San Diego-area real estate investment trusts have been acquiring a lot of property lately, though out-of-area acquisitions are fueling their portfolios.
Escondido-based Realty Income Corp. (NYSE: RIC), which appointed John P. Case as its new CEO within the past few weeks, invested a total of $738.1 million in 190 new properties in 32 states around the country during the second quarter of the year.
Most of these acquisitions are small, single-tenant retail properties that range from oil changing outlets to fast food restaurants. All are 100 percent leased with an average lease term of 14 years and average yield of 6.8 percent. About 70 percent of the revenue generated from these assets is from investment-grade tenants.
To date, the RIC has paid 517 consecutive common stock monthly dividends throughout its 44-year operating history and increased the dividend 72 times since Realty Income’s listing on the New York Stock Exchange in 1994. The monthly dividend is supported by the cash flow from more than 3,600 commercial properties owned under long-term lease agreements with leading retail chains and other commercial enterprises. The company is an active buyer of net-leased properties nationwide.
On Oct. 1, University Towne Centre-based Retail Opportunity Investments Corp. (NASDAQ: ROIC) announced it paid $153.7 million to acquire three grocery-anchored centers in the third quarter and has a binding contract to acquire a fourth for $32.5 million.
The acquired 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 for $52.4 million; and the 71,000-square-foot Robinwood Shopping Center in West Linn, Ore. for $14 million. Robinwood is anchored by a new Wal-Mart Neighborhood Market.
ROIC also has a binding contract to acquire Peninsula Marketplace in Huntington Beach for $32.5 million. The 100 percent leased shopping center is approximately 95,000 square feet and is anchored by Ralphs Supermarket and CVS Pharmacy.
"Having secured a record $368 million in shopping center acquisitions (through the third quarter), 2013 is proving to be our most active and successful to date," said Stuart Tanz, ROIC president and CEO in a statement. "Importantly, we continue to execute our prudent strategy of carefully seeking out attractive, off-market opportunities, through capitalizing on our long-standing relationships, to acquire exceptional shopping centers in our core West Coast markets that will provide the company with a balance of stable cash flow and good growth opportunities for years to come."
ROIC's local assets include the 73,025-square-foot Bay Plaza shopping center in National City, the 68,084-square-foot Euclid Plaza shopping center in National City, and the 37,729-square-foot Bernardo Heights Plaza shopping center in Rancho Bernardo.
ROIC specializes in the acquisition, ownership and management of "necessity-based" community and neighborhood shopping centers, anchored by national or regional supermarkets and drugstores. ROIC’s property portfolio currently includes 52 shopping centers encompassing approximately 5.6 million square feet.
During the third quarter, Rancho Bernardo-based BioMed Realty Trust Inc. (NYSE: BMR) completed the previously announced merger with Wexford Science & Technology LLC, an owner and developer of institutional-quality life science real estate.
The aggregate consideration for Wexford Science & Technology was approximately $669.1 million, with a portion of the purchase price paid through the issuance of 5.9 million shares of common stock and operating partnership units. The acquisition included 1.6 million square feet of new life science space and future development rights for at least 300,000 square feet in East Coast locations such as Philadelphia and Baltimore.
Along with the Wexford properties, BioMed recently acquired 320 Charles Street in Cambridge, Mass. for about $49.5 million. The approximately 99,500-square-foot laboratory and office building is 100 percent leased.
Local BioMed assets include such properties as a 125,219-square-foot office building occupied by Bristol Meyers Squibb (NYSE: BMY) at 4570 Executive Drive in University City; a 196,557-square-foot complex at 6114-6154 Nancy Ridge Drive occupied by Arena Pharmaceuticals (Nasdaq: ARNA); and a 176,000-square-foot building constructed for Isis Pharmaceuticals (Nasdaq: ISIS) at 2855 Gazelle Court in Carlsbad.
On Sept. 30, BioMed announced it restated its senior unsecured credit facility, increasing the revolving capacity under the credit facility to $900 million and adding a $350 million term loan for a total of $1.25 billion. The REIT also has an option allowing the amount of the credit facility to increase to $1.8 billion after satisfying certain conditions.
BioMed Realty owns or has interests in properties comprising approximately 16.3 million rentable square feet across the country.
American Assets Trust, Inc. (NYSE: AAT), is now in the midst of planning more than 600 residences and commercial space for dozens of local businesses in Portland, Ore.
The Portland property Hasalo on Eighth calls for 657 residential units comprising 593,000-square feet of residential space, nearly 32,000 square feet of accompanying retail plus a 26,000-square-foot anchor tenant that could be a grocery store.
"Portland is a city of neighborhoods. All of them are distinct, but what makes them great is their human scale. They are places you can walk with your dog or your family, where you can get a great cup of coffee or an incredible meal, where you can shop for groceries or stop by the cleaners," said John Chamberlain, American Assets president and CEO. "This project is about returning that human scale to the Lloyd District."
American Assets reported that as of June 30, the company owned or had a controlling interest in 23 office, retail, multifamily and mixed-use operating properties.
Local American Assets properties include holdings such as the 520,228-square-foot Carmel Mountain Plaza in Carmel Mountain Ranch, the 77,813-square-foot Carmel Country Plaza in Del Mar Heights, the 211,848-square-foot Solana Beach Corporate Centre and the 160-unit Imperial Beach Gardens apartment complex in the South Bay.