Rockwood Buys Playa Jefferson for $165M

Manhattan Beach, CA-based Vantage Property Investors has sold Playa Jefferson, a dynamic office campus located in Playa Vista, to Rockwood Capital for $165 million, or $660 per square foot. The news comes just four months after Vantage announced it would be adding a fifth 55,000 square foot, three-story creative office building to the office campus, where Facebook leased 35,000 square feet of space at the beginning of the year. Vantage Property Investors originally acquired the property in August 2011 for $33 million, at which time it was only 18% leased. Kevin Shannon of NGKF, the listing broker for the property, declined to comment on the deal.

Located at 12755-12777 West Jefferson Boulevard, Playa Jefferson features over 200,000 square feet of creative office space, with dramatic and distinctive architecture. The new three-story structure is being designed by Gensler, while AHBE Landscape Architects designed the new outdoor space to create an "outdoor living room." Vantage Property Investors was founded in 2003 by Ned Fox and Stuart Gulland to join forces in office development, investing $20 million to remake the property into a new creative space. "We mixed our building materials," Gulland said. "We want people to feel grounded to the environment. [...] Companies are flattening their corporate structures, sharing information and working in collaborative groups. Walls are less important."

The burgeoning Westside neighborhood is fast becoming the Southern California hub of Silicon Valley, with a growing number of tech companies choosing the relatively undeveloped area as their gateway to the region's entertainment and media offerings. "There's a herd mentality to the tech industry, so when one guy does something, everyone else follows," said Michael Pachter, a tech analyst at Wedbush Securities in Los Angeles.

For more news and information visit Blumberg Partners.

Corum Moves Forward with Class A Spec Industrial in Denver

Corum Real Estate Group, the Denver-based real estate firm, has purchased a 7.5-acre parcel of land in Adams County to develop Central 62 Distribution Center, a 124,600-square-foot, Class A, spec industrial warehouse and distribution facility. HFF worked on behalf of Corum to arrange joint venture equity partnership with a pension fund advisor, and also secured the construction loan for the partnership through a local bank. Corum bought the land from father-and-son Tony and Lou Ficco for $2.08 million, who had owned the site since 1941. Associate Director Matt McClintock and Senior Managing Director Jeff McClintock of NGKF handled the transaction. According to a Business Den article, their property originally had 10 acres but was cut down to 7.5 acres when Interstate 25 was built in the 1960s.

"Industrial real estate is a pretty hot commodity right now, and infill industrial is even harder to find," said Corum Vice President Eric Komppa, who runs Corum Real Estate Group along with his father Mike Komppa. "It's going to be the first development deal with I-25 visibility since the last cycle at least, if not longer."

Targeted at mid-size tenants requiring office, retail and showroom space, Central 62 is the latest speculative development in a "drum tight" industrial market experiencing under 2 percent vacancy in the central Denver area, according to Newmark Grubb Knight Frank. "This new industrial construction fronting I-25 is the first in decades, and as land values skyrocket in RiNo and along Brighton Boulevard, centrally located companies need new options," explained Matt McClintock, who brought the opportunity to Corum Real Estate.

BSD Builders has been contracted as the general contractor on the Central 62 project, which was designed by Ware Malcomb. Asking rates will hover around $8 per square foot, Komppa said, adding that the building has drawn leasing interest primarily from distribution outfits.

For more news and information visit Blumberg Partners.

CWCapital Marketing $2.1B in Assets

CWCapital Asset Management (CWCAM), a subsidiary of Bethesda, MD-based CW Financial Services, announced today that it's marketing a $2.12 billion portfolio of real estate and commercial mortgage loan assets in its capacity as special servicer. The portfolio covers properties throughout the country, many in major markets such as New York City, Atlanta, Las Vegas, Los Angeles/Orange County, Houston and Phoenix with the balance located in secondary and tertiary markets. The assets securing the portfolio total nearly 4.7 million square feet of office space, 3.5 million square feet of retail, 1.1 million square feet of industrial plus 4,700 multifamily units and 2,100 hotel rooms; the remainder of the portfolio consists of mixed-use, hospitality and industrial assets.

According to a press release from CWCAM, brokerage firms including CBRE, Eastdil Secured, Newmark Grubb Knight Frank, Mission Capital, and Marcus & Millichap, are overseeing the marketing of 20 assets with an unpaid principal balance of $1.38 billion. Additionally, 71 assets with an unpaid balance of approximately $740 million are currently being marketed via Auction.com.

In October 2013 when CWCAM marketed a portfolio of 134 assets with a unpaid principal balance of $3.43 billion, the vast majority of the assets eventually closed with overall recoveries averaging $0.66 on the dollar of the unpaid principal balance, according to a GlobeSt.com article.

For more news and information visit Blumberg Partners.

Physicians Realty Trust Buys Medical Office Portfolio for Record $141M

Milwaukee, Wisconsin-based Physicians Realty Trust announced that it had completed the purchase of a portfolio of four medical office buildings in the Phoenix area for $140.882 million, or $346.23 per foot blended average. The sellers in four separate cash sales were companies formed by Integrated Medical Services in Phoenix, a physician led (by Dr. John Dover) and managed organization. Newmark Grubb Knight Frank in Phoenix brokered the deal; terms were not disclosed, but according to NGKF, the $346.23 per foot average sets the record in the Phoenix Metropolitan for the highest price per foot ever paid for an on-campus, multi-tenant medical office building portfolio. Physicians Realty Trust represented itself in this transaction.

The properties in the portfolio include:
• Paradise Valley Medical Center, 3815 E. Bell Road, Phoenix
• North Mountain IMS Medical Building, 9250 N. Third St, Phoenix
• Avondale IMS Medical Building, 10815 W. McDowell Rd., Avondale
• Palm Valley Medical Office Building, 13555 W. McDowell Rd, Goodyear

The office buildings were developed between 2004 and 2009, and were 96% leased at the time of sale, according to a Phoenix Business Journal article. Three of the buildings are also located on hospital campuses, a premier spot for any medical office property. Dover said the sale gives the doctors a chance to monetize their assets, adding that the buyer understands the physician's perspective.

For more news and information visit Blumberg Partners.

TDA Buys Palomar Corporate Center

San Mateo, California-based TDA, Inc., a commercial real estate investment group, has purchased the Palomar Corporate Center, a fully occupied, 66,922-square-foot industrial property in Vista, California. Newmark Grubb Knight Frank (NGKF) completed the sale on behalf of the buyer; terms of the deal or a pricepoint were not disclosed, but CoStar reported that the building previously sold for $8 million in August 2006 when Donald A. and Vicki L. Whitacre purchased the property from H & J Devco LLC.

"The buyer sought out Palomar Corporate Center because it is a stabilized, pride-of-ownership asset in a good location where vacancy is very low - about 4.5 percent," said Brent Bohlken, senior managing director at NGKF. "The buyer plans to hold long-term."

The industrial building at 3210 Executive Ridge was built in 1999 and is situated on 3.62 acres. The property is fully occupied by EarthLite as its corporate headquarters, and features approximately 15,000 square feet of finished mezzanine space, four grade-level loading doors, four dock-high loading doors, a freight elevator and 128 parking spaces.

For more news and information visit Blumberg Partners.

DC Office Obsolescence Creep?

A new report from GlobeSt.com suggests that whether DC landlords will admit it or not, a certain percentage of the city's buildings have become, or are becoming obsolete. "The rapid obsolescence of B and C properties, some of which cannot be cured, is surprising," said Newmark Grubb Knight Frank's Senior Managing Director of Research Greg Leisch. "In my 45-year career I have never seen such rapid obsolescence." Obsolete, in current vernacular, indicates that a property lacks robust amenities or an urban location, are not convenient to mass transit, or have smaller floor plates or an extensive glass line.

NGKF are still preparing their findings for a full report and, according to GlobeSt.com, will reveal them in an upcoming white paper. An excerpt from the report follows:

"There has always been a difference between best-in-class office product and the rest of the market," Leisch tells GlobeSt.com. "Now, though, the differences have become more profound."

One telling statistic, Paul says, is that the share of office leasing by Class A offices has really taken off since the recession.

According to the report, "Since the start of 2008, Class A office properties in the Washington metro area have totaled 18.6 million square feet of net absorption, while Class B and C properties have experienced negative 13.8 million square feet of absorption, with each year reflecting positive net new demand for Class A space and a loss of occupancy in the balance of the market."

For more news and information visit Blumberg Partners.

Medistar Buys Three Beaver Valley Road for $62M

Houston-based Medistar Corp. announced this week that it had entered the mid-Atlantic market with the purchase of 3 Beaver Valley Road in Wilmington, Delaware for $61.8 million. The property was soldy by an entity controlled by KBS Realty Advisors. Newmark Grubb Knight Frank Capital Markets represented both the buyer and seller in the transaction.

"It is no surprise that this office building attracted multiple offers from a number of capable buyers across the country, given its well-established anchor tenant and proximity to many corporate headquarters," said Newmark Grubb Knight Frank's David Dolan, a senior managing director in the Philadelphia office, who helped arrange the transaction. "3 Beaver Valley Road had been maintained by a leading institutional owner with the level of amenities associated with first-class properties and also will benefit from the quickly improving economy in the area."

The 264,000-square-foot office building was 94% occupied at the time of sale with Farmers Insurance Exchange as the anchor tenant following significant recent lease-up efforts by Newmark Grubb Knight Frank. Built in 1995, the five-story property was recently improved with a renovated lobby, repaved parking lot and a new roof. The 18-acre site sits next to Brandywine Creek State Park and is near the intersection of Routes 202 and 92, about 25 miles south of Philadelphia.

For more news and information visit Blumberg Partners.