Newport Beach-based Koll Bren Schreiber Realty Advisors expects to close participation in its latest investment fund by April, and is putting more than 1 million square feet of Southern California property on the block.
The new fund is approaching its target of $400 million in equity capital, according to fund executives. With the new fund in place, KBS will have raised more than $4 billion and invested in 71 million-plus square feet of properties nationwide since opening in 1992.
“We’re not like your typical investment fund firm,” said Jeannette Poe, vice president of investor development at KBS.
Different Approach
One of the early players in the opportunity investment market, the firm has liquidated two portfolios already by taking a different approach from its competitors.
While most opportunity funds try to raise at least $1 billion, KBS keeps its sights fairly conservative,between $300 to $400 million.
KBS also builds portfolios without assuming outside debt.
“We don’t like to leverage our funds,” said Poe. “It allows us to buy a little quicker, because we don’t have to wait for lenders to approve our deals. Quite often we aren’t the highest bidders on properties, but not being dependent on outside financing gives us flexibility to work with different requirements by different sellers.”
The firm also follows a short-term investment strategy.
“Our normal hold is three to seven years,” said Bill Milligan, senior vice president of dispositions for KBS. “We acquire the real estate, manage it and sell it in that timeframe.”
On the Block
Along those lines, the company is shuffling many of its real estate holdings, putting on the market more than $130 million in 10 retail properties in Southern California.
“We acquired these properties in 1995 from multiple sellers,” said Milligan. “We have added value to these properties and based on our strategy, this is a good time to sell them.”
Two trophy properties being put on the market are a pair of neighborhood shopping centers,the 325,000square-foot Chino Hills Marketplace for $36.5 million and the 225,000-square-foot San Fernando Value Square for $26 million.
KBS is also selling three Ventura outdoor shopping centers. Near Highway 101 and Telephone Road, the company is asking $13.5 million for Poinsettia Plaza and $13 million for Main Retail Plaza. The third retail center is the Telephone Road Plaza, a 97,500-square-foot shopping center with a price tag of $11.6 million.
KBS is also putting on the market another Ventura property, a Mann Theatres building, for $3.4 million.
Other holdings KBS is selling include (with asking prices):
n Michael’s Plaza in Riverside, a 68,000-square-foot neighborhood shopping center, for $8.4 million.
n A 41,500-square-foot retail center in Escondido, the Mission Escondido, for $3.3 million.
n The 96,350-square-foot Palmdale Promenade for $8.8 million.
n The 100,200-square-foot Thomas Winery in Rancho Cucamonga for $7.6 million.
All of the properties in Southern California being sold by KBS total about 1.1 million square feet of space.
Seven of the properties are being marketed by Mark Lucescu of Marcus & Millichap of Newport Beach. Todd Goodman of CB Richard Ellis in Newport Beach is handling the listing for Chino Hills Marketplace,with an asking price of more than $36 million,and the Ventura malls.
Acquisitions to Come
As those deals wait to transpire, KBS is evaluating some $800 million in potential acquisitions, according to Poe.
One of those which has already closed is a recent purchase of a 342,000-square-foot office building in Lower Manhattan for $46 million.
Other deals, say KBS officials, are on the way.
“We do business with a lot of the same companies,” said Poe. “So most of our deals are negotiated directly with institutional sellers. We generally know what we want to buy before a fund even opens.”
KBS was founded by Orange County developer Don Koll and his former acquisitions executive at Koll Development, Chuck Schreiber, along with New York-based Peter M. Bren, brother of Irvine Co. owner Donald Bren. n
