COMMERCIAL
Newport Beach’s KBS Realty Advisors appears set to end a busy year of office buying with the purchase of a Denver skyscraper.
An affiliate of KBS is under contract to buy Denver’s Granite Tower office building, according to area brokers. The deal—first reported in the Denver Business Journal—is expected to close before New Year’s.
Granite Tower is 31 stories with 561,000 square feet and is about 95% full. Woodlands, Texas-based oil firm Anadarko Petroleum Corp. leases nearly half of the building. The occupancy rate at Granite Tower is in line with other nearly full buildings that KBS and its affiliates have been buying this year at top-dollar prices.
The goal is to buy “assets without leasing risk,” KBS Chief Executive Charles Schreiber said a few months ago.
The Denver sale price is thought to be about $150 million, or about $267 per square foot. Hometown seller Granite Properties reportedly paid $88.5 million for the tower in 2005.
The sale is expected to be the largest commercial real estate deal for 2010 in the Denver area.
KBS invests money for pension funds and also has a series of non-traded real estate investment trusts that raise money from individual investors. The company has left its mark on several cities this year.
Among its largest reported buys, the company’s affiliates paid $655 million for a recently built 1.3 million square foot skyscraper in Chicago, $208 million for Los Angeles’ 40-story Union Bank Plaza tower, and $115 million for a 38-story office in Louisville, Ky.
Mall Reworking
A local investment group is said to be planning a big redevelopment project at a struggling mall in Akron, Ohio, with a plan that will work around a couple of anchor tenants.
Irvine-based Premier Ventures LLC earlier this month paid a reported $3 million for 600,000 square feet of non-anchor space at Akron’s Rolling Acres Mall, a 1.2 million-square-foot shopping center.
Even at a $5 per square foot purchase price, it’s unclear how much of a deal the buyer’s getting. Other than a Sears and JC Penney store that are open and not part of the sale, the mall largely is empty, according to local reports.
The mall’s non-anchor space was shuttered more than two years ago, although some shop space is being used as storage.
Not much is known about Premier Ventures.
Representatives for the group have told the Akron press that the company is made up of a group of real estate investors who buy and rehabilitate properties nationwide. No other details on the ownership have been provided.
The group is said to be looking to convert the 50-acre site to a mixed-use property.
The seller was Invest Commercial LLC, an investor based in Beverly Hills that reportedly bought the property for $1.7 million in 2006.
IHP Capital Partners, an Irvine-based housing investor, is said to have partnered with the California State Teachers Retirement System on a big real estate fund.
CalSTRS is providing the bulk of a $128.7 million fund known as IHP Partners VI, according to several pension fund trade publications.
It appears to be the first deal between IHP and CalSTRS.
IHP got its start in 1992 through a partnership with another huge pension fund, the California Public Employees’ Retirement System.
It’s also raised money in the past with Newport Beach’s Pacific Life Insurance Co., as well as the Pacific Life & Annuity Co. and Northwestern Mutual Life Insurance Co., according to the company’s website.
Recent moves by IHP include an undisclosed investment in New Home Co., an Aliso Viejo builder started in 2009 by Larry Webb and other housing industry veterans.
CalSTRS will own 97% of the assets in the new fund, while IHP Capital Partners will own the rest and handle investments and management. The investments are expected to be held from five to seven years.
The investment plan will focus on homebuilder finance, land acquisition and development projects. CalSTRS expects returns on the investments to be in the mid-teens after fees, according to a report in Investment & Pensions.
