Real estate investor Passco Cos. remains on the lookout for apartment deals, even after a billion-dollar investment fund targeting multifamily properties the company had in the works failed to launch.
Irvine-based Passco, which reports having a portfolio of commercial and multifamily properties totaling about $1 billion, recently announced buying a 260-unit apartment complex in Birmingham, Ala.
The complex, called Stonegate, traded hands for $27.2 million, or about $105,000 per apartment, according to local reports. It’s said to be Passco’s second investment in Alabama.
The 5-year-old property, sold by an Alabama-based real estate investor, was reported to be 92% leased at the time of closing. Passco officials said they expect to do some minor upgrades to the complex.
The Stonegate sale is expected to be one of several Passco apartment deals the company is reported to have in the pipeline, though none of them will be funded through a non-traded real estate trust the company had been considering launching.
The company filed paperwork with the Securities and Exchange Commission in late 2009 to launch its Passco Apartment REIT Inc., a non-traded investment fund that was hoping to raise as much as $1.1 billion from investors from its initial public offering. But the REIT, similar in structure to offerings from other area investors such as Newport Beach-based KBS Realty Advisors and Irvine-based Steadfast Cos., never got off the ground.
Passco pulled the dormant registration statement from the SEC on July 17, saying in a filing that the company “is not going forward with the offering at this time.” No stock in the REIT had been sold.
Passco officials recently told industry website GlobeSt.com that the company was looking to raise about $100 million in equity through other means by the end of 2012, with a goal of buying six or seven apartment complexes. Deals in Columbia, S.C., and Indianapolis are likely.
Passco made its name last decade raising funds and buying properties for tenant-in-common deals, where smaller investors pool their money together to buy buildings. That market has virtually disappeared following the most recent downturn.
Covenant Construction
The homebuilding division of Costa Mesa-based Warmington Group is being tapped to build the first new homes in Ladera Ranch in nearly four years.
Warmington Residential California said it was selected by landowner Rancho Mission Viejo LLC to build 28 upscale homes in Covenant Hills, a gated neighborhood in Ladera Ranch.
The Covenant Hills homes are going up on land previously expected to hold custom houses, a plan that was put on hiatus amid the housing downturn.
Homes will largely be single-level, and will range in size from about 3,000 square feet to 4,150 square feet. Some homes will offer an optional second level for family, guests, or other uses.
A Warmington executive said the market for higher-end, single-level homes in South Orange County is underserved.
Prices are anticipated to start at a little over $1 million.
Construction on two model residences is under way, and the neighborhood will have its grand opening in the fall.
Warmington offered homes in Ladera Ranch’s first village when it debuted in 1999 and remained active in the masterplanned community until 2008.
Buchanan Buys
Newport Beach-based Buchanan Street Partners has bought an office building in Rancho Cucamonga for $10.6 million.
The real estate investment management firm said it acquired the 75,000-square-foot low-rise building, located at 9680 Haven Ave., for $141 per square foot.
The class A building, located about 1 mile from Ontario Mills Mall, is part of the HavenPark office campus and was built in 2007.
The three-story building was 89% leased at closing.
The property was acquired at about 40% below replacement cost, according to the buyer. Wells Fargo provided 70% loan-to-cost financing for the acquisition, with Buchanan Street providing the equity to complete the transaction.
A venture including Parkwood Real Estate Partners of Denver and Dallas-based Thackeray Partners was reported to be the seller.
It’s believed to be the first office purchase in California that Buchanan Street has made this year. A bulk of the company’s recent acquisitions has been in Texas, where the company has bought apartment complexes and offices in deals valued at more than $100 million.
