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TUSTIN, CA-The Los Angeles office of Palo Alto-based Broadreach Capital Partners has acquired its first Southern California asset, a vacant, 200,000-sf office complex that it plans to modernize and reposition in a joint venture with Newport Beach-based Stonewood Properties.The complex is called Tustin Commons and is composed of three, two-story office buildings ranging in size from 51,000 sf to 93,000 sf that are located west of Interstate 5 near Jamboree Road. David Simon, who heads Southern California operations for Broadreach, reports that the private equity firm bought the property for approximately $17 million from a group of private San Diego-based investors and plans to spend approximately $20 million more in repositioning it. Simon describes the property as “a well located, great value-add redevelopment opportunity” and says the Broadreach venture will turn it into a class A office and R&D campus. Construction will begin immediately on modernizing the two smaller buildings at 14101 Myford Road and 2642 Michelle Drive, which will include a new concrete and reflective green glass curtain wall, advanced communication infrastructure, new HVAC, and updated interiors that can be suited to a tenant’s needs. Both buildings are scheduled for second quarter 2005 occupancy. Stonewood Properties will oversee the day-to-day management, leasing, and construction on the Tustin Commons project. Jim Wood, founder of Stonewood, says the new owners of Tustin Commons are currently evaluating a variety of development possibilities with the City of Tustin on the third, 93,000-sf building at 14192 Franklin. Wood is a former Spieker Properties executive who formed Stonewood in February to make direct investments with Broadreach and other private equity partners in existing office and industrial assets throughout Southern California. Broadreach, managed by the former executive team of Spieker Properties Inc., invests in a variety of western US commercial real estate products through its $314-million real estate fund, BRCP Realty LP I. Simon, who repositioned assets similar to Tustin Commons while at Kearny Real Estate Co. and Citigroup Real Estate, notes that Broadreach Capital Partners expects to make several additional investments by the end of the year.John Collins of Voit Commercial represented Broadreach and Stonewood in the Tustin Commons transaction. The sellers were represented by Dave Desper of CB Richard Ellis and Jeff Chiate of Cushman & Wakefield.

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