CT Sells, Abbey Buys; Where Have All the Mergers Gone?
COMMERCIAL
Given the ultra-competitive market for property management services in Southern California, Newport Beach-based Donahue Schriber is going to Arizona to look for a greater national market presence.
Donahue Schriber, the 12th largest property management firm in Orange County according to the Business Journal’s latest ranking, has opened an office in Scottsdale and appointed Loretta Felix to oversee that operation.
Felix, who most recently was with The Rubin Cos. and BANC Commercial Arizona, will oversee four retail properties in the Arizona market owned and operated by Donahue Schriber. They include Gold Canyon and Santa Cruz Plaza in Tucson, Paradise Square in Phoenix and the Office Max Plaza in Scottsdale. A fifth property,The Summit at Scottsdale,is under construction with an anticipated completion in the spring.
“The excellent market demographics in Phoenix, Scottsdale and Tucson areas provide significant potential for expansion of our Arizona portfolio,” said Dan Donahue, chairman of Donahue Schriber.
CT Sells Two in Inland Empire
Newport Beach-based CT Realty Corp. has sold a 27,500-square-foot industrial center in Upland for $1.18 million to A & A; Produce. This follows the recent sale of a 72,500-square-foot industrial property in Corona for $3.55 million to American Products Co.
Both properties were viewed by CT Realty management as having substantially matured in terms of price appreciation. Although the property surely will continue to appreciate, the rate of increase is likely to slow down.
An opportunistic buyer, CT Realty regularly purchases properties,both commercial and residential,it believes it can upgrade and rehabilitate. After holding a property for a short time and increasing its cash flow, CT Realty typically will sell that property and move on to its next investment.
“Both the Upland and Corona projects have performed well and exceeded our expectations in terms of return on investment,” said Bob Campbell, president of CT Realty. “The Inland Empire continues to exhibit exceptional real estate opportunities, especially in the industrial segment, and we will continue to actively seek other similarly well-located, well-designed properties throughout the region.”
The Upland property consists of two buildings at 1370 W. Ninth St.: a 20,500-square-footer and a 7,000-square-footer. The larger building is occupied by A & A; Produce, with four other tenants occupying the remaining space in the complex.
Jim Mears of Pacific Inland Commercial Real Estate in Ontario, represented CT Realty while A & A; Produce represented itself.
Abbey Co. Adds Palm Springs Center
Costa Mesa-based The Abbey Co. has added to its Palm Springs holdings by recently acquiring the 63,000-square-foot Airport Commerce Center.
The property, located at 255 and 275 North El Cielo Blvd., is comprised of two single-story buildings that are separated by a 2.38-acre parcel of undeveloped land. This parcel is slated for future development. In total, the buildings and land comprise a little more than nine acres.
“These buildings … are strategically located immediately north of Tahquitz Canyon Way, Palm Springs’ central business district,” said Robert LeMoine, the Abbey Co.’s executive vice president in charge of acquisitions. “The office complex is also situated in the heart of the city’s newly-designated Foreign Trade Zone.”
The Abbey Co. already owns a 64,144-square-foot office complex nearby. The Class A Abbey Center-Palm Springs property was built in 1992.
RESIDENTIAL
One of the surprises of the new millennium has been the relatively light activity in the way of mergers and acquisitions in the homebuilding industry. After a frenetic 1998 and 1999,when names such as the Akins Co., Lewis Homes and West Ventures Communities disappeared from the landscape as they were snapped up by big national builders,this year has been relatively quiet, although a few major deals such as the Lennar Corp.-U.S. Homes transaction have been announced.
That is partly a result of the big boys taking the time this year to digest their recent acquisitions into their overall operations. At the same time, while the hunger for land pushed some to pay what many considered outrageous prices for companies with large land inventories, there is a growing uneasiness about having too much land. The fear, some say, is that a sudden jump in interest rates or an unforeseen national or foreign crisis could slow homebuying activity, leaving many of these firms holding large land inventories, a recipe for disaster during the last recession.
Still, many homebuilders and economists continue to foresee strong activity for the next couple of years. That could spark another merger binge.
While much of the past deal frenzy was motivated by a desire to acquire land assets, the next round of activity will see the targeting of human capital as a main goal, said Lennar Corp. executive Emile Haddad.
“There’s a lack of availability in people as much as in land,” he said. “Today, you can’t find good people at the middle and upper management level. And I emphasize ‘good.’ ”
