88 Hillside

NORTHERN CALIFORNIA

DALY CITY, CA-Equity Residential REIT has acquired the 95-unit 88 Hillside complex, a condo project that the REIT is renting as apartments, in this week’s roundup of commercial real estate news in the West. The Chicago-based REIT bought the property from San Diego-based OliverMcMillan for an undisclosed price, but industry sources tell GlobeSt.com that Equity paid $41 million. OliverMcMillan, in an announcement regarding the sale, said that it had no plans to sell the previously stalled, unfinished project that it acquired and renovated, but it received an unsolicited offer from the buyer. The project, formerly known as Landmark Plaza, is a six-story complex on Mission Street near John Daly Boulevard in Daly City. "Our plans for 88 Hillside included refurbishing the look and feel of the project through interior and exterior upgrades and additional amenities," noted Dan Nishikawa, OliverMcMillan managing director and principal in charge. OliverMcMillan had planned to start condominium sales with Pacific Marketing Associates later this year after completing the multi-million dollar renovation. The property is now listed on the Equity Residential web site at 88 Hillside Blvd. According to the web site, the units range from one to three bedrooms and from 1,052 to 1,250 square feet, at rents of $2,550 to $3,050.

The Michaels Development Co. and LINC Housing Corp. have broken ground on the transformation of a long-vacant lot on the west side of Oakland into a new 119-unit mixed-used, transit-oriented affordable seniors housing complex called Red Star Apartments. Designed by the architectural firm KTGY Group in Oakland, the project is being built on the former site of the Red Star yeast factory. Dave Lukens, vice president of Michaels Development, explained that Michaels and LINC had to take on extensive environmental remediation of the site, which was made possible through a $1 million remediation CALReUSE program grant from the state. Although no city funds were available for the $23 million project, the developers secured $1.1 million in Affordable Housing Program Funds from The Federal Home Loan Bank of San Francisco and an additional $1.5 million in Infill Infrastructure Grant Program funds from the California Department of Housing and Community Development. Additional equity will be raised through the sale of Low Income Housing Tax Credits awarded to Red Star Apartments by the California Tax Credit Allocation Committee. Construction is scheduled for completion in August 2012.

ORANGE COUNTY

Newport Marina

Newport Waterfront Apartments LLC, which is managed by a Los Angeles-based investment group, has acquired the 64-unit Newport Marina Apartments at 919 Bayside Dr. in Newport Beach from Newport Marina LLC for $14.85 million. Both the buyer and the seller were represented by SVP Stewart I. Weston of the Institutional Property Advisors division of Marcus & Millichap. The apartment complex, built in 1964, is situated on more than four acres of waterfront land with nearly 1,100 feet of water frontage on Newport Harbor and Promontory Channel. The project includes 64 condominium-style residences within 14 buildings, a private beach and boat slips that can accommodate up to 34 boats. “The building was sold subject to a favorable ground lease on an exceptional bayfront property,” says Weston. “Properties like this don’t come around that often. The ground lease does not expire for another 32 years, giving the new owner ample time to enjoy his piece of paradise. Over the long term, the rents at Newport Marina will continue to outgrow other prime markets, which should provide the owner with an above market yield; especially because of its waterfront location on one of the world’s most desirable harbors, a lack of comparable bay front multifamily properties and the high barriers to entry in this Orange County submarket.”

Hager Pacific Properties of Newport Beach has signed a tenant to a 10-year, 75,000-square-foot lease valued at $6 million at 341 W. Collins Ave. in the City of Orange and has acquired a 46,180-square-foot industrial building at 12300 Industry St. in Garden Grove for $3 million. Hager Pacific leased the space in Orange to Commercial Metal Forming, a supplier of tank heads and accessories and custom stampings for major truck axle manufacturers. One of the largest parcels of industrial land in Orange, the property is located between North Batavia Street and North Glassell Street and consists of several manufacturing and warehouse buildings situated close to the 55 and 57 freeways. Hager Pacific bought the Garden Grove property from Industry Grove LLC, an affiliate of Farmers & Merchants Bank. Rob Neal, a managing partner with Hager Pacific, describes the property as a “renovated and functional building” that is “an attractive location for a small manufacturing or logistics firm.” Mike Bouma and Paul Caputo of Voit Real Estate Services represented both Hager Pacific and Farmers & Merchants Bank and will also be marketing the property for lease.

Harmony Properties LLC has acquired a 45,560-square-foot industrial property at 1425 Moonstone St. in Brea from PSIP CAM Brea LLC for more than $4 million. The seller, which is an affiliate of Los Angeles-based Cohen Asset Management Inc., was represented by SVP Ian Britton and associate John Long of the Orange County office of Colliers International, along with first vice president Tom Dorman of the Orange office of CB Richard Ellis. The buyer was represented by Luke Hudson of Lee & Associates in Orange.

DCO BeachWalk LLC, a development company, has acquired 3.19 acres of land at 19891-19895 Beach Blvd. that will be used for one of the first redevelopments along Beach Boulevard in the Beach and Edinger Corridors Specific Plan of Huntington Beach, according to Kathy Fuller, vice president in the Irvine office of Voit Real Estate Services. Fuller represented the seller, the Evangelical Free Church of Huntington Beach; DCO BeachWalk represented itself. Fuller has represented the church as a landlord for years, overseeing all leasing of this property since September 2000. Two multi-tenant office buildings totaling 60,052 square feet are currently situated on the land and are occupied by various tenants. Following the sale, Voit’s in-house property management team will manage the property.

SAN DIEGO COUNTY

12890 Gregg Court

Delta Gateway has acquired a 3,500-square-foot In-N-Out Burger restaurant at 12890 Gregg Court in Poway from an individual investor for $3 million at a 5% cap rate. Delta was represented by Ryan Barr and Ryan Bennett of Lee & Associates-Net Leased Group in Carlsbad; the seller represented himself. Located on the corner of Community Road and Scripps Poway Parkway within a larger shopping center housing other retailers like Staples and Kohl’s, the property was leased to In-N-Out Burger on a 20-year triple-net ground lease with over 19 years remaining on the initial lease term. According to Barr, the deal took three months and closed after a 45-day escrow. “This was a very rare sale as you don’t usually see single tenant properties with In-N-Out Burger as the tenant come available for sale,” said Barr.

LOS ANGELES COUNTY

IMT Capital LLC has acquired the 160,00-square-foot former Northridge Valley Hospital on seven acres at 14500 Sherman Circle in Van Nuys from the Kings University for $14.7 million. According to EVP Lee Black of the Encino office of NAI Capital, who represented both the buyer and the seller, IMT plans to redevelop the property into apartments. He notes that the property is partially leased by Woodbridge Productions for filming and production offices, and The Kings University for overflow administration offices.