California

Macerich Closes First of Three Joint Ventures in Shopping Center Sector for $1.5B

by Nellie Day November 2, 2015

SANTA MONICA, CALIF. — The Macerich Company (NYSE: MAC) has closed on the first of three joint ventures in the shopping center sector. The company had previously announced it would form these ventures to contribute interests in eight regional malls, totaling about $2.3 billion. This first joint venture will allow GIC to acquire a 40 percent interest in Lakewood Center in Lakewood, Calif.; Los Cerritos Center in Cerritos, Calif.; South Plains Mall in Lubbock, Texas; and Washington Square in Portland, Ore. The cash proceeds to Macerich total $1.5 billion. This includes $964 million in excess loan proceeds. Macerich also expects to close the additional two joint ventures in January. These include a second joint venture with GIC on Arrowhead Towne Center in Glendale, Ariz., as well as a joint venture with Heitman on Deptford Mall in Deptford, N.J.; FlatIron Crossing in Broomfield, Colo.; and Twenty Ninth Street center in Boulder, Colo. The firm’s board of directors also declared two special dividends, each $2 per share of common stock. The first dividend is payable on Dec. 8, 2015, to stockholders of record at the close of business on Nov. 12, 2015. The second dividend is payable on Jan. 6, 2016, to …

November 2, 2015

OC’s Tight Industrial Market Leads to Bidding Wars, Rising Lease Rates

by Nellie Day October 27, 2015

Orange County’s industrial market highly favors the seller and landlord for properties of all sizes and conditions due to a tight vacancy rate and lack of available product. Vacancy rates have been on the decline, ending the second quarter of this year at 3.9 percent. Average asking rents rose to $0.83 per square foot – an increase of 9.2 percent over the 12-month span of the second quarter of 2014 to the second of quarter of 2015. The county continues to hit new pricing highs as well, with many transactions receiving multiple offers. Full-price offers are oftentimes not enough anymore, as bidding wars have driven prices above the listing. Demand remains extremely strong for owner/user industrial buildings in North Orange County. Several recent smaller sales transactions in the 10,000-square-foot range have sold for around $170 per square foot. Most of these properties received multiple offers within days of going to market. Industrial buildings in this size range were trading for about $125 per square foot just three years ago. On the leasing side, rates are escalating as product is in limited supply. User demand a year ago wasn’t as strong as it is now. This will likely continue to grow …

October 27, 2015

Market Reports Western Market Reports

Santa Monica Multifamily Market Thrives Amid a Few Challenges

by Nellie Day October 20, 2015

Santa Monica is Los Angeles County’s most stable beachside apartment rental location. The prices this market commands as the year progresses continue to surprise our brokerage team. No longer the sleepy beach town of old, we are seeing capitalization rates below 3 percent on 30- to 40-plus-year-old product with stringent, and at times almost suffocating, rent control laws. There have been multiple record-breaking transactions that have taken place in Santa Monica this year, including one mind-blowing apartment deal at 537 San Vicente Blvd. that sold for $16.1 million this past March. It was then sold to another party three months later for $19 million. The old adage about location rings true for Santa Monica as buyers consider future returns in this beachside enclave. The question right now on everyone’s mind is: how long can this last? It has been our opinion that this upward trend in pricing cannot last forever. It is inevitable that the Federal Reserve will raise interest rates soon. However, as rates rise, we will see a minimal effect on Santa Monica multifamily investment, as this “real -estate safe haven” makes investment even more desirable as stability is attractive to owners seeking long-term returns. Even though some …

October 20, 2015

California Market Reports Retail Western Western Market Reports

Retail Rents on the Rise in Los Angeles

by Nellie Day October 13, 2015

The retail market in Los Angeles is demonstrating exponential growth. Rents are going up, cap rates are going down and occupancy is soaring. Naturally, as lease prices rise, so do sale prices. As such, it is becoming increasingly difficult for investors to find opportunities where substantial rent growth is possible. Tenant competition is also fierce, and landlords are benefitting from extremely high demand throughout the market. Competition Abounds It’s only natural that retailers are competing over space as occupancy rises. One trend that has emerged in Los Angeles is competition among not only direct competitors, but indirect competitors as well. For example, a small grocer might compete with a Ross Dress 4 Less for the same location. Fueling this competition is an increase in large national retailers seeking out smaller urban spaces in downtown areas. Target, for example, is opening a store in LA’s Koreatown on Vermont and 6th streets at the base of a high-rise apartment building. When national soft goods chains open in urban hubs, there will be an evolution of retail surrounding those stores. Smaller discount stores and mom-and-pop retailers will likely suffer, which will lead to vacancies that tend to open the doors for new specialty …

October 13, 2015

Multifamily Seniors Housing Western

Expansion-Minded Carlton Senior Living Names David Coluzzi as President

by Nellie Day September 29, 2015

CONCORD, CALIF. — Carlton Senior Living, an operator of 11 seniors housing communities in Northern California, has named industry veteran David Coluzzi as its new president. The company is based in Concord, located between San Francisco and Sacramento, and is looking to expand its portfolio of independent living, assisted living and memory care properties. Serving the industry for over 26 years, Coluzzi most recently was CEO of Esquire Group, a senior living and apartment company with 1,200 units in seven communities in New Jersey. Coluzzi was formerly vice president of operations at Classic Residence by Hyatt (now known as Vi). He directed the management of a portfolio consisting of 10 luxury continuing care retirement communities (CCRCs) while leading the start-up of two new communities and an expansion that resulted in more than 4,000 independent living, assisted living, memory care and skilled nursing units in California, Arizona, Colorado, Illinois, South Carolina and Florida. Coluzzi served in the United States Air Force and holds a Bachelor of Science degree in health care administration from the University of Arizona in Tucson.

September 29, 2015

Market Reports Western Market Reports

Multifamily Investors are Sitting Pretty in San Diego

by Nellie Day September 29, 2015

It is a great time to be a multifamily owner in San Diego. Vacancies are at the low rate of 4.1 percent for the county, while rent growth is at its highest level since 2011. Cap rates and interest rates are still at record lows, and we are slowly seeing an increase in inventory as owners realize values are higher than ever. We will soon see a rise in interest rates, and can expect a reduction in values as the cash-on-cash returns are reduced. For every 100 basis points of increase in rates, we may see up to a 6.7 percent reduction in value. Rental market performance, according to the San Diego County Apartment Association, has weighted averages in San Diego up to: $974: Studios $1,301: one-bedroom $1,609: two -bedrooms $1,943: three -bedrooms South Bay has the highest vacancies at 5.1 percent, while North County has the lowest at 3.1 percent. Chase, one of the largest lenders in San Diego, is expecting rent growth of 35 percent over the next five years. This news is encouraging as the market has been flat in San Diego for years. There were 139 apartment buildings with 50 units or less that sold in …

September 29, 2015

California Retail Western

Victoria Brodsky Joins Colliers Retail Services Group

by Nellie Day September 28, 2015

SAN FRANCISCO — Colliers International has hired Victoria Brodsky to its retail services group. Brodsky, who has participated in the closings of more than $500 million in transactions, will become a member of Julie Taylor’s retail team. Brodsky most recently served as a retail specialist at Cushman & Wakefield in San Francisco.

September 28, 2015

California Market Reports Retail Western Western Market Reports

Retail Rallies in San Diego

by Nellie Day September 22, 2015

The San Diego retail market had another positive quarter, which built on the strength of the local economy. Strong job growth and low unemployment led to positive net absorption and a spike in sales activities. The unemployment rate decreased across the board. San Diego posted a 4.9 percent rate, a post-recession low for overall unemployment. This is the first time San Diego unemployment has been sub-5 percent since the beginning of 2008. Local San Diego retail employment has been steadily increasing by 2.4 percent over the past five years, according to CBRE Econometric Advisors. Annual growth for the next five years, however, is expected to be relatively flat. Despite the lack of space, there have been a few construction deliveries. Most of the current retail construction in San Diego is from mixed-use development and property renovations. Westfield plans to spend $500 million to expand its center at UTC. It will also spend $300 million in Carlsbad where it plans intends to transform an indoor mall into an open-air center. Regional malls are leading the trend, and smaller centers like Flower Hill Promenade and Del Mar Heights Town Center are keeping up with them. One of the most significant signings this …

September 22, 2015

California Multifamily Western

Inspire Communities Near Sacramento Names David Gold as New CEO

by Nellie Day September 16, 2015

GOLD RIVER, CALIF. — Inspire Communities has named David L. Gold as its new CEO. The manufactured housing community owner is located in Gold River, just west of Sacramento. Gold has more than 30 years of institutional experience owning, financing and investing in domestic and international commercial real estate, with a focus on low- and middle-income housing. He co-founded Rockland Capital Partners in 2011, and was a managing director at Los Angeles-based real estate private equity firm Paladin Realty Partners for more than a decade. The firm’s former CEO, Matt Follett, will remain as a board member of Inspire Communities. His focus will be limited to acquiring manufactured housing communities in Washington, Oregon and California. Private investment firm American Infrastructure MLP Funds also recently announced it will invest in Inspire’s infrastructure-related operating businesses that are profitable and can expand quickly with additional capital.

September 16, 2015

Market Reports Western Market Reports

San Diego County’s Industrial Market Continues its Hot Streak

by Nellie Day September 15, 2015

San Diego’s industrial market is on pace to be a record-setting year, as of the end of the second quarter. Countywide vacancy has plummeted to 5.76 percent due to another quarter of strong leasing and owner/user activity. The majority of San Diego’s industrial absorption has occurred on the fringes of the county. The southernmost submarket where this is occurring is Otay Mesa. This market has been a historical laggard, but has recently witnessed a flurry of leasing activity during the first half of 2015. The drivers for Otay Mesa’s demand are high-quality, large blocks of space, proximity for companies with maquiladora operations in Mexico and companies migrating out of expensive central submarkets in search of value. There is some speculative industrial development breaking ground in the county for the first time in almost 10 years. First Industrial Realty Trust and McDonald Property Group has tilted walls on First Park @ Ocean Ranch in Oceanside. The three-building, 237,000-square-foot project has received strong preleasing activity from users that like the northern San Diego location as a launching point to serve San Diego, Orange County, Riverside County and Los Angeles. Most importantly new projects like First Park offers state-of-the-art features tenants are looking …

September 15, 2015

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