HP Investors Makes Its Biggest Buy Yet
It's took quite a few quarters for HP Investors' latest buy, as the SD firm picked up McGrath Center, a nearly 300k SF power center for $107M.
For HP managing partner Sumeet Parekh, it's a return to his childhood in some ways. The stabilized deal—bought at a 5% cap—was a center that Sumeet himself was very familiar with prior to the purchase. “This is a shopping center I used to frequent when I was a kid. It had a great arcade there,” he says. For the most part, the center will remain as is—with some fascade and space modernization to attract national tenants, with the help of Cushman & Wakefield's John Jennings and Aaron Hill. But at 99% leased, little leasing needs to be done up front.The buy, a JV with Clarion Partners, is the largest single transaction for HP to date. HP has been on a buying spree of late, most recently entering the Portland market with a mixed-use center in the historic Pearl District, which we reported here.
The property, along Clairemont Mesa Boulevard and I-805 in Kearney Mesa, was sold by the McGrath family, which owned it since developing it in the early '90s, and is host to such tenants as Walmart, LA Fitness, Food 4 Less, Starbucks and Chipotle. This is the second HP/Clarion buy: The partnership bought Gaslamp Square in 2013—a full city block of retail and parking in the Gaslamp Quarter. Voit’s Randy LaChance and Mark Gaston brokered the sale.
HP also just broke ground on the Sharp Rees-Stealy build-to-suit project, which we previously reported here. With $31.7M in financing in tow from US Bank, Lankford & Associates and HP have begun the three-story, 100k SF medical office project in Rancho Bernardo, which is expected to replace Sharp Rees-Stealy's facility at 16950 Via Tazon by 2017. "This location will be about twice as large as our current Rancho Bernardo site, allowing us to add additional physicians and services," says Sharp Rees-Stealy CEO Stacey Hrountas. Colliers International's Tom Mercer and Kevin Craven, along with Savills Studley's Mike LaBelle and Bridget Garwitz, brokered the deal.