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Seven C’s Takes Rancho Bernardo Asset

25 Apr 2015, 1:58 pm

By Alex Girda, Associate Editor

Frontera Business Park, an industrial/R&D property in Rancho Bernardo, is under new ownership. Seven C’s Group L.L.C. acquired the two-building, 80,882 square-foot asset in a $10.5 million deal. Mark McEwen, Ted Cuthbert, and Matt Zimsky of Colliers International’s San Diego office arranged the sale.

Located on a 6.2-acre site at 10965-10993 Via Frontera Drive, the asset was completed in 1982. Major employers in the area include Microsoft, General Atomics, BAE Systems, Sony and HP. The new owner will look to improve occupancy at Frontera Business Park, which was just 41 percent occupied at the time of the transaction.

Prospects for backfilling the property seem good, as San Diego’s industrial market recorded a strong first quarter. Data from Colliers International shows that industrial/R&D net absorption totaled nearly 1.4 million square feet, the best performance in 16 years.

Rancho Bernardo, along with Rose Canyon/Morena, were the only two San Diego County industrial submarkets to record negative net absorption during the first quarter. But since negative absorption totaled only 20,000 square feet between the two submarkets, continuing improvement in the San Diego industrial market may soon move them to the plus side of the ledger.



Oak Coast Properties Picks Up Hotel Circle Asset

17 Apr 2015, 10:38 pm

By Alex Girda, Associate Editor

In a $49.2 million deal, the DoubleTree San Diego—Hotel Circle was recently acquired by an affiliate of Oak Coast Properties L.L.C. Bob Kaplan and Rod Apodaca of CBRE Hotels sold the 219-key property on behalf of two local investors.

According to a statement released by CBRE, the transaction involved separate deals for the leasehold and the land that were closed concurrently. The facility will continue to operate as a DoubleTree, and Portfolio Hotels & Resorts is handling property management duties.

Completed in 1970, the eight-story hotel is located on Hotel Circle South off Interstate 8 in Mission Valley. The property’s location also offers convenient access to most major local attractions, including Sea World, the San Diego Zoo, the Gaslamp Quarter and the San Diego Convention Center.

The hotel also includes the Panini Restaurant, as well as meeting and event space, outdoor pool and spa, and a five-story parking garage.

Petco Park’s $250M Neighbor Nears Construction Start

10 Apr 2015, 7:54 pm

By Alex Girda, Associate Editor

Construction is scheduled to start April 16 on the $250 Ballpark Village project near Petco Park following approval late last month by Civic San Diego. JMI Realty, Petco Park’s developer, is partnering with Lennar Homes on the master-planned district, one of the largest residential projects of its kind in the city.

Located along Park Boulevard and Imperial Avenue, the project will total 720 residential units divided among a 400-foot-tall tower and three six-story buildings.

Plans also call for 55,000 square feet of ground-floor retail, a parking structure with space for 1,214 vehicles and a pedestrian plaza. The project’s current form follows a number of design changes, notably the addition of 98 apartments.

According to the San Diego Union-Tribune, JMI is set to
to close escrow on its sale of the development site to Greystar and will handle construction of the apartment tower’s parking garage and infrastructure.

The first units will be available for move-in by the third quarter of 2017, and completion is slated for the second quarter of 2018.

Image courtesy of jmirealty.com

Grand Del Mar Joins Fairmont Portfolio Following Sale

2 Apr 2015, 7:50 pm

By Alex Girda, Associate Editor

One of the nation’s top hotels is getting a new name to go with its new ownership and management. Fairmont Hotels & Resorts is assuming management duties at the Grand Del Mar resort, which will operate as the Fairmont Grand Del Mar. The name change follows Blum Capital’s reported $230 million acquisition of a majority stake in the property from Manchester Financial Group, the private investment firm controlled by Doug Manchester, which is keeping a minority interest.

Located in Los Peñasquitos Canyon Preserve, the 249-key Fairmont Grand Del Mar has earned a Five Diamond rating from AAA for its luxury features. Highlights include eight two-story, 4,500-square-foot villas and a Tom Fazio-designed golf course.

Other facilities include 27,000 square feet of meeting space, a 10,000-square-foot ballroom, a state-of-the-art fitness center and a 21,000-square-foot spa that received a Five Star rating from Forbes Travel Guide in 2015. Six venues are available for dining.

The Fairmont Grand Del Mar joins a collection that includes some of the most famous names in hospitality, such as the Plaza in Manhattan, London’s Savoy and the Fairmont San Francisco. The location offers easy access to local, beaches, the Del Mar Thoroughbred Club and San Diego International Airport.

Image courtesy of thegranddelmar.com

Brian Kelley: Investcorp’s Acquisition Strategy

29 Mar 2015, 1:42 am

By Adrian Maties, Associate Editor

Investcorp, a Bahrain-listed alternative investment fund, recently expanded its U.S. residential portfolio with the acquisition of four properties in the metropolitan areas of Washington, D.C., Orlando, San Diego and Baltimore. The purchase price was  approximately $300 million.

The four assets are:

  • The Arcadian, a garden-style townhome property in Silver Spring, Md.;
  • The Orion on Orpington, a 624-bed student housing property in Orlando;
  • The Waterleaf Apartment Complex, a 456-unit multifamily apartment complex in a northern suburb of San Diego;
  • The Fairways at Towson, an 828-unit apartment community in the Baltimore metro area.

Together, the four properties total more than 2.1 million square feet of space, with approximately 1,900 multifamily and student housing units. According to Investcorp, they have an average occupancy of 96 percent.

Investcorp’s real estate group has been very active in the U.S. in the past 12 months, purchasing properties collectively valued at more than $850 million.

Brian Kelley, principal of Investcorp’s real estate investment group, spoke with us about his company’s future plans for the U.S. and the four newly acquired properties.

Q: Investcorp has spent nearly $1 billion in the past 12 months to purchase properties in the U.S. What’s your feeling about the current state of the U.S. real estate market?

A: We still see many opportunities in the U.S. real estate market, with improving fundamentals as well as creative and flexible capital available for financing. The market currently offers attractive yield potential relative to other investment classes.

Q: What drove your company to acquire residential properties in Washington, D.C., Orlando, San Diego and Baltimore?

A: These properties are consistent with Investcorp’s longstanding strategy of targeting properties in the top 30 to 40 markets in the U.S., with stable cash flows as well as some upside potential. Investcorp underwrites from the bottom up, which is to say we start with interesting property-level dynamics before going on to assess larger market features. That said, we consistently look for deals in 30 or so of the largest metro areas, including the four represented in this portfolio. These particular markets have such features as good schools; relatively high costs of area housing; income, job and population growth; and a diversity of employment drivers.

Q: What are your plans for the four residential properties?

A: With each of these properties, we are implementing light value-add and upgrade programs: interior renovations, common-area amenity upgrades, etc. We also plan to address some deferred maintenance issues. Consistent with our strategy, each of the properties is highly occupied, with stable cash flows.

Q: Investcorp purchased the four properties in joint ventures with different partners. Is this part of your expansion strategy?

A: We generally choose to co-invest with local operating partners who can provide local area expertise and hands-on day-to-day oversight of the properties. That said, we are fully staffed with asset management professionals who have the experience and resources to manage properties on a direct basis, as necessary, or in close cooperation with our operating partners. All four of these transactions include operating partners who have co-invested in the deals and thus share an alignment of interest with Investcorp and its investors.

Q: Do you plan to acquire any other properties in the near future?

A: We are active in most major (top 30-40) U.S. metro areas and are actively seeking new opportunities. A consistent theme in most of our real estate investments is strong levels of current yield.

Photo credit: Investcorp

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