News and Notes on Trends, New Projects and Construction Entering Or Leaving the Commercial Real Estate Development Pipeline Around the U.S.
In The Pipeline is a column on significant land sales, transactions and trends affecting office, industrial, flex, multifamily, mixed-use, hotel and public works developers. Send us news leads about your new project --
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Leasehold Sale Allows Santa Monica Biotech Project to Break Ground
The Lionstone Group, a Houston-based real estate investment firm, announced it has sold its ground leasehold interest on a four-acre parcel in Santa Monica, CA to Agensys, a biotech company that plans to build a 160,000-square-foot headquarters and clean research and development facility at the site.
Agensys, a wholly owned affiliate of Astellas Pharma US Inc., specializes in the development of proteins and antibody drugs to fight cancer. The sale of the site at 1800 Stewart St., a former American Standard water heater manufacturing facility, required almost two years of discussions with city and local officials, said Dan Dubrowski, a founding partner of Lionstone. Jim Jacobsen and Scott Rigsby of locally based Industry Partners acted as the local operating partner for Lionstone in the transaction.
Dubrowski described the deal as a "huge win" for all parties.
"Santa Monica keeps one of its most prestigious companies and a high-quality, knowledge-based employer, Agensys purchases an ideal location to consolidate their operations into a new world-class facility, and Lionstone sells part of its Santa Monica holdings and delivers very solid financial returns for our investor."
Construction begins this month and Agensys will consolidate six Santa Monica facilities into the new $95 million complex when it is completed in 2013. The project is designed to accommodate the firm's rapid growth from 180 employees to more than 300 over the next three years, according to Agensys Executive Vice President Paul Kanan.
The water heater factory has remained unoccupied since being closed by American Standard more than 30 years ago. The site is part of a nine-acre parcel acquired by the city in 1989 from Southern Pacific Railroad and was previously considered for use as a maintenance yard for the planned 15.2 mile light rail line that will run from downtown Los Angeles to Santa Monica. The Lionstone Group acquired the ground lease on the four-acre parcel in 2007 through Lionstone Cash Flow Office One, LP, a joint venture between Lionstone and the Oregon Public Employees Retirement Fund.
CBRE to Market Four Residential Parcels in Downtown Baltimore
HarborView Property Development Co. has enlisted the multifamily investment team of CB Richard to find a joint-venture partner, private equity placement or buyer to develop four parcels for a potential total of 1,548 units at 500 Harborview Drive in downtown Baltimore.
The properties represent the last developable parcels in HarborView, a former ship building and repair facility that has morphed into one of the city's most successful and prominent waterfront communities, said Mike Muldowney, executive vice president of CB Richard Ellis’ Washington D.C Multi-Housing Investment Team.
The HarborView project began with a high-rise condominium building in the early 1990s and expanded to include town homes, pier homes and a mid-rise condo building. The community includes a 340-slip marina and other resort-style amenities. HarborView Property Development is headed by developer Richard Swirnow.
CBRE’s Mike Muldowney, Bill Roohan, John Sheridan, Michael Rudolph, Brian Margerum, and Martha Hastings are representing HarborView Property Development.
$60M Loan Secured for Hilton Hotel in Carlsbad
HFF has arranged a $60 million construction/permanent loan for Wave Crest Oceanfront, LLC, to develop the 215-room Hilton Carlsbad Oceanfront Resort & Spa in Carlsbad, CA.
Due for completion in mid-2012, the resort will include about 15,000 square feet of indoor and outdoor meeting space, as well as a spa and fitness center and oceanfront restaurant. The eight-acre site is located in Carlsbad’s southern Ponto region near the Hanover Beach Colony housing development.
"The successful financing for the Hilton Carlsbad Oceanfront Resort & Spa reflects recovering hospitality fundamentals coupled with the capital markets recognition of irreplaceable real estate and strong, proven sponsorship," said Tim Wright, senior managing director for HFF (Holliday Fenoglio Fowler, L.P.) who represented borrower Wave Crest Oceanfront along with associate director Zack Holderman to secure the loan through UBS Realty Investors.
Wave Crest Resorts and its affiliates have developed, owned and managed real estate in the North San Diego County coastal areas for 35 years, Wright noted.
Adler Group Sells 16 Acres in Southwest FL
Adler Group has sold 16 acres at Pavilion Crossings, a 35-acre, multi-parcel site at the intersection of US Highway 301 and Falkenburg Road in Brandon, FL, which is being developed to accommodate in-line retail,
office space and outparcels.
Aztec Group, Inc. Senior Managing Director Howard Taft and director Charles Penan represented Adler Group in the sale.
Two long-term pre-leases secured by Adler Group for a 45,600-square-foot Publix Supermarket and a 5,000-square-foot Fifth Third Bank branch were key to the land sale. Construction is scheduled for completion early this year.
"We were able to attract a buyer by taking a piece of raw land and creating value for it through these high-profile leases," said Michael M. Adler, chairman and CEO of Adler Group.
Duke Realty to Expand Cincinnati Medical Campus
Just weeks after the opening of the first medical office building at Good Samaritan Medical Center/Western Ridge in Cincinnati, Duke Realty Co. announced it will develop a second MOB on one of four remaining land parcels near the campus.
The existing building, which includes an around the clock emergency department and imaging services, is affiliated with Good Samaritan Hospital, TriHealth-affiliated physician practices such as Group Health Associates and Queen City Physicians, and other medical services. The latest project, Western Ridge MOB II, will be a one-story, 29,700-square-foot facility developed, owned and managed by Indianapolis-based Duke.
Construction is scheduled to begin next month, with completion slated for July 2011. Wellington Orthopedic & Sports Medicine, a specialty medical practice which has 29 doctors in seven locations throughout Greater Cincinnati, has leased 18,920 square feet and will anchor the building. Tri-State Centers for Sight Inc. has leased 4,500 square feet. Christopher Vollmer Sr. and Christopher Vollmer Jr. with Grubb & Ellis Co. represented the tenants on the lease deal.
The new building on about four acres at 6909 Good Samaritan Drive, is the second of five planned buildings at the campus, including two more MOBs and a freestanding retail building.
The project also reflects Duke Realty’s long-term strategy of growing the percentage of MOBs and industrial buildings in its portfolio, while reducing the percentage of suburban office assets, said Keith Konkoli, Duke Realty senior VP for health care.
Rinker, NAL Moving HQ to Innovation at Prince William
Rinker Design Associates and NAL Research Corp. partnered to acquire 5 acres at Innovation at Prince William Technology Park in Manassas, VA, to construct a new shared headquarters complex. The firms will pay approximately $9 million for the land and construction of the first building pending final development costs. The deal is set to close in the spring.
RDA, an engineering and design company, and NAL, a research firm, will build two three-story structures totaling 90,000 square feet. Discovery Center I and II will be constructed in two phases with 45,000 square feet each. The organizations will move 112 workers into 40,000 square feet at Discovery Center I. Ground break for building one is scheduled for March and delivery is set for February of next year.
Avison Young, which represented the firms in the sale, was also hired to help design and develop the properties and lease the remaining 50,000 square feet.
"In addition to RDA and NAL’s headquarters, we are establishing a bioscience center and business accelerator for Discovery Center I," said Tom Sandlin, an Avison Young principal in Tysons Corner. "We believe the bioscience center will complement the technology activities of existing lab users such as George Mason University’s Biomedical Research Lab, Center for Applied Proteomics & Molecular Medicine and National Center for Biodefense and Infectious Diseases. The development and Discovery Center II could accommodate George Mason University’s lab needs at substantial savings."
Innovation at Prince William, also known as Innovation Technology Park, is a 1,500-acre public-private cooperative venture and the largest corporate development in Prince William County. George Mason’s 10-acre, $40 million Life Sciences Campus anchors the park. (By Laurie Forbes)
Tideridge Holdings Acquires Florida Land For $2.3M
Tideridge Holdings Acquistions, LLC. purchased 575 acres of vacant residential land on Highway 41 in Spring Hill, FL from CRM Florida Properties, LLC. for $2.275 million, or about $3,955 per acre. A preliminary plan is approved for the development of a single-family residential community.
The vacant parcel is located north of State Road 52, on U.S. Highway 41 in Pasco County. A total of 756 single-family homes are permitted for construction, although the MPUD zoning offers approval for 800.
Bill Eshenbaugh of Eshenbaugh Land Company represented the seller. (By Verneal Adams, CoStar COMPS #2018302)
O'Connell Development Buys 39 Acres in Springfield, MA
O'Connell Development Group Inc. acquired 39 acres of previously developed land in Springfield, MA, with plans to construct a retail center. Springfield Industrial Center Inc. sold the site for $4.2 million or $107,554 per acre.
The parcel is on Page Boulevard (Route 20) near Interstate 291, Exit 5A. The obsolete industrial buildings on the lot will be demolished and construction for the retail center is estimated to begin in late 2012.
Both Springfield Industrial Center and O'Connell Development Group were self-represented. (By Lindsey Maxwell, CoStar COMPS #2002542)
Baltimore Mall Outparcel Trades for $4.5M
SRD Golden Ring LLC purchased land on Petrie Way in Baltimore, MD, from Petrie Ross Ventures Inc. for $4.5 million or $2 million per acre.
The 2.25 acres is on one parcel at The Golden Ring Mall and has three ground leases in effect. M&T Bank, McDonalds and Panda Express will be located on this outparcel.
Matt Gorman, Thomas Gorman and Michael Shover of Marcus & Millichap represented the seller. Peter Snell of the same brokerage represented the buyer. (By Kyle Norris; CoStar COMPS #1994257)
APS Buys 145 Acres for $1.3 Million
Arizona Public Service Co. purchased 145.62 acres between US Highway 85 and Old US Highway 80 in Gila Bend, AZ, from Jokake Real Estate Services for $1.31 million, or about $9,000 per acre.
The all-cash transaction involved an 18-megawatt solar power plant with construction beginning in early 2011 with an estimated completion in November 2011. SOLON Corp. acted as an intermediary for APS during the sale and briefly held title to the property to ensure the project received necessary approvals from the local government. SOLON will also be responsible for the power plants construction efforts as part of the deal with APS.
Both the buyer and seller were represented in-house. (By Kenneth Arnold; CoStar COMPS #2007815 and #2007826)