Biltmore Commerce Center Sold for $58M

A joint venture between Lincoln Property Company and Oaktree Capital Management has purchased the Biltmore Commerce Center in Phoenix, Arizona for $58 million. Denver-based DPC Development Company sold the 258,348-square-foot Class A office building after purchasing it in 2013 for $42.77 million and deploying a major face-lift of the property.

"Phoenix has the lifestyle, the labor and the commercial real estate to generate upside value, drive demand and respond to tenant needs at almost any point of the real estate cycle," said Lincoln Property Company's Executive Vice President David Krumwiede, who directed the Biltmore Commerce Center investment purchase. "It's an exciting dynamic to work in, particularly when you have a team that can see potential at any given point in the cycle, and use their investment, development and management skills to build on that potential. It leads to a lot of opportunity in many venues, including this latest, great portfolio addition."

"One of the many strengths of Biltmore Commerce Center is the subterranean parking, which provides quick and direct access to all tenant floors via two separate elevator banks," added Mark Jacobs, Managing Director with Oaktree Capital Management. "Tenants can go from their car to their office in less than 60 seconds, compared to five or 10 minutes for most buildings within the submarket. In addition, the location offers great visibility while providing quick and easy access without the high traffic congestion that other projects often experience."

The Biltmore Commerce Center was constructed during the mid 1980s real estate boom at the northeast corner of 32nd Street and Camelback Road. It sits on a 7.5-acre site and includes a six-level parking garage. The property is currently 93% leased to a diversified group of established tenants including HDR Engineering, Lee & Associates, United Way, Greystar, North American Title Company and Miller Russell & Associates.

For more news and information visit Blumberg Partners.

Hines JV Buys 4000 MacArthur

Hines, the international real estate firm, announced this week that along with a subsidiary of a fund managed by Oaktree Capital Management it had purchased 4000 MacArthur in Newport Beach, California. The sale price or terms of the deal for the two ten-story buildings were not disclosed, but it is known that a previous owner, Tishman Speyer Properties, was marketing the property in 2007 and expecting to fetch around $170 million; Tishman paid KBS about $134 million, or $365 per square foot, for the two office towers in 2006. In 2011 Emmes reportedly bought a $40 million junior portion of a $100 million mortgage tied to the property for 80 cents on the dollar and moved to foreclose on the property from Tishman, according to an Idea Hall article.

Hines Managing Director Ray Lawler, who leads the firm's Orange County development and investment office, said, "4000 MacArthur's location, access, visibility, quality improvements, and credit tenancy make this a particularly attractive acquisition for Hines and Oaktree. We expect the exceptional top floor vacancy, creative speculative suites, and prominent building top and monument signage will draw additional premier tenants to our project."

Oaktree Managing Director Ambrose Fisher added, "4000 MacArthur is our eleventh project with the Hines Orange County team. We now own 2.8 million square feet in Orange County that we have taken from 65 percent leased at acquisition to nearly 90 percent leased today. Globally, we have purchased 21 office deals in the US and the United Kingdom with Hines, totaling 8.2 million square feet. With the addition of 4000 MacArthur to our portfolio, we look forward to owning two of the best buildings in Orange County."

The property was roughly 91% leased at the time of sale to twelve tenants, including: Hyundai Capital America, M/A-COM Technology Solutions Holdings, Lifescript, and Premiere Business Centers. Hines has assumed on-site property management responsibilities on behalf of the joint venture.

For more news and information visit Blumberg Capital Partners.

JV Buys Santa Ana Office Building

A joint venture between Hines, the international real estate firm, and Oaktree Capital Management announced this week that it had purchased 1750 East Fourth Street in Santa Ana, California for an undisclosed price. The JV acquired the property in a sale and lease back deal with State Compensation Insurance Fund, California's largest provider of workers' compensation insurance. The seller was represented in the transaction by Rob Bickel, Patrick Inglis and Thomas Maloney of JLL.

Hines Managing Director Ray Lawler, who leads the firm's Orange County development and investment office, said, "Orange County is projected to be among the highest rent-growth markets in the U.S. over the next five years. This property provides us the opportunity to add significant value through leasing and the continuing improvement of Orange County's market fundamentals."

Oaktree Capital Management Managing Director Ambrose Fisher added, "We are happy to begin a long-term relationship with State Compensation Insurance Fund, and we look forward to adding 1750 East Fourth Street to our Orange County real estate holdings. This is our 10th project with Hines in Orange County and our 18th with Hines globally."

The 229,989-square-foot, eight story Class A office building was originally developed in 1994 on 2.8 acres, with immediate access to the 5 and 55 Freeways. Under the terms of the deal, State Compensation Insurance Fund will lease back roughly 50% of the square footage via a long term lease, with the remaining 50% available for lease. Hines has assumed on-site property management responsibilities on behalf of the joint venture, according to a Commercial Property Executive article.

For more news and information visit Blumberg Capital Partners.

LA Investors Buy San Francisco's Mark Hopkins Hotel from InterContinental for $120M

The world renowned Mark Hopkins Hotel at One Nob Hill in San Francisco traded hands this week as the Los Angeles consortium that bought the Fairmont Hotel in 2012 picked up the property for $120 million from InterContinental Hotels Group. The partnership between affiliates of Michael Rosenfeld's Woodridge Capital Partners and funds managed by Oaktree Capital Management plans to invest $20 million in hotel renovations to the guest rooms and public spaces. InterContinental Hotels Group will stay on to manage the property.

Michael Rosenfeld, CEO of Woodridge Capital Partners, said, "We are thrilled to add the Mark Hopkins San Francisco Hotel to our holdings further reinforcing our relationship with the great city of San Francisco. We are committed to enhancing the value of this prized asset."

"Through a strong partnership with hotel employees and numerous city constituencies, we're excited about the future of the San Francisco luxury hospitality market, and owning both iconic assets on top of Nob Hill, the Mark Hopkins and the Fairmont across the street," added John Brady, Global Head of Real Estate for Oaktree.

Host to numerous U.S. presidents, world leaders, movie stars and business tycoons, the 383-room Mark Hopkins Hotel opened on December 4, 1926. It was built on the site of railroad magnate Mark Hopkins' 40-room mansion, who was one of the founders of the Central Pacific Railroad that built the railway that linked the United States coasts.

For more news and information visit Blumberg Capital Partners.