COMMERCIAL
Sometimes the highest price isn’t the best option in real estate sales.
San Juan Capistrano-based Argus Realty Investors LP recently paid $33 million for a 223,000-square-foot office building in Tempe, Ariz.
The two-story building was sold by Spokane, Wash.-based Crown West Realty, which had owned it for three years.
Bob Olshan, a vice president with Crown, told the Business Journal of Phoenix that Argus wasn’t the highest bidder.
“Argus convinced us they could close on schedule at the price they had committed to pay us,” Olshan said. “That’s critically important in Phoenix’s hot real estate market today.”
Sellers in Arizona want to avoid buyers who try to renegotiate a price right before a deal closes, said Tim Snodgrass, who heads Argus.
I haven’t heard of that happening in OC. But it seems like any hot market could face the same problem.
Tenants at the building, dubbed Elliot Corporate Center, include Honeywell International Inc., University of Phoenix, Jacobs Engineering Group Inc. and Remington College.
Argus pooled its money with 29 private investors. The investors are sharing ownership in a “tenant-in-common” structure that helps them avoid capital gains taxes from previous sales under section 1031 of the tax code.
Jean Murphy, Argus’ vice president of acquisitions, represented the company. Bob Buckley of Trammell Crow Co. and Rick Lee of Lee & Associates Commercial Real Estate Services Inc. represented Crown.
Argus has made one other buy in the Phoenix area: the $23.7 million acquisition of Tempe One Business Center.
Tops in Landfill Work
It turns out OC has the nation’s No. 1 landfill contractor by revenue in Santa Ana-based Sukut Construction Inc., according to Engineering News Record.
Sukut has done 81 landfill construction and remediation projects in California. Among them: the country’s longest-burning tire fire in Tracy in the northern San Joaquin Valley, where more than 7 million tires burned for more than two years.
The contractor put out the Tracy fire in 15 days and disposed of 50,000 cubic yards of contaminated material.
RESIDENTIAL
Irvine-based homebuilder Standard Pacific Corp. teamed with San Francisco-based real estate investor MacFarlane Partners LLC on a pair of condominium complexes in Los Angeles.
The two developments are set to cost $98 million, according to MacFarlane.
One condo complex, dubbed North Lake Lofts, is planned as a six-story development in Pasadena. Plans call for 106 condos one block south of the Foothill (I-210) Freeway.
The other development, Concert Park Lofts, is set to include 116 condos in three-story buildings in Playa Vista. The development would be Standard’s fourth in the masterplanned community.
MacFarlane is bringing money from California Public Employees’ Retirement System to the deal. The condo projects mark the eighth and ninth that MacFarlane has done with the pension fund through a venture that invests in urban infill projects.
Construction on the Pasadena lofts is set to start in March with completion set for 2007.
Work is expected to begin this month on Concert Park Lofts and finish in 2006.
Housing Revival
Irvine-based MBK Real Estate Ltd. last month said it planned to revive its senior housing division,in recent years the company has focused more on building homes and shopping centers.
MBK, a unit of Japan’s Mitsui & Co., plans to buy and develop senior apartments.
The company has tapped Terry Howard to lead the division, dubbed MBK Senior Living Communities. Howard previously ran his own company, The Howard Group, a senior housing consultancy.
“California continues to lead the nation in the percentage of aging adults,” Howard said in a statement. “The six-county Southern California region alone is home to more than 1 million persons age 75-plus. During the next five years this age group is projected to grow by 2.4%, double that of the general population.”
He said the situation is similar in OC, where the pool of those older than 75 is expected to grow annually at 2.2%, compared to 1.2% for the general population.
MBK President Stefan Markowitz said the company was an active senior housing developer in the 1990s. But later in the decade, “MBK substantially reduced its operations in response to weakness in the senior housing market.”
MBK is getting back in now that the excess supply of senior housing built in the 1990s has been absorbed, the company said.
