ORANGE COUNTY, CA—LBG Real Estate, a value-addinvestor, has completed the acquisition of a 30,000-square-footredevelopment retail property in Huntington Beach,CA, from US Bank. The developer entered intoescrow nearly two years ago, and has been securing entitlements andpermits for the redevelopment of the property. Having secured allof the necessary permits, the company was able to close on thepurchase.

“This particular asset had been through quite a lot of distress,starting during the great recession,” DougBeiswenger, managing partner at LBG Real Estate, “The reason for that is that the fee interest in theproperty was owned by Downey Savings and Loan, which was taken overby US Bank. The property was also subject to a long-term groundlease in favor of the original builder of the shopping center, andthe ground lease expired in December of 2013.” The expired groundlease and the shuttering of Downey Savings made this the “ultimatedistress opportunity,” according to Beiswenger, which he says iswhy the property sat vacant for so many years.

The investor originally set out to purchase the property from USBank in the middle of 2013, before the ground lease expired. Overthe next two years, it began securing entitlements during a veryslow escrow that ensured US Bank security throughout the process.“US Bank has an extremely successful branch at that property, anddid not want any risk of loosing the branch. So, they wanted us tohave permits in place before we closed,” says Beiswenger. “We hadto entitle and draw plans, and once we secured all of that, weclosed.” In the end, LBG Real Estate paid $6.1 million for theproperty, and will spend an additional $4 million onrenovations.

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Kelsi Maree Borland

Kelsi Maree Borland is a freelance journalist and magazine writer based in Los Angeles, California. For more than 5 years, she has extensively reported on the commercial real estate industry, covering major deals across all commercial asset classes, investment strategy and capital markets trends, market commentary, economic trends and new technologies disrupting and revolutionizing the industry. Her work appears daily on and regularly in Real Estate Forum Magazine. As a magazine writer, she covers lifestyle and travel trends. Her work has appeared in Angeleno, Los Angeles Magazine, Travel and Leisure and more.