Aliso Viejo’s CT Realty Investors is betting on a recovering Inland Empire industrial real estate market.
CT Realty’s been part of Inland Empire deals totaling close to 3 million square feet of space in the past few months. The deals, some done with other investors, add up to about $100 million.
More deals could be in store for 2011, according to James “Watty” Watson, CT Realty’s chief executive.
The company’s looking to do $200 million to $300 million in deals this year, “perhaps more,” Watson said.
“We’ll be more aggressive in industrial acquisitions,” he said. “We’re going to be active.”
Prices for industrial buildings in the Inland Empire, which counts an availability rate of about 15%, are off by half or more from recent highs.
A lack of construction in the region’s massive industrial market—which totals about 450 million square feet—should put a premium on high-quality buildings in good locations once the area’s market begins to recover, according to Watson.
“We see a huge opportunity over the next five to 10 years,” he said.
CT Realty has been involved in more than $2 billion of developments, acquisitions and sales since starting in 1994.
The privately held company’s in the process of raising money for its latest investment fund, CT California Fund VII.
The fund is expected to have a three-year investment period.
CT Realty projects meaningful job growth in 12 to 18 months and wants to make deals before employment gains push up prices.
The company raises money from wealthy individuals and undisclosed institutional investors.
Watson, a onetime executive at Newport Beach-based real estate developer and investor Koll Co. and current head of Aliso Viejo-based executive suite landlord TechSpace Inc., has been an investor in CT Realty’s funds.
He was brought on by founders Robert Campbell and U.T. Thompson about a year ago to take over chief executive duties.
Campbell, a local real estate icon who now is chairman, remains active in CT Realty’s daily operations.
The company has one of the stronger track records among area real estate investors, according to Watson. It’s sold 122 of more than 200 properties it’s bought during the years and counts a more than 25% rate of return, according to Watson.
CT Realty has bought more than 6,000 apartments and nearly 9 million square feet of commercial space in its 17 years.
A big portion of sales—including all of its apartments—were made before the commercial market crash starting in 2007.
The company did fewer deals from 2006 to 2008, Watson said.
For CT Realty’s recent deals, it teamed with Addison, Texas-based investor Behringer Harvard on three industrial buys since September, acquiring about 2.5 million square feet of space.
The largest of the three deals was a $50 million buy of San Bernardino’s Cajon Distribution Center.
The 1.4 million-square-foot, two-building center is being renamed the Inland Empire Distribution Center.
Internal Changes
CT Realty’s seen its share of internal changes since Watson’s arrived.
Among them, the company’s moved its headquarters from Newport Beach to TechSpace’s Aliso Viejo building. And it tweaked its name slightly, going from CT Realty Corp. to CT Realty Investors.
Watson also brought on another pair of executives, Carter Ewing and Jim Kelly.
Ewing, an executive vice president who heads up strategic acquisitions and investment, held posts at divisions of Koll Co. and Costa Mesa’s Arnel & Affiliates, the real estate company of George Argyros.
Kelly, another executive vice president who heads up the company’s San Diego operations, is founder of San Diego-based developer Emerald Venture Group Inc.
