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Orange County’s property management industry is set to see one of its biggest shake-ups in several years.
San Francisco-based RREEF Funds LLC, one of the country’s larger real estate investors and managers, confirmed industry buzz in late September that it planned to outsource property management duties for its nationwide portfolio of office and industrial properties,including a sizable chunk of buildings here in OC.
RREEF’s national portfolio now is close to 120 million square feet.
Those buildings have been estimated to be worth close to $25 billion.
Two companies are getting the work from RREEF, a unit of Germany’s Deutsche Bank AG.
Los Angeles-based CB Rich-ard Ellis Group Inc. is getting the biggest chunk of business, a nearly 70 million square foot portfolio in Northern California and the Pacific North-west, Northeast, Midwest and Southeast.
Houston-based Transwestern gets the remaining 47 million square feet of the RREEF portfolio, which includes the Southern California market as well as the Mid-Atlantic, Southwest and Southeast.
The transition should be done by the end of the year. RREEF had kept property management duties in house for nearly 30 years, according to the company.
Locally, the deal could have a big impact. RREEF managed about 6.6 million square feet of space in OC, according to the Business Journal’s latest ranking of local property managers in May. That placed it at No. 6 among OC’s largest property managers.
Transwestern was No. 18 on the list, with about 2.7 million square feet of space in its OC portfolio. Adding RREEF’s portfolio here would likely boost Transwestern to the No. 3 spot on next year’s list, behind CB Richard Ellis and Irvine Company.
Neither Transwestern nor RREEF has disclosed what the changes mean for local personnel.
RREEF counted about 60 local employees earlier this year. About 20 million square feet of properties, in OC and elsewhere, was managed out of the company’s Costa Mesa office.
Local buildings in its portfolio include more than 2 million square feet of industrial buildings in Fullerton, Costa Mesa’s MetroCenter at South Coast offices, plus the current Aliso Viejo headquarters of Valeant Pharmaceuticals International.
Transwestern’s Newport Beach office had about 18 employees as of May.
Brea Buyer
As my colleague Dan Beighley wrote in the Business Journal’s small business column last week, Blaine Convention Services, a tradeshow general service contractor previously based in Buena Park, has moved after buying a building in Brea.
The deal is believed to be the biggest owner-user industrial sale in north OC this year, according to Brad Gilmer, principal for Lee & Associates-Orange Inc., who represented the buyer.
Blaine Convention, which does setup and construction for trade show events, acquired a 107,084-square-foot industrial building at 114 S. Berry St. The move should provide Blaine Convention space to handle future growth, according to the company.
The sales price was a little more than $8 million, or about $75 per square foot.
Blaine Convention has been in business for more than 30 years. The company was interested in purchasing a building for several years, but until recently was priced out of the market, according to Gilmer. The buyer used a Small Business Administration loan through Wells Fargo & Co. on the deal.
The seller was Peninsula Finance Corp., which had foreclosed on the property last year. The building previously was owned by auto speaker company Audiobahn Inc., which went out of business.
The seller’s agents were Clif Fincher, also from Lee & Associates-Orange, as well as and Kurt Bruggeman and Jay Mast from the brokerage’s Irvine office.
Smurfit Site Being Marketed
When Western Realco LLC bought the Fullerton industrial site that previously housed the local operations of Smurfit-Stone Container Corp. in July, officials for the Newport Beach-based developer said they were still trying to figure out plans for the 15-acre property.
The company still appears to be testing out the waters before moving ahead with a definitive plan for the property, which counts a 140,000-square-foot plant and a 40,000-square-foot office building, plus outside storage and truck space.
Jeff Read and Greg Osbourne, from the Anaheim office of Grubb & Ellis Co., have been handed the listing for the property, which Western Realco bought out of bankruptcy court for $8.3 million.
The property’s listed as being available for lease, build-to-suit or sale.
The Fullerton site was a longtime home for Smurfit-Stone, a Chicago-based cardboard box maker that announced its intention to close the site and move local operations to Cerritos about a year ago.
The property was put on the market for sale last summer. Smurfit-Stone moved most of its roughly 100 workers from the site by early this year. Grubb & Ellis also marketed the property for the prior sale.
