Photo: Levelset

Written By: Teddy Swain, TRI Commercial Real Estate Advisor

Given all that is going on in the world today – Covid-19, shelter in place, record unemployment – it is now more than ever crucial that we continue to see the much needed affordable and market rate housing be built in the Bay Area. Cities and counties are still under pressure from state guidelines to meet the needed housing production thresholds despite a market that has been at a standstill for the last two months.

As things begin to open back up, it won’t take long for investors, builders, and developers to remember that the Bay Area remains one of the most underserved housing markets in the nation. To discuss how these projects can still get funded during this public health crisis I interviewed Vern Padgett, a 40+ year banking and finance veteran and colleague of mine at TRI Commercial.

Vern – I appreciate you taking the time today to talk over Zoom. Can you share a bit about your background in finance?

I started my career in business out of college back in 1977 as a management trainee at the Mechanics Bank. At that time the bank did engage in commercial real estate lending but it was typically activity in support of clients that the bank had worked with for multiple generations. It was a rather docile institution from a business development standpoint.

As I worked my way up through Mechanics Bank, I became involved more and more with CRE lending and eventually started the corporate banking division. We basically revamped the bank into a real estate industries group and a corporate banking group. I took over the real estate industries side as that was my specialty for several years and eventually left the bank in 2006. I was then a founding member of Presidio Bank and after that the Chief Banking Officer at Bay Commercial Bank. Eventually I left Bay Commercial to start Black Oak Ventures where we offer more creative bridge financing for borrowers who aren’t quite ready for the institutional lenders for whatever reason.

Let’s jump right in with two examples of spec housing development: an 8 unit condominium project and a 100 unit mid rise apartment building. Both are speculative housing developments but both have vastly different debt requirements. How are those loans typically funded?

The first, smaller project would be of interest to your local or regional bank and there are any number of those banks in the Bay Area that would be interested in funding those loans today.

For the larger loan you are going to look for somebody in the market that is looking to fund a larger deal. Wells Fargo is the knee-jerk option because they are probably the most active in that space. They are very fussy about who they lend to so you’re going to need to be a Wells Fargo client in order to get a Wells Fargo loan. Union Bank would also be a lender that may be interested as they are also a large player in that space. All these guys basically operate in a similar way; they have hold limits so they’ll do a $100MM loan but they won’t hold the full amount. They’ll participate out with bank partners so you may have a Wells Fargo originating the loan but they’ll have a ‘bank club’ and bring in say Union Bank, B of A, California Bank and Trust and they’ll spread the $100MM across their partners and keep the piece they want.

So essentially on the larger loans banks are spreading out their holding risk with a select number of bank partners?

Yes – that’s the business that a lot of these big lenders are in. They’re in the business of managing the big relationships, taking care of their client needs, absorbing the amount of balance sheet exposure that is best for them and shedding the rest to their bank participants. Loan demand isn’t high enough for a lot of the bank participants who try and originate their own deals and they don’t have the clients to fill their balance sheets. We are wash with liquidity right now, so as one of these banks you don’t want to be running at 60% loans to deposits because you don’t make any money, you want to be up around 80%, 90% or 100%. That’s why these partner banks are out there anxiously buying participations.

How has the underwriting for these loans changed given the trouble our economy is facing?

Well, there hasn’t been that much done in the last month and a half. Things have pretty much tamed down as people wait to see how things will play out but I’ve talked to a number of construction lenders recently who are still actively soliciting projects and have closed construction loans on the smaller type deals that we discussed. However, post Covid-19 the rules on those loans have changed: you need to be able to underwrite a hold on the loan as though you are going to hold the asset long term as an apartment building and cover it at a Debt Service Coverage on a 25-year amortization of that construction loan fully funded based on your proforma. Construction lenders today are looking to price their loans on an either or basis; say prime plus 1 – prime is currently 3.25% – so that is a 4.25% minimum rate but they probably are going to fix the floor at 4.5%. So, you can look at it as prime plus 1 or 4.50%, the higher of those two.

I would say that the underwriting metrics have been tightened down a quarter twist on the screw. Deals that would have been done at say 70% of retail value are now being done at 65%. So you’re seeing like a 5% cram down on the tightness of the underwriting. I think we still need a couple of months to see really where things will land.

We are currently in the midst of the pandemic; do you see lenders’ ability to fund construction loans like the two in our example continuing?

The answer to the question really depends on the product type and the track record of the sponsor. Retail development right now is somewhat radioactive so you’re probably not likely going to see much ground up retail development… for obvious reasons. Multifamily though is radically underserved especially in the Bay Area. It is very difficult to achieve entitlement for multifamily and the cities are under immense pressure from the state to fulfil their housing mandates and so I would suspect there will continue to be heavy demand as lenders like to see unfulfilled demand as a driver behind the reason to develop real estate. Not withstanding all the trouble that the economy is dealing with at large today as a result of COVID-19 and the SIP regulations; I can’t imagine that there will be any kind of long term interruption in that category from a lending standpoint.

There seems to be a shift towards pursuing business with existing clients rather than procuring outside clients that lenders may not have an existing relationship with, is this correct?

Yeah, it’s not as though we are in the midst of a go-go upcycle where banks are going to stretch to open up the doors to people who have very limited experience. People who used to work for a homebuilder and now want to BE a homebuilder are going to have a tough time. Those that have relationships and can demonstrate a successful track record in-line with the deal that they are trying to get approval for will still be able to find success today.

If you had to summarize our conversation into a few main takeaways what would they be?

I recently had a discussion with Bank of Marin regarding post Covid speculative for-sale residential product. Some of the key points that we discussed were:

  • The Bank maintains interest in the space and will lend a maximum of 70% of Bulk Sale Value (prospective completed value method), or 70% of documented Developer cash costs (the lesser of)
  • Will lend up to 18 months with a Coupon Rate to float at Prime + 1%, with Floor of 4.5% – 4.75% and a 1% Loan Fee plus all transaction costs for Borrower’s account
  • Release pricing on unit sales will be 125% of par, per unit, or 100% of net sales proceeds (the greater of the two)
  • Borrowers are to reflect solid successful track record with projects of a similar scope and complexity, with deep experience, demonstrable global liquidity, cash flow, and positive referrals from reliable sources.
  • Loans to be structured with full recourse to sponsorship via unconditional repayment guarantees with contingencies and contractor suitability is to be acceptable to Bank

Written By: Teddy Swain, TRI Commercial Real Estate Advisor

With 10,000+ units under construction and just as many more approved or proposed in the pipeline, there is no denying the San Francisco East Bay Area is experiencing a significant construction boom unlike past development cycles. To fuel that amount of new development the region is host to a massive influx of capital investment that, in the past, has seemingly been limited to only San Francisco and the Peninsula. With a large portion of those investment dollars flowing into new development projects, where does that leave all of the existing, aging product? I caught up with Eric Wang, Principal at Rev Projects, a Bay Area investor and developer to explore how he finds opportunity in existing buildings.

Eric focuses on revitalizing underappreciated properties – hence the name Rev Projects – in order to return profits to his investors and also the communities in which he works. Alongside his investments, Eric partners with local non-profit organizations specializing in areas of rehabilitation, homelessness, and education through donating a portion of his upfront fees on every deal. Some of Rev Projects past investments include Old Mother’s Cookies Lofts in Oakland, a R&D facility in Fremont, and most recently student housing in Berkeley. During this interview, Eric takes us through his decision making process for his latest student housing investment, where he finds opportunity in today’s market, and why he chose to invest here in the Bay Area. 

Thanks again for doing this, Eric. Let’s start with your background. How did you get into real estate?

Well let’s see, I started right out of college as an investor in institutional real estate with Prudential Real Estate Investors. I really valued those early experiences at Prudential because I got to understand, on a professional level, how institutional investors approach deal making, manage their investments, and develop projects! I eventually decided to go out on my own and that is when the idea to do Rev Projects came to life.

What motivated you to start Rev Projects and what exactly do you do?

I wanted to work on deals that I care about in areas that I care about. Rev Projects is focused on the middle market and acts as an investor, operator, and developer. Right now our focus is on the East Bay because we feel there is still a lot of value that we can add.

A lot of cities in the East Bay have seen significant inflow of new residents. Old Mother’s Cookies in Oakland was a perfect example of this: its former use was a cookie factory and several years ago a developer bought and re-purposed it into live/work housing to support an increased demand for loft style units with creative space.

Why the Bay Area?

This is a very good question; first things first, I wanted to be as close to the projects I work on as possible and I live here, so in that respect, the Bay Area made sense. The Bay Area is also one the strongest markets in the world. As an investor, if you are looking for a ton of upside on your investment, the Bay Area had that for a while but markets are now pretty much stabilized. However, what comes with that stabilization is some downside protection because it is such a core market, unlike some of the other tertiary markets that I think could be hurt in a falling economy.

If you don’t get the upside investing in the Bay Area that you might get elsewhere, fine, but you do get some protection. I think sooner rather than later people in my field are going to have to start thinking about not losing money rather than just the upside on their deals. That could happen tomorrow or it could be sometime in the next couple of years but that’s where people’s minds should be.

How do you approach each of your investments?

The approach I take is very much a value-add investment approach slowly underwriting and evaluating deals on a case by case basis. I only move forward with projects that I feel very comfortable with in terms of my strategy and execution. I am not a fund; I don’t need to deploy a ton of idle cash immediately so therefore I do fewer deals and tend to let stuff pass by. The deals that I really care about and I think I can do something great with I pursue.

In 2019 Rev Projects acquired a 120-unit student housing building on Telegraph Avenue in Berkeley. Can you take us through the strategy and decision making behind that deal?

Yes, Spectra Southside is essentially student housing. When it was first brought to my attention, I immediately noticed its location was just steps from the UC Berkeley campus and after some further investigation I realized it was very poorly managed. The property had been leased to a master tenant who was managing all of the residential units and that was just not run very well. I also knew that because students frequently move in and out, I would be able to get in there right off the bat and complete the improvements that were needed.

What are your thoughts on investing in Student Housing in general?

Student housing is more recession resistant than traditional housing, especially if you are close to a tier-one university. This is particularly true in supply constrained areas like Berkeley where there is already limited housing and university enrollment is increasing. You know, often times university enrollment increases during bad economic times because people want to go back to school to earn a higher degree.

I think overall, student housing is a great investment, especially at this time in the market cycle. Going in as an owner/operator you have to realize that it’s always going to be a bit heavy operationally. There is high student turnover and more wear and tear than your typical apartment complex but that’s why we contract out our property management to experts who specialize in student housing. Investors tend to pass on student housing because of the operational intensity but if its properly budgeted and managed, the pros far outweigh the cons.

East Bay Area housing development is booming. Would you consider getting involved with a ground up housing project?

Where I’m at right now with Rev Projects is very focused on acquisition, renovation, and revitalization. Taking old projects and breathing new life into them. That is fun enough for me!

If we were at a different point in the market cycle, I might reconsider my answer and take a look at some sites but ground up development is a different business entirely. I would love to be there one day but I don’t feel a deep need to be there today. Get back to me in 10 years and let’s see where I’m at.

So, what’s next for Rev Projects?

Well like I said, I operate in this middle market space where I’ve done a live/work loft deal, I just sold a R&D building, and now I’m working on the student housing project I bought last year. I am currently underwriting a couple of office deals so I actually stay pretty open in terms of asset type. I give up deal flow and total dollars invested for high quality deals that I know I can execute, no matter what asset type.

So, what’s next? That’s always the question and I leave it open – actually, what’s next is a good deal! 

November 15, 2019

SoMa, San Francisco, TRI Commercial, Brookfield, Peacock Construction
465 Tehama Street

Activity remains hot in San Francisco’s central SOMA (South of Market) district as developers target the area for new opportunity. Buyers remain on the hunt for opportunities to reap the benefits, snapping up properties as they hit the market. Barry Bram, Principal of TRI Commercial/CORFAC International, recently represented sellers of two unique properties in this district, 465 Tehama and 960 Howard, selling for $8.4 and $5.6 million, respectively. At 465 Tehama, TRI Principal Cal Nakanishi represented the buyer.  

The two buildings sit at the heart of a burgeoning wave of development in central SOMA, just blocks from Brookfield’s proposed 5M development near Mission and 5th Street. Plans for the nearly 1.7 million-square-foot mixed-use project will include seven buildings and 60,000 square feet of open space. Proximity to this type of development activity draws interest and bodes well for building owners. 

Zoned for mixed-use residential (MUR) development, the Tehama property is a fully rehabbed 8,000-SF state-of-the-art building with major upgrades to the structure/foundation, ADA life safety, electrical and plumbing systems. The buyer, Peacock Construction, will occupy the building as owner/user. 

Bram offered a few words of advice for buyers interested in property undergoing significant renovation or rezoning, “Buildings in this area are few and far between, and any building with a significant footprint is fought over by interested buyers the minute it becomes available, or is even thought to be available.  Zoning and use continue to be an area worth investigation prior to leaping forward, but it rarely creates an insurmountable challenge.” 

Over the past five years, the price per square foot for office buildings in central SOMA has increased by more than 35% and industrial flex by 44%, respectively. Recently, Ellation, Akga and Pivotal took significant blocks of space and Nektar Therapeutics is expected to move into more than 100,000 square feet nearby. 

With all the current details and potential pitfalls of zoning and owner use, Nakanishi said “the buyer of Tehama formed a team consisting of a land use attorney, San Francisco zoning consultant, architect, broker and lender  to minimize unforeseen complications related to zoning and use. The negotiations were efficient and minimized delays since all team members were communicating with input.”  

The Howard Street property, a longtime family-owned asset, sits on two parcels with a total footprint of 12,000 square feet, just two blocks off Market Street. Bram noted the buyer has plans to develop office and residential space. “It was a major coup for the buyer to be able to secure this purchase, with the pace of development in Central SOMA and limited investment opportunities,” he said. 

960 Howard Street

About TRI Commercial/CORFAC International

Founded in 1977, TRI Commercial/CORFAC International is a leading Northern California commercial real estate brokerage and property management firm (with more than 4 million square feet of commercial property under management) specializing in San Francisco, East Bay and the Sacramento Metro property markets. The company has expertise in tenant and landlord representation services and helps clients buy and sell commercial and investment-grade property. The company serves office, retail, and land, multifamily and industrial property sectors, with offices in San Francisco, Walnut Creek, Oakland, Roseville, Sacramento, and Rocklin. For more information call Dina Gouveia in Corporate Marketing at 925.269.3305

CORFAC International is comprised of privately held entrepreneurial firms with expertise in office, industrial and retail properties, tenant and landlord representation, investment sales, multifamily, self-storage, acquisitions and dispositions, property management and corporate services. For more information on CORFAC’s International presence, call the Chicago headquarters at 224.257.4400

View the original article on The Registry here.

Goodwill will occupy the building at right in the Foothill Farms Plaza retail center at 5401-5445 Auburn Blvd.
BEN VAN DER MEER | SACRAMENTO BUSINESS JOURNAL

By Ben van der Meer  – Staff Writer, Sacramento Business Journal
Sep 23, 2019, 9:56am EDT

On the corner of a busy intersection, the Foothill Farms Plaza retail center is a bit tired, something even the owner said he’d admit.

That’s beginning to change, though, with a $2 million investment at 5401-5445 Auburn Blvd. to refresh the buildings and bring in a new anchor tenant.

“We had an opportunity to buy and we had a relationship with Goodwill,” said Alan Gottlieb, president of Calabasas-based Real Estate Affiliates. “We felt they would add a lot to the center and to the community.”

Built in 1960, the 202,554-square-foot center has about 65,000 square feet of buildings. Goodwill will fully occupy a 34,000-square-foot building that formerly housed a grocery store but is currently being gutted for the new tenant.

“At Goodwill, we’re always looking for places where we can do the most good in the community,” said Rachel Wickland, chief mission officer for Goodwill Industries Sacramento Valley & Northern Nevada. The Foothill Farms location will have retail sales, donation drop-offs and community training, she said.

Gottlieb said that as Goodwill moves into its new space, the rest of the center is getting updated landscaping, parking, and other improvements, while anchors Harbor Freight Tools and O’Reilly Auto Parts will remain, though their buildings will also be improved.

Two spaces, of 4,800 and 1,500 square feet, are available. Bryan Wirt of TRI Commercial/CORFAC International is the broker for those spots. Gottlieb said the larger location would be ideal for a boutique gym or dance studio, while the smaller would best house some kind of food-related use.

According to Gottlieb, Goodwill is set to open in the first quarter of 2020, though Wickland said it could be as soon as November. Most of the rest of the property work should be done by November, Gottlieb said.

Property records with real estate data site Reonomy Inc. show Foothill Farms Sacramento LLC, with an address in Calabasas, bought the property in April for $5.2 million.

View original article on the Sacramento Business Journal here.

AUGUST 22, 2019 |ELENA HARRIS
Berkeley Land Company Sells Building in Multimillion-Dollar Deal

An office and retail building in Old Town Danville, California, has been sold to an Orange County investment firm.

The Laguna Niguel-based Blue River Equity purchased the building at 321 Hartz Ave. from the local Berkeley Land Company for $6.25 million, or about $551 per square foot.

Constructed in 1985, the two-story, 11,333-square-foot property is home to multiple tenants, including real estate firm Rassier Properties, Patterson Ranch Co., America’s Best Karate, Vector Marketing, Antigua Doors, Salon H and speakeasy-inspired wine bar Auburn Lounge.

Berkeley purchased the property back in 2004 for $3.5 million.

Edward Del Beccaro and Theodore Bard of TRI Commercial/CORFAC International represented the seller in the deal.

Please see CoStar COMPS #4812841 for more information regarding this transaction.

View the original CoStar article here.

By Ben van der Meer  – Staff Writer, Sacramento Business Journal
Aug 15, 2019, 2:58pm PDT Updated Aug 15, 2019, 7:11pm EDT

An industrial property at 1455 E. Kentucky Ave. in Woodland, which sold recently for $7.75 million, has both sizable yard space and access to a rail spur as points in its favor, said a broker on the deal.

A sought-after feature made a Woodland industrial property desirable. And for the buyer, another rarely found feature made it even better.

Both a sizable yard and access to a rail spur characterize 1455 E. Kentucky Ave., which Redding-based Gerlinger Steel & Supply Co. bought in early July for $7.75 million.

Jeff Post, a senior vice president with TRI Commercial/Corfac International who worked on the deal, said Gerlinger already owned an adjoining property in Woodland. The property at 1455 E. Kentucky Ave. has eight buildings and about 77,000 square feet of space.

“Us brokers call that low hanging fruit,” said Post, who represented the seller, Nampa, Idaho-based Gayle Manufacturing Co. Gerlinger will lease the property to ConXtech, a construction technology company relocating to Woodland from a site in Hayward, where a comparable property can be three times as expensive on a square-foot basis. “Of the 18 acres, half is yard space, and it has rail. That’s very beneficial to both.”

Tim Gerlinger, Gerlinger’s vice president, said the company wasn’t really looking for a local property, until 1455 E. Kentucky became available.

“It’s directly south of our property, so it was a good opportunity to expand,” he said. Though ConXtech will be the primary tenant, the rail spur access will make it easier to get materials from the Midwest for Gerlinger’s operation, he said.

A representative for Gayle Manufacturing did not return a message seeking comment. Post said Gayle’s directors decided late last year to consolidate operations in Idaho and close the Woodland site, though the company still has a small office here.

Industrial users, particularly construction companies, are on the hunt for yard space because they can use it to store equipment, vehicles and materials, Post said. As homebuilding and other construction sectors have grown in recent years, the availability of properties with sizable yards is 3%, he said. In the Woodland/Davis area, overall vacancy for industrial properties is 4.5%, according to TRI Commercial’s second-quarter figures (download the full TRI Sacramento Q2 Industrial report here).

“The fact that it has a very hard-to-find rail spur and a surplus yard, that’s next to impossible to find,” Post said.

Zac Sweet of Buzz Oates worked on behalf of the buyer in the deal.

View original Sac Business Journal article here.

Marilyn Hansen Joins TRI Commercial/CORFAC International in Walnut Creek

WALNUT CREEK (APRIL 23, 2019) – Longtime commercial real estate advisor Marilyn Hansen has joined TRI Commercial/CORFAC International in Walnut Creek as Senior Director. With more than 30 years’ experience in investment and leasing advisory, she will primarily focus on retail and investment brokerage by providing location intelligence, strategic planning, property acquisition and disposition for clients.

“We are pleased to welcome Marilyn to our East Bay office. With her considerable tenure in the industry, she strengthens our continuing efforts to provide a sophisticated platform to serve clients in the East Bay,” TRI Executive Vice President and East Bay Regional Manager Edward Del Beccaro said.

Despite reports of an impending market slowdown, Hansen is bullish on the investment market in the East Bay. “The market is strong, with low supply and high demand and l expect this trend to continue throughout 2019.  Economic indicators suggest we’re at the top of the market right now and as investor demand slows, we’ll see more buying opportunity for owner-users,” said Hansen. “Buyers and sellers are looking for brokers who can bring value-add to the table with deep local knowledge of the market, understand future trends in the industry as well as current financial and accounting regulations.”

According to the first quarter, 2019 TRI Northern California retail market report current vacancy sits below 5% with almost 2 million square feet under construction. Hansen believes there will always be a need for brick and mortar retail, though companies will have to adapt to evolving consumer habits.  Struggling retailers will disappear, stores will continue to “right size” and carry less inventory.  Successful companies will create a reason to shop, through retail experience, and AI will play a major role in the future of retail.

Before joining TRI, Hansen was with Colliers International in the East Bay and Grubb & Ellis in Silicon Valley. She is active in a variety of professional and community organizations including, the International Council of Shopping Centers (ICSC), Commercial Real Estate Women (CREW Network), Women Influencing Sustainable Change (WISC) and ProVisors, a professional networking organization.

About TRI Commercial/CORFAC International
Founded in 1977, TRI Commercial/CORFAC International is a leading Northern California commercial real estate brokerage and property management (with over 4 million square feet of commercial property under management) firm specializing in San Francisco, East Bay and the Sacramento Metro property markets. The company has expertise in tenant and landlord representation services and helps clients buy and sell commercial and investment-grade property. The company serves office, retail, and land, multifamily and industrial property sectors, with offices in San Francisco, Walnut Creek, Oakland, Roseville, Sacramento, and Rocklin. For more information, visit www.tricommercial.com.

CORFAC International is comprised of privately held entrepreneurial firms with expertise in office, industrial and retail properties, tenant and landlord representation, investment sales, multifamily, self-storage, acquisitions and dispositions, property management and corporate services. For more information on the CORFAC visit www.corfac.com.

View original article on The Registry.

Marilyn Hansen has joined TRI Commercial/CORFAC International in Walnut Creek as senior director with more than 30 years’ experience in investment and leasing advisory.

By Lisa Brown | April 24, 2019 at 04:03 AM

WALNUT CREEK, CA—Longtime commercial real estate advisor Marilyn Hansen has joined TRI Commercial/CORFAC International in Walnut Creek as senior director. With more than 30 years’ experience in investment and leasing advisory, she will primarily focus on retail and investment brokerage by providing location intelligence, strategic planning, property acquisition and disposition for clients.

Despite reports of an impending market slowdown, Hansen is bullish on the investment market in the East Bay.

“The market is strong, with low supply and high demand, and l expect this trend to continue throughout 2019. Economic indicators suggest we’re at the top of the market right now and as investor demand slows, we’ll see more buying opportunity for owner-users,” said Hansen. “Buyers and sellers are looking for brokers who can bring value-add to the table with deep local knowledge of the market, understand future trends in the industry as well as current financial and accounting regulations.”


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View original article here.

Three Oakland office towers are bought by East Coast investors for $494 million

Oakland’s Lake Merritt business district, a downtown area where three high rises have been bought. Three office towers in downtown Oakland have been bought by an East Coast investment group in a mega deal that places on the three high rises a combined value of nearly $500 million. Google Maps

By GEORGE AVALOS | gavalos@bayareanewsgroup.com | Bay Area News Group PUBLISHED: March 14, 2019 at 10:50 am | UPDATED: March 15, 2019 at 10:58 am

OAKLAND — Three office towers in downtown Oakland have been bought by an East Coast investment group in a mega deal that values the high rises at nearly $500 million and signals rising confidence in the East Bay’s largest city.

An affiliate of Connecticut-based Starwood Capital paid a combined $494 million for the towers, according to property documents filed on March 12 and March 13 with Alameda County officials.

The office buildings involved in the deal are located at 2100 Franklin St., 2101 Webster St. and 1900 Harrison St., all a short distance from Lake Merritt in downtown Oakland.

The seller was CIM Group, a developer and realty investor whose Oakland property holdings include Jack London Square, an iconic waterfront mixed-use complex.

In a separate and third transaction on March 14, CIM sold to Starwood Capital a downtown Oakland parking structure at 2353 Webster St., in a $17.7 million property deal.brought the total value of the three purchases to $512 million.

“This is a good long-term vote of confidence in favor of downtown Oakland,” said Edward Del Beccaro, an executive vice president with TRI Commercial, a real estate firm.

The deal was accomplished through two different transactions.

The office complex known as Oakland Center 21, consisting of the 2101 Webster tower, totaling 475,000 square feet; and the 2100 Franklin building, totaling 215,000 square feet; was bought by Starwood for $347.1 million, county documents show.

The 1900 Harrison high-rise, totaling 272,000 square feet, was bought for $147.2 million, according to Alameda County records.

Starwood also obtained $364.5 million in financing from Deutsche Bank to accomplish its purchases of the three office towers and the parking garage, the county documents show.

“Institutional investment money is flowing into downtown Oakland,” said Steven Banker, president of LCB Associates, an Oakland-based commercial real estate firm. “For quite a few decades, that wasn’t happening. Now it is.”

Why are investors more confident in Oakland? An array of economic trends have begun to bolster the East Bay city’s downtown district lately.

“Rental rates are likely to continue to go higher,” Del Beccaro said. “Tenants are migrating out of San Francisco. Tech companies are going to Oakland as we saw with Square.”

Square, a maker of mobile payments technologies and systems whose chief executive officer is the co-founder of Twitter, disclosed in December that it had leased all of the office space in downtown Oakland’s Uptown Station complex which formerly housed a Sears department store before it was turned into a mixed use office and retail building. Square rented 356,000 square feet in the development at 20th and Broadway, enough room to accommodate 1,700 workers.

“Oakland has a lot going for it,” Banker said. “You have the Square lease, more jobs in Oakland, you have the residential development downtown.”

Experts also believe downtown Oakland is starting to become less depending on the ebb and flow of office rents, vacancy levels and leasing activity in downtown San Francisco.

Traditionally, in past years, downtown Oakland primarily depending on landing tenants that had been squeezed out of San Francisco. When the office market in San Francisco went into a slump, tenants would tend to ignore Oakland during those cycles of weakness.

“San Francisco’s office market still has some influence on downtown Oakland,” Banker said. “But now, Oakland can stand on its own.”

View the original article on the East Bay Times here.

By Mark Anderson  – Staff Writer, Sacramento Business JournalFeb 21, 2019, 9:01am EST

A Boston-based investment manager has paid $7.1 million for 638 acres of agricultural land near Lincoln in Placer County, according to property records.

The land was purchased in two parcels of 478 acres and 160 acres.

The buyer, Hancock Agricultural Investment Group, is a subsidiary of Boston-based Manulife Asset Management, whose affiliate companies also include John Hancock Asset Management.

The recent sale, along with several other recent investments in agricultural land for wine grapesalmonds and olives, shows an increasing interest by East Coast institutional investors such as pension funds and insurance companies in buying ag land, especially for high-value crops.

“Institutional investment goes in waves,” said Jim Wirth, Senior Vice President with TRI Commercial/CORFAC International. “Especially when traditional investments are taking a beating, agriculture is seen as a good way to diversify a portfolio.” Wirth was not involved with this transaction.

“Ag has always had pretty consistent returns,” Wirth added. “You are buying a good investment over time, plus you have the underlying asset.”

Representatives of Hancock Agricultural didn’t respond to calls or emails seeking comment.

Hancock Agricultural has $3 billion in farmland assets under management. One of its larger concentrations of investment is in California, where it manages more than 65,000 acres. Its primary crops are almonds, pistachios, walnuts and wine grapes, and it has some smaller investments in alfalfa, olives and vegetables, according to its website. Its parent company, Manulife, had $93.4 billion in assets under management at the end of 2018, according to its website.

The land north of Lincoln appears to have been used to grow rice in the past and olives in recent years, based on Google satellite and ground images.

Hancock Agricultural touts production crops as good assets on its website because they offer “attractive returns, excellent capital preservation, portfolio diversification, low to moderate risk and a low correlation to traditional assets such as equities and bonds.”

To view the original article click here.