Orange County counts its share of locally based non-traded real estate investment trusts, which have raised billions of dollars from individual investors over the past few years to buy all types of properties across the country.
A new company based in Newport Beach is trying to make trading those non-traded REIT shares a little easier.
The company, called REITbid, said it is launching an online auction platform that matches buyers and sellers of shares in existing non-traded public REITs.
REITbid’s auctions are “designed to create liquidity in what has formerly been considered an illiquid asset class,” according to company marketing materials.
The company’s founders include Ray Wirta, the former chief executive of Los Angeles-based CB Richard Ellis, which now operates as CBRE Group Inc.
Wirta, who also counts ties to longtime Newport Beach-based developer Koll Co., serves as president for the investment properties group of Newport Beach-based Irvine Co., which is not involved in REITbid.
Of note: Irvine Co. Chairman Donald Bren’s brother, Peter Bren, is an executive at Newport Beach-based KBS Realty Advisors, which oversees five of the country’s most active non-traded REITs. The KBS executive team also counts ties to Koll Co., where Wirta served as chief executive.
Money raised through those five KBS offerings have been used to buy skyscrapers in Chicago, Los Angeles and Louisville, Ky., among numerous other investments.
An auction at REITbid would, in theory, allow a shareholder of a KBS-backed non-traded REIT to cash in their shares prior to the REIT’s scheduled timeline; that typically takes place about five to seven years after the offering finishes raising money.
Non-traded public REITs have issued nearly $80 billion of equity to more than 2 million shareholders over the past 10 years, according to REITbid.
Other locally based non-traded REITs include offerings backed by Steadfast Cos. and Thompson National Properties LLC, both of Irvine, as well as Newport Beach-based American Healthcare Investors.
Those ventures have bought a variety of offices, shopping centers, industrial buildings and medical properties.
Flower Terrace
One of the taller residential buildings in Santa Ana has traded hands.
Vitus Group, a Seattle-based investor and developer of affordable housing projects, recently bought Flower Terrace, a 200-unit apartment complex that’s in Santa Ana’s civic center area.
The 13-story building traded hands for $31 million, or $155,000 per unit, according to brokerage data. Long Beach-based Lomco was reported to be the seller of the complex, which was constructed in the 1940s and was originally built to provide housing to the congregation of the nearby Wycliffe Foundation.
Vitus said it plans to spend another $5 million to rehabilitate the property, with a focus on major system repairs, health and safety improvements, and bringing the property into compliance with upgrades required by federal, city and county authorities.
It’s the only property that Vitus Group owns in Orange County, according to the company’s website.
Occupancy at Flower Terrace is limited to qualified elderly and disabled tenants who earn no more than 50% of the area’s median income.
SC Sale
Talega Village Center in San Clemente is on the market for sale.
Brokers with the Newport Beach office of CBRE Group Inc. recently listed the 103,000-square-foot shopping center for sale. An asking price for the property, which is anchored by a Ralphs Fresh Fare supermarket and includes an assumable $11.6 million loan, hasn’t been disclosed.
Phoenix-based Vestar Development Co., which runs the District at Tustin Legacy shopping center, bought the shopping center a little more than two years ago, as part of a multiproperty acquisition that totaled about $86.5 million.
The San Clemente center, which opened about five years ago near the entrance of the Talega Golf Club in the 3,500-acre Talega housing development, is about 86% full, according to marketing materials.
Memphis Multifamily
Newport Beach-based Rael Development Corp. has a new apartment project planned in Tennessee, next to The University of Memphis.
An affiliate of the investment and development group plans to build an upscale, 74-unit complex in Memphis. The project is expected open next year and should cost about $13 million, factoring in the costs associated with demolishing three older buildings on the site, according to local reports.
It’s Rael’s first project in the city.
“Our whole business model, is building extremely high-quality, durable apartments near great campuses,” Principal Graeme Rael told the Memphis Daily News.
