RESIDENTIAL
A slew of apartment complex sales by Milwaukee? Northwestern Mutual Life Insurance Co. has proven to be a big source of business for local investors this month.
Laguna Niguel-based Raintree Partners LLC recently bought 204 apartments in Silicon Valley from an affiliate of Northwestern. It? the first acquisition for Raintree, which was formed in 2007 and has $200 million in funding.
The deal?or the Trellis Square Apartment Homes in Sunnyvale?raded hands for $38.3 million, or about $188,000 per square foot. The property? 95% full.
Raintree, which counts four workers, is hoping to make a handful of additional deals this year, according to Chief Executive Jeff Allen, assuming more owners are willing to drop their sale prices from the highs reached in the past few years.
?e?e been tracking coastal properties for the past year and half. Until recently, the pricing was too rich,?Allen said. ?ecently, we?e seen several institutional sellers have a change in attitude.?
One of those institutional sellers appears to be Northwestern.
Last week, I profiled Newport Beach-based Stoneridge Capital Partners, the Paul Merage-funded investor that paid $70 million for a complex in Rancho Santa Margarita that had been owned by Northwestern. That story also noted that another Orange County-based investor, Newport Beach-based Pacific Coast Management, paid $56.3 million for a Northwestern property in Aliso Viejo.
Nearly $400 million worth of apartment complexes have been sold in recent weeks by Northwestern in California and the East Coast, according to local reports.
Allen previously ran another apartment development company: San Juan Capistrano-based J.B. Allen Realty Inc. The company made many acquisitions through short-term partnerships, Allen said.
?hat wasn? a good, sustainable long-term model,?he said.
Now Raintree is using equity provided by a single entity?vergreen Real Estate Partners LLC, a subsidiary of Chicago-based M3 Capital Partners LLC.
Raintree still has a few legacy properties that were bought by J.B. Allen under its management.
The new company expects to hold on to acquisitions for seven to 10 years. It will be looking at distressed assets, and possibly ground-up developments, although there? better opportunities these days from existing assets, Allen said.
New Warmington Biz Line
A division of Costa Mesa-based homebuilder Warmington Group, one of OC? larger privately held companies during the housing boom, is ramping up a fee management line of business.
Warmington? California homebuilding division recently was retained to manage, build and sell 130 homes in Rancho Cucamonga and Chino Hills, while the company? Nevada division is doing the same for 482 homes in three subdivisions near Las Vegas.
The business is part of a fee management arrangement?here a third-party company typically is paid a percentage of the deal to handle the sales?etween Warmington and Irvine-based TriPacific Capital Advisors LLC, an institutional investor that has roughly $1 billion in housing investments.
Warmington also said it? providing due diligence analysis and asset management services on a large portfolio of housing project loans for Comerica Inc., and it is analyzing the new home project, real estate-owned portfolios for Bank of America Corp. and a subsidiary of Guaranty Bank.
Asset projection and real estate-owned management work for financial institutions is going to grow significantly in the upcoming year as more builders cease doing business and more properties are foreclosed on by banks, according to Jim Warmington Jr., chief executive for Warmington? California and Nevada homebuilding operations.
Warmington had a similar line of fee management business in the 1980s and early 1990s. The company? current crop of work might be the most of any homebuilder in the country, according to Warmington.
COMMERCIAL
Irvine? Faris Lee Investments, one the West Coast? top brokers for retail space, is opening a branch on the East Coast.
The company just opened a New York office, which will be led by newly hired principal Richard Berlinghof. He counts 23 years of commercial real estate experience. Prior to Faris Lee, Berlinghof was a director at Merrill Lynch.
Faris Lee sees the economic downturn as an opportunity to add talent, grow market share and increase its East Coast banking relationships, according to President Richard Walter.
In Irvine, the company added Eric Rosa as a managing director of financial institutions. His focus will be evaluating and advising on distressed asset, loan and portfolio acquisitions and dispositions, as well as real estate-owned asset management, the company said.
