LBA Realty and KBS Realty Advisors, two of Orange County’s most active commercial property investors through much of 2014, wrapped up the year with a blockbuster transaction in Northern California.
An affiliate of Newport beach-based KBS said last week that it closed on the purchase of Towers at Emeryville, a three-building, 815,000-square-foot office campus in Alameda County.
The property, sold by an affiliate of Irvine-based LBA Realty, went for $248 million, or about $304 per square foot.
The deal is the priciest office sale of the past year in the East Bay, according to local news reports.
The 16.1-acre waterfront property near the San Francisco Bay Bridge was reported as being listed for sale in September. LBA and Greenwich, Conn.-based Starwood Capital paid a reported $130 million in 2010 to buy the buildings out of receivership.
The offices were about 60% empty when LBA and Starwood bought them; today’s vacancy rate is about 16%. Tenants include AAA, whose Northern California headquarters are there; Gracenote Inc.; and the University of California-San Francisco.
KBS REIT III, a nontraded real estate investment trust overseen by KBS, bought the property, using a $175 million loan to help fund the purchase. The deal closed on Dec. 23, according to regulatory filings.
“The Towers presents KBS with a great opportunity to purchase an institutional quality asset located just across the Bay from San Francisco in the dynamic East Bay/Emeryville market,” KBS Western Regional President Rodney Richerson said in a news release.
“We consider this to be one of the best assets in a market that is seeing increasing interest from financial service and technology-
oriented users who do not want to pay the high rents associated with downtown San Francisco,” he said. “As San Francisco goes, Emeryville has historically followed.”
The offices were built between 1972 and 1985 and were most recently renovated in 2012. They currently bring in $20.3 million in rents annually.
The new owner said it plans to convert the property’s conference center into a permanent tenant lounge and meeting space.
KBS and its affiliate companies, in addition to the Emeryville property, own 10 properties in the Greater Bay Area totaling more than 2 million square feet.
Mission Viejo Addition
Retail Opportunity Investments Corp., a San Diego-based real estate investment trust that buys shopping centers and has been adding OC properties to its portfolio at a rapid clip, has closed on the purchase of a grocery-store-anchored center in Mission Viejo.
The REIT, which also operates under the ROIC name, last month finalized the purchase of Mission Foothills Marketplace, an 111,000-square-foot center on Los Alisos Boulevard.
The center, near the Foothill (241) Toll Road in Mission Viejo, is anchored by a Vons and a CVS Pharmacy.
The property was about 92% occupied when ROIC first struck a deal to buy it a few months ago.
The Mission Viejo center was sold by Los Angeles-based Decron Properties Corp., a privately held shopping-center operator that sold properties to ROIC in Thousand Oaks and Ontario at the same time.
The three shopping centers, which total about 370,000 square feet, sold for a combined $108.5 million, or about $293 per square foot.
ROIC now owns about 40 shopping centers, including six in Orange County. The other local properties are in Huntington Beach, Garden Grove, Santa Ana and Cypress. Its OC portfolio now totals nearly 700,000 square feet, most purchased in the past two years.
The 111,000-square-foot Cypress property, called Cypress Center West, is on Ball Road and recently got a new facade, signage and landscaping, according to the company.
The REIT is headed by President and Chief Executive Stuart Tanz, who previously served as chief executive of San Diego-based Pan Pacific Retail Properties, now part of Kimco Realty Corp.
