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Thursday, Mar 28, 2024

Three Firms Head Outside State for Triple Play

Valley-area real estate investors are enjoying a hot summer, with a trio of local firms making major investments in the office, multifamily and industrial sectors. All of them, however, are picking up acquisitions outside the pricey Southern California real estate market. Last month, Gelt Inc. purchased a 628-unit apartment portfolio in Salt Lake City for $67.5 million. The Tarzana real estate investment group is doubling down on Utah after buying an apartment community there last year for $25.5 million. It won’t be the company’s last foray into the state, according to Partner Keith Wasserman. “We like the Salt Lake City market for investment because of its growing workforce, population and economic health of the region and the state overall,” he said. “It will continue to be one of our targeted areas for investment, and we hope to build a portfolio of at least 3,000 units in the greater Salt Lake area over the next couple of years.” Woodland Hills-based Adler Realty Investments Inc. purchased three industrial buildings in Tempe, Ariz., last month for $5.5 million. The properties, located near Phoenix Sky Harbor International Airport, total 57,000 square feet and are 78 percent leased. The company funded the acquisition with proceeds from the sale of a Phoenix land parcel as part of a 1031 deferred tax exchange, said President Michael Adler. “These properties add to our portfolio’s diversification,” Adler said, adding that the company’s acquisitions director, Chris Engel, will continue to look throughout the western U.S. for investment opportunities. One place he might look is the Pacific Northwest. That’s where Glendale-based American Realty Advisors acquired a 317,000-square-foot, mixed-use property in the heart of Seattle’s South Lake Union district for $251 million in July. The building is located at Westlake Avenue and Denny Way, and was developed by Vulcan Real Estate of Seattle in 2009. Vulcan is the real estate arm of Vulcan Inc., a Seattle firm founded by Microsoft Corp. co-founder Paul Allen. “Opportunities to acquire a newly constructed building with high-quality tenants at a Main and Main location are rare,” said Drew Hess, who runs American’s investment group. “This type of property checks off all of the boxes: great urban location, great tenants and new high-quality construction and amenities.” Residential Opportunity The Rancho Simi Recreation and Park District is vacating its 13-acre headquarters after a half-century and selling the property for residential development. The underused parcel, at 1692 Sycamore Drive in Simi Valley, is marketed on an unpriced basis by CBRE Executive Vice President Laurie Lustig-Bower. “It is rare to have a parcel this size, within (Los Angeles County) in a prominent residential area, come to the market,” she said. As a result, the property is generating considerable buzz. “We’ve had a lot of inquiries from developers of all types, regional and national. The property lends itself to a developer that wants to have a lot of creativity in how they design a new community,” Lustig-Bower said. There’s potential to build up to 626 units on the property, which is zoned for high-density residential. Because the parcel is being deemed surplus by the recreation agency, 15 percent of any units developed there must be set aside as affordable housing. That makes the property eligible for an added density bonus. The park district is a separate government agency from the city of Simi Valley formed to create and maintain parks. Last month, it purchased an 81,197-square-foot industrial building in Simi for $8.6 million, said Larry Peterson, district manager. The new headquarters, at 4201 Guardian St., is large enough for indoor storage of vehicles, equipment and a mechanic shop that currently are housed outdoors at the Sycamore property, he said. The seller was Tepco Ltd. of Simi, according to real estate data provider CoStar Group Inc. The land on Sycamore was a donation from a developer in the 1960s. Of course, demand for high-density residential land in Simi has climbed in the last 50 years. In fact, for the better part of two decades the recreation district has talked about selling the land and relocating. The talk turned serious about nine months ago, Peterson said, when the residential development market in the region started heating up. It will be up to the agency’s five-member board to determine what will be done with the proceeds from the land sale, he said, but “ultimately the funds will be used to continue our mission.” The property is situated south of the 118 freeway, a short drive from the Simi Valley Town Center Mall. The agency is looking for a new home for a bike park that currently leases about 2.5 acres on the parcel, Peterson said. Staff reporter Karen E. Klein can be reached at (818) 316-3123 or at [email protected].

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