COMMERCIAL
Sperry Van Ness still has an active Orange County presence and is looking to hire, according to the Irvine-based brokerage’s founders.
In the May 25 issue of the Business Journal, I wrote how a number of Sperry brokers had moved on to competing local commercial brokerages in the past few months.
The moves came after Portland-based Guardian Management LLC, Sperry’s largest franchisee owner, opted earlier this year to consolidate five Southern California offices, including its franchise in Irvine, into its West Los Angeles office.
Guardian acquired the franchises last year, as part of a portfolio of Sperry offices in California and Arizona.
Not all of Sperry’s existing operations and personnel in Irvine were affected by Guardian’s decision, said company cofounder Rand Sperry, who started the business in 1987.
Sperry Van Ness has a separate franchise in Irvine that’s not tied to Guardian, and that line of business is still going strong, Sperry said. The company’s investment offshoot, SVN Equities LLC, also was unaffected by Guardian’s decision to consolidate operations.
“We’re alive and well,” Sperry said.
The remaining company’s been on a bit of its own hiring spree, according to Sperry. The office has added about a dozen brokers who had all been part of the Guardian-side of the business in Irvine. It’s also looking to hire additional leasing and investment sales brokers from outside the company.
Sperry’s remaining operations in OC now count about 50 people in leasing, sales and property management roles who are handling both commercial and apartment buildings, according to the company.
Corinthian Deals
Santa Ana-based Corinthian Colleges Inc., a vocational schools operator that’s been one of OC’s better performing businesses during the recession, has hired Chicago-based Jones Lang LaSalle Inc. as its real estate strategic alliance partner.
Under the agreement, Jones Lang LaSalle will provide tenant representation, project management, facility management and lease administration services for Corinthian.
Corinthian runs schools that offer degrees and certificates in healthcare, automotive technology, criminal justice, technology and other areas.
The company’s real estate portfolio totals about 4.5 million square feet in more than 150 buildings in the U.S. and Canada. Its headquarters are in Santa Ana’s Hutton Centre office complex.
The company has an active real estate portfolio. From 2004 to 2008, nearly a quarter of Corinthian’s campuses have been relocated. In addition, nearly 85% of the company’s campuses were either expanded or remodeled during that time, the company said in its last annual report. Its leases typically run 5 years to 10 years, the company said.
KBS Cuts Payments
Officials for Newport Beach’s KBS Real Estate Investment Trust say that the increased concessions it is using to land and keep tenants at its buildings will pay off in the long run,once those offices are sold.
The non-traded REIT, one of several investment programs overseen by KBS Realty Advisors LLC,the third-largest buyer of commercial properties last year, according to trade publication Commercial Property News,recently told investors that because of the tough commercial real estate market, it planned to cut back shareholder distributions this summer.
Payments will be dropping from the 7% annualized rate it had been paying since its inception about three years ago to about 5.25% in July and August, the company disclosed in a recent filing with the Securities and Exchange Commission.
KBS REIT’s portfolio totals 88 buildings and about 21.2 million square feet of commercial buildings, as well as real estate debt investments. The buildings in its portfolio are about 91.5% full, which is “substantially outperforming” the market as a whole, the company said.
To keep occupancy levels up, the company’s been increasing tenant concessions, including three or more months of free rent. That’s begun to impact cash flow, officials noted.
The payoff will be worth it, according to Chief Executive Chuck Schreiber.
“Our asset managers have done an extraordinary job keeping the occupancy of our buildings above 90% during some of the most challenging economic times that any of us have faced,” Schreiber said in a letter to shareholders this month.
“This high occupancy level will be very beneficial for the assets in the future and should contribute to achieving a premium in the sale price when we sell these properties,” he said.
Data Mixup
In my June 8 article “Two Big Office Sales; More in the Works?”, we were given some incorrect broker information. CB Richard Ellis Group Inc. is handling the sale of 3 Imperial Promenade, now known as Santa Ana’s 3 MacArthur Place. Michael Kane, Bob Smith, Paul Jones and Karen Scholte are representing Tishman Speyer Properties.
