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Transwestern Facilitates Office Asset Redevelopment into Creative Space

31 Aug 2015, 3:37 pm

By Adriana Pop, Associate Editor

Transwestern has arranged equity and debt financing for the acquisition and repositioning of a flex research and development facility in Tustin, Calif.

14201 Franklin Ave. in Tustin, California

14201 Franklin Ave. in Tustin, California

The redevelopment of the 39,762-square-foot property at 14201 Franklin Ave. is scheduled for completion in early 2016.

Transwestern’s Robert Murphy, Gary Limjuco and Steven Orchard organized the financing on behalf of Harbor Associates LLC.

Transwestern sourced equity from a new discretionary fund representing several private investors. The non-recourse debt included a 60 percent loan-to-value ratio, a 3.5 percent interest-only rate and a four-year term. The financing structure exploits shifting dynamics to create above-market returns with a stabilized 8.3 percent yield on cost.

“Harbor saw potential in this asset that others missed because it requires a significant amount of due diligence,” said Murphy. “Harbor focuses on mid-sized, Class B or better office repositioning opportunities in Southern California, and this asset presented an attractive opportunity at a favorable price.”

The two-story building spreads across 2.3 acres, half of which is vacant land that will be converted into outdoor amenities and additional parking. Other improvements will include a new lobby, atriums, natural lighting, polished concrete floors and 14-foot exposed wood ceilings. The office redesign will cater to tenants seeking creative spaces, which are in high demand in Orange County.

“There is a significant supply and demand imbalance for creative space in Orange County, and owners of creative projects have seen incredible success, achieving rental premiums of 20 percent above traditional office rents,” Justin Loiacono, principal at Harbor Associates said in prepared remarks. “The Transwestern team presented us with a variety of capital solutions from both institutions and family offices, ultimately sourcing a partner that believed in our new platform and business plan for this asset.”

Located within 1 mile of Interstate 5, the 261 Toll Road and Jamboree Road, the facility provides easy access throughout Orange County and Southern California. Tustin Marketplace, a 1.6 million-square-foot outdoor shopping mall, and the 1 million-square-foot District at Tustin Legacy shopping mall are also situated in the property’s proximity.

Netflix Completes Largest Hollywood Office Lease

31 Aug 2015, 1:06 pm

By Alex Girda, Associate Editor

Netflix revolutionized the way we watch TV shows and movies, but that revolution needs space. The streaming service recently announced it completed a leasing agreement with Hudson Pacific Properties to occupy space at the real estate company’s ICON office tower along the Sunset Corridor. The lease is the largest agreement of its kind in terms of space taken to be completed in the Hollywood submarket.

ICON Tower

ICON Tower

Set to occupy 200,052 square feet of space at the Hollywood tower, Netflix is working with Mayor Garcetti’s business team to secure relocation and permit approvals. The ICON tower is part of a $200 million creative office development that is taking shape in Hollywood’s Sunset Corridor.

ICON is a 14-story development project totaling 323,000 square feet of space. The LEED Gold certified development is up for completion in the winter of 2016. The Sunset Bronson Studios master-plan is set to also include a five-story 96,000-square-foot creative office building and a 1,600-space parking structure.

Netflix CFO David Wells noted that “the property’s combination of office, stage and production space provides an ideal setting.” The move signals an important era for the city, as L.A. fights to maintain and expand a tech-city image. Silicon Beach has done plenty to keep the area in the loop in terms of the tech boom, but generalizing the trend to other submarkets is necessary for that purpose.

KBS Names New Vice President of Asset Management for Two West Coast Markets

27 Aug 2015, 1:15 pm

By Alex Girda, Associate Editor

KBS Realty Advisors announced that it promoted one of its own to a position of management. As of this month, the real estate investment company named Clint Copulos as the vice president of asset management for the Portland, Oregon and Sacramento, California markets.

Clint Copulos - Vice President, Acquisitions / Asset Management at KBS

Clint Copulos – Vice President, Acquisitions / Asset Management at KBS

Copulos will henceforth handle the management of numerous KBS properties located in the two metros. The new VP is also in charge of acquisition and disposition activities in the two markets, as he oversees a portfolio of around one million square feet of office space. Formerly responsible for the performance of assets in downtown San Diego for a Dutch real estate investment trust, Mr. Copulos has been with KBS since 2013.

According to the CEO of KBS, Charles Schreiber, “Clint brings a strong background of relevant experience to our asset management team and we’re confident that he will help lead the way with solid knowledge of the real estate market in these regions.” A University of California, Irvine alumnus, Mr. Copulos’ experience with the company, where he has been involved with acquisitions worth $650 million during the last year, has determined his rise as a part of KBS.

Even the Smallest Assets Incite Interest in L.A.

26 Aug 2015, 4:18 pm

By Alex Girda, Associate Editor

A 30-year-old office building in the Los Angeles market is off the market, following a transaction worth nearly $5 million. Winaldi Venture LP and Winaldi Bellisimo LLC sold the asset to Papazian-Hirsch Calabasas LP. The transaction was arranged by brokerage Charles Dunn Company representatives Justin Mendelson and Fred Sheriff and Darrell Levonian.

11260 Wilbur Ave

11260 Wilbur Ave

Located at 11260 Wilbur Ave, the two-story building is located on a one-acre site in the Porter Ranch neighborhood. The Spanish-style asset offers a total of 15,798 square feet of office space. The property offers proximity to the nearby Porter Valley Country Club and the Facey Medical Group in an affluent part of Los Angeles.

The brokerage firm affirmed that the property generated wide interest, with 10 different offers coming in for the property. Charles Dunn Company eventually closed the transaction with long-time client Papazian-Hirsch at a 6.7 percent cap rate.

According to Justin Mendelson, the property was “an opportunity for the buyer to trade from another property that we sold at a four percent cap rate into this office building in a submarket with great demographics and a cap rate of 6.7 percent.”


L.A. County Won’t Transfer from LAX-Area Asset

25 Aug 2015, 4:55 pm

By Alex Girda, Associate Editor

The LAX real estate submarket recently recorded a major leasing deal, as the area continues to transform. The County of Los Angeles renewed its agreement with landlord JM Eagle, and is set to stay on the tenant roster at the company’s building on W. Century Boulevard near the Los Angeles International Airport.

Chris Runyen - Senior Managing Director, Charles Dunn Company

Chris Runyen – Senior Managing Director, Charles Dunn Company

Inked for an additional five years, the leasing agreement means that the county will continue to occupy its 50,100 square feet of space at the JM Eagle building. The value of the loan is estimated at around $6 million. According to rentv.com, the tenant chose to represent itself during the leasing process, while the owner, a company dealing with PVC pipe manufacturing, was represented by Charles Dunn Company.

Located at 5200 W. Century Blvd, the 10-story building offers a total of around 325,000 square feet of office space. Offering proximity to the 405 and 105 freeways, the property also offers proximity to LAX. The building has seen a spike in leasing over the past 12 months, with its occupancy rate climbing from 60 to 70 percent over that interval, part of the overall trend in the submarket. According to Chris Runyen of Charles Dunn Company, the market has become “a less costly alternative to El Segundo, Playa Vista, and Silicon Beach.”

Image courtesy of charlesdunn.com

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