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

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.

Del Mar Retail Center is Latest Local Buy for Donahue Schriber

By Alex Girda, Associate Editor

Donahue Schriber has recently acquired Del Mar Heights Village, a retail center, for $40.9 million, the San Diego Business Journal reported. C.W.  Clark Inc. of La Jolla, the seller, was represented by the San Diego office of Cassidy Turley.

Del Mar Heights Village currently has 31 local and regional tenants, and is shadow anchored by Vons and CVS Pharmacy. The 107,846-square foot property enhances a local portfolio that includes the recently renovated Del Mar Highlands Town Center.

In addition, Donahue Schriber, a private REIT, recently closed escrow on Bonita Centre in Chula Vista, a 98,854-square-foot center anchored by Vons and Rite Aid outlets.Bonita Center, which traded for an undisclosed amount, will likely undergo renovations that will preserve its original architecture. Elsewhere on the West Coast, Donahue Schriber acquired Four Corners Shopping Center in Washington.

The purchases also add to other recent California shopping center acquisitions by the firm, such as The Crossings at Paso Robles on the Central Coast, and the Mandalay Village Marketplace in Ventura County. All told, Donahue Schriber owns and operates a portfolio totaling more than 12 million square feet in the western U.S.

Image courtesy of  donahueschriber.com

GF Properties Gets $25M Loan for SpringHill Suites Project

By Alex Girda, Associate Editor

GF Properties Group L.L.C. has obtained a $25.1 million loan for construction of the Marriott SpringHill Suites development in Oceanside, Calif.  A team from Holiday Fenoglio Fowler L.P. consisting of managing directors Aldon Cole, Matt Kafka, and associate director Zack Holderman arranged the financing.

The SpringHill Suites hotel will be built on a site located at the southeast corner of North Myers Street and Mission Avenue. Scheduled for completion in late 2013, the hotel will be part of a mixed-use development that will also include 231 residential units and 49,000 square feet of commercial space.

Entitlements for the five-block urban infill development have been in place since 2008, according to information on GF Properties’ website. The five-acre site near the Pacific Ocean will offer easy beach access.

HFF secured three-year financing for the SpringHill Suites project at 65 percent loan-to-cost through US Bank.  GF Properties handles national investments and operates real estate companies as a wholly-owned subsidiary of the Southern Ute Indian Tribe.

Rendering courtesy of gfpropertiesgroup.com