Boston Investment Manager Pays $7.1 Million for Placer County Farmland
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 grapes, almonds 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.”
Award-winning San Francisco investment advisor Gary Cohen has a gift for unsnarling quirky puzzles in #CRE. His five-year quest to track down the owners of 500 Turk St. and acquire the property on behalf of his client, Tenderloin Neighborhood Development Corporation, is a prime example.
Through his work with TNDC, Gary is always on the lookout for potential sites for affordable housing development in San Francisco. The property at 500 Turk St. was perfect, but seemingly unattainable. It hadn’t been on the market in 50 years or more.
“Everyone in town had their eye on that property, but no one could figure out who owned it,” Gary said. An infamous tire repair shop, Kahn & Keville, had been there for decades, remaining virtually unchanged as the neighborhood modernized around it. It was clear that the current ownership was not aware of the potential of the property. An initial public records search revealed that it was held in a trust, but all the trustees had long since passed away. Gary’s interest was piqued.
“It was really a question of digging past the surface,” he said. “The rent had to be going somewhere . So, I decided to follow the money.”
For five years, Gary chipped away at the mystery, sifting through old records and circumventing dead ends until he found a 1953 trust document that led him to the former owner’s son. He’d inherited the property with his sisters, who also live out of state.
Once Gary managed to connect with the owner, it was a fairly uncomplicated transaction. His determined detective work paid off with a win for all the parties. TNDC got a great property for a new affordable housing project, and the owner transformed an under-performing asset and traded into a more conveniently-located East Coast property with a significantly enhanced return.
It’s like the saying goes, “Never stop trying. You’ll never know how close you were to succeeding…”
Henry specializes in Investment properties, including apartments, industrial, commercial and mixed-use developments. Henry has been associated with TRI Commercial since 1995 and has successfully completed sale and lease transactions in the greater Bay Area, and more particularly in the South of Market and Northern Peninsula areas. Henry is a member of the San Francisco Board of Realtors, the California Association of Realtors, and the National Association of Realtors.
By Lisa Brown | Reporter for Globest.com
SAN FRANCISCO—A trifecta of transactions that were all associated with a single Mission District property were marketed and closed by TRI Commercial/CORFAC International, according to president Tom Martindale, SIOR. The buyer of the building located at 2650 18th St. was Chai LP, a multi-generational, family-owned real estate investor based in San Francisco.
In the initial transaction, Jason James, senior adviser at TRI, marketed and subsequently sold the two-story, 34,400-square-foot, production/distribution/repair (PDR) zoned industrial building with 42 below-grade parking spaces. He represented the seller, 2650 18th Street LLC, in the $14.25 million deal, where the property was occupied by Weston Wear. James subsequently represented Weston Wear in its relocation to 389 Oyster Point Blvd. in South San Francisco, where it now occupies approximately 12,000 square feet.
While the Mission property was in escrow, James also leased the entire building to Zesty, a catering company that delivers, sets up and serves healthy restaurant-made meals to businesses throughout San Francisco. The company plans to take occupancy of its new space soon. Zesty was founded in 2013 and is backed by numerous Silicon Valley investors and venture funds. KQED,Heath Ceramics and HTC (designer of Android phones) are located across the street from the future Zesty headquarters.
James tells GlobeSt.com: “The active sale environment and the demand for such limited blocks of space is very indicative of what is going on with the market, there’s more demand than available space.”
James said that 2650 18th St. was offered for sale unpriced and during the listing period, there were many offers for the property from a variety of investors, as well as potential owner/occupiers.
“Given how hot the San Francisco market is and the highly desirable location of this property, I was not surprised by the level of activity the offering generated. It really could have gone in the other direction of being purchased by a developer with an eye toward adding additional floors to the site, but we found a local investor who wanted it as-is and a tenant that was willing to renovate the building on their dime,” he added.
As previously reported, a historic preservation effort includes a project in the Mission.
TRI Commercial/CORFAC International Completes a Trifecta of Deals Associated with a SOMA Commercial Property
San Francisco, California (October 12, 2015) –TRI Commercial/CORFAC International President Tom Martindale, SIOR, announced today that Senior Advisor Jason James has completed a trifecta of transactions that were all associated with a single property in the SOMA (South of Market) area of San Francisco.
James marketed and subsequently sold a two-story, 34,400-square-foot, PDR zoned industrial building with 42 below-grade parking spaces located at 2650 18th Street in the Mission District of the city. He represented the seller in the $14.25 million deal – 2650 18th Street LLC, which was occupied by Weston Wear.
The buyer of the building was Chai LP, a multi-generational family-owned real estate investor based in San Francisco.
While the building was in escrow, James also leased the entire building to Zesty, a catering company that delivers, sets up and serves restaurant-made meals to businesses throughout San Francisco. The company was founded in 2013 and is backed by numerous Silicon Valley investors and venture funds. James said that Zesty plans to take occupancy soon. KQED, Heath Ceramics and HTC (designer of Droid phones) are located across the street from the future Zesty headquarters.
James concurrently represented Weston Wear in its relocation to 389 Oyster Point where it now occupies approximately 12,000 square feet.
James said that 2650 18th Street was offered for sale unpriced and that, over the course of the listing, there were many offers for the property from a variety of investors, as well as potential owner/occupiers.
“Given how hot the San Francisco market is and the highly desirable location of this property, I was not surprised by the level of activity the offering generated. It really could have gone in the other direction of being purchased by a developer with an eye toward adding additional floors to the site, but we found a local investor who wanted it as-is and a tenant that was willing to renovate the building on their dime.” James said.
“The active sale environment and the demand for such limited blocks of space is very indicative of what is going on with the market, there’s more demand than available space.” he added.
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 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, Oakland, Walnut Creek, Sacramento, Roseville and Rocklin. For more information, visit www.tricommercial.com or call 415.268.2200.
About CORFAC International
CORFAC International is comprised of privately held entrepreneurial firms with expertise in office, industrial and retail, tenant and landlord representation, investment sales, multifamily, self-storage, acquisitions and dispositions, property management and corporate services. Chicago, IL-based CORFAC has 48 offices in the U.S., 7 in Canada and 25 offices internationally. Founded in 1989, CORFAC firms completed (in 2014) more than 10,000 lease and sales transactions totaling 400 million square feet of space valued in excess of $7.4 billion. For more information on the CORFAC network, call the Chicago headquarters at 224.257.4400 or visit www.corfac.com
On behalf of TRI Commercial we are pleased to welcome Lawrence Chan to the San Francisco Office.
Lawrence Chan
Lawrence has a B.S. in Biochemistry from the University of California, Davis and an MBA from the Kellogg School of Management, Northwestern University and has spent the last 25 years in the biotechnology industry in sales and marketing positions. He is a proud native of San Francisco and lives in the city with his wife, Michaela, two children, Mila (9) and Kian (6), and Jax, the family cat.
Specialization
Through acquiring and managing a large portfolio of properties, Lawrence grew a passion for and specializes in Multi-Family investments and has become extremely well-versed in the San Francisco’s rent control ordinance.
“This is one of the most prominent grocery-anchored retail centers on one of the busiest intersections in Sacramento… it is definitely a great piece of real estate,” Wirt tells GlobeSt.com.
SACRAMENTO—The University Village Shopping Center, located at the southeast intersection of Fair Oaks Blvd. and Howe Avenue in Sacramento has changed hands. The seller wasHowe and University LLC, a local investor that acquired the property in 2002.
Merlone Geier Partners, a San Francisco-based investment company, purchased University Village Shopping Center for an undisclosed price, which is reportedly said to be around $20 million.
TRI Commercial/CORFAC International’s Bryan Wirt was the only broker involved in the deal. The 82,688-square-foot shopping center is approximately 97% occupied with only one, 1,700-square-foot space available for lease.
“This is one of the most prominent grocery-anchored retail centers on one of the busiest intersections in Sacramento… it is definitely a great piece of real estate,” Wirt, who specializes in retail real estate investment sales, tells GlobeSt.com.
Wirt adds that it was a “value-add” investment for Merlone Geier Partners and that portions of the property could be redeveloped to add more retail space.
The center, located at 27 University Ave., is anchored by Safeway in approximately 27,000 square feet. Other tenants include CVS, Citibank, Starbucks, AT&T and Bandera Restaurant.
Merlone Geier Partners is a private real estate investment company focused on the acquisition, development and redevelopment of retail and retail-driven mixed-use properties on the West Coast. Primarily focused on community and neighborhood shopping centers, the firm and its predecessor, M&H Realty Partners, has been actively investing in West Coast retail property since 1993.
Owner/User Buys Flex Bldg in Roseville for $3.2 Million Family Trust Sells 7501 Galilee
By Ann O’Brien
September 9, 2014
An individual owner/user purchased the flex building at 7501 Galilee in Roseville, CA from a private family trust for $3.2 million, or about $80 price per square foot.
The 39,775-square-foot building was constructed in 2002 on three acres of land in the Roseville/Rocklin Industrial submarket of Sacramento. It was 100% occupied at the time of the sale.
The buyers are doing business as Intech Mechanical Co. and plan to move into the building Q4 2014.
Jeff Pehrson of TRI Commercial/CORFAC represented the buyer. Walter Smyth and Todd Sanfillippo of CBRE represented the seller.
Please see CoStar COMPS #3098759 for more information regarding this transaction.
Could it be that our current, crazed market represents a paradigm shift where demand forever outpaces supply?
The owners of existing rent controlled apartment buildings in San Francisco have seen three strong years of consistently rising rents and ever-increasing property values for their buildings. And that’s great, right? According to RealPage, as of the second quarter of 2013, San Francisco has now moved into the number-one metro market position in the entire country for rent increases with a hefty 7.8% annualized rent growth. When this rent growth is combined with the rent control rules in San Francisco, owners here are in one of the few markets where a vacancy is a reason to pop the champagne cork.
The big question is, will the party stop when rents go flat—or even drop? Many have suggested we are in another dot-com-like bubble, as we saw in the early 2000’s, and that we should be prepared to feel the pain of the bubble popping. There are others who feel we may have stepped over a threshold toward an upward trend that shows no sign of stopping. This group sees a paradigm shift to a new San Francisco rental reality. They believe that rents will continue their upward trend and reach world-record levels. They feel the world has discovered that San Francisco is a great place to live and work, and there will be no turning back on rents.
Let’s look at some of what the bubble advocates have recently been suggesting about a coming end to the good times for San Francisco. Recent articles and headlines from all different kinds of publications have predicted doom for San Francisco: “Bearish Ken Rosen Growls About Tech” from the San Francisco Business Times; “Vulnerable San Francisco Ignores Growing Tech Bubble Talk” from the San Francisco Bay Guardian; and “Shades of ’99: New Data Shows the Tech Boom Is Looking More and More like a Bubble” from Business Insider.
A Tale of Two Tech Booms
Despite the gloom of the above articles, I don’t think the bubble is ready to burst. Let’s start with a simple supply and demand analysis of the market. There are effectively no plans to create rent controlled apartment units in San Francisco outside the few below-market units in the pipeline attached to new construction. We can therefore make an assumption that there will not be significant growth of supply in the market for the foreseeable future.
That takes care of supply, so what about demand? In general, rents tend to move in step with new job creation. New office leases and expansion of existing company leases are one predictor of new jobs for the city. If we look at new and expansion leases (excluding renewals) we see an interesting story.
The top-10 leases in terms of square feet leased (either new or expansion leases) for the largest square footage, as reported in the San Francisco Business Times for 2013, are as follows:
As we look at this list, it is interesting to note the depth of companies signing new leases. Gone are the days of market-share or advertising-driven dot-com companies, who dominated the market during the last bubble. Many of those companies had business models that derived 100% of their income from advertising or future revenue based on market share.
A landlord friend of mine distinctly remembered that time:
One aspect of the dot-com fiasco (in the early 2000s) was that many of the enterprises had as their primary business objective the capture of “market share.” They did not have a business model that promoted income but rather captured an ever-increasing percentage of market share. Using that business model, they paid operating expenses primarily out of capital dollars, since the revenue stream was weak or non-existent. When the capital market weakened, the enterprise failed and creditors (including landlords) were left holding the bag. The market (both commercial and residential) reacted accordingly as the demand decreased. In the long term, it was but a downward “blip” on a market that recovered. The short-term investor was vulnerable, as were businesses that expanded in the belief that the dot-com expansion would not end.
Today, of the companies in the list below, only Google gets the lion’s share of its revenue from web advertising and market share. (I am willing to bet that probably 80% of all people in this state have a free Google email account.) At the end of 2013, Google noted that 91% of their revenue was derived from advertising.
The tech boom of the early 2000’s was susceptible to the popping bubble factor more than the companies that are successful today because the new jobs at that time were mostly at companies whose sole business plan was to provide a vehicle for web advertising. (If you remember, this was the single focus of Yahoo at the time.)
If you look closer at Google’s last three years of revenue, you will notice that each year they have actually been decreasing their web advertising revenue and increasing their other revenue. Perhaps all those PhDs on the bus from San Francisco to Mountain View are helping the company evolve to a less bubble-oriented strategy as a way to help keep their jobs. There are many new initiatives at Google, like their robotics program, their extending life expectancy program, the infamous Google Glass, the Google self-driving car, Google Shopping, Google Chrome, and many other diversification plans. I am willing to bet their future plans will not rely on advertising to keep the magic bus rolling.
Outside Google, we can see significant job growth in the biotech, healthcare, financial and software sectors as well. Many of these companies, like Kaiser and Visa, are mature, long-established companies—a far cry from the start-ups we saw in the early 2000’s. If 2014’s new and expanding leases continue along this trend, we will likely see a continued increase in jobs, which will increase the demand for apartments, which will inevitably increase rents.
If we switch gears and look beyond the tangible factor of the job growth that has led to rent growth and we look at the quality of life issues that are also drawing young people to San Francisco, we see another interesting factor in our demand analysis. San Francisco has mild weather, a growing sports and food culture, and proximity to wine country and beaches. It is easy to see why companies are moving to the Bay Area. They want to be where young people—their employee base—want to live.
For me, I see the glass as half full. The long-kept secret is out and everyone knows it: San Francisco is a great place to live and work. We are in the middle of a paradigm shift where San Francisco continues to lead the world in technology, business and, yes, rents. I don’t see that ending any time soon.
Terrence Jones is a senior broker associate with TRI Commercial and specializes in the marketing and sale of investment properties. His business specialty is San Francisco rent controlled apartments. He has extensive experience with properties with special circumstances. He can be contacted at 415-786-2216 or by email at tjones@tricommercial.com. @terrenceojones
