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Local real estate investment firms find business elsewhere

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A number of locally based, privately held commercial property investors have at least one major thing in common -- they like going out of town to buy properties.

This week American Recovery Property Trust, a unit of San Diego-based Sovereign Capital Management, joined with New York City-based Northwood Investors to acquire the 524,800-square-foot Congress Center in Chicago for $95 million.

Sovereign Capital has been busy, having just acquired Inifinity Urban Century's interest in Daymark Realty Advisors for an undisclosed sum earlier.

Carlsbad-based Terramar Retail Centers announced this week that it had paid $42.2 million to acquire the 93,873-square-foot Spring Street Pavilion in Long Beach.

"Long Beach is experiencing prolific growth and the center has a dominant location in a region with very strong demographics and a large customer base,” said Steve Bowers, Terramar president and CEO.

Terramar Retail Centers is a commercial investment, management and development company.

Since its founding in 1996, it has acquired and managed more than 6.5 million square feet of retail properties.

Terramar is currently under construction on The Headquarters at Seaport District, a restoration and reinvention of the historic 1930s-era Old Police Headquarters property into a premier 100,000-square-foot open-air restaurant, retail and entertainment venue adjacent to the company’s signature Seaport Village leasehold.

Terramar currently owns and operates 24 neighborhood, community, specialty and power centers totaling more than 3.6 million square feet in the Western United States.

Earlier this month locally-based MG Properties Group -- which according to the CoStar Group (Nasdaq: CSGP) owns 16 apartment complexes -- representing about 2,500 units in San Diego County alone, acquired a four-property portfolio in Lancaster, Calif.

The properties – Cordova Park (416 units), Granada Villas (320 units), Sienna Heights (314 units) and Woodlands West (140 units) – were purchased for $91.75 million from a private seller who wasn’t identified.

MGPG President Mark Gleiberman called the transaction "a unique opportunity to leverage both MGPG's operational expertise and historically low long-term financing rates to generate high cash-on-cash returns for our investors based on current operations."

Built between 1984 and 1990, the properties are located along the Interstate 14 freeway and near retail amenities, public recreation facilities and Lancaster's recently redeveloped Boulevard District.

In a statement, Justin Smith, MGPG's senior vice president of investments, called the purchase, "an extension of our strategy of acquiring high-quality assets in secondary markets.”

Since December 2010, MGPG has completed 14 multifamily property acquisitions totaling 3,391 units at a value of more than $380 million.

MGPG anticipates closing an additional $200 million in new acquisitions within the next 12 months.

MGPG, which employs 250, has acquired 80 multifamily developments totaling nearly 13,700 units during the past 20 years.

The company's current portfolio includes 42 properties with 9,500 units in California, Washington, Arizona and Nevada, and represents approximately $1 billion in total asset value.

In August, Westcore Properties, which owns primarily office and industrial properties from San Diego to Switzerland, paid $45.6 million for the 673,177-square-foot Kato Industrial Park in Fremont in Northern California.

Westcore-owned properties that aren’t here include two 437,214-square-foot warehouse buildings in Plano, Texas; a 455,000-square-foot industrial building in Charlotte, N.C.; the 475,000-square-foot Greenville Center in Livermore, Calif.; and a 724,800-square-foot industrial building in Lodi, Calif.

University Towne Centre area-based Westcore has owned and/or managed some $3.9 billion worth of industrial and office assets, totaling some 26 million square feet, in 550 buildings.

Assets owned by Westcore here include the 224,630-square-foot Miramar Industrial Center, the 128,000-square-foot Southrail Business Center and the 102,113-square-foot Sandrock Industrial Park in Kearny Mesa.

Pathfinder Partners LLC, a San Diego-based company specializing in making opportunistic investments in distressed real estate properties and defaulted loans, has made a couple of new acquisitions in recent weeks.

One of these acquisitions was that of the Tuscan Townhomes, a luxury, 63-unit, townhome project located at 11511 Magnolia Avenue in Riverside.

Pathfinder and its operating partner, Stratford Partners, acquired the property for $10.55 million.

Tuscan Townhomes, a gated community, was completed in 2009 and is currently fully leased. All units are two-story, two-bedroom, two-and-a-half-bath luxury townhomes averaging 1,200 square feet.

"Riverside is one of the fastest growing metropolitan areas in California -- with easy access to Orange, Los Angeles and San Bernardino counties, and housing prices here are finally on the upswing," said Lorne Polger, Pathfinder Partners senior managing director. "We believe this is the strongest submarket within the area, and we were able to purchase the project at significantly below replacement cost."

Pathfinder, in conjunction with Metrowest Development, has also acquired the 40-unit McKinley Apartments in Phoenix.

Since its inception in 2006, Pathfinder has acquired more than $500 million in defaulted commercial real estate loans and REO properties.

It owns and operates several thousand residential units, and several hundred thousand square feet of office and retail space in California, Colorado, Arizona, Washington, Florida, Texas and Oklahoma.

In San Diego County, Pathfinder acquired the 68,000-square-foot EastLake Medical & Professional Center (an office and medical condominium property) through a foreclosure action in May 2011.

Pathfinder also owns the 14-unit Leucadia Shores Apartments in Encinitas and has acquired numerous single-family homes in the South and North County, through its Raintree Residential arm.

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Terramar Retail Centers

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5973 Avenida Encinas, Suite 300
Carlsbad, CA 92008

Related Videos

Old Police Headquarters transforming into retail center

Aug. 29, 2013 -- Reporter Carlos Rico visits the Old Police Headquarters next to Seaport Village as it is being converted into a shopping and dining destination.