Costa Mesa-based shopping center owner Donahue Schriber has been on an acquisition and development kick in several of its West Coast markets of late, following a $1.2 billion recapitalization that was completed in mid-2011.
One market the company is not as sold on is Arizona, according to Chief Executive Pat Donahue, whose company counts an 80-property shopping-center portfolio that’s valued at close to $2.5 billion.
The company currently has five shopping centers in Arizona, and it is looking to get out of that market in the next year, Donahue said, speaking late last month at a commercial real estate forum sponsored by California State University, Fullerton’s Mihaylo College of Business and Economics.
“I don’t feel we can be competitive there,” said Donahue, whose company also has properties in California, Oregon, Washington and Nevada.
Donahue, a 1978 graduate of Cal State Fullerton, told attendees at the forum that a new wave of competition is now a challenge for longtime retail property owners in many markets.
It is particularly acute in markets where competitors have taken over properties that were foreclosed on during the downturn, with many going for bargain prices that gave new owners room to lower rents.
Donahue Schriber’s five Arizona centers run about 665,000 square feet in total, and all of the properties are grocery-anchored, according to the company’s website.
The largest property it owns in the state is The Summit at Scottsdale, a 323,000-square-foot community center that’s anchored by a Safeway and Target.
Donahue Schriber hasn’t announced specific plans for the sale of the Arizona properties, or how much it expects to raise from the sales.
The company has already been active selling some properties in the state.
Last year a trio of its properties in Tempe, Chandler, and Gilbert, Ariz.—which total close to 700,000 square feet—sold for about $122 million, according to local reports.
That deal was among the five largest commercial property sales in the region last year, according to the Phoenix Business Journal.
The company’s overall retail portfolio runs about 12 million square feet. It has annual revenue of close to $200 million.
Additions to the company’s portfolio last year included centers in San Diego County, Central California and Washington state.
One local sale in late 2012 was for South Coast Marketplace in Santa Ana. The 93,379-square-foot property is at 2701 W. MacArthur Blvd., roughly two miles from South Coast Plaza.
A Glendale-based family trust bought the property—which is anchored by a 48,617-square-foot Ralphs supermarket—at the end of December, according to property records.
Terms of the sale weren’t disclosed. It was listed for sale at $36.7 million.
Arizona Rentals
The apartment market in Arizona continues to attract OC money.
An affiliate of Irvine-based apartment investor Bascom Group LLC recently paid $13.6 million for a 194-unit complex in Flagstaff, Ariz.
The company’s Bascom Arizona Ventures LLC affiliate paid about $70,000 per unit for the Alpine Ridge Apartments complex, on behalf of a discretionary fund it runs.
Alpine Ridge, which was built in 1992, is next to Northern Arizona University. Apartments average about 814 square feet, according to Bascom. It’s one of several recent apartment acquisitions in Arizona for Bascom; other purchases in Phoenix, Avondale, and Mesa over the past six months added about 1,400 apartments.
Bascom officials said more deals in the area are expected soon.
KBS Adds in NC
Newport Beach-based KBS Realty Advisors has bought a 17-story office in Raleigh, N.C., that the real estate investor describes as the most prominent office building in that city’s suburbs.
The company said earlier this month that it bought Captrust Tower, a 300,389-square-foot office and retail building in the North Hills area of Raleigh.
The building sold for about $98.4 million, or $327 per square foot, according to officials with Raleigh-based Kane Realty Corp., which sold the building in a venture with Indianapolis-based Duke Realty Corp.
Kane will retain an ownership interest in the project through the joint venture formed with KBS.
The building opened in 2009 and is 95% leased. It counts 275,630 square feet of office space and 26,813 square feet of retail space, in addition to a six-level parking structure.
