Middle Market Digest: This Week in Southwest
Here’s a look at this week's trends, announcements and deals that you may have missed in Southern California, Utah, Arizona and Nevada.
NEW & NOTABLE
LONG BEACH, CA—The Port of Long Beach has been named the “Best Green Seaport” in the world at the 32nd annual Asian Freight & Supply Chain Awards hosted in Shanghai by the Asia Cargo News shipping trade publication. The Port of Long Beach, known as the Green Port, has succeeded in dramatically reducing its environmental impact. Adopted in 2005, Long Beach’s “Green Port Policy” has led to significant improvements in air and water quality from initiatives such as the Clean Air Action Plan (CAAP) and the Technology Advancement Program (TAP). The newly updated CAAP identifies strategies to further reduce pollution from every source and accelerate progress towards a zero-emissions future.
PHOENIX—The Arizona Multihousing Association has named Courtney Gilstrap LeVinus as the president and CEO. For nearly 20 years, LeVinus has worked with the AMA leading their advocacy team at the federal, state and local levels. She’s the co-founder of Capitol Consulting, LLC a public affairs and association management firm which is headquartered in Phoenix. In her new role Courtney will represent the 2,000 plus AMA member companies including property management firms, developers, rental property owners and rental housing industry suppliers from across Arizona.
LOS ANGELES—CBRE has hired Scott Chalmers as managing director, heading its newly renamed West LA office located in Century City. Chalmers joins CBRE from Kenrick Ventures Real Estate Solutions, a private real estate services firm, where he was president and chief executive officer. In this capacity he oversaw all company operations, including investments, brokerage, consulting, joint ventures and partnerships. Prior to Kenrick, Chalmers served as first vice president at real estate investment trust Arden Realty, Inc. where he headed the largest region in the company. His other titles include regional vice president at Trizec Properties Inc., senior vice president at J.H. Snyder Co., vice president at Premisys Real Estate Services and vice president at Studley Inc.
PHOENIX—Cohen Asset Management has assigned Lincoln Property Company to manage a Phoenix industrial portfolio totaling 20 buildings and more than 3.5 million square feet. The assignment brings LPC’s Phoenix property management portfolio to 10.2 million square feet, ranking it among the Valley’s top property management firms. Buildings within the Cohen portfolio range from 42,281 to 466,418 square feet in locations across metro Phoenix. Together, they underscore Cohen’s focus on acquiring, owning, developing and actively managing a critical mass of industrial properties in select target U.S. markets that, in addition to Phoenix, include Northern and Southern California, Dallas-Fort Worth, Northern New Jersey and Eastern Pennsylvania.
SAN DIEGO—San Diego-based Sunrise Management has hired J. Monty Petersen to its Phoenix team as regional project director. Reporting to Suzanne Reinke, regional vice president of operations for Sunrise, Petersen will oversee build outs and renovation projects for the company’s Arizona multifamily portfolio, working closely with regional real estate managers, property managers and regional maintenance directors on project approvals, project strategy and timelines. With nearly 30 years of construction, property management, asset preservation and maintenance experience, he is well equipped for the job. Prior to joining Sunrise, Petersen was director of national accounts for Phoenix-based AZ Partsmaster, where he was responsible for developing and growing business. Before that he was vice president of building services for Gorman Services Inc. also in Phoenix.
BEVERLY HILLS, CA—CORE Real Estate Group has opened in Beverly Hills. The firm’s strategy to reestablish and elevate the traditional boutique brokerage model by employing an approach to business that is uncomplicated and specifically tailored to helping its agents thrive. Founded by real estate industry veteran Steve Lewis, CORE Real Estate Group has signed on more than 30 agents since inception including major powerhouses such as Mimi Starrett, Jeanne and Joey Valvo, Nina Chinn, Alissa Solomon, Craig and Evelyne Ashley, Yves and Murray Mieszala, Jan Reichmann and Amy Colvin Kaz.
SCOTTSDALE, AZ—Progress Residential has hired Chaz Mueller CEO. Mueller joins Progress Residential with nearly 25 years of experience in the multi-family housing industry. Mr. Mueller brings his expertise in applying best-in-class utilization of human and technology resources, highly sophisticated pricing and revenue management, and superior asset allocation and investment decision-making to Progress Residential. Most recently, Mueller served as President of Irvine Company Apartment Communities, a California-based real estate investment firm with more than 58,000 apartments. Previously, he was President and Chief Operating Officer of Archstone, a $20-billion owner and operator of high-quality apartment communities, where he was a senior executive for nearly 20 years.
DEALTRACKER
LOS ANGELES—Canyon Partners Real Estate has acquired The Harvey, a 177-unit, midrise apartment community with 1,900 square feet of ground floor retail space located in Hollywood, California. The transaction was acquired through Canyon Multifamily Impact Fund III LLC, a joint venture between Canyon and CIT Bank, N.A., with CIT’s Real Estate Finance business also providing a $20.4 million senior loan to fund the acquisition and capital improvements. The Harvey is the second acquisition to date by CMIF III. As part of the acquisition, the property will be renamed The Derby Hollywood to reflect its historically rich Hollywood location, the neighborhood’s history rooted in film and entertainment and the celebrities depicted in the building’s mural. CMIF III is strategically positioned to target acquisition opportunities in Southern California and promotes the implementation of resident programs through a variety of education, healthcare and community initiatives designed to benefit both residents and the communities in which they live and work. This is the third fund within Canyon’s workforce housing platform dedicated to advancing community development and embracing environmental responsibility. CMIF III is also directly in line with CIT’s pledge to invest in the betterment of the communities in which it serves.
SAN DIEGO—Parallel Capital Partners has renewed its nearly 200,000-square-foot lease with American Specialty Health Inc. at The Elements. The lease is valued at $110 million with a term that exceeds 10 years. The Elements is located at 10201 Wateridge Circle and 10221/10241 Wateridge Circle in San Diego’s Sorrento Mesa neighborhood. Parallel Capital Partners in 2014 acquired the three-building, five-story class-A office complex. Since then, the nearly eight-acre property has undergone a more than $3.5 million capital improvement program, including extensive upgrades to common areas, fitness center upgrades, new landscaping incorporating seating areas adjacent to water features, a new outdoor workout area and painted exteriors. American Specialty Health comprises a large portion of the complex, which spans a total of 278,787 square feet.
WEST HOLLYWOOD—Charles S. Cohen, owner of Pacific Design Center, has signed a lease with One Iota for approximately 8,000 square feet of office space in PDC’s Green Building in West Hollywood. Marc Horowitz, Cohen Brothers Realty Corporation‘s SVP and national director of leasing, represented the landlord in the transaction. Michael Shuken of Savills Studley represented the tenant. One iota’s technology solutions help retailers create a seamless, omni-channel experience breaks down the barriers between online and in-store shopping across every device, bringing the choice and flexibility of online shopping into retail locations. Located at 700 North San Vicente Boulevard, the Green Building is popular within the creative community, as well as with traditional office user. It features vision glass that floods tenant spaces with natural light and offers sweeping views from the Hollywood Hills to the Pacific Ocean, and floor plans accommodate the functional and collaborative space needs of creative activities.
PHOENIX—Pavilions on Central, a 254-unit class-A multifamily community located at 1 W. Campbell Ave. in Phoenix, has traded hands. Tyler Anderson, Sean Cunningham, Asher Gunter and Matt Pesch with CBRE Multifamily Institutional Properties in Phoenix represented the seller, a Dallas, Texas- based private real estate fund advised by Crow Holdings Capital – RE. The buyer was Seattle, Washington-based Security Properties and funds managed by Los Angeles, California-based Oaktree Capital Management, L.P. Built in 2000, Pavilions on Central is an urban community featuring a mix of townhome and loft-style units with one-, two- and three-bedroom floor plans. All 254 units were renovated from 2013-2016 and received upgraded interior finishes including wood plank flooring, stainless steel appliances, tile backsplashes, quartz countertops, and modern plumbing and lighting fixtures. The community features a contemporary resident clubhouse, fully equipped fitness center, swimming pool and spa, and WiFi in all community areas.
TEMECULA, CA—The MCA Business Center, a newly constructed 143,169-square-foot industrial building located at 41573 Dendy Parkway in Temecula, CA, has traded hands for $16.9 million. VP Scott Stewart of Lee & Associates Temecula Valley and Roger Carlson of CBRE, represented the landlord, MCA Realty, Inc. Stan Nowak and Cody Lerner of Avison Young represented the buyer, Western Plastics. Western Plastics plans to occupy the newly completed MCA Business Center immediately and the building will serve as the company’s corporate headquarters.
IRVINE, CA—Community Preservation Partners has closed on a $14.3 million development deal to acquire 98 multi-family units spanning two communities in Ogden, Utah. Construction commences this week at the 58-unit Normandie Apartments, 610 1st St., and 40-unit Osmond Heights, 630 23rd St. Renovations will continue through most of the year and each resident will be relocated for a single night at CPP’s expense. The transaction preserved 98 affordable units through the combination of a 20-year renewal on the existing 54 project-based Section 8 vouchers and an unusual reallocation of 44 project-based Section 8 vouchers from another property located outside of the city. The original owner of the transferred Section 8 vouchers had planned to let the contract expire in 2018 allowing the property to raise rents and operate as a market rate complex. However, CPP, with the support of the U.S. Department of Housing and Urban Development (HUD), facilitated the renewal and transfer of those 44 vouchers to Normandie and Osmond Heights, preserving the affordable units and increasing the overall affordability within the City of Ogden. Previously, only 54 households benefited from Section 8 vouchers throughout both communities, and the remaining 44 units were restricted to households making 60 percent of the area’s median income or less. Starting this August, the project-based Section 8 vouchers will be ported to the CPP properties, making all 98 of the units eligible for residents with Section 8 vouchers.
WOODLAND HILLS, CA—A class-B office property located at 5955 De Soto
Avenue in the Warner Center submarket of Los Angeles, California, has traded hands for $14 million. Located on the corner of De Soto Avenue and Oxnard Street, the two-story, 53,410 square foot office building sits on 2.94 acres of land. Madison Partners’ Bob Safai, Matt Case, and Brad Schlaak represented the seller, Majestic Asset Management. Chuck Wilson and Brian Chastain of Colliers International and Brian Forster of Pacific Partners Commercial represented the buyer, a private trust. The property, was approximately 97% leased upon closing. Majestic, headed by David Fradin, is a Southern California-based investment, development, and management firm that had entitled the property for 368,896 square feet of mixed-use development in accordance with the Specific Plan.
PASADENA—Genton Cockrum Partners has sold Six25 Fair Oaks for $31 million. Located at 625 Fair Oaks Avenue in South Pasadena, California, the 92,547-square-foot creative office building was bought by Greenbridge Investment Partners. Acquired by Genton Cockrum Partners in 2014 for $20 million, the 3-story, class-A suburban property built in 1987 was repositioned and re-tenanted as a creative office building. The property was repositioned with creative features that appealed to global technology, design, creative and traditional tenants.
LONG BEACH—San Antonio Apartments, a 20-unit apartment community in the Bixby Knolls submarket of Long Beach, has traded hands for $4.88 million. Principal Robert Stepp and SVP Michael Toveg of Stepp Commercial represented the seller, a private LLC. The buyer was a private investor. The property closed at a 4.2 percent cap rate and a price per unit of $243,750. Built in 1948, this 22,247-square-foot, two-story building is located at 1090 E. San Antonio Drive, and consists of 20 units on an oversized lot, comprising 16 one-bedroom/one-bathroom units and four studio units. The property features balconies and beautifully landscaped grounds, as well as 11 private parking garages.
DENVER, CO—HFF has secured $17.3 million in financing for Spring Meadow, a 271-unit, apartment community in the Phoenix suburb of Glendale, Arizona, on behalf of Western Wealth Capital, which acquired the property on behalf of the borrower, an MDC Realty Advisors USA, Inc.-managed fund, to secure the five-year, floating-rate loan through a national bank. The partnership acquired the property on an all-cash basis in October 2017, and this loan was arranged post-close to assist with their capital expenditure program. This transaction follows four other recently announced loans HFF arranged on the partnership’s behalf for Greentree Place and Autumn Creek Apartments in Chandler, Arizona, as well as Brynwood and Sereno Park Apartments in San Antonio, Texas. Spring Meadow is located at 10030 North 43rd Avenue minutes from downtown Glendale, Glendale Community College and Westgate City Center. The property is also close to Interstate 17 and State Highway 101, which offers accessibility around the greater Phoenix metropolitan area. Spring Meadow comprises one- and two-bedroom units ranging from 525 to 918 square feet. Some of the units have undergone recent upgrades to include new appliances, flooring, paint, fixtures and in-unit washers and dryers. Amenities include a swimming pool, hot tub, barbecue/picnic area, fitness center and covered parking. The HFF team representing the borrower included managing director Josh Simon and senior director Brad Miner.
LOS ANGELES—L3 Technologies Torrance Tech Campus, five-building, 574,010-square office/R&D campus in Torrance, CA, has traded hands for $124 million. The campus is 91% occupied by L3 Technologies and Torrance Memorial Medical Center. NKF Capital Markets co-head of U.S. capital markets Kevin Shannon, along with Ken White and Scott Schumacher, as well as market experts Eric Lastition and Geoff Ludwig, represented the seller, a partnership of Platform Ventures and PMRG. NKF Capital Markets executive managing director David Milestone and managing director Brett Green arranged financing on behalf of the buyer, FRM Associates. FRM was self-represented. L3 Technologies, which leases 80% of the project, had recently executed a 15-year lease extension and expanded operations in this mission-critical facility where the company develops electron devises for amplification of communication and data transitions in both civilian and military applications.
BUILDING BLOCKS
PHOENIX—The Statesman Group has plans to break ground on The Manor Village of Desert Ridge, a $50 million, 287,000 square-foot senior living facility. This is the second location in Arizona for The Manor brand and 12th among Statesman’s Canadian and U.S. portfolio. Located on Deer Valley Road between 52nd and 56th streets, The Manor Village of Desert Ridge will offer a collection of 196 independent-living, assisted-living and memory-care suites that feature a variety of floorplans ranging in size from 446 to 1,043 square feet. Independent-living suites will be equipped with a full kitchen, stackable washer and dryer and a state-of-the-art, emergency call and response system. Residents will also have access to a robust lineup of amenities. Statesman will break ground this winter with expected completion by early 2020.