COMMERCIAL
Tony Thompson, the former chairman of Santa Ana-based Grubb & Ellis Co., has another real estate investment offering in the works.
Less than a year after Thompson launched his latest real estate investment company, Irvine-based Thompson National Properties LLC, he’s looking to start up a related business, TNP Strategic Retail Trust Inc.
The real estate investment trust is looking to raise up to a billion dollars from investors. The initial registration statement for the company was filed last month with the Securities and Exchange Commission.
While the venture has to file with the SEC, its shares won’t trade on a stock exchange.
It’ll be the latest non-traded REIT to have started up in Orange County in the past couple years. Other investors that have kicked off similar ventures include Irvine-based Shopoff Group, Ladera Ranch-based Strategic Storage Trust Inc. and Newport Beach-based KBS Realty Advisors.
Grubb & Ellis also sponsors two non-traded REITs, which primarily invest in apartments and healthcare properties.
But not everyone is enamored with non-traded REITs.
A study last month by Cornell University’s School of Hotel Administration warned of potential pitfalls for long-term investors.
Non-traded REITs usually fix the price of shares, which could short investors in the long run if the trust subsequently sells buildings for a big payoff, according to the study.
The plan for Thompson’s REIT is to focus on buying retail properties in the Western U.S. It also might buy or originate a number of different types of loans tied to those types of properties.
Thompson is targeting buildings or centers costing $10 million to $100 million that are at least 80% full and with minimal levels of near-term lease rollover. Any big sales of properties aren’t likely to happen for about five years, the company’s registration statement said.
Roughly 86% of the offering’s proceeds will be used for investments. Among expenses, the company plans to spend about 7% of the potential $1 billion in proceeds to pay sales commissions for the REIT’s dealer manager, TNP Securities. Another 3% of the proceeds will be used for dealer manager fees.
How long it will take the REIT to raise funds remains to be seen,it needs to raise a minimum of $2 million before the registration becomes effective.
Last week saw Thompson’s latest bid to rejoin the board of Grubb & Ellis fall short in a contested proxy vote. One reason Grubb opposed its former chairman’s bid was because it felt that TNP Strategic Retail Trust competed with its own non-traded REIT offerings.
Aerospace Lease
Wellington, Fla.-based B/E Aerospace Inc., one of the largest makers of cabin interior products for commercial passenger aircraft and business jets, renewed its lease for its Anaheim operations.
The company signed a lease for its warehouse at 3355 La Palma Ave., in the Anaheim Canyon. The 100,000-square-foot building is owned by San Diego-based landlord Kilroy Realty Corp.
B/E Aerospace is paying about $9.5 million for the 10-year lease, or monthly rents of about 79 cents per square foot.
The Anaheim site is used to make refrigeration inserts and gallery air chillers, according to the company.
The building is part of Kilroy’s Anaheim Tech Center, a five-building industrial property that totals about 600,000 square feet.
Kilroy’s industrial portfolio in OC totals about 42 buildings and 3.7 million square feet.
Bob Goodmanson of the Newport Beach office of CB Richard Ellis Group Inc. handled the lease.
RESIDENTIAL
Two local companies were part of a $32 million apartment deal in the Denver suburbs.
Irvine-based apartment investor Bascom Group LLC bought Saddle Ridge Village Apartments, a 320-unit property in Aurora, Colo.
The deal, which closed late last month, went for about $100,000 per unit at the complex, which was sold by Newport Beach-based Steadfast Cos. Apartments there charge rents from $700 to about $1,400 per month.
It was one of four Colorado apartment complexes owned by Steadfast. Bascom’s Denver portfolio now totals 20 properties with 7,200 units, the company said.
