The 2200-2208 W. Eighth St. property, known as the William Penn Apartment Homes, was sold this month by Bascom Group LLC. Irvine private-equity group Bascom purchased it in 2006 for $9.6 million and spent several million dollars on renovations. But the group decided to sell after some partners wanted to cash out, according to Brent Sprenkle, associate partner at L.A. real estate services company Hendricks & Partners, who represented Bascom.

Omninet is an investment vehicle of Beverly Hills resident Neil Kadisha, who ranked No. 39 on the Business Journal’s list of Wealthiest Angelenos last May with a net worth of $1 billion. The company has been seeking underperforming commercial properties in the Southwest of more than 50,000 square feet and valued at more than $5 million.

The apartment building had been on the market for a month and about 30 potential buyers toured the property, with 10 putting in offers. But Omninet’s all-cash offer and willingness to close in 10 days with no contingencies made it the favorable choice.

“It was an impressive transaction,” Sprenkle said. “Buyers and sellers usually want two weeks to inspect a property and 75 days to close.”

Omninet intends to continue operating the building as a rental. Units are all studios averaging about 250 square feet with monthly rates of $600, he said.

In January, Omninet bought a five-building office campus in Commerce for $40.1 million from Thomas National Properties LLC in Irvine. Its portfolio also includes the 45-story Sky Las Vegas condo tower and the 44,000-square-foot Valencia Oaks office building.

Omninet represented itself in the transaction.

Omninet Capital has closed on the purchase of Commerce Office Park, a 285,368-square-foot institutional-quality office campus at South Eastern and East Slauson avenues in Commerce, Calif., Omninet, which is headquartered in Beverly Hills., Calif., announced Monday. A dollar amount was not released.

The five-building Class A office property is situated on six separate parcels in the Los Angeles Basin, giving the buyer the option of selling off the buildings individually in the future.

Dan Vittone, senior vice president, and Alan Pekarcik, executive vice president, of Voit Real Estate Services’ Irvine office, represented both Omninet and the seller, Thompson National Properties, on behalf of the tenant-in-common owners of record, in the sale. Kevin Shannon, Scott Schumacher and Ken White of CBRE Group Inc. and Tom Sheets of Cushman & Wakefield Inc. also represented the seller.

The park has access to several major Los Angeles freeways, including the Long Beach I-710, Santa Ana I-5, SR-60, San Gabriel I-605 and Century I-105.

Commerce Office Park is 90 percent leased, predominantly to departments of Los Angeles County and the State of California, said Vittone, who added, “This investment offers the buyer the ability to increase rents over time.” Michael Daniel, a partner at Omninet, said that with this acquisition, the company ends 2011 with more than $200 million in commercial acquisitions.

Los Angeles’ Class A office market was sluggish in the fourth quarter, according to a report by Cresa Los Angeles. Leasing activity was slow, and the overall availability rate of 19.1 percent remained near its 2010 peak. The average for Class A space was $32.16.

The technology sector appears to be starting to expand, the report commented, but most other industries “continue to find ways to do more with less … office space.” Most submarkets reportedly are struggling with high vacancy and soft demand, and lackluster leasing is expected to continue for most of this year.

Dan Vittone, Senior Vice President, SIOR and Alan Pekarcik, Executive Vice President, SIOR, in Voit’s Irvine office represented the seller, Thompson National Properties on behalf of the tenant-in-common owners of record, and the buyer, Omninet Commerce, LP. Kevin Shannon, Scott Schumacher and Ken White of CBRE and Tom Sheets of Cushman & Wakefield also repped the seller.

“Commerce Office Park was 90 percent leased at the time of this sale, predominantly to departments of LA County and the State of California,” said Vittone. “This investment offers the buyer the ability to increase rents over time and potentially sell off the five buildings individually as they are each situated upon their own parcel.”

Our records show that the property had sold in a previous transaction for $50 mil, or about $175 mil, in early 2005, about seven years ago. In that deal, Argus Realty Investors LP, a San Juan Capistrano-based tenant-in-common buyer, purchased the property from El Segundo-based Summit Commercial. ]]> http://omninet.com/2012/01/city-of-commerce-biz-campus-trades-for-near-40-mil/feed/ 0 http://omninet.com/2012/01/five-building-office-park-changes-hands/ http://omninet.com/2012/01/five-building-office-park-changes-hands/#comments Mon, 30 Jan 2012 21:18:32 +0000 Alex http://omninet.com/?p=485 COMMERCE, CA-Thompson National Properties has sold Commerce Office Park, a 285,368-square-foot institutional quality office campus located at 4900, 5500, 5700 and 5770 South Eastern Ave., and 5801 E. Slauson Ave. here. The class A, five-building office property is situated on six separate parcels in the Los Angeles Basin.

Dan Vittone, senior vice president, and Alan Pekarcik, executive vice president, in Voit Real Estate Services’ Irvine office represented the seller on behalf of the tenant-in-common owners of record, and the buyer, Omninet Commerce LP. Kevin Shannon, Scott Schumacher and Ken White of CBRE and Tom Sheets of Cushman & Wakefield also represented the seller.

“Commerce Office Park was 90% leased at the time of this sale, predominantly to departments of LA County and the State of California,” Vittone explains. “This investment offers the buyer the ability to increase rents over time and potentially sell off the five buildings individually as they are each situated upon their own parcel.”

Both Voit and TNP could not disclose details regarding the sale. An unidentified source not involved in the deal tells GlobeSt.com that it went for approximately $40 million.

The Commerce office submarket is approximately 1.1 million square feet, and has had no speculative office construction since 1991, according to Vittone.  Commerce Office Park is located on the corner of S. Eastern and E. Slauson Avenues, and has access to a number of major Los Angeles freeways including the Long Beach I-710, Santa Ana I-5, SR- 60, San Gabriel I-605 and Century I-105 freeway.

“Commerce Office Park is the newest addition to Omninet Capital’s office portfolio in Los Angeles and ends the 2011 year with over $200 million in commercial acquisitions,” explains Michael Daniel, a partner at Omninet Capital.

In other TNP news, TNP Strategic Retail Trust Inc., a public non-traded REIT that invests in grocery and drug-store anchored, multi-tenant necessity retail properties and other real estate-related assets, has purchased Morningside Marketplace in Fontana, CA.

Morningside Marketplace is a neighborhood, grocery-anchored shopping center, built in 2001 and anchored by Ralphs. The property is nearly 96% occupied by a mix of national and regional tenants, including Chevron, Chase, KFC, Pizza Hut, Baskin-Robbins and Togo’s, among others.

“We believe Morningside Marketplace is well positioned to benefit from the improving retail market in the Inland Empire,” says TNP senior vice president of acquisitions, Steve Corea. “The property is in a key location, easily accessible to the 15 and 210 freeways, with strong demographics in the surrounding area.”

The retail property is comprised of 87,793 rentable square feet and consists of eight buildings on seven parcels, including four single-tenant buildings.

In a $8.6 million deal ($75.42 per foot) scheduled to close at press time, a company formed by Omninet was expected to purchase 114,029 sq. ft of office space in Phoenix. The two buildings are within the Siete Square office complex at 3737 N. 7th Street and 3877 N. 7th Street.

The seller in the cash transaction is a venture formed by Angelo, Gordon & Co. in New York City, NY (John Angelo, Michael Gordon, principals) and Fenway Properties in San Diego, Calif. (Steven Rosetta, Larry Jackel, partners). The sale is being negotiated by Chris Toci and Michael Crystal of Cushman & Wakefield of Arizona Inc. in Phoenix. The buildings are 89 percent occupied. Crystal and Kevin Lange of C&W have the leasing assignment.

In a separate transaction totaling $6.5 million ($51.82 per foot), a limited partnership formed by Omninet acquired 127,128 sq. ft. of office and industrial space in Mesa and Gilbert. The seller was a company formed by U.S. Bank, as successor to Wells Fargo Bank, as trustee for the registered holders of Wachovia Bank Commercial Mortgage Trust Commercial Mortgage Pass-Through Certificates Series 2006-C28.

The sale was brokered by Mindy Korth and Barry Gabel of CB Richard Ellis in Phoenix. The purchase included a 64,899-square-foot office at 5416 E.Baseline Road in Mesa and a 62,229-square-foot flex, industrial building at 5222 E. Baseline Road in Gilbert. Both structures are within the Inverness Commons business park. The two‐story office building, which was constructed in 2001, was 57 percent leased at closing.

The flex, industrial structure, which was built in 1999, was 60 percent occupied. Pete Wentis, Warren Johnston and Kevin Cosca of CBRE have the leasing assignment.

At year-end 2010, another limited partnership formed by Omninet paid $7.45 million ($85.79 per foot) to buy a 86,835-square-foot back-office building at 3540 E. Baseline Road in Phoenix.

In 2006, BREW reported affiliate companies of Omninet paying $10.692 million to acquire several parcels located along both sides of Central Avenue and just south of Camelback Road. Sources say Omninet is buying an office building located near 7th Avenue and Bell Road in Phoenix. No further details on that deal.

Michael Daniel is the contact at Omninet (301) 300-4100. Learn more from the C&W agents at (602) 253-7900. Call the CBRE agents at (602) 735-5555.

By LOU HIRSH

Monday, August 22, 2011

Local property investment experts say the recent Standard & Poor’s downgrade of U.S. government debt will likely trim the overall ranks of financing sources to get deals done, and slow down the recent pace of price appreciation on attractive commercial properties.

But that won’t necessarily stop some well-capitalized firms from seeking out bargains in what remains a shaky economic recovery.

“We tend to thrive on dislocation in the market,” says Mitch Siegler, senior managing director of San Diego-based Pathfinder Partners LLC. In late July, the firm acquired a lender-owned, 120-unit apartment complex in Mesa, Ariz., for $5.4 million, less than two weeks after purchasing an 84-unit Arizona condo development under similar distressed circumstances.

Since 2006, Pathfinder has acquired more than $350 million in defaulted commercial real estate in seven states. That includes Eastlake Medical and Professional Center in Chula Vista, which it bought at an April foreclosure sale for $4.6 million in cash.

Opportunity for Some

If the recent debt downgrade causes credit to tighten, and owners are forced to sell off properties to get some cash liquidity, there could be more opportunities for well-funded buyers to snap up multifamily, office and retail properties, Siegler said.

While continued low interest rates should help make acquisitions feasible, he said there remains a “tale of two cities” climate for credit availability — with big real estate investment trusts still finding ample funding options, while smaller businesses struggle to get financing as banks remain selective in their lending.

With their own credit recently being downgraded, the nongovernment agencies Fannie Mae and Freddie Mac also may be reducing their involvement in certain kinds of investing, including multifamily projects. Siegler said that means other types of investors may need to step forward to fill the void.

At Beverly Hills-based Omninet Capital LLC, which last year announced plans for $100 million in San Diego area commercial investments over the next few years, Managing Partner Benjamin Nazarian said the firm’s strategies were not impacted by recent turmoil set off by the debt ceiling debate and subsequent S&P downgrade.

The company is scouting for follow-ups to recent local acquisitions including the Rancho Serra Mesa retail center and Sky Park Business Center, both in Kearny Mesa, with a total value of approximately $16 million.

However, Nazarian said that some buyers may find it more difficult to get financing through commercial mortgage backed securities, also known as CMBS, which essentially are commercial mortgages bundled together and issued as bonds. Fewer CMBS loans being issued could in turn have a dampening effect on real estate values.

A Climate Change

“The bigger impact is the realization that the economy has slowed down,” Nazarian said. “Therefore, investors will be more conservative in pricing properties because they can no longer assume significant rental growth for the next couple years, as they were doing just six months ago.”

The larger issue for commercial real estate could be the negative hit to consumer psychology delivered by the D.C. debt debate, government downgrade and the resulting stock market upheaval.

Mark Riedy, executive director of the Burnham-Moores Center for Real Estate at University of San Diego, said continuing uncertainty about the domestic and global economies will likely keep demand in check for new office and retail buildings.

Well located commercial properties could continue to see prices bid up by multiple suitors, amid the “flight to quality” that began several months ago amid a lack of new construction. However, he said housing demand could be squelched for several more years, and skittish companies won’t be expanding their office space needs significantly for some time.

There may be pockets that recover more quickly, but overall real estate demand conditions may not return to normal until 2013 or 2014 at the earliest. The Federal Reserve’s pledge not to raise interest rates could help prevent things from getting worse in the next two years, but the Fed has exhausted its options for spurring improvement now that borrowing rates are as low as they can get.

Risk-averse consumers and businesses could remain on the sidelines as long as there is no agreement in Washington about how to proceed next.

“Things would otherwise be ripe for a recovery with these low interest rates, but right now there’s just no spark,” Riedy said.

Lou Hirsh, Reporter

San Diego Business Journal

4909 Murphy Canyon Rd., Suite 200

San Diego, CA 92123
858-277-8904

lhirsh@sdbj.com

www.sdbj.com

“The Voit team was successful in marketing this property as an excellent opportunity for a buyer to acquire a lender-facilitated, value-add investment property,” says Vittone, a senior vice president at Voit. “The property is located in a submarket that is demonstrating the beginning signs of economic recovery, and we leveraged that momentum to drive interest.”

Vittone continues that “Ultimately, we secured the right buyer and directed a seamless transaction for both parties.” The property is located at 201-401 North Buffalo Dr., less than one mile from Highway 95.

Westcliff Plaza, which was built in 1994 to resemble a French country manor, sits on 3.54 acres. Eleven of the development’s 12 one-story and two-story office/medical buildings were included in this sale, while the remaining building was sold as a condo in 1995.

As GlobeSt.com previously reported, Omninet has been on a buying streak lately. The company recently acquired two foreclosed buildings totaling 127,128 square feet situated in Inverness Commons, a 130-acre, master-planned business park in the Southeast Valley of Gilbert, AZ for $6.5 million. And earlier this year, the investment company paid $6.7 million for a CVS Pharmacy-anchored property known as Rancho Serra Mesa Shopping Center at 3332 Sandrock Dr. in San Diego.

The company said the transaction officially closed on March 4. The center was acquired from lenders out of receivership proceedings involving the former owner.

Last year Omninet, a Beverly Hills-based private investment firm, announced it planned to make $100 million in San Diego commercial real estate investments over the next few years. Its recent buys have included the Sky Park Business Center, off Aero Drive in Kearny Mesa, with a value of $9.2 million.

http://www.sdbj.com/news/2011/mar/14/view-local-hotel-market-sees-sales-surge-continuin/

“This investment transaction was unique, as there are few distressed retail properties trading in the central San Diego area,” Caston explained. “Knowing that, we marketed the opportunity on a broad basis and attracted offers from numerous local, regional and national firms.”

“It’s a tremendous value-add opportunity for the buyer as the recovering retail market will enable it to enhance the center’s value through strategic leasing and repositioning of the asset in a stronger market”, according to O’Neill.

The property was sold through San Diego-based Douglas Wilson Companies as receiver, and acquired by Beverly Hills-based Omninet Capital, LLC. “Voit did an excellent job facilitating a complex transaction and obtaining numerous approvals in order to close the transaction. We look forward to working with them again in the future,” stated Benjamin Nazarian, Omninet’s Managing Partner. Located on 4.69 acres at 3202 – 3304 Greyling Drive, and 3332 Sandrock Drive in San Diego, the center, known as Rancho Serra Mesa Shopping Center, is anchored by a CVS Pharmacy.

“As it was a receivership sale, the transaction required Voit, as well as the buyer and receiver to work with multiple lien holders and the San Diego County Superior Court in order to close the transaction. Douglas Wilson did an exceptional job of handling the process, and both the buyer and property owner were extremely professional and patient. Omninet remained flexible throughout the transaction, worked diligently to keep the process moving smoothly and were able to remove contingencies in just 10 days,” Askew said.

About Omninet Capital:

Omninet Capital is a diversified investment firm concentrating in the fields of real estate, middle-market private equity and late stage venture capital. Omninet’s principals were instrumental in the creation of Qualcomm, a leader in wireless communications, providing the foundation for the firm’s proactive investment management style. For more information, please visit http://www.omninet.com.

About Douglas Wilson Companies:

Douglas Wilson Companies was founded in 1989 to provide a wide range of specialized business, workout, and real estate services to law firms, state and federal courts, corporations, partnerships, pension funds, REITs, financial institutions, and property owners throughout the United States. With offices in Las Vegas, San Diego, San Francisco and Washington, DC, the Company is the largest business services entity of its kind, providing workout and problem resolution, crisis/force majeure response, asset management, consulting, business planning, receivership, development, entitlement, and construction management services. To date, receivership services have been provided in over 600 matters involving assets valued in excess of $12 billion. Heading the Company’s team is Chairman and CEO Douglas P. Wilson, a nationally recognized authority in problem resolution, development, and real estate management issues.

About Voit Real Estate Services:

Voit Real Estate Services is now a 10-office commercial real estate firm that through its brokerage and asset services professionals working together, provides strategic property solutions scaled to clients’ needs. Combining 39 years of expertise in property management, investment advisory, financial analysis, market research, asset management, tenant advisory and brokerage services, Voit provides clients with forward looking strategies that create value for their assets and portfolios.

Voit is a privately held, debt-free firm that has successfully navigated numerous market cycles since 1971, and currently employs more than 200 people. Voit has owned, developed and managed over 45 million square feet of commercial real estate, participated in $1.3 billion of construction projects and completed over $32 billion in brokerage transaction volume. Further information is available at www.voitco.com.

The buyer was Omninet Serra Mesa, LP, c/o Omninet Capital, 9420 Wilshire Blvd., Suite 400, Beverly Hills 90212. Omninet Serra Mesa GP LLC is the general partner, with Benjamin Nazarian as manager. The acquisition was financed with a loan of $5,785,000 from U.S. Bank.

The seller of the property (assessor’s parcels 428-040-19 and 20) was Douglas P. Wilson as court-appointed receiver in a judicial foreclosure. The property was owned by R&D Properties (22 percent), Ralph Burni as trustee of the Ralph Burni Family Trust (66 percent), and as successor trustee of the Dean Burni Family Trust (12 percent).

The seller was represented by Senior Vice President Mark Caston, and vice presidents Tony O’Neill and Kendrick Askew of Voit Real Estate Services’ San Diego office.

“This investment transaction was unique as there are few distressed retail properties trading in the central San Diego area,” Caston said.

The center was constructed in 1965 and is anchored by a CVS Pharmacy.

In September 2003, the property was sold for $6,775,000, with $6.42 million in financing from California National Bank.

http://www.sddt.com/RealEstate/article.cfm?SourceCode=20110311tdb