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
LOS ANGELES—Madison Realty Capital has opened its first West Coast location in Los Angeles. The firm has been experiencing ongoing growth and expansion. As part of this West Coast expansion, MRC has also named veteran commercial real estate finance professional Bradley Ross as the firm’s newest member of the team. Ross will be based in Los Angeles and will work closely with MRC principals to identify and secure loan origination opportunities throughout the Southern California and Western U.S. markets.
LAS VEGAS—Nick Barber has joined JLL as SVP in its Las Vegas, Nevada office. Barber brings over 15 years of commercial real estate experience where he is focused on working with owners of office properties in the leasing and disposition of their assets. Barber comes to JLL from a global commercial real estate firm where he served as director. Previously, he served as vice president of brokerage at a local firm. Throughout his career he has completed over 800 transactions with a value in excess of $800 million.
LADERA RANCH, CA—SmartStop Asset Management has promoted Gerald Valle to SVP, self storage operations. Valle, who joined SmartStop in 2017, previously served as vice president of operations. In his new role as part of a senior executive team with more than 100 years of combined self storage management experience, Valle will oversee the day-to-day operations of all SmartStop Self Storage branded facilities throughout the United States, comprised of more than 240 professionals. The SmartStop portfolio encompasses 116 facilities located throughout the United States and Toronto, Canada, comprised of approximately 73,500 units and 8.5 million rentable square feet.
SAN DIEGO—JLL has hired Lauren Stilley to its West Coast retail team as VP of leasing. Stilley will work across the Hawaii and California markets in her new role. Stilley previously served as Vice President for the Festival Companies, where she was the lead account manager for Maui projects including the Maui Mall, Lahaina Gateway, and the Shops at Wailea. While at Festival, she consulted on various projects in Kapolei including for the James Campbell Company for the last 6 years. She also oversaw the leasing of more than 2.5 million square feet of open-air shopping centers in Southern California. She brings with her extensive knowledge of the region as well as expertise in national tenant management and representation. Prior to the Festival Companies, Stilley was a Leasing Director at Vornado Realty Trust and The McGarey Group and began her career at Forest City in their LA Offices. She graduated from the University of Kansas with a B.A. in History. She is a member of the Urban Land Institute and the International Council of Shopping Centers.
DEALTRACKER
LOS ANGELES—Hunt Mortgage Group has provided a loan in the amount of $20 million to refinance Beverly Towers, an affordable senior housing property located in Montebello, California. The property is age 62+ Section 8 LIHTC affordable multifamily property located at 1315 West Beverly Boulevard. The property has 189 units and is comprised of one, eight-story high rise building. Built in 1975, the property offers 133 one-bathroom efficiency units and 56 one-bedroom, one-bathroom apartments. Beverly Towers also contains leasing and social services coordinator offices on the first floor. The property currently operates subject to a HUD Section 236(e)(2) use agreement that became effective in 2003 when the pre-existing Section 236 financing was retired. Terms of the agreement that the owner continues to agree to accept the Section 8 HAP Contract project based rental assistance and continues to make the housing affordable to tenants whose income is 80 percent of median income or lower. The borrower is Montebello Senior Housing, LP, a California limited partnership backed by key principal Stephen Doty. Doty is President of Doty-Burton Associates development corporation as well as the Chief Executive Officer of Living Opportunities Management Company (LOMCO), a full-service property management company that currently manages the property. Kent Davis serves as President of LOMCO and is responsible for refinance acquisitions and property management opportunities.
RANCHO CUCAMONGA, CA—RC Plaza, a neighborhood shopping center at the signalized intersection of Archibald Avenue and East Foothill Boulevard in Rancho Cucamonga, California, has traded hands for $9.8 million. Hanley Investment Group‘s EVP Bill Asher and president Ed Hanley, along with VP Joe Miller of Voit Real Estate Services of Anaheim, California, represented the seller, a private partnership based in Orange County, California. The buyer, a private investor from Los Angeles, was represented by Eric Treibatch of Ophir Management Services Inc. of Encino, California. Built in 1984, RC Plaza is comprised of nine retail buildings totaling 37,239 square feet and situated on 3.01 acres in San Bernardino County. National tenants include Starbucks (with a drive-thru) and Pizza Hut. The property purchased is the majority share of the RC Plaza shopping center, which includes an additional multi-tenant 15,717-square-foot building that is separately owned and was not a part of the sale.
PHOENIX—A private investor in Scottsdale has purchased the Comfort Suites Old Town Scottsdale at 3275 N. Drinkwater Blvd. for $7.3 million. The investor, who specializes in hospitality properties, plans to update the operations of the hotel and take advantage of quality market conditions in the Old Town Scottsdale hotel industry. The Comfort Suites Old Town Scottsdale is situated on 1.32 acres of land an includes 32,436 square feet of space. The 60-room suites hotel was constructed in 1995. The Scottsdale investor purchased the property from Colony North Star REIT, with offices in Los Angeles and New York. James Meng and Jon Grantham of Colliers International in Greater Phoenix negotiated the purchase on behalf of the buyer. Colony North Star represented itself in the transaction.
REDLANDS, CA—Park West Plaza, a 52,388-square foot retail property located in Redlands, California, has traded hands for $6.2 million. Chuck Shillington, an investment specialist in Marcus & Millichap’s Ontario office, had the exclusive listing to market the property on behalf of the seller, a partnership. Park West Plaza is located at 415 and 461 Tennessee Street in Redlands, California. The shopping center was built in 1978. There are four buildings situated on 3.87 acres.
LOS ANGELES—Bellwether Enterprise Real Estate Capital LLC has secured two refinancing loans totaling $30.5 million for a single-tenant office building in El Segundo, CA and a retail center in Orem, UT. The properties include a $25 million refinancing loan for a single-tenant office building in the South Bay region of Los Angeles and a $10.5 million refinance loan for a retail shopping center located in Orem, UT.
PHOENIX—NAI Horizon represented the seller in the $6.95 million sale of a 50,000-square-foot tractor trailer repair and maintenance building in Phoenix. NAI Horizon SVP Isy Sonabend represented Wabash National Trailer Centers of Lafayette, Indiana, in the sale of the trucking facility at 2830 S. 51 st Ave., to TEC Equipment of Portland, Oregon. Built in 2000, the property sits on 14.4 acres. The building features 24-foot clearance and 14 drive in/grade level doors. It is 20 minutes from Phoenix Sky Harbor International Airport.
LOS ANGELES—DivcoWest has completed the purchase of 331 North Maple Drive, an approximately 91,000 square foot office building in the heart of Beverly Hills’ Media and Entertainment District. 331 North Maple Drive is a three-story office building featuring large floor plates and parking for approximately 270 cars. Built in 2000, the building is located proximate to the Beverly Hills’ Golden Triangle, a distinctive neighborhood with numerous hotels, restaurants and shopping that is also one of the most desirable office markets in Los Angeles. Digital and media companies with a nearby presence include Google, LiveNation and Fandango. 331 North Maple is currently 60% leased to a single tenant. DivcoWest plans to strategically invest capital in the building to further enhance 331 North Maple’s position in the market, creating a desirable class-A location for future tenants.
PHOENIX—Ocotillo Plaza, a redeveloped retail building situated in the heart of Chandler’s Ocotillo area, has traded hands for $11.2 million. JLL SVP Peter Bauman and Tivon Moffitt, senior managing director Dennis Desmond and SVP Tyson Switzenberg represented the building seller, Thompson Thrift Retail Group. Nina Patel represented the buyer, Southern California-based Slater Avenue II LP. Ocotillo Plaza totals 121,829 square feet at 2880 S. Alma School Road, on the northwest corner of Queen Creek and Alma School roads in Chandler, Arizona. The building and 10-acre site was purchased in 2017 by Thompson Thrift and then renovated from a former Target store into a multi-tenant retail building that is now fully leased to Goodwill and the flagship location of Shoppers Supply, a ranch, home and outdoor supply retailer.
LOS ANGELES—A creative office campus in Costa Mesa, CA, has traded hands for $13.7 million. Keith Black and Ross Bourne of CBRE represented the buyer, Dunbar Real Estate Holdings, in the transaction. The seller, Ko’s Baker Center INC., was represented by Tom Nguyen of Hopkins Real Estate. Located at 660 Baker Street, this creative office campus, which is currently undergoing an extensive remodel, holds four different office buildings—a 7,700 square-foot single-story building and three two-story buildings between 14,869 square feet and 20,217 square feet — and a revamped courtyard with outdoor workspaces and upscale furnishings. The project totals 62,902 square feet. The campus, which was mostly vacant at the close of escrow, is undergoing a remodel that will be completed by the end of 2018. The overhaul of the site will continue the gentrification of the Baker/Bristol corridor that has been seen a number of creative office and retail projects come to the area over the past few years.
SCOTTSDALE, AZ—A local partnership known as DBM Ventures has purchased 2.79 acres within Perimeter Center with plans to develop an $9 million office building in the upcoming year. DBM Ventures, a partnership comprised of David E. Sellers and two other prominent commercial real estate development leaders, purchased the acreage at 8399 E. Hartford Dr. in Scottsdale in May. The partners plan to develop a two-story, 32,054-square-foot office building on the property that incorporates modern architectural design. Construction is slated to begin at the end of this year with occupancy scheduled for summer 2019.
LOS ANGELES— Greystone has provided a $10.7 million Fannie Mae DUS loan to refinance Casa Bella Apartments in Los Angeles, California. The loan was originated by Matt Stevens, managing director at Greystone, with Don Salka of First Pacific Financial acting as correspondent on the transaction. The Fannie Mae DUS loan includes a 10-year term and is interest-only. Located in the highly desirable Brentwood area of western Los Angeles, Casa Bella Apartments comprises 43 residences including studios and one-bedroom units. The three-story mixed-use complex also includes three ground-floor retail suites and on-site parking.
CERRITOS—A single tenant office-warehouse property in Cerritos, California, has traded hands for $6.2 million. The 27,072 building, located at 12851 166th Street and situated on approximately 2 acres, is part of a master-planned business park built in 1978. The property is 100% leased by PBF Energy who has occupied the building for 18 years. Madison Partners’ client, 5270 Sunset Blvd LLC, purchased the property as part of a 1031 exchange. The purchase price represented a 5.5% CAP rate. The deal transacted in under 40 days with bank financing involved. The Seller was exclusively represented by Fred B Cordova and Jake Sachse of Kennedy Wilson.
LOS ANGELES—A seven-property apartment portfolio in the Southern California cities of Downey, Bellflower and Norwalk for $15 million. Jack Levis and Matt Levis of CBRE represented the seller, an unidentified nonprofit organization, in all seven transactions. The Gateway Cities Portfolio consists of a total of 75 units and 48,906 rentable square feet. The buildings are located at 7417 Arnett St, 8344 Alameda St, 8442, 8446, 8450 Stewart and Gray Rd, 10319 Western Ave, 10714 Western Ave, Downey, 12044 Sycamore St, Norwalk, and 9903 Belmont St, Bellflower. Each site is centrally located within its submarket and in proximity to employment centers, transportation corridors, schools, parks and recreational facilities. Each of the buildings has been occupied by long-term tenants and has been locally owned and managed for decades. Team Levis also represented the buyer, a private Los Angeles-based real estate company, in the purchase of the portfolio.
NEWPORT BEACH, CA— KBS Real Estate Investment Trust II has completed the third sale at Corporate Technology Centre, an eight building office park. Three properties—the AT&T building at 400 Holger, 450 Holger and 475 Holger—have been sold. KBS is focused on renovating the remaining five buildings, which KBS intends to rebrand as District | 237. The five class-A buildings, which will soon be vacant, have over 400,000 square feet of rentable space. District | 237 presents an opportunity to create a campus environment for one large tenant with 416,000 square feet, or multiple tenants with their own individual building, ranging in size from 46,700 square feet to 100,000 square feet. Planned renovations for District | 237 include a 60-foot-high monument sign, allowing for tenants to have prominent signage facing the highway, completely updated landscaping and modified exteriors. Currently 350 Holger Way is undergoing a complete interior renovation that will include, a new lobby, a private tenant lounge, an outdoor amenity area and gym. The office component of the building has been opened up to create large open work spaces, collaboration areas and an executive conference center.
PHOENIX—Hunt Mortgage Group has provided an $11 million first mortgage bridge loan to finance the acquisition and renovation of a multifamily property located in Phoenix, Arizona. The transaction was sourced by Doug Marshall, CCIM at Marshall Commercial Funding, Inc. Regency Park Apartments is a 104-unit garden-style multifamily complex that is located at 6333 N. 12th Street, which is part of the North Central Phoenix apartment submarket. The property was built in 1971 and consists of six, two-story residential apartment buildings and a single-story clubhouse building. The property is being acquired through two Tenant-in-Common borrowers and will be owned by Palos Verde Phoenix, LLC and Regency Park Associates, LLC. The loan will include a $1.56 million future funding commitment for capital improvements towards the renovation and improvement of the property. The loan is structured as a 36-month floating rate loan with two options to extend the loan term for a period of 12 months each.
PHOENIX—TLG Investment Partners and Concord Wilshire Capital have acquired the Sheraton Grand Hotel located in Phoenix, Arizona for $255.0 million through an affiliate of TLG Phoenix, LLC. Marriott International is the majority capital partner with TLG and Concord Wilshire and will be managing the asset. TLG Investment Partners is a Fort Lauderdale based real estate investment firm headed by Leland Pillsbury and Christopher Nieberding, which invests in multiple classes of real estate including recreation, residential and commercial properties. Concord Wilshire Capital is a joint venture partner with TLG Investment Partners. They are a national real estate development and investment firm headed by Nate Sirang, which specializes in hospitality and residential assets. The Sheraton Grand Phoenix is situated in the heart of downtown less than two blocks away from the 900,000 square foot Phoenix Convention Center as well as near the downtown campus of the University of Arizona and Chase Field, home of the Arizona Diamondbacks.
COACHELLA—George Smith Partners has arranged $32.4 million in financing for the ground-up development of a 250-room, 35 acre, casitas-style resort hotel flagged by an IHG Hotel Indigo in Coachella, California on behalf of the developer, Glenroy Coachella. Steve Bram, principal and co-Founder of George Smith Partners, worked with SVP David R. Pascale, Jr. and AVP Huber Bongolan Jr. to arrange a $24.4 million senior construction loan and $8 million PACE funding for the hotel – the first new construction hotel project ever financed by PACE in California. This hotel will be the closest hotel to the Empire Polo Club – the site of many famous Music Festivals held annually attracting some of the world’s most talented and diverse artists. It is also perfectly located to capture business from regional tennis, golf, film and other corporate events. The hotel’s ground-breaking architecture is ideally designed for entertainment-based events. The property includes a 13,000 square-foot convention center, 10,000 square-foot salt water pool with a summer cooling system and a DJ booth/cat walk, an eleven-acre ‘playground’ to host music related events, wellness retreats and corporate/private events, and 250 guestrooms with private entrances and en suite bathrooms. Many of the guestrooms are located in spacious two-, four-, and six-bedroom casitas with living rooms and social areas for entertaining options. The hotel also provides a restaurant, spa, gym and yoga/pilates studio.
LAS VEGAS—KeyBank Real Estate Capital has originated a $22.5 million Freddie Mac, first mortgage loan for Estates at Westernaire, located in Las Vegas, NV. Built in 1995 and renovated in 2014, the 336-unit multifamily property is comprised of 40, two-story buildings, a leasing center and a fitness center. The sponsor plans on investing in property renovations over the next three to four years. Fred Dockweiler of Key’s Commercial Mortgage Group arranged the fixed-rate financing with a 94-month interest only term. The loan will be used for additional renovations and to facilitate the acquisition of the property.
PHOENIX—Dunbar Real Estate Investment Management of El Segundo, Calif. purchased Mill Avenue Business Park, located at 40 E. Baseline Road, 5030 S. Mill Avenue and 5005-5025 S. Ash Avenue in Tempe, from Birtcher Anderson Realty of San Juan Capistrano, Calif. for $14.3 million. Bob Buckley, Steve Lindley and Tracy Cartledge of Cushman & Wakefield Phoenix negotiated the transaction on behalf of the seller. Mill Avenue Business Park is a 134,886-square-foot business park with a strong presence on both Mill Avenue and Baseline Road – two major arterials in Tempe. Built in 1983, the seller recently invested $1.3 million in capital improvements. Currently 87.7% occupied, the business park draws a wide-range of office, industrial and retail uses, including the legal, healthcare, professional services, tech, telecommunications, fitness, and foodservice industries.
BUILDING BLOCKS
CHULA VISTA, CA—Baldwin & Sons has completed construction on Deann and Al Baldwin Athlete Residences at the Chula Vista Elite Athlete Training Center, a U.S. Olympic and Paralympic training site covering 155 acres. The new dormitory, located near the best-selling Otay Ranch by Baldwin & Sons master-planned community, opens this month. The new dormitory, constructed by Baldwin & Sons, is a two-story building that includes 30 suites. The suites are a mix of two-bedroom with two-bath and four-bedroom with two-bath options, providing a total of 100 additional beds. About half of all units are ADA-accessible to accommodate para-athletes training at the campus.
TEMPE—StreetLights Residential has broken ground on The Cameron, its first luxury multifamily community in Tempe and third project in Arizona. With design influenced by the surrounding southwestern terrain, The Cameron will bring four stories of luxury living to the growing Tempe area. The exterior will feature a beautiful landscape while the interior use of natural stone, metals and warm woods will complement the natural surrounding scene. Complete with 349 apartment homes, The Cameron will offer several floorplans including studios, one-, two- and three-bedroom apartment homes ranging in size from 504 to 1,660 feet. Residents will have access to a variety of amenities including a resident bar, private dining space, flex fitness center with yoga lawn, makers creative space, resort style pool, bocce ball courts and much more. Interior schemes include granite and quartz countertops, island seating, custom cabinetry, stainless steel appliances, built-in speakers with Sonos Surround Sound connection and numerous other distinctive features.
SAN DIEGO—In a partnership with San Diego-based D.K. Realty Holdings and Pathfinder Partners is nearing completion on downtown Ramona’s newest multifamily community—finalizing construction on the model units at Paseo Village Townhomes in Ramona. Located in the heart of rapidly growing Ramona in northeast San Diego County, the new, 31-unit, nine-building luxury development is at Day and La Brea streets. San Diego-based Pathfinder, which specializes in opportunistic and value-add multifamily real estate investments, acquired the 2.5-acre parcel—complete with approved architectural plans—in late 2016. The remaining units in the community will be completed this fall. Paseo Village’s three-bedroom, two-and-a-half-bath, Craftsman-style homes – each with a two-car, direct-access garage—are 1,577 to 1,632 square feet. Prices start in the 400,000s.
PHOENIX—Construction of a $23 million athletic complex at Ottawa University is set for completion in 2019. Cawley Architects is the design firm behind the 110,000-square-foot Ottawa University Athletic Facility for Indoor and Outdoor Athletics. The project is at the SWC of Tierra Buena Lane and Civic Center Drive in Surprise. The outdoor center totals 58,000 square feet and the indoor center totals 52,000 square feet.
PHOENIX—Construction of a $23 million athletic complex at Ottawa University is set for completion in 2019. Cawley Architects is the design firm behind the 110,000-square-foot Ottawa University Athletic Facility for Indoor and Outdoor Athletics. The project is at the SWC of Tierra Buena Lane and Civic Center Drive in Surprise. The outdoor center totals 58,000 square feet and the indoor center totals 52,000 square feet.