KBS Realty Advisors LLC, the Newport Beach-based investment company led by Charles Schreiber Jr. and Peter Bren, has a second real estate investment trust in the works.
The company recently filed a registration statement for KBS Real Estate Investment Trust II Inc., an offering looking to buy office, industrial and retail buildings.
It’s looking to raise up to $2.8 billion over several years. Rather than going through a traditional initial public offering, the fundraising is being handled through national and regional brokerages.
It’s a similar structure to the company’s first KBS REIT, which kicked off in early 2006 and has raised close to $700 million so far. The first REIT’s fundraising is expected to run through early next year and likely will end once the second fund begins.
About 70% of the new fund’s portfolio is expected to be invested in buildings, while the remainder will be spent on real estate-related investments like mortgages, mezzanine and bridge loans, as well as debt and derivative securities.
KBS said it plans to focus 70% of its portfolio to investments on lower-risk properties, which it defines as existing buildings that are at least 80% full. Debt financing will be used to fund about 65% of the cost of its real estate buys.
The size of the purchases for the first KBS REIT has been increasing in recent months. In early August, the company paid $124.5 million for a 2.3 million-square-foot industrial portfolio owned by Minnesota’s Opus Corp. Later that month, it was part of a venture that bought another 11.4 million-square-foot industrial portfolio for $516 million.
Along with Chief Executive Schreiber and President Bren, the brother of The Irvine Company’s Donald Bren, the executive team includes Peter McMillan, executive vice president and treasurer, and Keith Hall, executive vice president.
Master of Corona
Newport Beach-based Master Development Corp. is continuing to be a big presence in Corona.
The developer just bought two industrial buildings totaling 100,020 square feet for $9.2 million.
Fleetwood Aluminum sold the buildings to buy a larger one, also in Corona.
The company is consolidating five locations into a 200,000-square-foot headquarters.
Master Development plans to remodel both of the buildings and offer them for sale or lease.
The two buildings, on Railroad Street, were funded through a venture with GE Asset Management, manager of General Electric Co.’s U.S. pension plan.
Master Development formed a $50 million venture with GE Asset Management last year, targeting industrial buildings in Southern California. This was the fourth buy for the partnership.
The developer has built 28 buildings in Corona since 2003.
Master Development has started turning its attention to buying existing properties in the city that can be redeveloped, according to Bryan Bentrott, the company’s executive vice president.
“Our current activity in 2007 totals $23 million in value-added acquisitions and $75 million in planned developments,” he said.
The company hopes to achieve an equal $100 million balance between these two strategies by mid-2008.
Walter Frome and Bill Livesay of Voit Commercial Brokerage LP’s Irvine office represented Master Development and Fleetwood Aluminum in the transaction. Frome and Livesay also will be marketing the remodeled buildings for sale or lease.
Another Maguire Sale?
In last week’s column, I mentioned that Griffin Towers, twin 14-story buildings in Santa Ana’s South Coast Metro area, were listed for sale by Los Angeles-based Maguire Properties Inc.
Now it looks like two more of Maguire’s higher-end local buildings could also be on the trading block.
Irvine’s Main Plaza Towers, at 1920 and 2010 Main St., are said to be up for sale, according to area brokers. Eastdil Secured is the listing agent for the properties.
The two 12-story buildings near John Wayne Airport, which sit behind El Torito Grill, total more than 570,000 square feet. They’re considered to be two of Maguire’s better buildings in Orange County. Brokers speculate the Irvine Co. could be a potential buyer.
The two landlords have been making deals together in recent weeks.
In late September, Irvine Co. paid Maguire a reported $218 million for Regents Square, a three-building office complex in La Jolla.
