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 IRVINE, CA—Landsea Homes has hired veteran industry executive Tom Baine as president of Southern California Division. Baine brings nearly 30 years of homebuilding experience to his new role, which will oversee the planning, development and implementation of the company’s communities in the region. Baine joins Landsea Homes after a long and distinguished career with Taylor Morrison Home Corp., one of the largest homebuilders in the United States. His career began in 1990 as a customer service representative, and he continually rose throughout the company before serving the last 14 years as Vice President of Operations, managing numerous communities in Orange County, San Diego County, Los Angeles County and the Inland Empire. The company also announced that longtime Landsea Homes executive Greg Balen will serve in a new role, as the company’s Vice President of Corporate Homebuilding Operations.
SAN DIEGO—John R. Couvillion has joined Murphy Development Company as SVP and director of development. He will be responsible for overseeing the development process at all MDC projects from acquisition and construction through leasing or disposition, as well as analysis of new development and acquisition opportunities. Couvillion is a real estate development executive who has entitled and developed more than 2.5 million square feet of office and industrial properties and entitled thousands of residences during his 30+-year career. Most recently, he served as vice president of development for Badiee Development, involved with the acquisition, entitlement and design of six industrial properties totaling 420,000 square feet in North County. In 2011 he established Integritas Holdings LLC. Among his projects, he acted as Stone Brewing Company’s real estate development and construction liaison for the recent development of its 55,000-square-foot Packaging Hall in Escondido and Stone’s newest restaurant, Stone Brewing World Bistro & Gardens, in Liberty Station.
LOS ANGELES—DJM Capital Partners has promoted Ken Lee to CFO and Becky Sullivan to COO. Lee, who joined the firm in 2011, formerly held the title of VP, working in acquisitions and asset management capacities to close more than $1 billion in new financing, recapitalizations and acquisitions. Sullivan has been with the company for more than 14 years and most recently served as SVP of construction and development. In her role, has overseen more than $500 million of development projects, including the 191,000-square-foot Pacific City in Huntington Beach, the 116,000-square-foot Lido Marina Village in Newport Beach and Bella Terra shopping center in Huntington Beach.
DEALTRACKER
LOS ANGELES—CenterPoint Properties has purchased an industrial property in Los Angeles for $21 million. The 125,798 square-foot property, located at 13217 South Figueroa Street, is a single-tenant industrial building. The buyer plans to refurbish the asset and build approximately 12,000 square feet of a new two-story office. Robert Flores and John Privett of CBRE represented the seller, Goldrich & Kest Inc. in the transaction.
LOS ANGELES—The Culver, a four-story, 28-unit class A luxury apartment complex situated in the Culver City/Palms neighborhood of Los Angeles, has traded hands for $15.65 million. Avison Young principal Peter Sherman based in Los Angeles, was the sole agent for the transaction and represented the seller, Palm Heights LLC. The buyer is Mapleton Culver City LLC. Built in 2006, The Culver is located at 3325 South Canfield Avenue. The property offers a mix of studio, two-bedroom and three-bedroom floorplans with nine-foot ceilings, in-unit washers and dryers, balconies and common-area amenities, including a rooftop deck with seating and grills; a state-of-the-art gym; a Bosch coffee station and business center that opens up to a courtyard.
GLENDALE, AZ—Adobe Ridge, a 224-unit multifamily asset in Glendale, Arizona, has traded hands for $41 million, which represents $183,036 per unit. Steve Gebing and Cliff David of IPA represented the seller, The Praedium Group, and procured the buyer, Aukum Group. Adobe Ridge is located adjacent to the Arrowhead Ranch master-planned community in Glendale between 43rd Avenue and 51st Avenue with approximately 1,144 feet of exposure along Loop 101. Access to Interstate 17, Black Canyon Highway, and State Route 51, the Piestewa Freeway, is nearby. The community is situated at the edge of the Deer Valley and Interstate 17 employment corridors, home to 38 million square feet of office, industrial and flex space. Nearby employers include USAA, American Express, Discover Financial Services, Honeywell Aerospace, Blue Cross Blue Shield of Arizona, and Wells Fargo. Adobe Ridge provides residents with a stylish blend of open-concept apartment homes with nine-foot ceilings, controlled access gated entry, outdoor spaces with picnic areas and barbecue grills and 40 detached garages.
LAS VEGAS—Brixton Capital has signed lease deals with Sprouts Farmers Market and Del Taco at its 358,632-square-foot Rainbow Plaza shopping center located at 861 South Rainbow Blvd. in Las Vegas, Nevada. Sprouts Farmers Market will occupy approximately 30,000 square feet of space, taking up a portion of a former JCPenney’s box space. Construction is slated to begin soon. Del Taco has started construction on a drive-through restaurant occupying approximately 2,400 square feet of space on the corner of South Rainbow Blvd. and Alta Drive, located at the north end of Rainbow Plaza. This will revitalize a corner that formerly contained an older jewelry store building that had been vacant for almost 10 years.
PHOENIX— Cypress West Partners has acquired a class-A medical office building in Phoenix in a joint venture with MedProperties Holdings. This transaction marks Cypress West’s 8th acquisition with MedProperties. The two-story 50,040-square-foot medical office building, located at 9520 West Palm Land, is 95 percent occupied with major tenants that include: Cardiac Solutions, Arizona Arthritis & Rheumatology Associates and University of Phoenix. Cypress West Partners and MedProperties were represented by Kidder Matthews in the transaction for the property known as West 101 Gateway, with the seller, who was represented by CBRE.
LOS ANGELES—Mountaingate Plaza, a 281,240-square-foot value-add shopping center in Simi Valley, California has traded hands between a joint venture between Investcorp International Realty, Inc. and ScanlanKemperBard (SKB) and Merlone Geier Partners. Mountaingate Plaza comprises eight buildings and outparcel pads that, in addition to the Valley Marketplace, Rite Aid, 99 Cents Only and dd’s Discounts anchors, are home to Fitness 19 (opening fourth quarter 2018), Black Bear Diner, Smash Burger, El Pollo Loco, Jersey Mike’s Subs, Starbucks, U.S. Armed Forces and Ventura County Health Care Agency. Situated on 24.78 acres at 1197-1301 East Los Angeles Avenue and 2022-2090 First Street, Mountaingate Plaza is located at one of the top intersections in Simi Valley; more than 66,000 cars pass the intersection of Los Angeles Avenue and First Street daily, and more than 77,000 residents earning an average annual household income of $135,000 live within a three-mile radius of the center. An HFF investment advisory team of led by Gleb Lvovich, Bryan Ley and Daniel Tyner represented the seller in the deal.
LOS ANGELES—Thorofare Capital has funded a $13 million short-term bridge loan for the refinance and renovation of Park Terrace at Gateway, a 277-unit assisted and independent living facility located in North Phoenix, Arizona. The two-year, interest only floating-rate loan provides an initial advance of $10 million to repay the construction loan and fund reserves to facilitate the lease-up of vacant units, with $3 million withheld for future funding of the completion of unit renovations and an “earn-outs” based on performance milestones. The ADA-compliant property consists of 184 independent living units and 93 assisted living units. It features a garden-style layout, with amenities including multiple recreation rooms, a tennis court, large pool, refurbished outdoor patio space and a walking trail.
TUCSON, AZ—A three-property, 236-unit apartment portfolio in Tucson, AZ, including River View Villas, Santa Cruz Vista, and Westlake Village, has traded hands for a total of $8.6 million. Hamid Panahi and James K. Crawley, investment specialists in Marcus & Millichap’s Tucson office, along with Peter R. Flis, an investment specialist in Marcus & Millichap’s Sacramento office, had the exclusive listing to market the property on behalf of the seller, a private investor. The buyer, an individual/personal trust, was also secured and represented by Panahi, Crawley, and Flis.
LOS ANGELES—Empire Towers V, a five-story 124,529-square-foot class-A office building in Ontario, CA, has traded hands for $29.9 million. NKF co-head of US Capital Markets Kevin Shannon, executive managing director Ken White and senior managing director Michael Moore represented the seller, TA Associates. The buyer, MGR Realty, was self-represented. Built in 2007 and situated on 4.4 acres at 3990 Concours Street, Empire Towers V is within walking distance of numerous amenities including restaurants and hotels and provides access to the Ontario Mills Mall, Citizens Business Bank Arena and the Ontario Convention Center. The Ontario Airport is also less than a mile from the site. The property is currently 100 percent occupied by 11 tenants including United Health Care Services, Chapman University and CEMEX.
IRVINE, CA—Sundance West Apartment Homes, a 41-unit apartment community situated in Costa Mesa, CA, has traded hands for $16.4 million. Avison Young principal Peter Hauser and associate Matt Hauser based in the Irvine office, represented the seller, Mariman & Co., as well as the buyer, an Orange County-based private family investment partnership. The buyer assumed the existing loan with Chase Bank. Built in 1965 and located at 1990 to 2002 Maple Avenue, Sundance West Apartment Homes features 40 two- and three-bedroom floorplans and one studio floorplan. Situated on just under two acres of land, the property includes 12 one- and two-story buildings including a separate rental office. The property features a pool, additional storage, laundry facilities, and 69 parking spaces.
LONG BEACH—Patio Gardens, a 127-unit apartment community located at 4874 East Los Coyotes Diagonal in the Traffic Circle neighborhood of Long Beach, has traded hands for $50.8 million. Built in 1958, the property is comprised of 19, two-story buildings and is situated on nearly six acres fronting Los Coyotes Diagonal. Robert Stepp, principal with Stepp Commercial, represented the seller, a Long Beach-based private investor, as well as the buyer, Emeryville-based based HFH Limited. The closing cap rate was 3.8 percent and a price per unit of approximately $406,300. HFH Limited assumed the existing JPMorgan Chase loan with a 55-percent down payment. Stepp worked with the seller to acquire the asset for $35.3 million in June 2016. After just two years, the asset was sold for $15.5 million more, providing testimony to the continuing strength of the Long Beach rental housing market.
PHOENIX—The Holiday Inn & Suites Phoenix-Mesa/Chandler at 1600 S. Country Cub Dr. in Mesa has been sold to a Canadian investor for $13.1 million. The Manitoba-based investor, developer and hospitality management company plans to renovate and add mixed-use elements to the existing hotel property. Grantham and James Meng of Colliers International in Greater Phoenix negotiated the sale transaction. A conglomerate of five separate limited liability corporations sold the property to AP2 Development of Manitoba, Canada. This marks the first Phoenix acquisition for AP2 Development. Kirk Pankey of Lagundi Hotels & Resorts represented the buyer in the transaction.
BUILDING BLOCKS
PHOENIX—Prologis has selected Graycor Construction Company as the general contractor for its new Prologis I-17 Logistics Center – Phase I, a class-A flex industrial development that sits on 25 acres of prime infill space within Phoenix’s 7th Street corridor. When complete, Phase I will total four buildings and 558,712 square feet, divisible from 25,000 to 211,000 square feet. The project is located at 2111 – 2145 S. 7th St. in Phoenix, at the highly visible southeast corner of 7th Street and Interstate 17, and with 1,100 feet of I-17 frontage. Ameron, a major concrete cylinder pipe manufacturer, previously occupied the site. Graycor will begin construction at Prologis 1-17 Logistics Center this month, with completion slated for first quarter 2019. When finished, Phase I will total four buildings ranging in size from 82,284 to 211,208 square feet. Each will offer 32-foot clear height, 52- x 50-foot column spacing, 135- to 210-foot truck courts and the flexibility to accommodate multiple mid-size users. The property is three minutes from downtown Phoenix and seven minutes from Sky Harbor International Airport.
WEST HOLLYWOOD, CA—Construction has started on 1250 Fairfax, a 53-unit apartment building on Fairfax Avenue, just south of Fountain Avenue. Approved unanimously by the West Hollywood Planning Commission, the residential project includes 12 affordable units for low and moderate-income residents. The five-story development, slated for completion in 2020, will transform a long-dormant site with residences located within four buildings connected by a network of open bridges and walkways and organized around a central cluster of semi-public courtyards. The contemporary take on the traditional courtyard style was designed by award-winning Culver City based R&A Architecture + Design and includes intimate nooks for dining and entertaining and is inspired by the works of famed Southern California architect Irving Gill. Over a century ago, Gill designed the legendary Dodge House in West Hollywood. Although the property was demolished in 1970, it remains a beloved feature of West Hollywood’s architectural history due to its modern design and ahead-of-its-time features that became emblematic of many Southern California residences.