COMMERCIAL
The syndicators are back.
Not that they ever left, but it’s been a while since they closed a headline-making deal here. Last month, two Orange County-based companies unveiled eye-popping transactions.
Syndicators pool money from a group of investors to buy office buildings or other real estate. The arrangement is different than investing in a real estate fund,with a syndicator, each investor owns a piece of the real estate, not a piece of a fund. In real estate lingo, investors are “tenants-in-common.”
Investors typically are rich people selling property and buying into the syndicator’s deal to avoid paying capital gains taxes under a part of the tax code known as 1031.
With a syndicator, the investor doesn’t have to lift a finger to manage the property. The risk: It can be harder for an investor to sell and get his money back whenever he wants.
Irvine-based Passco Real Estate Enterprises Inc. and a pool of investors anted up $100 million for the Village at Orange, a shopping center formerly known as the Mall of Orange.
William Winn, Passco’s chief operating officer, said the company plans to add some shops, including Old Navy, and restaurants.
The 858,000-square-foot Village at Orange recently underwent a $30 million renovation.
Passco made headlines last year with its $148 million buy of the 1.2 million-square-foot Puente Hills Mall in Industry,the largest buy organized by a syndicator in recent memory in Southern California.
In another big deal last month, Mission Viejo-based Mammoth Equities LLC and investors paid $62 million to Newport Beach-based investor Newport Federal for two office parks in Cypress.
The acquisition marks Mammoth’s largest tenant-in-common deal, according to Russ Colvin, who heads the company’s investment arm, Mammoth Equities Capital Group LLC.
“The public is becoming aware of the opportunities of tax-deferred exchanges,” Colvin said.
To be sure, low interest rates have helped. Colvin said the deal could include up to 70 investors.
In Cypress, Mammoth bought five buildings on Corporate Avenue and one building at 10805 Holder St. The properties now are branded with the Mammoth name.
Alan Pekarcik, Dan Vittone and Rob Mitchell of Voit Commercial Brokerage LP represented both parties in the deal.
Complex Renamed
The Two Town Center office complex in Costa Mesa is no more.
Last month Los Angeles-based CommonWealth Partners LLC said the office park has been renamed Pacific Arts Plaza. The developer plans to better integrate the four-building, 19.2-acre campus with new walkways, landscaping, signs, lighting and graphics.
The buildings themselves also have been renamed. The 15-story tower at 611 Anton now is Pacific Arts I. Other buildings are dubbed Pacific Arts II, III and IV.
CommonWealth has been contemplating a future 18-story, 400,000-square-foot office tower to be named Pacific Arts V.
Aside from its office towers, the campus is known for the sculptured garden designed by Japan’s Isamu Noguchi and for its restaurants.
RESIDENTIAL
OK, this time it’s for sure. Really, no kidding, it’s going to happen. We’re pretty sure anyway.
The Navy two weeks ago announced it is finally set to auction off El Toro. The Navy is set to sell all four parcels, which total 3,720 acres, in January, with escrow closing in July.
Bidders can make an offer on one or more parcels.
If I’m a little skeptical about the sale, it’s only because the Navy has delayed the sale before.
And after first announcing it would auction off the entire base at once, the Navy later said it would sell off one parcel at a time starting with the one and only parcel that is entirely free of contamination.
That sparked a decision by Irvine to bump up the fees it plans to charge developers at the base.
I’ve heard the city has just nixed the fee hikes.
At least now, Irvine has annexed the base and set up the zoning for its redevelopment into parks, exposition centers, golf courses, homes, shops and offices.
El Toro always has been a good story, starting from the announcement the base would be closed to the fight over an airport there.
The defeat of an airport arguably was Irvine Mayor Larry Agran’s greatest political victory. Ironically, the base now threatens Agran’s re-election to City Council. Other members of the council have assailed his ethics, including the potential awarding of lucrative contracts for disposing of trees at the base.
As for the auction, the next major step is for potential buyers to get their hands on an invitation for bid, which is a form that must be completed to qualify as a bidder.
Bidders also will have to deposit some
cash with the General Services Administration, which is handling the sale for the
Navy in coordination with Colliers Seeley
International Inc.
For details: www.heritagefields.com
