COMMERCIAL
For Nader Shah, 2005 feels a lot like 1999.
Back in 1998 and early 1999, there wasn’t a whole lot of office construction, according to Shah. But developers could sense the pent up demand for it.
“I kind of feel that’s where we are again in the timeline here,” Shah said.
And he should know. In the late 1990s, Shah worked for Dallas-based Koll Development Co., back when it still was in the hands of Donald Koll.
Now, Shah, 47, has been tapped by Chicago-based Higgins De-velopment Partners LLC, which is owned by Chicago’s Pritzker family, to build up an operation on the West Coast.
His title is senior vice president, and he has chosen 4590 MacArthur Blvd. in Newport Beach to be the company’s regional headquarters.
Shah lives in Newport Beach.
Higgins puts up office and industrial buildings on behalf of companies and government agencies. Back in Higgins’ hometown of Chicago, it’s building a regional headquarters for the FBI, Shah said.
The developer already has earmarked $100 million of its own money to do deals here, Shah said. He said he plans to initially focus on Southern California, from San Diego to Ventura counties, as well as inland.
“I don’t have to go out and raise money,” Shah said.
In addition to Higgins, the Pritzkers own Chicago-based Hyatt Corp. and The Marmon Group Inc., an industrial conglomerate.
Earlier this month the family settled a dispute over its fortune brought by Liesel and Matthew Pritzker against their father, Robert Pritzker. The younger Pritzkers get $450 million each.
The older generation should do better,11 Pritzker cousins are set to get an estimated $1.3 billion each under a family breakup pact reached several years ago.
McCarthy Finishes Offices,Its Own
St. Louis, Mo.-based McCarthy Building Cos. last month wrapped up construction on Birch Bayview Plaza II, which includes three office buildings in Newport Beach.
McCarthy has offices in the first phase of Birch Bayview and is set to occupy one of the new buildings as well.
In addition to serving as general contractor, McCarthy is a development partner with Newport Beach-based Steadfast Commercial Properties on Birch Bayview.
Even so, McCarthy Chairman Michael Bolen said his company doesn’t have plans to get into the development business. Both the first and second phases of Birch Bayview were an exception, he said.
McCarthy built 97,000-square-foot Birch Bayview Plaza I in 2001.
James Palda of Steadfast Commercial Properties, said in a statement, “McCarthy was also able to maintain the budget, although the construction market posed challenges due to material and labor shortages.”
Kansas City Here I Come
Two Orange County companies went to Kansas City, Mo., to do a deal.
Irvine’s Passco Real Estate Enterprises Inc. recently paid $44 million for a big chunk of Olathe Station shopping center there,Passco’s first buy in the city.
The real estate investor bought 11 buildings totaling 320,469 square feet from Birmingham, Ala.-based AIG Baker. Passco now is a landlord to Bed Bath & Beyond Inc., OfficeMax Inc., PetSmart Inc. and other tenants.
The entire shopping center includes 13 buildings, totaling 611,643 square feet.
Faris Lee Investments, also based in Irvine, brokered the deal.
Passco is one of several companies here known as syndicators. It pools individual investors to buy real estate and then manages the property on their behalf.
The investors share ownership in a relationship known as tenant-in-common. Typically, these investors have just sold another property and avoid paying capital gains taxes by putting their money into another deal, taking advantage of a tax code dubbed 1031.
Syndicators are doing a brisk business, with interest rates still low. They say investors like getting out of the property management business.
They’re even buying and selling to each other: Mission Viejo’s Mammoth Equities LLC recently paid $15.3 million to Triple Net Properties of Santa Ana for Saddleback Financial Center.
The four-story, 72,980-square-foot office building is located at 24012 Calle De La Plata in Laguna Hills.
Jeff Hanson and Ryan Gallagher with Grubb & Ellis Co.’s Newport Beach office represented Triple Net.
Broker President
Stan Mullin, a senior vice president with Grubb & Ellis in Newport Beach, this year is serving as president-elect of the Washington, D.C.-based Society of Industrial and Office Realtors, a nationwide trade group for office and industrial brokers.
He is set to take the office of president next year and served as national vice president last year.
Under society rules, once a broker wins the national vice presidency, as Mullin did for 2004, he automatically serves as president elect and president the following years.
The society promotes ethics and offers courses in commercial real estate. It’s also a tool for brokers to network with each other across the country, and thus garner referral business, Mullin said.
Mullin joined Grubb in 1982 and has been a member of the society since 1988.
