Brookwood Financial Partners Buys Kearny Mesa Office Complex

By Alex Girda, Associate Editor

Brookwood Financial Partners L.L.C.,a private equity firm based in Massachusetts, has acquired Four Points Business Park, a three-building, multi-tenant property in Kearny Mesa.

The deal marks the third San Diego-area transaction in the past 20 months for Brookwood, which previously added the Mission Valley Crossroads and Bernardo Executive Center properties to its holdings.

Located at the corner of Ruffin Road and Chesapeake Drive, the 124,712-square-foot Four Points complex was 86 percent occupied at the time of the acquisition.

The area is a favorite of professional service firms, regional sales offices and back office operations of national and regional corporate tenants. According to the buyer, the San Diego office market has seen 12 consecutive quarters of positive absorption, with the Kearny Mesa submarket also seeing constant improvement over the past several years.

Brookwood represented itself in the transaction while the seller was represented by Bob Prendergast and Lynn LaChapelle of Jones Lang LaSalle Inc. Terms of the deal were not disclosed. The new owner has enlisted CBRE Group Inc. as the property’s leasing agent.

Brookwood has acquired around 10 million square feet of office, retail, flex and R&D properties, as well as 143 hotel guest rooms, 138 condominium units, 572 apartment units and 1,360 residential lots.

Image courtesy of bfplp.com

Industrial, M-F Properties Trade in El Cajon

By Alex Girda, Associate Editor

A 109,400-square foot industrial property located at 1111 Pioneer Way has been acquired by 1111 Pioneer Partners L.L.C. for $6 million, rentv.com reports. Located on a 4.4-acre lot just north of Fletcher Parkway, the warehouse property is currently fully leased to Vision Systems and Toro Co.

Principals of Vision Systems, which leases 25,000 square feet at the property, control the 1111 Pioneer Partners ownership entity. Newmark Grubb Knight Frank arranged the deal on behalf of the seller, Longkin Properties; Inland Pacific Commercial Properties represented the buyer.

On the residential front, Trion Properties bought a 22-unit apartment complex for $2.35 million, Trio plans to upgrade the value-add property, which had not been proactively managed by its former owners. A team from Colliers International arranged the deal.

A plan to increase the property’s value and existing rent rates will be put in place at the El Cajon asset, as company officials are confident that the investment will eventually yield a 7.5 percent cap rate. Colliers International would also be involved with the eventual sale of the property, rentv.com reports.

OliverMcMillan, Capri Capital Start 208-Unit M-F Project in East Village Arts District

By Alex Girda, Associate Editor

Capri Capital Partners and OliverMcMillan have launched construction of a new residential community in San Diego’s East Village Arts District. Dubbed The Lofts at 688 13th Street, the 208-unit project will be completed in about two years. It is among the latest examples of redevelopment sparked by PETCO Park, the nine-year-old home of the San Diego Padres.

Located on three quarters of a city block, the property will offer studio, one-bedroom and two-bedroom units. Ground level units will feature floor-to-ceiling glass, and will be separated from the sidewalk by gated terraces.

Upper level apartments will feature views of the city, the complex’s landscaped courtyard or both. Ground-level units that face toward the courtyard will have private patios. The complex will incorporate two 2,660-square-foot street-level retail spaces, and the developers will widen the section of the 13th Street sidewalk adjacent to the new building.

Highlights of resident amenities at The Lofts at 688 13th Street will be a roof deck offering architectural lighting, steel and wood trellises, lounge seating, fire pits and an enclosed pet area. Extensive common areas and a media lounge, as well as a Fully Fit Gym, will round out the common-area facilities.

Rendering: OliverMcMillan/Pappageorge Haymes Partners/AVRP Studios

Beech Street Closes $9.6M Fannie Mae Loan for El Cajon Property

By Alex Girda, Associate Editor

Beech Street Capital L.LC. has arranged $9.6 million in Fannie Mae financing for the acquisition of Bella Vista Apartments, a 150-unit affordable residential property in El Cajon.

The 10-year fixed-rate loan has 9.5 years of yield maintenance, one year of interest-only and a 30-year amortizing schedule.

Bella Vista Apartments comprises  two ten-story buildings. Resident amenities include a common swimming pool and a playground and laundry facilities. The property is convenient to metropolitan San Diego as well as Downtown El Cajon.  

Kristen Croxton and Greg Reed, Beech Street Capital executive vice presidents based in Newport Beach, originated the deal. Chris Hutchinson of Alcole Capital Group represented the buyer.

The property was the last real estate asset in California held by an unnamed institutional investor eager to divest its holdings in the area, Croxton explained. Beech Street also underwrote a welfare tax abatement to be secured by the borrower during the loan’s inaugural year.

Aimco Acquires Oceanfront M-F Complex in La Jolla for $29M

By Alex Girda, Associate Editor

In a $29 million deal, Aimco has acquired Prospect 400, a 60-unit oceanfront property in La Jolla. The Denver-based apartment REIT was identified as the property’s new owner by CoStar.

Jim Neill, Eric Comer and Merrick Matricardi of CBRE Group Inc.’s San Diego office arranged the transaction on behalf of the Carolyn M. Holmer Irrevocable Trust, the property’s seller. Prospect 400 was developed in 1970 on a parcel where the newspaper publisher and philanthropist F.W. Kellogg once owned a summer home. The complex was most recently renovated in 2010.

Prospect 400 offers 60 units, including 29 one-bedroom apartments, 24 two-bedroom units and seven studios. The property also features 10 resident garages, while the community’s amenity package offers access to a heated pool, an ocean-view sundeck, a hydrotherapy spa and a lounge equipped with a full kitchen, media niche, billiards table and restrooms.

The building traded at around $483,000 per unit, pricing considerably higher than San Diego’s median values for 2012, as estimated by Marcus & Millichap Real Estate Investment Services Inc. Price increases in the area have been sluggish during the past four years.

Photo credit: CBRE Group Inc.

Chart courtesy of Marcus & Millichap Real Estate Investment Services Inc. at marcusmillichap.com

Inland American Lodging Grabs Andaz San Diego for $53M

By Alex Girda, Associate Editor

Inland American Lodging Group, Inc. has added the Andaz San Diego to its portfolio in a $53 million deal. Operated by Hyatt, the 159-key property is located in the Gaslamp Quarter near the San Diego Convention Center, PETCO Park and San Diego Bay.

Seventeen of the guest rooms are suites. Amenities include 18,500 square feet of meeting space, a fitness facility, four restaurants, a heated pool and a rooftop lounge and deck.

Previously known as the Ivy Hotel, the property was rebranded Andaz San Diego in 2010. American Lodging Advisor Inc.’s president & CEO, Marcel Verbaas, commented: “This purchase aligns with our objective to acquire luxury, upper-upscale and urban upscale hotels in the top 25 lodging markets.” A 6,000-square-foot upscale Katsuya by Starck restaurant recently opened on the Andaz’ lower level.

Hyatt’s Andaz brand targets luxury boutique hotels in urban and resort locations. Each property draws its distinct design aesthetic from its surroundings.

Image courtesy of sandiego.andaz.hyatt.com

IDS, TIAA-CREF Pay $60M For Kearny Mesa Campus

By Alex Girda, Associate Editor

A joint venture of IDS Real Estate Group and TIAA-CREF recently completed the acquisition of Cabrillo Technology Center, a three-building, 285,585 square-foot corporate campus in Kearny Mesa, from Cabrillo Properties L.L.C., according to CoStar Group, which reported the price as $59.5 million.

The transaction was arranged by a team from CBRE Inc.’s San Diego office, including Louay Alsadek, Evan August, Brad Black and Andy Taylor. IDS Real Estate Group recently completed the purchase of a San Diego-area tech center.

Located on a 17-acre site on Balboa Ave., the campus consists of a building completed in 1963 and two others developed in 2000. One of the two newer buildings, 8690 Balboa Avenue, has earned LEED Silver certification as well as an Energy Star rating.

The facility is 96 percent leased to Raytheon and HDR Engineering. The facility was extensively renovated by Cabrillo Properties.

According to Matt Aminoff, vice president at IDS Real Estate’s San Diego office, “Cabrillo Technology Center was an opportunity to acquire quality infill real estate in the sought after submarket of Kearny Mesa well below replacement cost.”

Image courtesy of cbre.us

JMR Plans Q2 Start for $38M Residential Project in Santee

By Alex Girda, Associate Editor

JMR Properties Inc. plans to launch construction of a $38 million residential project in Santee during the second quarter, the San Diego Business Journal reported. Dubbed Parc One @ Santee, the project received city approval late last year.

Located at the corner of Cuyamaca Streetand Town Center Parkway, the 172-unit community will be near the San Diego River and the Santee Trolley Town Square shopping center. The San Diego Trolley links the area with San Diego State University, Old Town and Downtown San Diego. A recently completed 55-acre community park offers baseball, soccer and football fields, tennis courts, picnic areas and playgrounds.

Parc One @ Santee will incorporate energy-efficient materials as well as an environmentally conscious design provided by O+L Architects. The community will include such upscale amenities as a swimming pool, spa, a high-end fitness facility, club room and landscaping.

Granite countertops, deluxe appliances, designer light fixtures, luxurious carpeting and ceramic tiles throughout the bath and kitchen complete the amenity package. West America Corp., the project’s contractor, is expected to complete construction by the summer of 2014.   

Rendering courtesy of olarchitects.net

Pebblebrook Pays $113M for Embassy Suites San Diego

By Alex Girda, Associate Editor

Pebblebrook Hotel Trust has added the Embassy Suites San Diego Bay to its portfolio after paying $112.5 million for the 337-key hotel. The acquisition of the full-service, upper-upscale hotel expands Pebblebrook’s portfolio to 26 properties valued at about $2.1 billion.

As part of the deal, the REIT assumed a $66.8 million secured, non-recourse loan, with the balance of the purchase price being funded through available cash.

Embassy Suites San Diego Bay, which will be managed by HEI Hotels and Resorts, operated at 83 percent occupancy in 2012. Completed in 1988, the property underwent its most recent major renovation in 2006. A $3.5 million overhaul of the guest suites was completed last spring.

Located Downtown at the intersection of Harbor Drive and Pacific Highway, the hotel is within walking distance of such attractions as the San Diego Convention Center, the Gaslamp Quarter, Seaport Village, Petco Park and Horton Plaza Shopping Mall. Distinctive features of the property include a 12-story atrium and panoramic views of the bay and the city.

Standard guestroom amenities feature a 37- or 42-inch flat-screen TV, microwave, mini-refrigerator, coffee maker, and high-speed Wi-Fi Internet access. Hotel facilities include 5,000 square feet of meeting space, the PFC Bar & Grill, 3,411 square feet of retail space and an indoor heated swimming pool and whirlpool.

Regency Scored County’s Top 2012 Retail Buy: $81M Grocery-Anchored Center in Hillcrest

By Alex Girda, Associate Editor

Regency Centers Corp. wrapped up 2012 with San Diego County’s biggest retail transaction of the year. Last month, the Jacksonville, Fla.-based REIT paid $81.1 million for Uptown District, a 148,638-square-foot grocery-anchored center located at 940 University Ave. in the Hillcrest neighborhood. Costar Group identified the buyer as Commercial Properties Services, which was represented by Alvin Mansour of Marcus & Millichap Real Estate Investment Services Inc.

Uptown District is anchored by Ralphs and Trader Joe’s, and its tenant roster includes national brands like Starbucks, Party City, Pier 1 Imports, Wells Fargo and Panera Bread. About 550,000 residents live within a five-mile radius. The 26-year-old property was renovated most recently in 2007, Costar reported.

Uptown District is 95 percent occupied, a rate that illustrates the strength of San Diego’s retail market. By the end of last year, vacancy in San Diego had declined to about 3 percent, well below the national rate of 9 percent, according to Marcus & Millichap.

Chart courtesy of Marcus & Millichap Real Estate Investment Services Inc. at marcusmillichap.com

Contactor Heads for Home on $11M USD Ballpark Project

By Alex Girda, Associate Editor

An $11 million rejuvenation effort at the University of San Diego’s aging baseball park is rounding third and heading for home. Turner Construction Co. recently hit the 50% completion mark at Fowler Park, which is on track for topping out later this month and completion in February.

Taking shape at  53-year-old Cunningham Field, Fowler Park will add 1,700 seats and a new player clubhouse. Also on tap are two suites, a press box, restrooms, concessions, stadium lighting, new sod and synthetic turf. Fowler Park is home to the Toreros, one of the top 25 college baseball teams in the country.

Turner Construction is employing green building methods, including the use of local and recycled materials and low-flow plumbing fixtures, all intended to qualify the project for LEED Silver Certification.

In addition, Turner is using the EcoPort Trailer for its jobsite office. Constructed of nontoxic, formaldehyde-free plywood, the trailer uses solar and wind-generated power and composting technologies.

Rendering courtesy of usdtoreros.cstv.com

Golden Door Spa in San Marcos Commands $25M

By Alex Girda, Associate Editor

The Golden Door Spa, a Japanese-themed luxury resort in San Marcos, has traded for $24.8 million, according to Holiday Fenoglio Fowler, which arranged the sale to an undisclosed buyer. HFF’s team was led by senior managing directors Dan Peek and Bill Stadler, and also included managing director Scott Hall and Alexandra Lalos, an analyst with the firm.

Located a 40-minute drive from downtown San Diego, the Golden Door Spa opened in 1958 and was rebuilt in 1975. Its facilities include  fitness centers, a tennis court, swimming pool, Jacuzzi, water therapy pool, Japanese bathhouse, archery range and about 20 miles of hiking trails.

Also on the grounds are a 122-acre avocado orchard and organic vegetable and fruit gardens. In addition, the new owner has also acquired the Golden Door brand, and retains the right to expand the property.

According to HFF, Golden Door Spa represents “one of the most well-known destination spa resorts and wellness brands in the world.” The property’s redevelopment and expansion opportunities, as well as its familiar brand, proved attractive to investors, explained Peek.  

Image courtesy of spafinder.org

Carey Watermark Pays $85M for Courtyard in Hotel Circle

By Alex Girda, Associate Editor

Carey Watermark Investors, a joint venture of W.P. Carey & Co. and Watermark Partners L.L.C., has snapped up the Courtyard San Diego Mission Valley/Hotel Circle for $85 million. The deal was arranged by Jones Lang La Salle Inc. managing director John Strauss along with senior vice presidents James Stockdale and Samantha Fisher.  

Information on the Web site of the seller, Tarsadia Investments L.L.C., indicates that the company is a Newport Beach, Calif.-based firm allied with two other hospitality-related companies: T2 Development, a development and investment management firm, and Evolution Hospitality, which provides hotel management services. Carey Watermark is retaining Evolution Hospitality to manage the property.

The Courtyard San Diego Mission Valley is a 317-key facility in Hotel Circle near Downtown San Diego. It offers ready access to popular attractions like the San Diego Zoo, Old Town, SeaWorld and local beaches. “The location and physical quality, together with consistent performance and strong brand and in-place cash flow, make it a solid addition to our portfolio,” explained Michael Medzigian, Carey Watermark’s CEO. The hotel has 7,000 square feet of meeting space, a business center, fitness facilities, an outdoor pool and multiple dining options. Courtyard San Diego Mission Valley was renovated in 2008.

Carey Watermark was attracted by the hotel’s “strong brand affiliation and robust performance, coupled with San Diego’s strong and improving fundamentals,” commented Jones Lang LaSalle’s Strauss. He noted that revenue per available room in the San Diego market increased 8.8 percent year-over-year through October, and occupancy is up 5 percent compared to 2011.

Image courtesy of hotels.com

Keating Hotel Group Refinances 2 Historic Gaslamp Properties

By Alex Girda, Associate Editor

The Keating Hotel Group has refinanced the Keating Hotel and the Mercantile Building, two neighboring properties in San Diego’s Gaslamp District. A team from Holiday Fenoglio Fowler L.P. led by Aldon Cole and Husayn Hasan placed a 10-year, 4.7 percent fixed-rate loan with Cantor Commercial Real Estate.

Located at 5th Avenue and F Street, the vintage buildings total 40,400 square feet. The 35-key Keating Hotel dates from 1890 and underwent its most recent major renovation five years ago. Pininfarina, perhaps best known for its collaboration with Ferrari, served as design consultant for that upgrade.

Dining venues include Croce’s Restaurant and Jazz Bar, Patrick’s Gaslamp Pub and a recently added lounge offering hotel access.

Located next door to the Keating Hotel, the Mercantile Building is currently home to a two-level Brick + Mortar restaurant.

Keating Hotel Group, which is headed by Edward Kaen and Chris Harris, will use the proceeds to retire existing debt and repatriate equity, HFF explained in a statement.

Image courtesy of thekeating.com

By Alex Girda, Associate Editor

HFF Secures Debt for Holland Partners’ Downtown M-F Project

By Alex Girda, Associate Editor

Holland Partners Group Management Inc. has secured $45 million in construction and permanent financing for a 242-unit apartment complex in Downtown San Diego. Dubbed 15th and Market, the 243,000-square-foot  property will include 10,000 square feet of ground-floor retail space.

Senior managing director Tim Wright, managing director Casey Davidson and associate director Zack Holderman led the HFF team that arranged the construction loan and 10-year permanent loan. Holland Partners was represented by Thomas Warren, COO of Southern California development, and Brent Schertzer, a development associate.

According to data from Marcus & Millichap Real Estate Investment Services Inc., multi-family construction in the San Diego market is generally on an upswing. Despite a dip in permitting compared to last year, new product completions are well ahead of 2012 levels. Both permitting and completions will beat the tally for 2010 handily.

Chart courtesy of Marcus & Millichap Real Estate Investment Services Inc. marcusmillichap.com.

Image courtesy of ccdc.com

Cruzan/Monroe, Cigna Buy DiamondView Tower for $121M

By Alex Girda, Associate Editor

In a $121 million deal, Cruzan/Monroe and Cigna Investments Inc. have acquired San Diego’s DiamondView tower.  Seller Wereldhave USA was represented by CBRE Inc. The 15-story, 305,255-square-foot building is located at 350 Tenth Ave. and offers views of nearby Petco Park.

DiamondView Tower is 95 percent occupied by such tenants as the Fashion Institute of Design and Merchandising, Red Door Interactive, Cox Media, Comerica Bank, as well as CBRE’s Downtown San Diego office. CBRE will continue to handle leasing, as it has since the building’s completion in 2007.

The property includes a two-story lobby, as well as its signature 15^th-story skybox, available as a hospitality penthouse unit. The building offers services such as the Fit Athletic Club, a fitness center with an outdoor pool and deck. Developed as the first component of a baseball-centric project, DiamondView Tower will now be used to capture some of the area’s potential for street-level retail.

For a more on the sale of the DiamondView building, click here.

School District Sells Surplus Sites; Retail Center Fetches $27M

By Alex Girda, Associate Editor

The San Diego Unified School District has approved the sale of two unused school sites but is holding onto a third in hopes of attracting a developer, KPBS.org reported.

The district received bids of $16.5 million each for Barnard Elementary School in Ocean Beach and a similar bid for an elementary school site in Mission Beach. A third property, an undeveloped parcel in Paradise Hills, attracted a $3.1 million bid.

However, two board members blocked the sale of the Mission Beach site on the ground that finding a development partner would be a better option for the district than selling the property. The board ordered district staff to find an alternative site to sell from among seven designated for disposition.

In other transaction news, an affiliate of Kleege Enterprises paid $27.3 million for Clairemont Village, a 127,175-square-foot neighborhood center. Pacific Clairemont Holdings I, an affiliate of Essel Manager Inc., sold its property at a slight discount from the $29 million price that it paid for the property in 2005, the San Diego Business Journal reported.

Located at 3005-3033 Clairemont Drive and anchored by Keil’s Food Stores, the center was constructed in 1978 and is 85 percent leased to a tenant roster that also includes HomeTown Buffet, Time Warner Cable, Carls Jr. and McDonalds. Flocke and Avoyer Commercial Real Estate and CBRE Group Inc. represented Pacific Clairemont Holdings; Kleege Enterprises represented itself.

Image courtesy of sandi.net

Orange Garden Apartments in Poway Re-Opens After $15.3M Upgrade

By Alex Girda, Associate Editor

Orange Garden Apartments is the newest addition to Poway’s roster of affordable housing communities. Affirmed Housing Group recently announced the grand re-opening of the property after it bought the former market-rate complex and completed a $15.3 million renovation. Eligible residents include those earning 30 percent to 60 percent of the local median income.

The six-building complex comprises 52 units with one, two or three bedrooms. Highlights of the renovation included new floors, cabinets, appliances and carpets. On the exterior, Affirmed Housing upgraded landscaping, fencing, roofs and stucco.

Amenities include a pool, a community room, computer room, tot lot and on-site parking. Monthly rents range from $419 to $1043.

Affirmed Housing Group President James Silverwood commented that the company is “extremely pleased with the outcome of our first partnership with the City of Poway.” In 2011, the city invested $10 million in road and sewer improvements to the area. That enhanced the market appeal of properties like Orange Garden Apartments and Oak Knoll Villas, a complex across the street that was similarly converted to affordable housing after a recent renovation.

Image courtesy of Google Maps.

Balboa Mesa Shopping Center Trades Hands in $59M Deal

By Alex Girda, Associate Editor

Regency Centers Corp. completed a deal to own San Diego’s Balboa Mesa Shopping Center. The real estate company paid a premium of $59.5 million to Balboa Realty L.L.C. Regency is currently on track to acquire a number of retail properties boasting high occupancy rates and representing good value for money. The 189,321 square feet of space the shopping complex offers are leased by a number of high-quality tenants.

Developed back in 1969, the retail center is anchored by a Vons grocery store, and also includes a 77,000-square-foot Kohl’s and a 24,000-square-foot CVS/pharmacy. At the time of the transaction, the property had an occupancy rate of 95 percent. The center is helped by its placement at the intersection of Balboa and Genesee avenues: More than 60,000 vehicles pass by on a daily basis, and the area’s residential population totals about 126,000 in a three-mile radius.

According to Regency Centers’ vice president of transactions, Howard Overton, the newly acquired property “fits Regency’s standards for a dominant shopping center, including infill location, market-leading anchors and population density.” The company has big ideas for its new property, with Gregg Sadowsky, Regency’s senior market officer, noting that “the 95 percent-leased property offers an immediate redevelopment opportunity to increase the square footage of the center, further improving the net operating income for the project.”

Regency Centers is one of the largest owners, developers and operators of grocery-anchored and community shopping centers. At the end of the second quarter of 2012, the company had a 364-property real estate portfolio, including co-owned assets.

Photo courtesy of loopnet.com

Hines-J.P. Morgan JV Secures $188M Loan for Office Campus

By Alex Girda, Associate Editor

Hines and J.P. Morgan Asset Management have secured senior financing worth $188 million from Wells Fargo for its La Jolla Commons office campus in San Diego’s University Town Centre district, according to the San Diego Business Journal.

Arranged by Jones Lang LaSalle Inc.’s capital markets division, the loan provides debt and construction financing for the campus, where Hines is developing a 415,000-square-foot office building (pictured). Scheduled for completion in 2014, the building is fully leased to LPL Financial, which will consolidate operations from multiple local offices. LPL Financial’s lease is one of the largest ever in San Diego.

La Jolla Commons also includes a 13-story, 300,000-square-foot office building completed in 2006 by Hines and its capital partner, TIAA-CREF. Hines said in January that it had recapitalized the property by selling it to a new joint venture that includes both Hines and J.P. Morgan Asset Management.

In other news, a 29,325-square-foot building in Britannia Industrial Park fetched $2.3 million for the seller, PCCP SG Kearny Otay BIP I LLC. Barragan Family Trust, the new owner, will occupy the property and operate it as the Box Company. Located on a 1.9-acre site, the property was completed in 2008. Cassidy Turley and Dare Real Estate arranged the transaction.