A Chat With Laurus' CEO
LA-based Laurus CEO Phil Cyburt is having a good week: they rolled the dice on 1155 Market in 2011 for $200/SF and just sold it for $519/SF to Patson. He reveals they actually considered refinancing, not selling, the property (it's got a strong tenancy with lots of leverage, after all). But CBRE did a good job presenting a good buyer pool with all kinds of capital eying the deal, he says. The sale marks his company's exit from the city, but he steals a quote from the Terminator by saying "we'll be back" (hey, the man does work in Century City).
He wants to buy properties to gain more velocity (Laurus has three office buildings in Houston, for example). Buying in S.F. this year sounds "good to me," he says. The S.F. market is starved for product, however, and continues to outpace the last cycle, he says, with lots of interest from Asian markets. He's got some advice for other buyers in his boat: You've still got to be willing to roll up your sleeves and go into areas that haven't been touched in a long time.
Laurus' other NorCal project is an hour and a half east of the city. Diablo Grande is a master planned community bought out of bankruptcy in 2008. There are 487 homes built so far in its first phase, which calls for 2,350 homes. They are moving forward on additional lots now. Interested residents include those wanting to cash out of East Bay and the Bay Area and head to Tracy and Patterson to take advantage of more accessible housing (Diablo's prices start in the mid-$300ks). An influx of jobs in the Valley is also driving migration; Patterson has two new fulfillment centers for Amazon and Restoration Hardware—at 1M SF each. Those centers have a bigger employee base than an average warehouse user, he says. (Everything is bigger in Texas, or towns that share a name with Texas rivers.)