An affiliate of Newport Beach real estate investor KBS Realty Advisors is looking to go on a bit of a buying spree.
One of KBS’s real estate investment trusts bought a bank-owned office complex in San Diego County for more than $40 million.
It’s also eyeing another pricey industrial building in Texas that’s tied to the Dallas Cowboys football team.
The investment trust completed the buy of the Horizon Tech Center, a three-building office in the Scripps Ranch submarket of San Diego.
The purchase price for the 157,884-square-foot complex was $40.5 million, or nearly $257 per square foot.
This month’s sale is the highest-priced office sale in San Diego so far in 2010, according to Steve Rowland, a broker in Cushman & Wakefield Inc.’s San Diego office.
Other high-end buildings in San Diego have been trading, on average, for about $236 per square foot this year. Prices topped the $370 per square foot mark during the market’s heyday.
Unlike many of those other area buildings recently trading hands, the Horizon Tech Center is fully leased. Lockheed Martin Corp. takes up the three buildings through a lease whose initial term runs through 2014.
Lockheed Martin is paying about $4.2 million annually in rent for the offices, according to regulatory filings. KBS should earn about a 10% yield on its investment, according to Rowland.
The trio of buildings opened their doors last year and were built by Phoenix-based Opus West Corp. Despite being fully leased, the buildings fell into financial trouble as the debt-strapped developer filed for bankruptcy last year.
The buildings—which had $38 million in loans—were taken over in March by Bank of America Corp. through foreclosure, according to Jeff Cole, executive director in the Irvine office of Cushman, which handled the sale for the bank.
The deal’s the latest example of an Orange County investor snapping up a recently built pro-perty that was put up by Opus West and turned over to Bank of America, its primary lender, following the developer’s high-profile bankruptcy.
In Irvine, a partnership including Newport Beach-based Greenlaw Partners paid about $56 million, or about $177 per square foot, for the Opus West-built 2050 Main St. office tower in a deal that closed early this year.
Earlier this month, a Newport Beach-based investment group that operates under the Chino Hills Mall LLC name bought the Shoppes at Chino Hills, a 388,000-square-foot mall that was developed by Opus West in 2008 at a reported cost of $135 million.
The Chino Hills mall traded hands for $94.5 million; it had about $105 million of debt tied to it as of last year.
Texas Facility
The KBS fund that bought the Scripps Ranch office property also is under contract to buy the ground lease tied to a new 400,123-square-foot distribution facility in Irving, Texas, for about $19 million.
The industrial building, which opened earlier this year, has a high-profile name and tenant: It’s called the Dallas Cowboys Distribution Center.
The building is being used as the football team’s merchandise headquarters, to handle Cowboys apparel and goods. It’s believed to be the largest building of its type for any professional sports team in the U.S.
It was built by Dallas-based developer Bandera Ventures Ltd. The property, near Dallas/Fort Worth International Airport, gets about $1.5 million in annual rent, with a lease term of nearly 10 years.
KBS hasn’t disclosed when it hopes to close on the Dallas transaction.
So far, the investment trust has raised more than $1.1 billion from investors during the past two years.
Including the latest deals, it has closed on or announced deals for 11 office and industrial buildings, totaling close to 4 million square feet of space. Those buildings are more than 95% leased.
An earlier KBS fund started in 2006 has raised nearly $1.7 billion from investors. The investor used that money to buy more than 80 properties and loans tied to buildings.
KBS has another three non-traded funds in registration with the Securities and Exchange Commission or in the early stages of fundraising, which in total could raise several billion dollars for buying commercial buildings, distressed assets and apartments.
