PS Business Parks Buys RREEF Industrial Assets for $520M

December 27, 2011 Leave a comment

Assets Include 5.3 Million SF in San Francisco Bay Area

By Laurie Forbes
PS Business Parks Inc. (NYSE:PSB) purchased RREEF America LLC’s 5.34 million-square-foot industrial and flex portfolio in Northern California for $520 million or $97 per square foot.

In connection with the deal, the buyer assumed a $250 million secured loan that matures in five years and entered into a three-year unsecured term loan for $250 million with Wells Fargo Bank.

The 18 business parks are 82.2 percent leased to 216 tenants in the San Francisco Bay Area. They consist of:

Concord
Concord Business Park: seven flex and three industrial buildings totaling 246,000 square feet;

Fremont 
Bayview Business Park: two industrial buildings totaling 104,000 square feet;
Christy Business Park: three industrial buildings and one warehouse totaling 334,000 square feet;
Industrial Drive Distribution Center: one warehouse with 199,000 square feet;

Hayward 
Bay Center Business Park: 12 flex, industrial and warehouse buildings totaling 464,000 square feet;
Cabot Distribution Center: one warehouse containing 249,000 square feet;
Diablo Business Park: one flex and 11 industrial buildings totaling 271,000 square feet;
Eden Landing: one industrial building with approximately 83,000 square feet;
Hayward Business Park: six industrials and three warehouses totaling 1.1 million square feet;
Huntwood Business Park: two flexes and one industrial totaling 176,000 square feet;

Milpitas
Dixon Landing Business Park: seven industrial buildings and one warehouse with 505,000 square feet;

Oakland
Port of Oakland: two industrial buildings and one warehouse with 200,000 square feet;

Santa Clara
Walsh at Lafayette: three warehouses and one flex with 320,000 square feet;

San Jose
Little Orchard Distribution Center: one warehouse containing 213,000 square feet;
Charcot Business Park: four industrial buildings totaling 164,000 square feet;
Montague Industrial Park: four industrials and two warehouses totaling 315,000 square feet;

San Leandro
Doolittle Business Park:four industrials with 113,000 square feet; and,

Sunnyvale
Kifer Industrial Park: four warehouses with 287,000 square feet.

Read entire CoStar article here.
PS Business Parks, a division of Public Storage, Inc. has been busy lately and it comes as no surprise that they would pull the trigger on this portfolio.  The bigger question is what’s happening with RREEF, which seems to be liquidating a lot of properties.  Consolidation or cash strapped?

Filed under In the News, Industrial, Peninsula Tagged with , ,

Flex Building in Richmond Sells for $3.15M

December 27, 2011 Leave a comment

Comparable details:

Address:  1732-1776 Wright Ave, Richmond

Seller:   Fire-In-The-Hole, LLC

Buyer:  AA Portable Power Corp.

RBA SF:  41,850

Lot size:  1.10 AC (47,916 SF)

Selling price:  $3,150,000 ($75.27/SF)

Type:  Industrial-Flex

The property was built in 1970 and has two drive-ins and two docks.  The buyer is an owner/user who plans to occupy half of the property while the other half is leased.

Filed under Alameda County, East Bay, In the News, Industrial, Recent Sales Tagged with ,

CRE Price Index Sees First Year-Over-Year Gain Since 2008

December 16, 2011 Leave a comment

This CoStar article verifies what we are seeing in the Bay Area.  Investors are looking at their options and see growth potential and deals to be had in the market.  Volatility in the stock market, yields compared to alternative investments and the historical lows in interest rates have fueled investors to seek out commercial real estate.

Fewer Distressed Sales and Solid Investment Grade Deal Activity is Driving Sustained Pricing Rebound

By Randyl Drummer

CoStar’s monthly National Composite Index of commercial real estate prices increased 2.2% in October from the same period a year ago, the first year-over-year improvement since the economy took a sharp downward turn in 2008.

The solid recovery of investment-grade property prices and the continued decline in distressed sales volume spurred the growth in commercial property pricing, lifting the index to an impressive 1.8% gain in October from the previous month and continuing its upward trend.

The year-over-year and monthly increases in October reflected long-awaited positive momentum in the composite index, which has now achieved a steady 1.3% average monthly growth rate over the six-month period between May and October 2011, according to this month’s CoStar Commercial Repeat Sale Index (CCRSI), based on 743 repeat sale transactions recorded in October and more than 100,000 repeat sale transactions since 1996.

Other highlights from this month’s CCRSI report include the following:

  • The General Commercial Index continued its steady move upward, increasing by 1.4% in October, the sixth consecutive month of rising prices since reversing the 32-month downward trajectory in general commercial property pricing that began in September 2008.

 

  • The Investment Grade Index gained a strong 3.4% in October from the previous month. After bottoming in late 2009, this index bumped along near the bottom around the same level for almost two years before beginning its recent climb in March 2011. Growth resumed in September following a brief pause in August, and CoStar analysts predicted sustained growth because it synchronizes with the price increase tracked by the General Commercial Index, an indication of an across-the-board recovery.

 

  • Stable fundamentals across most commercial property markets and product types, including improving occupancy, and softening downward pressure from distress sales, supported the solid performance of both the investment grade and general indices. The level of distress sales as a percentage of general commercial repeat sales fell from 33% in March 2011 to 24% in October 2011. For investment-grade properties, this ratio dropped even more steeply, from 53% to 28% in the same period.

Read more of the CoStar article here.

Filed under Finance, Market Updates, National Tagged with ,

TMG Partners Buys Three Industrial Buildings in Fremont

December 15, 2011 Leave a comment

By Blanca Torres
TMG Partners of San Francisco and Alcion Ventures of Boston teamed up to buy three vacant buildings totaling 235,000 square feet in Bayside Technology Park in Fremont.

Terms of the deal were not disclosed.

The purchase is somewhat of a deja vu for TMG, which bought 1.5 million square feet in the Bayside Technology Park in 2005 and sold it a year later.

“As we have history with this property, we feel we will be able to identify high quality tenants and provide competitive leasing proposals,” said Michael Covarrubias, chairman and CEO of TMG Partners. ”We are confident that the uptick in demand for tech space will continue.”

This is the first joint venture between TMG and Alcion, a real estate private equity firm that manages more than $845 million in investment capital.

Read entire SF Business Times article here.

Filed under Alameda County, East Bay, In the News, Industrial, R&D, Recent Sales Tagged with

Prologis Feels Effect of European Presence

December 14, 2011 Leave a comment

Shares of Warehouse Owner, With Quarter of Portfolio in Europe, Have Dropped on Investor Concern Over Continent
BY A.D. PRUITT

Prologis Inc., the world’s largest public owner of warehouses, is fending off investor fears that a financial meltdown in Europe would be a major setback for the company.

San Francisco-based Prologis, which just months ago completed a merger with its biggest rival, has 25% of its portfolio, or 148 million square feet of warehouse space, operating or under development in 15 European countries. Most of those properties are in the U.K., France and Germany.

Wall Street clearly is aware that Prologis has more exposure to Europe than other U.S. real-estate investment trusts.

Read entire Wall Street Journal article here.

Filed under Industrial, National Tagged with , ,

RREEF For Sale? Deutsche Bank Signals REIM Business May Be on the Block

December 1, 2011 Leave a comment

Management of $59.4 Billion CRE Portfolio Could Be Up for Grabs as Part of Larger Strategic Review

By Mark Heschmeyer

Deutsche Bank is conducting a strategic review of its global asset management division, which includes its RREEF real estate investment management business.

RREEF with more than 600 employees manages $59.4 billion in real estate globally for more than 800 institutional clients.

Deutsche Bank has reported that its asset management business has been hurt by the intensifying European sovereign debt crisis, which has led to ongoing uncertainty, volatility and an unabated slowdown in client investment volumes. And if the situation doesn’t change, it would put further pressure on short-term results. However, it also said that signs of a broad-based recovery in the real estate market, if continued, would improve prospects in alternative investments.

The strategic review of the bank’s asset management division is focusing in particular on how recent regulatory changes and their associated costs, along with changes in the competitive landscape, are impacting the business and its growth prospects.

All strategic options are being considered, the bank said. The review covers all of the asset management division globally, except for its DWS franchise in Germany, Europe and Asia, which Deutsche Bank has already determined is a core part of its retail offering in those markets.

Read the entire CoStar article here.

Filed under Finance, In the News, National Tagged with , ,

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