InterMountain Management Develops Two Marriott Hotels

By Natalie Dolce

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The two properties together will
provide more than 200 new rooms.

(Mark Your Calendars: RealShare REAL ESTATE 2012, March 22^nd in Los Angeles).

DEVELOPMENT

LAKEWOOD, WA-This month, prep work began on a site located on Pacific Highway that will soon be home to both a Courtyard by Marriott and a TownePlace Suites by Marriott. The two properties together will provide more than 200 new rooms in an area that has traditionally been underserved by the hospitality industry. “As the host city for JBLM, we are delighted to have additional hotel space to meet the needs of the hundreds of vendors, contractors and other business people who provide services to the military base; not to mention family and friends of the military personnel stationed at the base,” says Lakewood City Manager Andrew Neiditz. “With the addition of these two hotels, there will be four very nice properties on Pacific Highway, all that have sprung up in the past four years.” Construction on the two hotels, which will be located next door to each other, will take place at the same time. Groundbreaking for both properties is scheduled to begin in the fourth quarter of 2012 with an anticipated completion date in the fourth quarter of 2013. GlobeSt.com learns that total construction cost for the two hotels is $23 million. The four-story 109-room Courtyard by Marriott will provide both business and leisure travelers with upscale accommodations that will include a full-service restaurant and bar, meeting space for up to 100 people, a fitness center and outdoor pool. The TownePlace Suites by Marriott is an extended-stay facility that offers business travelers a moderately priced option. The 101-room hotel will be comprised of studios and one- and two-bedroom suites with full kitchens and in-room work spaces. Other amenities include a fitness center, an indoor swimming pool, a business center and on-site laundry facilities. The new hotels are being developed by InterMountain Management LLC.

LOS ANGELES-Abode Communities, Los Angeles City Councilmember Eric Garcetti, the Los Angeles Unified School District, Former California State Assemblymember Jackie Goldberg, community members and residents just recently celebrated the opening of Rio Vista Apartments, the first joint-use development in the County of Los Angeles that combines affordable housing and an Early Education Center on LAUSD surplus land. The ceremony was hosted at 3000 Verdugo Rd. in the Glassell Park neighborhood of Los Angeles. The residential portion, designed and developed by Abode Communities, provides 50 new, two- and three-bedroom affordable rental units to families earning between 30% and 60% of the Area Median Income (between $19,200 and $38,400). Rio Vista Apartments is the third development in Abode Communities’ portfolio to achieve a LEED for Homes Platinum rating. Green features include reclaimed municipal water irrigation, solar water heating and a rooftop garden, among others. This development was made possible with funds from the American Recovery and Reinvestment Act, Federal HOME Investment Partnerships Program and Low Income Housing Tax Credits. Financing for the $27-million residential portion, including the parking garage, was provided through a variety of private and public funding sources, including private tax credit equity loans by U.S. Bank, U.S. Bancorp Community Development Corp., the Los Angeles Housing Department and the California Department of Housing and Community Development. LAUSD is a major underwriter in the project, providing a 66-year ground-lease and supporting the joint development with an equity contribution. 

MORENO VALLEY, CA-USAA Real Estate Co. acquires 26 acres of land here for the immediate development of a 522,772-square-foot, state-of-the-art distribution center. Southern California-based Overton Moore Properties will act as developer for the project. Millie and Severson Inc. will serve as contractor and the architect on the project is HPA Inc. Centerpointe Logistics Center will feature 32’ clear height concrete tilt construction, cross-dock configuration and 113 dock positions and 126 trailer storage spaces. The site, located at the northwest corner of Cactus Avenue and Frederick Street, offers convenient access to I-215 and 60 freeways, and will benefit from the demand driven by the Ports of Los Angeles and Long Beach.

LOS ANGELES-Sterling Construction Co. Inc. revealed a joint venture in which Sterling’s California affiliate, Myers and Sons Construction LP, has a 30% interest, was apparent low bidder on a $102.6-million highway construction project for Caltrans. Shimmick Construction Co. is lead partner on this joint venture with a 70% interest. The three-year project, which begins this summer, entails rebuilding Highway 710 for a nine mile stretch south of Los Angeles including 8 bridge widenings, 3,300 concrete panel replacements and 90,000 cubic yards of concrete paving.

LEASES

SAN FRANCISCO-Highridge Partners and Montgomery Capital Partners signed two significant leases in January with 6 Waves for 26,405 square feet and iCrossing for 19,119 square feet at 550 Kearny St. “When we acquired 550 Kearny we saw the potential for the building to be upgraded and repositioned as an attractive location option for technology companies. As South of Market was rapidly running out of class A space, we developed a plan to take advantage of this building’s premier location and large flexible floor plates and make design changes that enhance the appeal to technology companies,” explains Jim Clifford of San Francisco-based Montgomery Capital Partners which is responsible for Bay Area properties acquired by the partnership. A complete renovation of the building entrance, lobby and the 9,800 square feet of ground floor retail space is underway and should be completed in the second quarter of this year. The 10-story office building comprises approximately 196,000 rentable square feet. “In addition to the new leases, we also executed 36,285 square feet of lease renewals since we took ownership,” says Clifford. “The combined leasing activity brings the building to 70%  leased versus approximately 40% leased when it was acquired.”

SALES

SAN DIEGO-Two class A medical buildings have changed hands for $147.5 million. The buildings, sold by Kilroy Realty Corp., total 253,676 square feet. The buyer was LaSalle Investment Management. The properties are located at 15004 Innovation Dr. in Rancho Bernardo and 10243 Genetic Center Dr. here in San Diego.

LOS ANGELES-Pendo Investments, a Los Angeles-based real estate investment firm has acquired a four property, 89-unit apartment portfolio, located in the Inglewood/Southbay and Bellflower submarkets of Los Angeles. Pendo acquired the portfolio with financing from Chase and Fannie Mae and equity from Pendo principals and outside investors. The portfolio has a total value in excess of $13 million. The properties were acquired “off-market” from “mom and pop” private owners and provide Pendo the opportunity to add value through capital improvements and “hands-on,” active management, according to a prepared statement. Pendo will focus on upgrading unit interiors by installing new flooring, counters, cabinets, lighting fixtures, and paint schemes and will implement exterior improvements including, new roofs, landscaping, parking/paving upgrades, signage, painting and other façade improvements.

COMPTON, CA-Dedeaux Properties LLC has purchased a 58,384-square-foot truck terminal on approximately 5.88 acres parcel of land located at 550 S. Alameda St. here for approximately $10 million. “Dedeaux Properties continues to execute on its strategy of acquiring prime transportation facilities in Southern California with the purchase of our second truck terminal in 2011” according to principal Brett Dedeaux. “550 S. Alameda St. is a relatively new and functional terminal offering a strategic location on the Alameda Corridor with close proximity to the Ports, freeways and Central Los Angeles.” The fully secured facility offers three entry points with 125 loading positions and excess trailer parking spread between two cross dock terminals.  Dedeaux Properties will lease the larger 38,938-square-foot cross-dock to an affiliated entity, Dart Transportation, and offer the adjacent 19,446-square-foot building for lease. Dedeaux Properties was represented by Sean O’Donnell at Grubb & Ellis and seller, Kelco Logistics, was represented by John McKeown at Commercial - REAG Inc.

EL SEGUNDO, CA-Stamps.com Inc. purchased Grand Avenue Plaza at 1970 & 1990 E. Grand Ave. here for $13.35 million. The acquisition coincides with Stamps.com’s mission to acquire a new corporate headquarters in the highly desirable El Segundo area. Grand Avenue Plaza consists of two adjacent three-story buildings totally 82,000 square-feet. Construction and renovation will expand the square footage to approximately100,000 square feet. Stamps.com plans to occupy a portion of the space and the remaining portion will be leased out. International design firm Ware Malcomb is providing architectural and interior design services for the renovation.

FOUNTAIN VALLEY, CA-Lee & Associates closed a $12-million sale consisting of two industrial buildings located at 11161 Slater and 17375 Mount Herrmann in Fountain Valley, CA. Both properties total113,857 square feet. Senior vice presidents and principals Pat Lacey and Jim Snyder of Lee Newport Beach represented the seller, PPII LLC, a private real estate owner based in Orange County. The buyer and existing tenant in both buildings, Seven Pacific, represented itself. Seven Pacific, which will continue to occupy the two large industrial buildings, uses the properties for mechanical engineering, design, manufacturing and vehicle integration.

FINANCING

SANTA ANA, CA-After extensive negotiations with lender Allied Irish Bank, Santa Ana-based Daymark Realty Advisors has successfully secured a loan modification and extension on behalf of its investors for an industrial property at 1650 Sunflower in Costa Mesa, CA. When Daymark was purchased by a partnership between Sovereign Capital Management Group and Infinity Urban Century in August 2011, the 1650 Sunflower property was facing an imminent loan maturity. The property, which is fully leased by Federal Express Corp., serves as the company’s primary shipping and distribution facility in the Central Orange County area. Although the property was performing and covering its debt service in full, the borrower’s inability to meet certain extension conditions presented a material risk to the investors, according to a prepared statement. In order to satisfy the extension conditions, the investors would have been required to contribute a significant amount of new capital to pay down the $17.5 million loan. Daymark’s structured finance division negotiated a modification of the loan that allowed the borrower to amortize the required pay-down amount over a 24-month period. As a result, the investors not only avoided any upfront capital contribution, but also were able to retain the existing cash reserves at the property. In addition, the maturity default risk was eliminated and the loan was extended for an additional term of up to two years. 

SAN FRANCISCO-W3 Partners, an institutional real estate investment manager, has completed a recapitalization of 543 Howard St., a five-story, 72,000-square-foot office building and an adjacent 4,000-square-foot parking lot in the South of Market district. The building, which was originally built in 1923 as a two-story warehouse, was substantially redeveloped by its owner, Erik Robbins in 2003, with the addition of two stories, plus a mezzanine. The building is located directly across the street from the new Transbay Terminal Center and features a rooftop deck offering sweeping views of downtown San Francisco and SOMA. The building is 91% leased by six tenants with rents that are significantly below current market rents.  

POMONA, CA-El Segundo, CA-based Venture West Funding Inc. has arranged a $10-million loan for the refinance of a 100-unit luxury apartment complex here. Matt Douglas of Venture West Funding arranged the financing through CapitalSource for the apartment complex, which is owned by a joint venture between Virtú Investments and a commingled investment fund sponsored by Lowe Enterprises Investors, a Los Angeles-based real estate investment manager and affiliate of national full service real estate firm, Lowe Enterprises Inc. Known as Helix at University Village, the complex is located at 510 E. 3^rd St. in Pomona, CA. and primarily serves as graduate student housing for Western University of Health Sciences across the street. 

MEDFORD, OR-Cohen Financial has secured a $15.4-million refinancing for Bear Creek Plaza, a retail center here. The 185,800-plus-square-foot property is located at 1000 Biddle Rd. directly adjacent to Interstate 5. Bear Creek Plaza anchor tenants include Bi-Mart, Big Lots, Dollar Tree and T.J. Maxx. Brandon Harrington, Cohen financial director in the Phoenix office, originated the transaction with a CMBS lender.  He secured a 10-year, non-recourse, low interest fixed-rate loan with a 30-year amortization. The borrower is Bear Creek Ventures LLC, a commercial real estate investor.

Categories: West, Hotels, Development, Seattle