CT Realty Sells Another Turnaround
Property; Centex big in North OC
Future Orange County construction activity is in for a slowdown. June contracts for future construction in Orange County declined substantially in both commercial and residential sectors, according to The McGraw-Hill Cos., a research service that tracks such information. Analysts attributed the decline to continued interest-rate fears, coupled with tightening regulations and a dwindling supply of ready-to-build land.
The total value of future OC contracts awarded in June totaled $329.6 million, down 39% from the $541.6 million recorded during June 1999. The commercial sector took the biggest hit, declining 43% to $133 million. The value of future residential contracts totaled $196.6 million, down 36% from the $308 million in June 1999.
Year-to-date, the figures don’t look much better. The value of future OC contracts totaled $1.7 billion through June, off 20% from the $2.1 billion in the first six months of 1999. As with the June figures, the nonresidential sector accounted for a large portion of the decline through the first six months of 2000, off 33% to $683.6 million as compared to year-ago levels. The value of residential contracts was off a more modest 8%, totaling $1 billion through June 2000.
COMMERCIAL
CT Realty Corp. continued its buy low-sell high game, disposing of a 74,500-square-foot building in Irwindale for $5.4 million to the Louise Mickel Trust. The Newport Beach-based real estate investment and development company, along with joint venture partner Howard & Howard Inc., acquired the property for $3 million in 1997 from Smith & Nephew Inc.
“We excel in seeking out value-added opportunities with strong location benefits that can be favorably re-positioned in the marketplace,” said Bob Campbell, president of CT Realty. “We are actively reviewing Los Angeles-based properties that match our investment profile and foresee numerous opportunities in the future.”
The Irwindale building, at 15715 E. Arrow Highway, sits on a 4.92-acre parcel near the junction of the 210 and 605 freeways. Earlier this year, Cordis Webster, a manufacturer of heart catheters and other medical equipment, signed a long-term lease to occupy the space. The company, a subsidiary of Johnson & Johnson, is renovating the interior to meet its sanitary manufacturing requirements.
Robert Howard, a partner with Newport Beach-based Howard & Howard, said his firm was satisfied with its return on this investment.
“We are extremely pleased with our participation in this property, as well as our joint venture relationship with CT Realty,” he said. “The Irwindale property is a great building in a great location and now it has a quality tenant to match.”
Finding undervalued properties and turning them around is not new to the principals at CT Realty. The company traditionally acquires properties it feels are undervalued, upgrades them and then resells them.
It’s most recent success story: The Sherman Industrial Park in Corona, which the company acquired in July 1997 for $1.27 million. At the time, the complex was only 50% leased, but the company spent $250,000 to upgrade the look and feel of the buildings,doing such things as improving the parking situation and painting and revamping the interiors. CT Realty recently was able to sell the property,now 100% leased to tenants such as Western Waste and Westpac Air Conditioning,for $2.43 million to Sherman Avenue Business Park LLC.
RESIDENTIAL
The Irvine-based division of Centex Homes continues to do well in North Orange County.
The company recently took down the final 16 lots of a purchase of 84 5,500-square-foot lots in the Serrano Heights masterplanned community in Orange from SunCal Cos. Additionally, Centex also closed escrow on another nearby land parcel, taking control of 20 4,000-square-foot lots out of the 100 lots it has agreed to purchase in that area. Prices were not disclosed.
Mackey O’Donnell, Craig Atkins and Mike Hunter of O’Donnell/Atkins Co. represented Centex and SunCal in the transactions.
