This Week's LA Deal Sheet
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Turner Impact Capital, an investment management firm focused on social impact investing, launched a multifamily fund that will acquire and manage up to $1B of workforce apartments in urban markets throughout the US.
Principal and CEO Bobby Turner tells Bisnow the fund, which just closed its first acquisition—Regency Pointe, a 599-unit, 48-building community in the Washington-Arlington-Alexandria metro area—will target densely populated markets with high ethnic diversity and an underperforming school district. Turner Impact Capital was formed about a year ago with the sole objective of trying to create sustainable solutions to many of today's societal problems, focusing on education, housing and preventive care. "We've got to tackle all three issues holistically," he says. The new fund, Turner Multifamily Impact Fund, addresses the shortage of affordable options for those earning up to 80% of area median income, and is a counterpoint to the preponderance of luxury development.
The business model allows it to acquire property at market prices and drive profitability for investors, not by raising rents, but through property management improvements and community-enriching programs—think after-school tutoring, employment assistance, and health and well-being services. "We can do amazing things between the hours of 8 and 5." Noting he's been both a capitalist and a philanthropist, Bobby says Turner Impact Capital is fueled by the idea that making money and making social change aren't mutually exclusive. He says the multifamily fund has attracted investors, including Citi Community Capital, the University of Michigan endowment and Rockefeller Brothers Fund, that recognize that social impact investing can drive superior risk-adjusted returns.
A JV of Shubin–Nadal Realty Investors and Penwood Real Estate Investment bought a four-building complex in Torrance for $11.8M, with plans to reposition it for flex industrial, retail and potentially creative uses. The 108k SF of brick buildings, two of which feature glulam, bow truss roofs, occupy more than five acres at 19100-19122 S Vermont Ave. The site is one minute from the on/off ramps of the San Diego (405), Harbor (110) and Artesia (91) freeways. The Klabin Co's Todd Taugner, David Prior and Frank Schulz repped both the buyer as well as the seller, Silmor Investments Co. They'll also market the new development, which is slated to begin remodeling next spring.
Kennedy Wilson completed the acquisition of a majority interest in Vintage Housing Holdings, an affordable family and senior apartment developer. The company invested about $78M for a 61% stake in VHH, which owns interests in 30 multifamily properties totaling 5,485 units in the Western US (including 756 units in California). EVP Matt Windisch says KW acquired the portfolio off-market through a direct relationship with the seller. The property developer and current manager of VHH will own the remaining 39% of the equity interests and maintain its role as manager.
Nearon Enterprises, a Walnut Creek-based private investment company, bought a 115k SF industrial building in Moorpark (200 Science Dr) from San Diego-based Hamann Cos for $9.9M. Benchmark Electronics, an integrated contract manufacturer, subsequently signed a 10-year lease. Lee & Associates-LA North/Ventura's Mike Tingus and Grant Fulkerson repped the buyer and seller as well as the landlord and tenant in the separate deals, which have a combined value exceeding $19M. The property includes excess land that provides expansion capabilities for Benchmark or another 30k SF building. Although the building wasn't listed for sale, the dynamic duo knew that Nearon, a client for some 15 years, would be interested in the highly improved manufacturing facility. Benchmark had been occupying the facility but was considering a relocation. The Lee team was confident that it could retain the tenant, providing Nearon with a fully leased investment.
CT Realty sold the largest building at its Magnolia Point redevelopment project in Corona, a 201k SF warehouse and distribution building, for $20.1M. Amrapur Overseas Inc, which manufactures and distributes bedding, towels, draperies and other home textiles, purchased the building (1560 E Sixth St) to serve as its US HQ and logistics facility. The building is located on 8.8 acres and features 32-foot clear height, 21 dock-high doors and two grade-level ramps. Lee & Associates' Jeff Ruscigno and CBRE's Ben Seybold repped the seller. Lee's Ted Sawyer represented the buyer. CT sold its first building at Magnolia Point earlier this year and is marketing the two remaining buildings.
Montana Avenue Capital Partners LLC, a Santa Monica-based real estate investment, management and development company, bought a 50k SF office/industrial building in Redondo Beach (2400 Marine Ave) for just over $9.5M. MAC plans to invest an additional $2M to convert the property, rebranded as “LINQ on Marine,” into a high-end creative office campus. (Think polished concrete floors and exposed ceilings, glass roll-up doors, indoor/outdoor collaborative workspace and wrap-around patio spaces.) JLL's Steve Solomon represented MAC in the acquisition and will handle leasing at the project, where sizes will range from 3,500 to 25k SF of contiguous space. JLL's Luke Staubitz, Harvey Beesen and Andrew Dilfer repped seller Klein Family Partnership.
A two-building, 16-unit multifamily property in West LA changed hands for $5M cash or more than $312k/unit. Located side by side at 1263 and 1267 Barry Ave, just south of Wilshire Boulevard, the buildings sold at a 3.4% cap rate following a 15-day escrow. Charles Dunn Co's Hamid Soroudi repped the seller, a private investor. The buyer, also a private investor, represented itself. According to Hamid, the buyer has plans for future apartment or condo development.
Lincoln Property Co acquired the Burbank Collection, a campus of three office buildings (303 and 333 N Glenoaks Blvd and 300 E Magnolia Blvd) encompassing nearly a full city block in downtown Burbank, from Kennedy-Wilson. Lincoln plans to transform the three-acre site into a cohesive, walkable campus featuring a central pedestrian walkway adjoining new outdoor decks and terraced dining areas. The project represents roughly half of the city’s 740k SF of Class-A office inventory. The Burbank Collection's already home to entertainment companies like Cartoon Network and Nickelodeon. Completion: early 2016.
Goldrich & Kest Industries sold Pico Plaza Apartments, a two-building, 43-unit property in LA, to a private investor for just over $4.8M or $112k/unit. The buildings are located across the street from each other at 1226 and 1237 Arapahoe St.
Cutler & Gross, a luxury eyewear retailer, leased 1,350 SF at 8505 Melrose Avenue in West Hollywood for its first West Coast flagship. RKF's Kristin McCann and Sinvin Real Estate's Christoper Owles repped the tenant, while landlord Josiko Properties represented itself. Slated for a summer opening, this will be the second US location for Cutler & Gross, which produces high-quality frames in its factory in Cadore, Italy.
RealtyMogul.com named Megan Goodfellow head of credit, commercial real estate, as part of the recent launch of the company's commercial lending division. Formerly with Centerline Capital Group and JP Morgan Chase, she'll be responsible for the credit risk management of RealtyMogul's equity and debt platform, including private money, bridge and permanent financing for commercial RE properties.
George Smith Partners named three new principals. Bryan Shaffer, who joined George Smith Partners in 2011, has closed more than $4B in financing throughout his 20-plus-year career, including complex loans for portfolio restructuring, exit from bankruptcy, and note purchases. Jonathan Lee has been with the firm since 2005. Since then, he's arranged more than $1B in financings, with special expertise in funding ground-up development as well as stabilized permanent financing. Shahin Yazdi joined GSP in 2007 and helped set up the firm's advisory services arm to assist borrowers and lenders with troubled loans and distressed assets. The trio join existing principals Steve Bram, Gary Mozer, David Rifkind, Gary Tenzer and Malcolm Davies.
Bill Williams, a 38-year veteran of the construction industry, joined steel fabricator Stantru Reinforcing Steel Co in Fontana as sales manager.