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Everyone wants a piece of OC retail, especially close to the coast, CBRE SVP Phil Voorhees tells us. (If you have OC retail space you might get featured in a Kardashians episode.) But it's tough to get in. Here's why.  1) Demand is up among investors, but supply isn't. “We haven't seen this kind of dearth of retail centers for sale in Orange County in years,” Phil says (snapped with son Mercer). That isn't going to keep investors from trying, however. Phil tells us that the strong interest in the property type ought to last the rest of the year and well into '15.  2) Why do they want in so badly? Vacancy rates continue to decline, and rents remain strong, particularly in the best coastal markets, Phil explains. From the market bottom in 2010, the economy is give-or-take four years into the recovery cycle that has historically lasted seven or more years, so there's still a lot of upside value to be captured. Recently, Phil and colleagues Brad Rable, Megan Read, Matt Burson, Jimmy Slusher, and John Read repped the seller of the 35k SF Garden Grove Festival Square in Garden Grove, which traded for nearly $12M, at a 5.59% cap.  3) There are also macroeconomic factors. The spread between cap rates and interest rates—across all retail asset types—is about twice as wide as it was at the peak of the 2006-07 cycle, Phil adds. “As long as Treasuries remain low (about 2.5% now, down from about 3% at the start of the year), we expect the strong run to continue.” |
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SoCal Industrial Comes Back Everywhere Newport Beach-based REDA principal Jason Krotts says his company's poised to take advantage of the comeback in SoCal industrial, with more than 3M SF in development projects in the pipeline, including 500k SF of spec space it just broke ground on with JV partner Irvine-based Bascom Group (Jason's on the right, with Bascom Group managing principal Jerry Fink). The two spec developments are the 141k SF Malt Avenue Distribution Center in City of Commerce and the 358k SF Hemlock Distribution Center in Fontana. SoCal industrial hasn't just come back in a few select markets, Jason explains, it's come back everywhere there's a significant industrial concentration in OC, IE, and LA County. “The activity level in Southern California continues to lead the nation,” he says. |
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What You Don't Know About Bill Passo Position: Passco Cos CEO Background: Bill Passo has overseen the growth of the firm, which has acquired, managed, or developed more than $3B in property in 20 states since he founded it in 1998. Picture taken: Bill and Eileen “Magic” Passo in The Bugaboos in British Columbia, celebrating Bill reaching one million vertical feet heli skiing. Projects Passco is known for: Puente Hills Mall. The company purchased the property in 2003 and sold it in 2005, in the largest TIC transaction in the industry at that time. It'is still one of the top five transactions in the TIC industry. Also, the Promenade at Howard Hughes. Located off the 405 freeway at Sepulveda, it's a lifestyle center Passco converted to an entertainment center. Favorite Song: “Me and Bobby McGee” by Janis Joplin Music Group: Fleetwood Mac Favorite vacation: Riding camels in front of the Egyptian pyramids and seeing gorillas in Rwanda. "My favorite city of all time is Rome!" Favorite Book: Think and Grow Rich by Napoleon Hill Favorite Food: Italian Startling fact: Bill has scored even par twice playing golf. |
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OC Events for Charity |
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 Snapped: Lee & Associates Orange prez Bob Sattler, Lee media guru Lisa Congdon, and Lee CEO Jeff Rinkov. Lee & Associates Orange blood drive, which Lisa organized, attracted more than 60 people to donate, including Bob, Jeff, Lee brokers, staff, and various drop-by donors from other Lee offices and other real estate brokerages. The drive was organized in honor of friend and co-worker Clif Fincher, who has been hospitalized since early February, having undergone a series of procedures that have required daily blood transfusions. Lisa tells us the drive will be an annual event. |
 When in doubt, play bocce ball (at least that's what we do). Snapped: members of the HKS Architects OC team at the fifth annual IOS & Haworth Bocce Ball Tournament on the sand in Newport Beach last Thursday. Tourney winners donated to the local charity of their choice. Overall winner CRESA gave $2,000 to CJ Hubbard, broker division winner CBRE gave $1,500 to Boys Hope Girls Hope, and architecture and design division winner LPA gave $1,500 to Kids Work Santa Ana. |
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