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REITs made big deals in 2013, some in San Diego County

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Whether they are San Diego County-based buying elsewhere, or outside firms buying local properties, real estate investment trusts did huge business in 2013 and into 2014.

On Jan. 30, Alexandria Real Estate Equities (NYSE: ARE) paid about $64 million -- including the assumption of a $40.7 million U.S. National Bank loan -- when it acquired a 116,566-square-foot building at 3545 Cray Court in the Torrey Pines submarket.

The property, sold by San Diego-based Lankford & Associates, is 100 percent leased to Scripps Research Institute.

Lankford is best known for having developed such projects as the Hall of Justice and Smart Corner in downtown San Diego and the Scripps Northridge development overlooking Scripps Ranch.

Rancho Bernardo-based BioMed Realty Trust (NYSE: BMR), in the midst of developing a 300,000-square-foot facility for Regeneron Pharmaceuticals in Westchester County, N.Y., is not only building but continued to acquire properties throughout last year.

BioMed added about 2.5 million square feet of life science properties when it acquired Baltimore-based Wexford Science & Technology for $640 million last June.

BioMed has since increased its credit facility capacity from $1 billion to $1.25 billion.

BioMed also posted 27 new leases in the fourth quarter totaling approximately 352,500 square feet in Cambridge, Mass., and Fremont, Calif.

“With strong leasing during the quarter coming from our largest markets on both coasts, we continue to reap the benefits of building lasting relationships with the key life science industry participants," said Alan D. Gold, BioMed chairman and CEO.

BioMed, having invested in more than $5 billion in life science real estate over the years, owns or has a major ownership interest in more than 16.3 million square feet from Boston to San Diego.

Escondido-based Realty Income Corp. (NYSE: O), with its focus on single-tenant retail, gained a new leader after CEO Thomas Lewis retired; John P. Case was promoted the top post on Sept. 3.

At the beginning of 2013, shareholders approved Realty Income's (RIC) $3.1 billion acquisition of American Realty Capital Trust (Nasdaq: ARCT). That single deal added 515 freestanding, mostly retail properties to the company's portfolio.

Late last year RIC -- with its $1.5 billion credit facility-- reached an accord with Inland Diversified Real Estate Trust Inc. to acquire 84 single-tenant, 100 percent net-leased industrial, distribution and retail properties nationwide for approximately $503 million.

The 84-property acquisition with completion expected this quarter, is being financed with approximately $349 million in cash and the assumption of approximately $154 million of debt.

RIC had yet to release its year-end figures, but Case said late last fall that 2013 would be a strong year for the company.

"We now believe estimated acquisitions in 2013 will be approximately $1.5 billion versus our prior estimate of at least $1.25 billion, as acquisitions activity remains robust," Case said.

Of the 3,866 properties in RIC's portfolio, 3,846, or 99.5 percent, are single-tenant properties, and the remaining 20 are multi-tenant.

Del Mar Heights-based American Assets Trust (NYSE:AAT) wasn't nearly as active on the acquisition front as Realty Income in 2013, but it amended and restated its $250 million credit facility to prepare for future acquisitions of office and retail properties.

"We continue to review acquisition opportunities in our primary markets that would complement our portfolio and provide long-term growth opportunities," American Assets wrote, adding that interest rate changes might impact its ability to acquire new assets.

The company's portfolio comprises approximately 3.1 million rentable square feet of retail and 2.6 million square feet of office space, along with a Waikiki hotel and 900 apartments.

Los Angeles-based Kilroy Realty Corp. (NYSE: KRC) has less office space in San Diego County since selling off 13 of its loca properties to focus more on markets like San Francisco and Seattle.

Last month it announced a 1.1 million-square-foot, San Diego property portfolio sale to a Starwood Capital Group entity for $327 million. The properties are in Sorrento Mesa and Carmel Mountain Ranch.

At the time of sale, Kilroy -- which still has about 4 million square feet of office space in San Diego -- said assets commanding such a high price is a testament to the San Diego market's strength.

Other local REITs include University Towne Centre-based Retail Opportunity Investments Corp. (Nasdaq: ROIC), which paid $153.7 million to acquire three grocery-anchored centers in the third quarter of 2013 and has a binding contract to acquire a fourth center for $32.5 million.

The properties include the remaining 51 percent interest in the 464,822-square-foot Crossroads Shopping Center in Bellevue, Wash.; the 161,000-square-foot Five Points Plaza in Huntington Beach; and the 71,000-square-foot Robinwood Shopping Center in West Linn, Ore.

ROIC also has contracted to acquire the 95,000-square-foot Peninsula Marketplace in Huntington Beach.

"Having secured a record $368 million in shopping center acquisitions, 2013 is proving to be our most active and successful to date.," said Stuart Tanz, ROIC president and CEO said after the end of the company's third quarter.

As of Sept. 30, 2013 ROIC owned 51 shopping centers totaling approximately 5.5 million square feet across the country.

Rancho Bernardo-based Excel Trust (NYSE: EXL) -- which also specializes in retail shopping centers -- acquired the leased portions of the 403,526-square-foot Stadium Center in Manteca, Ca. for $41.2 million in July, and a major part of the 474,990-square-foot League City Towne Center in the Houston area for $39.5 million in August.

Excel Trust also had a significant sale last year when it parted with the 228,236-square-foot Grant Creek Town Center in Missoula, Mont. for $32.3 million in September. Excel said it realized a $10.8 million gain on the transaction.

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