Koll, Idaho Fund Teaming on $125M Industrial Binge
By MATHEW PADILLA
Newport Beach-based The Koll Company is looking to buy $125 million worth of industrial buildings in partnership with an Idaho pension fund.
Koll is teaming up with the Public Employees Retirement System of Idaho, which is putting up $50 million in cash to fund the deals.
The partnership plans to use about 60% debt on its acquisitions, allowing it to buy up to $125 million worth of industrial buildings, said Alan Airth, managing principal with Koll. The investors plan to look at property from the Mexican border to Ventura County and as far east as Palm Springs.
Koll is eyeing industrial properties with several tenants doing everything short of heavy manufacturing, Airth said. Koll plans to consider deals from $5 million to $100 million, he said.
The partnership was set up with the help of CS Capital Manage-ment, an affiliate of Los Angeles-based Chad-wick, Saylor & Co.
Koll, a developer, manager and investor of commercial property, specializes in buying industrial buildings these days. Chairman Donald Koll (photo) is known in Orange County for his past work building glistening office towers. Koll owns a complex of 68 industrial buildings totaling 1.2 million square feet near John Wayne Airport.
In 2002, the company refinanced its debt on the complex to free up cash to fund more deals.
Meanwhile, Koll also is set to build 27 high-end industrial buildings at the Irvine Spectrum.
Koll’s Airth said the developer should break ground next month on the first phase of 14 buildings.
Koll is in escrow on half the buildings in the first phase, which should be finished in November, Airth said. The buildings are set to sell from $196 to $227 per square foot, he said.
Newport Beach-based The Irvine Company recently decided to halt land sales to developers of small buildings in the Spectrum.
“It will definitely help us, because it limits the supply of available properties,” Airth said of the Irvine Co.’s move.
Koll hasn’t set a date to start construction on the second phase, but it should be soon, Airth said.
A slew of developers, including Santa Ana’s The Nexus Cos. and Sacramento’s Panattoni Development Co., plans 11 projects of small buildings for sale in the Spectrum, according to a report by CB Richard Ellis Inc.
Those projects total 131 buildings, mostly under 10,000 square feet, and are selling for some of the highest prices in the county.
Koll’s partnership with the Idaho pension fund is not related to development but is set to focus on buying existing properties, Airth said.
Last year, Koll served as an investment advisor to San Francisco-based real estate investor RREEF on the buy of a Cypress industrial complex.
Airth said Koll has an ownership interest in its partnership with the Idaho pension fund,the company is doing more than advising, he said.
Last summer, Koll bought three industrial buildings in Carson for $12.9 million. Koll owns or controls about 1.5 million square feet of industrial space overall.
Donald Koll split with Dallas-based Koll Development Co. in 2001 and formed the Koll Co.
