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Portfolio acquisition

SAN DIEGO -- Westcore Properties has increased its U.S. commercial real estate holdings to more than 24 million square feet with its purchase of an 11.1-million-square-foot industrial portfolio in California and the Midwest from the Joe Benvenuti Company.

The $600 million transaction is the largest industrial real estate acquisition in California in 2012 and the second largest industrial acquisition in the United States over the same period, according to Jones Lang LaSalle (NYSE: JLL).

Westcore acquired the properties in a joint venture with a fund managed by DRA Advisors LLC, a New York-based investment adviser.

“We have been long-term believers in industrial markets supported by ports and agri-business, which has led us to invest heavily in greater San Francisco as well as the San Joaquin and Central Valley areas of Northern California,” said Marc Brutten, chairman and founder of Westcore.

The 110 buildings acquired by Westcore and DRA include 8 million square feet in Sacramento, 1.9 million square feet in St. Louis and 1 million square feet in Indianapolis.

“The acquisition of such a sizeable portfolio of institutional-grade industrial properties in core West Coast markets underscores our commitment to growing our base and scope of operations into a regional powerhouse,” said Don Ankeny, Westcoreís president and CEO.

“This acquisition brings a diversity of building types, from multitenant to flex to bulk, that allows us to incubate the future growth of our tenants in a closely held environment,” said Neil Johnson, Westcoreís managing director of acquisitions.

In the transaction Westcore Properties, DRA and the seller, JB Properties, were represented by Mark Demetre, Bill Niethammer, Matt Lofrano and Mike Zimmerman, of Jones Lang LaSalleís Sacramento office.

Stratford closes a deal

DEL MAR -- Stratford Partners Real Estate, a Del Mar-based private investment company, closed a deal to acquire Prana Apartment Homes in the city of Lafayette in Boulder County, Colo. for $36.1 million.

Prana is a 254-unit apartment community built in 2010 and voted the “Most Outstanding” apartment community in the Denver Metro Area by the Apartment Association of Metro Denver.

Denverís multifamily investment market has kept pace with the notably brisk coastal markets, and the Apartment Association of Metro Denver reports that the Metro Denver area’s multifamily vacancy rate was 4.3 percent on Sept. 30, the lowest rate in more than 10 years.

Additionally, the association reported that net absorption of units is exceeding new construction, and rental rates continue to rise.

“Prana is an exciting acquisition for Stratford Partners and we will continue to expand our portfolio in this market,” said Stratford co-founder Jesse Wilson, who was born and raised in Boulder.

Stratford is focused on the acquisition and development of multihousing assets throughout the West Coast.

Exposed homebuilders

(Bloomberg) -- The Mexican homebuilding industry is among the nationís most-exposed sectors to the outcome of U.S. budget negotiations, Standard & Poor’s analyst Eduardo Uribe said.

Spending cuts and tax increases totaling more than $600 billion will start taking effect next year, potentially triggering a recession in the worldís biggest market, if U.S. lawmakers fail to reach an accord.

“If the economy deteriorates, it could block their access to financing” and leave them with a backup in inventory, Uribe said Friday from Mexico City. The industry “depends on external financing for growth and refinancing.”

Sare Holding SA and Urbi Desarrollos Urbanos SAB are among the Mexican companies that would be most affected if the budget fallout crimps growth, he said.

TIAA-CREF stake

(Bloomberg) -- TIAA-CREF, the manager of retirement accounts for employees of nonprofit institutions, acquired a 49 percent stake in New York by Gehry, making it the biggest owner of the luxury apartment tower in lower Manhattan.

The recapitalization deal values the 76-story building at $1.05 billion, according to a statement Friday by Forest City Enterprises Inc., the Cleveland-based developer that previously held the majority stake.

The transaction reduced Forest Cityís share of the tower to 26 percent, from 51 percent.

Washington-based National Real Estate Advisors, which previously held a 49 percent stake, has reduced its ownership to 25 percent.

Forest City expects proceeds of about $120 million from the recapitalization, according to the statement.

Stone resignation

(Bloomberg) -- Mary Stone resigned from the Financial Accounting Foundationís (FAF) board of trustees less than two weeks after she was accused by the Securities and Exchange Commission of violating her responsibilities in overseeing Morgan Keegan & Co. mutual funds during the credit crisis.

The FAF, which oversees the board that sets U.S. accounting standards, expects to fill Stoneís spot next year, according to the Norwalk, Conn.-based organization.

Stone, an accounting professor at the University of Alabama in Tuscaloosa, took a leave of absence on Dec. 10, the day the SEC announced its claims against her and seven other former directors of the funds.

The SEC accused the mutual fundsí directors of allowing assets backed by subprime mortgages to be overvalued as the housing market collapsed in 2007.

The action followed a related $200 million settlement with Morgan Keegan, a subsidiary of Raymond James Financial Inc. (NYSE: RJF), last year and sanctions against two employees in 2010.

Digger oversupply

(Bloomberg) -- Caterpillar Inc., Komatsu Ltd. and other construction equipment makers have built enough capacity in China to satisfy global demand twice over while sales in the country are falling, according to a research company.

Manufacturing capacity in China is almost 600,000 excavators a year while the worldwide market is about 300,000, according to London-based Off-Highway Research.

Inventories of crawler excavators in China are about 100,000, almost equal to projected 2012 domestic sales, the research firmís Managing Director David C.A. Phillips said.

The supply glut is a blow to Peoria, Ill.-based Caterpillar (NYSE: CAT) and its competitors who built factories and bought local companies to grab a share of the biggest construction equipment market.

Now, with government property controls slowing construction, those companies are cutting output and trying to export unsold equipment.

“Itís all very scary,” Phillips, who visited China in November, said Dec. 12.

Demand growth in China was as high as 25 percent for some types of equipment in the decade through mid-2011, according to Phillips.

The industry assumed that pace would persist and kept assembly lines going even after the slowdown began last year, said Karen Ubelhart, a Bloomberg Industries analyst in New York.

Phillips sees annual demand growth in China slowing to as little as 5 percent for the next three to five years.

Chinese excavator unit sales fell 25 percent in November, a 19th straight monthly drop, according to “China Construction Machinery Business Online.”

As competition intensifies, Chinese companies are offering customers “wildly crazy, very attractive financing,” said Phillips, who has been with Off-Highway for more than 30 years.

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