Newport Beach’s Hager Pacific Properties recently paid $30 million for the Stater Bros. Holdings Inc. campus in Colton.
Hager Pacific took on the grocery chain’s lease, which ends in 2008.
Robert Neal, an executive vice president with Hager, said Stater Bros. has broken ground on a 1.6-million-square-foot campus at the former Norton Air Force base in San Bernardino County. The supermarket chain likely will move before its lease ends, he said.
The Colton property totals 50 acres and contains six buildings, including 245,000 square feet of cooler space, 500,000 square feet of industrial space and 55,000 square feet of offices.
The freezer space is the most valuable of the existing buildings, according to Hager’s Neal.
He said it can cost up to $150 per square foot to put up a building with refrigeration. Special steps have to be taken, such as ground level heating to keep the foundation from freezing.
“It’s more than just an air-conditioned building,” Neal said. “If land freezes it expands, and when it expands it pushes up the floor.”
The refrigerated buildings are staying, but the rest of the buildings could be leased as is or demolished, he said.
The site also has about 12 acres of other land for more buildings.
Hager Pacific is open to leasing or selling buildings on the campus, he said.
Chuck Belden and Barry Gail of Cushman & Wakefield Inc., and Janine Padia of JP Realty Services represented the buyer and seller.
Hager Pacific has three leading partners: David Hager, Adam Milstein and Neal.
They put their own money into deals, not working with pension funds, insurance companies or investment funds as some other developers do, Neal said.
WaMu Campus Up for Sale
Los Angeles-based Maguire Properties Inc. is looking to sell a majority interest of the Washington Mutual campus in Irvine and once considered selling a similar stake of Park Place,so hears my counterpart Andy Fixmer at the Los Angeles Business Journal.
The potential deal was reported in an Australian newspaper, and Fixmer called Robert Maguire, who heads the real estate investment trust, to confirm.
The Aussie paper reported Macquarie Office Trust and DB RREEF Trust are in the running for Maguire’s $1.1-billion portfolio.
Maguire declined to discuss some of the details in the report but told Fixmer the group of properties for sale should not change further. The portfolio includes One California Plaza in downtown L.A., the San Diego Tech Center, the Washington Mutual campus in Irvine, the Wells Fargo Center in Denver and the Cerritos Corporate Center.
Maguire wants to retain a 20% to 30% stake as well as management of the buildings.
The real estate investment trust is looking to reduce its debt after agreeing in January to pay $1.5 billion to Los Angeles-based CommonWealth Partners LLC for 5 million square feet of office buildings in four states, Fixmer hears. That deal included Pacific Arts Plaza in Costa Mesa.
Maguire has been expanding aggressively of late, making some big plays in OC.
In October, the company agreed to pay $151 million for Washington Mutual’s campus. And Maguire paid $475 million for Park Place in Irvine in two deals last year.
Orange County apartment rents are set to climb 5% this year to an average rate of $1,369 per month, according to the latest report from Marcus & Millichap Real Estate Investment Brokerage Co.
Economic growth and high-priced homes are the cause.
“Apartments in Orange County are a hot commodity as few first-time homebuyers can afford a home in the county,” said John Przybyla, regional manager of the company’s Newport Beach office, in a statement. “The strength of the rental market encourages investors to pay premium prices for assets, and prices for smaller properties are strongly on the rise. Investors are willing to accept lower returns to own a property in this high-growth market.”
Also noted in the report:
OC employers are on track to add 35,000 workers in 2005, a 2.4% increase. Expected to add the most positions this year are professional and business services companies, hotels and tourism-related firms, and financial businesses.
Builders should finish 1,500 apartments this year, a decline from 1,900 units last year.
Projects wrapping up construction in 2005 will be in Brea, Placentia, Anaheim and Irvine. More than 6,000 apartment units are in the planning stage.
Vacancy is on track to decline 50 basis points by the end of the year to 3.4%. Areas registering strong demand include Irvine and all of South County. Apartment vacancy in Irvine has dropped 200 basis points to 6.7% during the past 12 months. Mission Viejo’s vacancy is down 210 basis points to 3.8% so far this year. Aliso Viejo has seen a 160 basis point drop in vacancy to 4.7%.
Rent growth has been particularly strong in luxury apartments, which should end the year up 6% to $1,626 per month.
The median price per unit is up 7% versus a year ago to $157,400 per unit.
