Irvine-based Cornerstone Core Properties REIT Inc., a new real estate investment fund targeting industrial parks, is starting to spend some cash.
The firm, an offshoot of Cornerstone Real Estate Funds, which has been in business here since 1989, just spent $31 million on two Southern California deals.
A Westminster industrial building that’s home to construction products maker Don De Cristo Concrete Accessories Inc. is the new fund’s first Orange County buy.
Cornerstone paid $11.2 million for the 102,200-square-foot facility at 15172 Goldenwest Circle.
The industrial building, on 5.4 acres, has about 15,000 square feet of office space. The building was bought at a capitalization rate of 6.85%.
It’s not the first time the property has traded hands in recent years.
The seller was the See Myun and Ock Ja Kymm Family Trust, which had paid Don De Cristo about $8.3 million for the site in 2003. The building also sold in 2000, for a reported $5.1 million.
Don De Cristo, which makes steel and concrete construction products for homebuilding, commercial and government contractors, moved to Westminster in 2000 after being in the Irvine Spectrum for nearly 20 years.
The tenant is in the midst of a five-year lease, which expires in April 2008. The current rent is for about $60,425 per month, or about 59 cents per square foot. Don De Cristo has the option of renewing for another five years, at a minimum of about 64 cents per square foot.
Cornerstone officials said they are confident that in 2007 Don De Cristo will exercise its option to extend the lease.
Troy Williams, senior vice president for the Orange-based office of Grubb & Ellis Co., represented the seller. Scott Read of the brokerage firm’s Newport Beach office represented Cornerstone.
It’s the second local deal Cornerstone has struck in the past month. It also bought a 116,223-square-foot industrial property in Torrance, part of the masterplanned Harbor Gateway Business Center, for $19.7 million.
Both deals were partially funded with proceeds raised from Cornerstone’s latest blind pool offering, which started a year ago. The fund is hoping to raise as much as $355 million. It has raised about $29 million to date. The plan is to focus on multitenant industrial parks. The company also used $20.2 million from a $50 million credit pact with the New York branch of HSH Nordbank AG to fund the purchases.
Chief Executive Terry Roussel leads Cornerstone Real Estate. The company was founded in 1989 as Koll-Cornerstone. Longtime OC developer Donald Koll was an early Cornerstone backer but isn’t involved with the fund today.
The investment firm also is under contract to buy Phoenix industrial park, known as Mack Deer Valley, for $23.2 million. The acquisition of the 180,985-square-foot property is set to close this month.
Hager Looks Local Again
Local developers and investors said 2006 was as hard as ever for to find good deals in their own backyard.
As a result, a number of local players have expanded their reach to different markets. Newport Beach-based Hager Pacific Properties has gone as far as Detroit, Atlanta and Dallas.
The company had focused on Southern California for most of its deals until recently. Last year, it spent close to $210 million on acquisitions, with about 80% of that being deals out of state. The company still has a local portfolio of about 8 million square feet of commercial space, and 3,000 apartments.
The company buys, redevelops and then sells shopping centers, office and industrial buildings and apartments. The pendulum could begin to start swinging in the other direction this year, said Rob Neal, the company’s managing partner.
Hager plans to buy in the range of $100 million to $150 million in 2007, with about half of that being “value-type properties” in Southern California, he said.
O’Donnell Grows in Mexico
An offshoot of Newport Beach developer O’Donnell Group Inc. bought a 295,343-square-foot manufacturing center in Toluca, Mexico.
Following the latest deal, Mexico City-based O’Donnell-Mexico now owns about 4.3 million square feet of logistics and manufacturing facilities in Mexico, worth about $200 million.
David O’Donnell is the managing partner of O’Donnell-Mexico and has been in Mexico City for well more than a decade. His father, John O’Donnell, owns O’Donnell Group in Newport Beach and is an investor in the Mexico company.
More JPMorgan
In last month’s column item on JPMorgan Chase & Co. moving their local offices to Costa Mesa’s Center Tower, I neglected to mention Studley Inc.’s Wendy Han and Will Adams, who represented the investment bank in the five-year lease transaction.
