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DJM Capital Seeks Partner for Regional Retail Portfolio

San Jose-based developer DJM Capital Partners Inc. is looking for an investment partner for its La Habra Marketplace shopping center and three other retail properties it owns in Southern California.

DJM, which describes itself as a private equity real estate group, is looking for investors to invest equity in a roughly 962,000-square-foot, four-property portfolio of predominantly grocery-anchored retail properties it bought in 2003 and 2004.

The properties include the 372,000-square-foot La Habra center, located at the intersection of Imperial Highway and Beach Boulevard.

Anchor tenants at the La Habra complex—which has seen some renovation work of late—include a Sports Authority, Ross Dress for Less and a Regal Entertainment Group movie complex. Brokerage data shows the center being 98% full.

DJM paid a reported $76.9 million for the La Habra property in 2004, as part of a $167.7 million purchase of three-property portfolio.

Other SoCal retail centers now being marketed for a new equity partner include properties in Torrance, Lakewood and Ventura.

The La Habra, Lakewood and Torrance properties were acquired using private equity funds and institutional mezzanine debt financing, according to DJM.

“The judicious use of mezzanine debt helped DJM generate substantially higher returns for the private equity invested,” according to the developer’s website.

Officials with the Los Angeles and San Francisco offices of brokerage and investment advisory firm Holliday Fenoglio Fowler LP are representing DJM in the latest fundraising efforts.

The money raised from the equity investment will be used to recapitalize the portfolio, and will give the investor priority for future retail investment opportunities, according to HFF.

DJM’s principals will maintain “significant equity positions in the portfolio going forward,” HFF said.

It noted that DJM also will maintain day-to-day management responsibilities of the properties.

DJM also owns the 775,000-square-foot Bella Terra shopping center alongside the San Diego (405) Freeway in Huntington Beach, and is planning to partner in the soon-to-be-revived Pacific City mixed-use project in the city.

Those properties aren’t involved in the latest fundraising plan.

Apartment Financing

Officials with the Irvine office of Holliday Fenoglio Fowler helped arrange $22.8 million in mezzanine financing for the development of Santa Ana apartment complex The Marke.

Lyon Communities and partner Integral Communities, both based in Newport Beach, last month broke ground on the 300-unit Marke project in the South Coast Metro portion of Santa Ana, at a 4.4-acre parcel the intersection of MacArthur Boulevard and Main Street.

The development is expected to be completed by the end of next year.

HFF secured the three-year mezzanine loan through Pearlmark Real Estate Partners LLC of Chicago.

Senior financing for the project was provided by Bank of America, and other involved lenders include California Bank & Trust and Comerica.

Tile Mile Sale

A 51,500-square-foot retail showroom on Tile Mile Row in Anaheim has been sold to a Santa Fe Springs-based investor in an all-cash deal.

The building, at 1301 S. State College Blvd., changed hands for $8.7 million, or about $169 per square foot.

The buyer is Thrifty Oil Co. a privately owned real estate investor that has several large industrial properties in its hometown, among other investments.

Earlier this year it paid nearly $23 million for a Santa Fe Springs site that’s expected to see more than 400,000 square feet of industrial development.

“We’re all cash buyers and long term investors who look for quality properties in class A locations that perform well in all economic cycles,” said Moshe Sassover, Thrifty Oil Senior vice president.

Tim Joyce, a principal for the Newport Beach office of CLW Real Estate Services Group, represented the seller of the Anaheim property, Los Angeles-based Weingart Foundation, and co-represented the buyer with Steve Schaner of Ashwill Associates.

The deal closed in about 35 days from the start of due diligence to the close of escrow, according to Sassover.

The State College property counts painting retailer Dunn Edwards and Barcelona-based Porcelonsa, the world’s largest porcelain tile manufacturer, as anchor tenants.

The building has never been vacant since it was constructed by Weingart Foundation 23 years ago, according to CLW’s Joyce.

“It’s a solid example of the iconic properties that Thrifty Oil Co., buys and holds in its shopping center portfolio,” Joyce said.

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Mark Mueller
Mark Mueller
Mark is the Editor-in-Chief of the Orange County Business Journal, one of the premier regional business newspapers in the country. He’s the fifth person to hold the editor’s position in the paper’s long history. He oversees a staff of about 15 people. The OCBJ is considered a must-read for area business executives. The print edition of the paper is the primary source of local news for most of the Business Journal’s subscribers, which includes most of OC’s major corporate and community players. Mark’s been with the paper since 2005, and long served as the real estate reporter for the paper, breaking hundreds of commercial and residential real estate stories. He took on the editor’s position in 2018.
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