COMMERCIAL
The proposed blockbuster sale of Costa Mesa’s Pacific Arts Plaza has hit a snag, according to a report in a trade publication.
Last month, I wrote a story about the expected deal for the high-end office complex that holds the headquarters of law firm Rutan & Tucker LLP and others.
The eight-building complex totals about 787,000 square feet of offices and retail space plus some developable land. Pacific Arts Plaza has been operating under receivership for most of this year after former owner Maguire Properties Inc.— now MPG Office Trust Inc.—defaulted on its loans.
A deal in the $200 million range, which would have been the largest local office sale of the year, was expected to be announced shortly, according to numerous real estate sources.
The buyer was said to be a unit of San Diego-based real estate investor American Assets Inc.
The company recently filed a registration statement for a $500 million initial public offering, with some of the proceeds to be used to expand into areas such as Orange County.
Complications appear to have arisen. Last month, American Assets was said to have put money down toward a $210 million purchase of the complex. But trade publication Real Estate Finance & Investment this month reported that the deal had fallen apart.
What next? Other companies rumored to be potential bidders for Pacific Arts Plaza have included Newport Beach’s Irvine Company as well as an investment fund run by Los Angeles-based CB Richard Ellis Group Inc., which recently acquired Orange City Square (see story, page 1).
Real Estate Finance lists Irvine Co., OC’s dominant landlord, as the current front-runner for the complex. If that deal gets completed, expect to see some apartment development at Pacific Arts Plaza at some point down the road, market watchers say.
An August story in the Business Journal noted that Irvine Co. Investment Properties Group President Rick Gilchrist—former chief executive at Maguire Properties—was assigned the role of heading up acquisitions for the company, which has stayed on the sidelines when it comes to office buys in the past few years.
Gilchrist told the Business Journal then that Irvine Co. was “focused on identifying appropriate apartment and office projects that will enhance our existing portfolio of high-quality, well-located projects.”
Pacific Arts Plaza has 468,000 square feet of developable space, which could include stores or apartments.
Voting Guide
It’s not exactly man-bites-dog news, but the trade association that represents the county’s commercial real estate development industry is endorsing the Republican candidate in November’s election for California’s next governor.
The Southern California chapter of NAIOP’s 2010 voter guide has endorsed 17 local and state candidates for the Nov. 2 election. All but one (incumbent state Sen. Curren Price Jr.) are Republicans.
With a minimal amount of local ballot measures having a big effect on the real estate industry this election, NAIOP SoCal is turning most of its attention to the governor’s race and urging its members to help elect Meg Whitman.
It’s a defensive move for the industry more than anything, according to Jim Camp, the legislative affairs chair for NAIOP SoCal. A Republican governor will veto anti-growth, job-killing measures that “sneak through” the state Legislature, which happens more than you think, Camp said.
Nearly 800 land-use bills are proposed every year in Sacramento on average, and half are problematic for the real estate industry, according to Camp. Of those, nearly a hundred bills are deemed by the group to be “job killers,” he said.
Despite the association’s efforts to prevent their passage, a handful of bills still can make their way to the governor’s desk to get signed off, he said. That’s where a Republican is needed to use the governor’s veto power, he said.
“If Jerry Brown is elected, there’s no backstop,” said Camp, who also serves as executive vice president of Newport Beach developer Greenlaw Partners.
NAIOP SoCal’s voter guide also recommends voting “no” on Proposition 19, the marijuana legalization initiative. So it’ll likely remain a cigar bar at next year’s Night at the Fights.
Target Deal
After nearly two years, San Clemente’s deal to sell land for a Target store has been completed, according to brokers.
Target Corp. completed a deal to buy 14.8 acres of city-owned land near the Talega community, where the retailer is planning a nearly 140,000-square-foot store that could break ground shortly.
The sales price was $13.8 million, according to Brandon Johnson, managing director with Newport Beach land brokerage Tierra Development Advisors, which represented the city in the deal.
It’s one of the largest land deals in South OC this year, standing alongside a recent deal valued at close to $15 million in Mission Viejo, where Target was the seller. Miami-based builder Lennar Corp. bought that 7.4 acre parcel to build condominiums and townhomes.
The San Clemente sale has been in the works for nearly two years. Target originally was expected to pay nearly $18 million for the land. The new store could open by late next year.
