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Ex-Irvine Co. Exec to Head Seattle Real Estate Adviser

COMMERCIAL

Michael McKee, the former No. 2 at Newport Beach’s Irvine Company, has come out of retirement to lead one of the country’s top advisers to big real estate investors.

McKee recently was appointed chief executive of Seattle’s Kennedy Associates Real Estate Counsel LP, which bills itself as the largest privately held real estate investment adviser in the country.

He had been an independent director on Kennedy Associates’ board the past two years.

McKee retired from Irvine Co. in late 2008 after 14 years at Orange County’s dominant real estate company.

He’d held the chief executive title at Irvine Co. for about a year and a half before announcing his retirement. Even before McKee’s promotion, he long was considered the No. 2 executive at the company, behind Chairman Donald Bren.

With the new job, McKee’s joining another real estate company with a huge portfolio.

Privately held Kennedy Associates counts close to $13.4 billion of assets under management. Its portfolio includes more than 127 million square feet of office, retail, apartments, hotels and industrial buildings, according to the Seattle Daily Journal of Commerce.

Much of that portfolio is owned through a partnership Kennedy Associates has with Bentall LP, one of Canada’s largest real estate advisers. The two companies teamed up four years ago and are in the middle of consolidating, which McKee will oversee.

Kennedy Associates’ closest local office is in Los Angeles. The extent of its OC holdings isn’t clear; the last time it made news in OC for a deal was in 2005, when it was part of a group selling a Costa Mesa office complex for $45 million.

Drugstore Development

Development activity is in a lull, but Irvine’s KZ DevCo LLP said it is finding work building drugstores in California and Hawaii.

KZ DevCo said it has completed construction on seven CVS/pharmacy and Long’s Drugs stores, both part of CVS Caremark Corp., so far this year and has six additional stores under development.

The total value of those projects is in excess of $120 million. The seven completed stores count more than 131,000 square feet in California and Hawaii.

The company’s recently completed a CVS/Long’s Drugs project in Huntington Beach, and has another project in the works for that city. It also has an Anaheim project on tap.

Last year, the company completed 15,000 square feet of space in OC amid a slow year for local projects. That was enough to nab KZ DevCo the No. 8 spot on the Business Journal’s June 21 list of developers.

A nearly 30% reduction in construction costs during the past two years has in part prompted drugstores to move ahead on the construction of buildings, according to the company.

Picture Correction

In the June 14 issue of the Business Journal, I wrote that Australian real estate investor Dexus Property Group would be taking up shop at the distinctive Von Karman Avenue headquarters of Master Development Corp., following a partnership it struck with the Newport Beach company. Unfortunately, we included a picture of the wrong building in the story. Master’s headquarters still is at 4200 Von Karman Ave.

RESIDENTIAL

A real estate investment trust that targets apartment buys and is headed up by Santa Ana’s Grubb & Ellis Co. has collected more than $170 million from investors since 2006, at about $10 per share.

Now a Moraga-based investor has initiated a tender offer for some of those shares at a big discount—it thinks some investors will be willing to cash out of their investments at just $2 per share.

Investment manager MacKenzie Patterson Fuller LP this month sent out an offer to investors, with the initial hopes of snapping up some $2 million worth of shares from the Grubb & Ellis Apartment REIT.

According to MacKenzie’ math, the investment trust counts a liquidation value of $2.48 per share, although it notes it hasn’t conducted an appraisal of the company’s assets.

The company’s pitch to shareholders is that “it’s your money, but you can’t access it.”

“Now you can move your money into a more liquid investment or simply cash out and pay your bills,” MacKenzie said in a letter to shareholders.

Grubb’s officials are recommending investors reject the pitch, saying the company—which has bought close to $360 million of apartments to date—is worth more than the tender offer, although it didn’t say how much more.

Apartment Appointment

The property management arm of Irvine-based apartment investor Western National Group has a new president.

Western National Property Management recently appointed Laura Khouri, a 15-year veteran at the company, as its president. She replaces Thomas Shelton, who left earlier this year.

As president, Khouri will lead a team of more than 700 people who manage about 22,750 aparments throughout California, Arizona and Utah.

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Mark Mueller
Mark Mueller
Mark is the Editor-in-Chief of the Orange County Business Journal, one of the premier regional business newspapers in the country. He’s the fifth person to hold the editor’s position in the paper’s long history. He oversees a staff of about 15 people. The OCBJ is considered a must-read for area business executives. The print edition of the paper is the primary source of local news for most of the Business Journal’s subscribers, which includes most of OC’s major corporate and community players. Mark’s been with the paper since 2005, and long served as the real estate reporter for the paper, breaking hundreds of commercial and residential real estate stories. He took on the editor’s position in 2018.
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