An investor unit of Germany’s Deutsche Bank AG is making some big buys in Orange County.
The latest: San Francisco’s RREEF Funds LLC bought Fluor Corp.’s headquarters building in Aliso Viejo.
The Deutsche Bank asset manager unit last month paid $25 million to $30 million for the 109,948-square-foot, four-story building off the San Joaquin Hills (73) Toll Road, sources said. The actual price was not disclosed.
Fluor is moving its top brass to Irving, Texas, where it’s developing a 26-acre site. The engineering services company plans to open the new headquarters in April.
Ted Snell and John Desper of CB Richard Ellis Group Inc. represented RREEF in the buy and are marketing the building for lease. Jeff Osborn of Cushman & Wakefield Inc. represented Fluor.
“They have a great deal of confidence in the Aliso Viejo market,” Desper said of RREEF.
The office vacancy rate is 6.8% in Aliso Viejo and 8.3% in the county as a whole, according to CB Richard Ellis.
“Those are numbers we haven’t seen in a long, long time,” Desper said.
Last summer RREEF bought the first two phases of the Summit Office Campus on the other side of the toll road in Aliso Viejo. Sources said the five buildings totaling 483,375 square feet went for $100 million or so, roughly $200 per square foot.
The Fluor building is going for about $250 per square foot. RREEF is looking beyond Aliso Viejo as well.
It’s taking South Coast Metro Center in Costa Mesa off the hands of Stockbridge Capital Partners, according to industry sources. The sale of the three buildings is set to close escrow soon, sources said.
Stockbridge bought 555 Anton Blvd. earlier this summer with partner McCarthy Cook & Co. for $57 million, or $243 per square foot. Stockbridge and McCarthy already owned 535 and 575 Anton.
Word is RREEF is buying Stockbridge’s majority stake and McCarthy will stay on as property manager and partial owner.
Schriber Stepping Back
Thomas Schriber’s recent decision to surrender his chief executive title at the company he helped create marks a historical point for Costa Mesa-based Donahue Schriber Realty Corp.
Schriber, who plans to step down at the end of the year, will remain chairman of the company.
Schriber and Daniel Donahue bought John S. Griffith & Co. in 1976 and changed its name. Donahue died in 2002.
Patrick Donahue, chief operating officer and Daniel’s brother, is set to become chief executive.
Donahue Schriber has grown into a real estate investment trust owning or operating 70 shopping centers in California, Nevada and Arizona. It has plans to develop 24 more centers totaling 4 million square feet and valued at $550 million.
Other recent changes at the company: Lawrence Casey, chief financial officer, is set to become chief operating officer, and Lisa Hirose, vice president of finance, is set to become chief financial officer.
“Dan and I always believed in looking ahead and planning for the company’s future,” Schriber said in a statement. “These changes are part of a succession plan created over three years ago by Dan and myself to utilize the pool of talented individuals who have demonstrated the ability to lead the company.”
In December, the real estate investment trust doubled its credit line with banks to $425 million, with an eye to doing more deals.
Banc of America Securities LLC, the investment banking arm of Bank of America Corp., and 10 other banks provided the credit.
“It’s kind of like going to the credit card company and boosting your limit,” Donahue’s Casey said, in a January interview.
Investors have bid up prices of shopping centers during the past several years. Like other real estate, low interest rates have been a factor in price appreciation.
Donahue Schriber has been focusing its growth outside of OC. Last year, the developer built nine shopping centers and bought three others in California, as well as in Phoenix and Las Vegas.
In 2004, Donahue Schriber lost work managing four shopping centers for The Irvine Company after the Newport Beach-based real estate owner took over running its malls.
The REIT still owns and operates 10 shopping centers in the county.
REITs in general face some risk, according to some analysts. There has been too much price appreciation in nearly all real estate and a spike in interest rates is all but certain, according to the critics.
Donahue Schriber limits its overall debt exposure to 50% or so, and most of that is fixed, the company’s Casey said in a previous interview.
The company mostly is owned by large institutional investors.
In 2003, a JP Morgan Chase & Co. fund paid $150 million for a 40% stake in Donahue Schriber. The fund replaced Boise, Idaho-based Alscott Inc., a private foundation affiliated with the heirs of the Albertson’s Inc. chain.
