both the interior and exterior of the more
than 297,000-square-foot property.
The complex was constructed in phases
between 1973 and 1980 by Morris and
Barbara Steiman, who later left the property to the family trust. Steve Huffman,
partner; Chris Rogers, senior investment
associate; and Dick Bassett, associate partner, all of Phoenix-based Hendricks &
Partners, handled the sale. Rogers says
that this was a very high profile sale, which
was tracked by hundreds of real estate and
legal experts in the area. He explains that
the family trust was being disbursed, which
was the reason for selling the property for
the first time in 35 years.
“This sale continues to prove that investors see the San Diego apartment market
as a solid investment market into the future, with low vacancy rates, continued
rental upside and continued barriers to
new construction,” he says.
Baltimore Apartments
The other complexes Rogers mentioned include Rreef’s Bella Terra apartment complex in Vista, which it sold
for $69.5 million to three locally based
partnerships sponsored by R&V management, as well as the $71-million sale of
the 300-unit Cardiff by the Sea apartment
complex from Essex Property Trust to
Property West. Rogers says that there were
many interested buyers in the 20-acre site,
due mainly to the fact that “the property
is an icon.” He says the complex—which
is 100% occupied with a wait list and in
a prime location—offers itself “to a big
value-add upgrade, which is what the buyers saw in it.”—Natalie Dolce
REIT EXECUTIVES TACKLE
ECONOMY, MARKET ISSUES
If you want to know what’s going to happen to real estate values and performance,
just watch what happens to REITs. That
was one of the themes sounded at the
opening of Nareit’s annual conference in
San Diego as a series of speakers and panels tackled topics relating to the impact of
the economic downturn and the continuing credit crunch.
REITs are a good indicator of how the
commercial real estate world is going to
perform, Nareit first vice chair Connie
Moore commented in remarks preceding
a panel that she moderated called “
Navigating in Turbulent Waters.” REITs constitute “a window to the commercial real
estate market,” said Moore, who is president and CEO of San Francisco-based BRE
Properties Inc., an apartment REIT.
Moore compared the world of commercial real estate to an iceberg, of which
REITs represent just the tip. Nonetheless,
Moore said, “The iceberg is all one structure,” so wherever the tip goes, you can be
sure the rest of the structure follows.
Despite the negative news that’s been
hitting the press regarding the retail sector, chairman and CEO David Simon of
Indianapolis-based Simon Property Group
said that, “From the outside, it looks a lot
worse than it is.” Simon observed that
press reports might create the impression
that retail is in a panic mode. “We’re not
panicked about retail,” he said. “It’s not as
bad in the trenches as the media would
seem to indicate.” In particular, Simon
noted, retailers are faring better today
than they did in the downturn of the early
1990s because retailers now have a much
better handle on inventory control.—Bob
Howard, GlobeSt.com
INLAND EMPIRE
$150M Arena
Opens Paid-For,
And Debt-Free
The City of Ontario has unveiled its new
$150-million, 225,000-square-foot Citizens
Business Bank Arena on a 37-acre site just
north of Interstate 10 between Haven and
Milliken avenues. At a time when many
California cities are struggling with their
finances and the state itself is in a funding
bind, the new 11,000-seat Ontario arena is
paid for in full and debt free—with an outside operating contractor guaranteeing to
pay the city at least $1 million per year.
Greg Devereaux, Ontario’s city manager, says that the city paid cash for the
new arena primarily through two sources
of funding, land sales and annual city sur-pluses. Ontario bought 200 acres of land
at what was once the Ontario Speedway
for less than $2 per sf in the late 1990s,
Devereaux explains, and that land rose
Citizens Bank Arena
tremendously in value over the years.
The city sold all of the land except for the
37-acre arena site, earmarking the proceeds of the land sales to fund the arena.
The $150-million price tag is the all-in cost
of the project, Devereaux notes.
Ontario also has struck a rare deal with
its arena operator, AEG, the same company that operates the Staples Center in
Los Angeles. The deal puts AEG fully at
risk for the cost of operating the arena,
and it also provides that AEG must pay
the city a minimum $1 million per year.
After AEG pays the $1 million and takes
its fee, the city also gets 75% of the back
end, should there be any.—Bob Howard,
GlobeSt.com
REGENCY LAUNCHES
470,000-SF CENTER
Regency Centers kicks off construction
today on its Murrieta Marketplace, a
470,000-square-foot shopping center
that will feature retailers, banks and
restaurants, including a 137,940-square-
foot Target and a 124,076-square-foot
Lowe’s. The Florida-based retail REIT’s
new center will take shape on a site at
Clinton Keith and Winchester roads,
one of the busiest intersections in Southwest Riverside County.
According to Jim Reuter, Regency Centers VP of investments, the company acquired the land for the shopping center
in July 2007 with a view toward developing
“in one of the area’s busiest future residential and retail growth corridors.” The Murrieta Marketplace project is expected to be
constructed in phases and completed in
2010.—Bob Howard, GlobeSt.com—SOCAL
