SARES-REGIS Group acquired 150 acres of prime industrial land on I-10 in Ontario to develop seven state-of-the-art, LEED-certified distribution buildings totaling approximately 3M SF. The largest of the buildings has been pre-leased to QVC for the giant video and e-commerce retailer’s first West Coast distribution hub. Containing just over 1M SF, the building will be completed July 1, 2016, and boast 30k SF of office and cafeteria space. The company anticipates hiring 1,000 employees by 2020. The property is part of the undeveloped 243-acre Meredith International Centre, extending nearly a mile on the north side of I-10 between Archibald and Vineyard avenues, which is part of a new Specific Plan and Development Agreement approved by the Ontario City Council. Lee & Associates' Joe McKay repped SRG in the land purchase and lease. Lee's Chuck Noble, John Hatzis and Dave Hunsaker repped the land seller, the Meredith family. CBRE's Erik Wanland in Ontario and Mike Barker in Wayne, PA, repped QVC.

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California Landmark president Ken Kahan sold Villa Montana, a 20-unit apartment property in West LA to a private investor for just over $20M. According to Marcus & Millichap, the property (11611 Montana Ave in Brentwood) fetched the highest sales price/unit for an LA apartment building not adjacent to the ocean. (For the math-challenged, it equates to slightly over $1M/unit.) According to M&M's Ron Harris, who represented Ken and procured the buyer along with Greg Harris and Paul Darrow, the Spanish Revival-style Villa Montana was designed to condo specs and would be difficult to replicate in Brentwood today. Kevin Green, Joseph Grabiec and Michael DiSimone were also part of the listing team. The buyer acquired the property without debt, exchanging out of a property in NYC.

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Marking its first investment in the SoCal retail market, Harbor Group International partnered with Image Capital to buy 357 N Beverly Dr, a 14k SF, Class-A urban retail property in Beverly Hills's Golden Triangle for $40M. The property is 100% leased on a triple net basis to H&M subsidiary C.O.S. for the brand’s first US store.

LEASING

Penske Logistics leased a truck terminal containing nearly 18k SF in South Gate (9925 Miller Way) from Dedeaux Properties. Voit Real Estate Services' David Fults and Brian McLoughlin repped the landlord in the lease deal valued at $3.6M. According to David, the building sits on 184k SF of land and is located on the 710 Freeway, providing great access to the Ports and Central LA. Because of the lack of trucking-approved properties in LA, he and Brian were able to drive multiple offers on the property and get excellent lease terms. Cushman & Wakefield's Chuck Berger and Mike Foley repped Penske, which will use the property for container storage.

 
EXECUTIVE NEWS

TMC Financing added Diana Hallal and Christina Johnson to the firm's SoCal commercial real estate lending team of Jennifer Davis and Jennine Gilmer. Diana, who joins TMC as SVP of business development, is responsible for the acquisition of commercial real estate loans while Christina, a business development associate/junior loan officer, provides commercial loan production support. The pair came to TMC from Union Bank. In the past three years, TMC has participated in projects worth more than $612M to SoCal businesses, primarily through the US SBA 504 lending program.

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Mark Montoya joined Snyder Langston's residential construction division SL Residential as VP-Multifamily, focused on developing the multifamily market in LA as part of the builder's growth strategy for the LA region. The 30-year industry veteran comes to the firm from Morley Builders, where he was responsible for the executive management of the residential division, overseeing student housing, multifamily, mixed-use, affordable and senior housing communities.