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SAN DIEGO-Equastone, formerly Equus Realty Advisors LLC, has acquired its first CBD office building. The La Jolla-based investment firm has aggressively built a portfolio of value-added properties in various submarkets of San Diego as well as in Arizona, Colorado, Nevada and Texas, but its $10 million buy of the 925 B St. building was its first in the city’s downtown area.”It’s an empty building and we like empty buildings,” says Chad Carpenter, Equastone’s CEO. He tells Globest.com that Chicago Title Co. vacated the property in the last six months to take space in the Merrill Lynch building at 701 B St. Equastone acquired the building from Fidelity National Financial, Chicago Title Co.’s parent company. Ron Lloyd and Hans Miller of Orion Realty Group represented Fidelity in the deal.The property is a six-story, class B building with 66,000 sf of rentable space. Carpenter says “we have five business plans on the property and are getting activity from all groups.” The plans include leasing the property to tenants; selling to an office owner-user; selling to an office condo converter; selling to a residential condo developer; or selling to a developer of boutique hotels.Carpenter says activity on all fronts has been strong and is not pushing the property in any particular direction. “If we get an offer that hits our number, we’ll sell,” he adds.David Bourne, Equastone chairman says market conditions have kept the company out of Downtown San Diego. “We’re a value-add buyer and we don’t bet on rents going up to make a play.” Instead, Bourne adds, the company looks at acquiring properties at a significant discount, “instead of relying on pure rental growth.”The acquisition closes Equastone’s private equity real estate fund, Equastone Value Fund I, which the firm manages on behalf of high net worth investors. The $50 million fund acquired roughly $200 million of property in western states. The fund’s acquisitions were mostly in the $15-20 million range.Soon, the fund will open Equastone Value Fund II. While Bourne says the timing isn’t right to release many specifics on Fund II, he says it will target value-add properties in the $20-40 million range throughout the western states.

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