COMMERCIAL
Newport Beach-based Turner Development Corp., one of the area’s larger developers since its founding in 1979, is eyeing distressed properties and loans for its latest venture.
The company said late last month it had closed on its Turner Opportunity Fund I LP.
The fund, which Turner Development will manage, plans to buy distressed commercial real estate in California, Arizona and Nevada, as well as pools of performing and non-performing loans, according to Rusty Turner, the company’s president.
Turner’s not disclosing how much money it raised. It plans to buy real estate worth $3 million to $30 million. The company tapped a number of wealthy investors to fund the venture.
When Turner envisioned the fund more than a year ago, its plan was to focus on buying distressed individual properties.
Now, following steeper drops in property values and increased stress on lenders, the company is more likely to go after loan portfolios, particularly those originated by regional and community banks, said Sean Sheward, who heads up finance and acquisitions for the developer.
Portfolios taken over by the Federal Deposit Insurance Corp. are expected to be a big source of business for the fund. The government regulator has a streamlined sales process and does not have the same pride of ownership that’s keeping others from pulling the trigger on sales, he said.
The FDIC “is a willing and motivated seller,” Sheward said. “They’re the best source (of deals) today.”
Turner has bought or developed more than 5.5 million square feet of buildings and completed more than 270 acres of land development. Recent projects include the Turner Riverwalk, a 1 million-square-foot business park in Riverside that the company’s leasing up.
It could use some money from the new fund for development projects, although with the market as it is, distressed debt is the best opportunity right now, Sheward said.
New Start
Orange County Head Start Inc., the local affiliate of one of the country’s largest child development programs, is moving its headquarters within Santa Ana.
OC Head Start signed a 25,350-square-foot lease at 2501 S. Pullman St. in Santa Ana, where it will be moving its administrative office toward the end of summer.
The group, which has been in existence since 1979, serves about 4,000 preschool-aged children and their families and had been based elsewhere in Santa Ana. It employs about 400 people in OC and has nearly 40 locations.
Terms of the deal weren’t disclosed. The 65-month lease is an expansion of about 4,000 square feet for OC Head Start.
The move will lower OC Head Start’s rent, according to Mark Gardner, a broker with the Newport Beach office of Travers Realty Corp.
The 52,800-square-foot building is part of the Freeway Corporate Park, which faces the Costa Mesa (55) Freeway.
OC Head Start is leasing the ground floor of the office and will get its name on the top of the building, according to Gardner.
Travers’ Gardner and Randall Parker represented OC Head Start in the lease. Robert Caudill and Matt Didier, from the Anaheim office of Grubb & Ellis Co., represented the building’s landlord, Irvine-based Crown Realty & Development Corp.
Grubb’s Caudill and Didier, along with John Pomer, also just completed another sizable education-related lease locally.
Argosy University signed a 10-year, 33,483-square-foot lease at 601 Lewis St. in Orange. The university will fully occupy the single-story building, which is owned by Irvine-based City Office LP.
Grubb’s brokers, along with Roger Doebke of Simplex Realty Services Inc., represented the landlord. Patrick O’Loughlin and Jeff Kernochan of Fischer & Co. represented Argosy University in the transaction.
RESIDENTIAL
Arte Moreno, the owner of the Los Angeles Angels of Anaheim, is buying distressed apartments in his hometown of Phoenix, according to reports.
Moreno and business partner Joseph Fitzgerald recently bought an apartment complex still under construction for $2.3 million, according to CoStar Group Inc.
The 14-unit Biltmore Court complex, which still needs close to $750,000 of construction work, sold for $165,000 per unit.
The seller was the National Bank of Arizona, which had taken title of the property in lieu of foreclosure.
Moreno and Fitzgerald plan to rent the property as apartments until the market returns and then sell the units as condominiums in about five years.
The project’s near Moreno’s home next to the Arizona Biltmore hotel and golf course.
