Affiliates of Newport Beach-based KBS Realty Advisors, one of the country’s most active real estate buyers in the past few years, aren’t slowing down their pace of deal-making, if the past month’s docket of transactions is any indication.
KBS has raised billions of dollars from investors since 2006 through a variety of funds. It’s been involved in nearly $800 million worth of property acquisitions, sales and loan transfers over the past few weeks, according to local reports and regulatory filings.
The company’s most prominent new acquisition is in Tempe, Ariz., where it’s buying a recently built midrise office campus for $137 million, according to local reports.
The 439,000-square-foot Fountainhead Office Plaza—which includes a 10-story building, a six-story building, and a six-story parking structure—sold for about $312 per square foot.
The deal is one of the priciest seen in the Phoenix area in several years, and the first office complex there to trade above $300 per square foot since early 2008, according to local reports. Both buildings are said to be leased to University of Phoenix through 2023. San Antonio-based USAA Real Estate Co. sold the buildings, which was built to environmentally friendly standards.
The next deal pending for KBS’ acquisition team appears to be in Austin, Texas. A non-traded real estate trust run by the company is under contract to pay $48 million for a five-story, 174,000-square-foot office in Austin that was built in 2009. That works out to roughly $275 per square foot.
The Austin office, called the Domain Gateway, is part of the city’s 10-acre Domain Lifestyle Center, an 800,000-square-foot shopping center.
The building is leased to OneWest Bank FSB through 2019. It’s being sold by its developers, a venture including Austin-based Endeavor Real Estate Group and institutional investor RREEF America LLC.
KBS also has at least one sale moving forward. Plymouth Meeting, Pa.-based Exeter Property Group said earlier this month it was buying a 2.1 million-square-foot industrial portfolio from KBS for an undisclosed price.
KBS and its affiliates paid close to $150 million for the industrial buildings in a series of transactions largely during 2007 and 2008.
In the largest transaction of the month, a KBS affiliate officially took over ownership of a 317-building portfolio of bank and other small commercial properties from New York-based Gramercy Capital Corp.
A transfer had been expected since May, after Gramercy fell behind on debt payments tied to the 25 million-square-foot portfolio, which it bought in 2008 for $3.3 billion.
KBS held about $450 million of the secondary debt tied to the portfolio at the time of the default. It is expected to join other debt holders in pushing for a sale of the buildings.
Land Grab
The New Home Co., the Aliso Viejo-based homebuilder that’s turning 50-acres of land at Irvine’s Lambert Ranch into a 169-home development, said it’s starting up a new land-buying business to snap up other properties.
TNHC Land Company LLC will buy land in Northern and Southern California.
The company’s looking to buy land that will hold single-family detached and attached home subdivisions, as well as land for development of master-planned communities, where homes could be built by other companies in addition to The New Home Co.
The company currently is eyeing a few properties that could hold as many as 1,400 home lots, according to Joe Davis, a founding partner with The New Home Co. who’s also directing strategy for the new business line.
The company’s not necessarily interested in the largest land parcels, said Davis, who previously headed up the residential development division of Newport Beach-based Irvine Company.
“We don’t want to be the largest builder in any market,” he said. “We’re looking to build unique products—we want to do things that are fun.”
Projects as small as 10 homes could work, if they’re in the right location, he said.
The privately held company is not disclosing how much it expects to spend buying land; its financial backers include IHP Capital Partners in Irvine, Santa Monica-based Watt Cos. and Tricon Capital Group in Toronto.
Landscape Expansion
Gaithersburg, Md.-based commercial landscaping company Brickman Group is opening a new regional office in Santa Ana as it expands into Orange County.
The company, which provides landscape maintenance for office and industrial parks, commercial campuses and other locations, will have about 20 people working from the new office, at 1015 E. Chestnut Ave.
Brickman, which expanded in Los Angeles earlier this year through its acquisition of locally based Dworsky Landscaping, hopes to have about 300 field employees in OC once operations here get ramped up.
