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Real Estate Bisnow
The largest commercial real estate publication in the United States.
January 4, 2012 


Checking up on
PMB's Jim Rohan

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Pacific Medical Buildings SVP of development Jim Rohan has a lot to be thankful for. Wait, wrong holiday. He's got a lot to resolve to be thankful for when Thanksgiving comes around. With healthcare one of the brighter spots in the economy, he'll be a panelist at Bisnow's first San Francisco Healthcare Summit, Jan. 18 at the City Club. (You can register now.)
We found what must be Monet's impressionist portrait of Jim. The company: broke ground on an 80k SF single-tenant office building connected on four floors to a new hospital that Eden Medical Center, part of the Sutter Health system; has one under construction in Castro Valley, and is nearing completion on a 125k SF single-tenant building for Facey Medical Clinic in LA. Also, PMB is co-developing a $200M hospital in Texas with an associated 55k SF MOB, and a skilled nursing facility in San Diego. In addition, it’s working with JLL on projects for individual and healthcare system clients throughout the US. PMB primarily develops for its own account but has about $1B of medical office assets in partnership with Ventas. Jim keeps up his own health by playing tennis and spending time with family, which includes three children and three grandchildren, with a fourth on the way.

Geeks and jocks may not mix on the university quad, but it’s a different story in the tech-rich SOMA District. That’s where Kilroy Realty Corp closed the purchase of 370 Third St and signed an 11-year lease with Pac-12 Enterprises for its HQ. Formed last year, Pac-12 Enterprises is the integrated content and media company of the Pac-12 Conference (celebrating the big Oregon Rose Bowl victory). Allen Matkins partner/real estate chair Tony Natsis (whom we snapped a while back with Regent Properties’ Jeff Dinkin) and senior counsel Andy Ouvrier provided legal representation to the landlord, Kilroy Realty Corp. Tony tells us Pac-12 Enterprises will occupy well in excess of 70k SF on the second and third floors. The space will include a state-of-the-art studio that will broadcast all Pac-12 sporting events—some of which will be on Fox and ESPN, some on cable and satellite stations.
Kilroy went into escrow on the building in October and struck the Pac-12 deal the Friday before Thanksgiving. Kilroy’s purchase of the building made the Pac-12 lease effective. Tony says Pac-12 was in a huge hurry to get to the end zone. Unlike tenants who have the option to stay where they are, the new company had no existing HQ. “Their initial location in the world is going to be our building.” The building sale needed to close sooner than Kilroy had planned so there would be no impediment to Pac-12 starting construction of its broadcast facilities, in order to fulfill its contractual obligations with the various networks to produce sports programming. Without the lease, Tony says Kilroy wouldn’t have closed until January. “We had to speed up that entire process.” (In football they call that rushing.)
There were more moving parts than a marching band: six different parties were involved, Tony says, including two ground lessors (a Brookfield entity and Pacific Bell, the building’s previous occupant). Three sets of brokers worked on the deals. On the lease, a team from Cushman & Wakefield repped Pac-12, while CAC’s Bill Cumbelich repped Kilroy. On the building sale, Eastdil Secured’s Jeff Weber and Stephen Van Dusen repped sellers Cerberus Institutional Real Estate Partners and Lincoln Properties. Pac-12’s legal team included Seyfarth Shaw’s David Roseman and Mark Mengelberg. During the negotiations, Tony says all that anybody could talk about was their favorite football teams. “We had guys from Berkeley, guys from Oregon.” Tony, a Michigan fan, must be pretty pleased with the Wolverines’ overtime win in yesterday’s Sugar Bowl.


This morning we chatted with Marcus & Millichap's Rob Reis, who repped Senior Housing Properties Trust in the purchase of Tiffany Court, a 57-unit assisted living facility in Walnut Creek for $11.3M or more than $198k/unit. The seller, Furman Properties LLC, is a local developer, owner, and operator. Rob tells us the facility traded at an 8.25% cap, which is "exactly what it should be" for a quality property in a great location—less than half a mile from the 233-bed Kaiser Permanente Walnut Creek. Tiffany Court opened in November 1996 and leased up in three and a half months. The seniors housing specialist says the Bay Area market is great for performing properties in major metro areas. “There’s a lot of demand, and I expect that to continue this year.” He's selling non-stabilized properties, as well, such as a 97-unit assisted living facility in Manteca he sold last year for just over $7M.

Got deals cookin' in the New Year? Send 'em to julie@bisnow.com.
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