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LAGUNA NIGUEL, CA-A joint venture of the locally based Muller Co. and GE Real Estate that acquired a three-million-sf portfolio of office, industrial and retail properties in Southern California and Arizona from Thousand Oaks-based Silagi Development & Management paid a price north of $460 million. The deal, reported earlier on GlobeSt.com but without a price, included a $120-million investment by GE.

The GE-Muller JV won the deal in bidding with about 20 other prospective buyers, according to vice chairman Kevin Shannon of CB Richard Ellis, who tells GlobeSt.com that the properties were offered both as a single portfolio and as three separate office, industrial and retail deals. Shannon was part of a CBRE team representing Silagi that included vice chairman Darla Longo, executive vice president Barbara Emmons and senior vice president Ken White.

Some 47% of the properties are in the Inland Empire, 15% in the Conejo Valley and Ventura County, and the balance in the Arizona cities of Scottsdale, Phoenix, Mesa, Sun City and Tucson. The nearly three million sf of space includes 1.6 million sf of industrial product that was built between 1975 and 2003, 738,813 sf of office space that was built between 1982 and 2006, and 562,839 sf of retail properties that were built between 1972 and 2007.

Shannon describes the properties as “a quality portfolio in great locations,” with the portfolio approximately 86% leased to 270 tenants. He says the combination of the vacancy to be filled and the strength of the geographic markets offers significant potential for the new owners to build value through rent growth.

For example, Shannon points out that the office portion of the portfolio consists primarily of buildings in the Inland Empire and the Conejo Valley, which have shown some of the country’s strongest fundamentals in recent years. Along with about 11% vacancy in the office portion of the portfolio, there is potential for rent growth when leases roll over, the CBRE vice chairman adds.

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