Voit Ramping Up Acquisitions Activity

IRVINE, CA—After a selective year of purchase transactions in 2014, Voit Real Estate Services is off to a strong start in 2015 with three acquisition/disposition deals totaling $45 million. The firm, an active investor in the Southwestern marketplace, closed more than $100 million in transactions in 2013, followed by $43 million in 2014, and Director of Acquisitions & Real Estate Chris Evans tells GlobeSt.com exclusively that Voit is ready to “amp things up” this year.

The three January transactions Voit closed were composed of acquisitions and dispositions throughout the Southern California market. They included the acquisition of 2850 Redhill in Santa Ana; the sale of Voit Placentia Business Park in Placentia; and the disposition of Oceanside Commerce Center in Oceanside. We spoke with Evans about the three transactions and about Voit's acquisitions activity moving forward.

GlobeSt.com: What is behind your firm's increased acquisition momentum this year?

Evans: People in the industry have made the comment that we have been laying off acquisitions for a little bit. I understand that because we've only been doing a few select deals and have been trying to be very strategic with the majority of our accounts. We haven't been dormant, but for the last couple of years I've been working directly with [the firm's founder and CEO Bob Voit] and institutional value-add groups. With a selective eye, we went out to do deals and we cycled through a couple of the investments, but we are poised to amp things up from what we've been doing.  We're highly motivated; current market conditions couldn't be better for acquisitions, but it's hard to find deals these days.

We have a fantastic platform that allows us to see things others don't see. When we need to dive down into a submarket, we can do it. Most shops wouldn't have the ability to go out into, say, the Roseville market in Sacramento and look at smaller industrial spaces and ask [VP of market research Jerry Holdner], “What happened in the 1,000-to-2,000-square-foot market in 2015?” But we have the ability to get that minutiae and tap into that kind of segmentation and find even more value. We are out there being active. If the year continues the way it has been, we'll be looking for equity partners with which to do additional deals. We're local and have boots on the ground on many levels. We're out there and are interested in new deals and in people venturing with us.

GlobeSt.com: What did the three recent transactions in Southern California have in common?

Evans: They're all Southern California real estate, and we were capitalizing on the fact that it's a great time to reposition and sell and/or buy. 2850 Redhill is an interesting new play for us. It's just shy of 100,000 square feet, a two-story office in the Airport Area that is very traditional, but Voit hasn't participated in this type of B+/A- office property. This one is kind of strategic because it's a hybrid creative/traditional office property. The interior is composed of suites that are a creative-office build out with exposed ceilings and open collaborative areas, but the outside looks more like traditional office space. Outside, nobody really knows about it. This is a way for us to capitalize on its current condition and create a true identity, and we will be doing capital infusion into that project to give it a balance. It's a good way to have equilibrium and not overcommit to creative. We'll be waking it up a bit since it's been relatively the same building for the past 20 years, so we'll give it a more up-to-date look, we'll landscape and add a little more eye catching elements and amenities.

The other properties we were capitalizing on a couple of transactions that were purchases and being able to trade 5-cap on exit. We were repositioning them, and then we maximized their occupancy and sold them. Now we're looking to redeploy that capital.

GlobeSt.com: What types of deals are you looking at going forward?

Evans: We have a value-add entrepreneurial group with the ability to work through things closer to the market and dabble in areas where we currently have a presence. We have a strong brokerage presence in a lot of markets, and we have the ability to tap into the experts who are there in order to add that value. We also do a portion of it internally in our own account. We think this fosters a good culture, but we see opportunities for bigger plays and groups—we're not on the major institutional core level, but we would like to start playing in that arena. If it fits into our backyard, we should be able to figure it out.

GlobeSt.com: What role does property management play in your acquisition strategy?

Evans: It all depends, and we're being sensitive to this. It's difficult being an investment arm of a company that also owns brokerage and other business lines. We have to do what's best for our client. If we can capitalize the utilization of our own property managers, then that's great. They're right there helping us out. It's interesting when you bring in a true property manager whom you trust and who has the ability to talk to tenants every day. You get more operational-level detail when you include property management in the discussion. You also get operational expense accuracy because it's as if they're doing a bid while you're doing the due diligence for the acquisition, so we have the actuals on day one of ownership vs. based on historicals and educated guesses. It's more accurate, so we use this to our advantage.