SUMMER 2009
Colliers International
OCPERSPECTIVE Orange County Quarterly Newsletter
21.6 Acre Land Sale and Subsequent Lease Transaction Changes SoCal Market Landscape
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In what could be the largest transaction to take place in Southern California in 2009, Birtcher Development & Investments, in partnership with Cornerstone Real Estate Advisers, LLC, acquired a 21.6-acre site in Anaheim, Calif., for $20 million.
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o lia The firm plans to develop a buildAve ., A n to-suit facility for Northgate Gonzales a hei m Markets, a family-owned grocery store chain. Development is scheduled to commence in the fourth quarter of 2009. Northgate Gonzales Markets signed a15year lease for 100% of the property.
The future 375,000 square-foot warehouse and distribution center for the grocer chain will be located at 1201 North Magnolia Avenue in Anaheim, Calif. The property will be developed according to LEED standards and will feature Spanish-style architecture.
Inside This Issue
(See Grocer Leases 21.6 Acres on page 4)
Executive Corner................................................. 2 `` Keeping Your Finger on the Pulse.................... 2 `` Colliers Welcomes New Executives to Orange County.................................................... 3 `` Positioning Now for Future Success............... 3 `` Colliers Top Producers of 2008........................ 3 `` Industry Organization Recognizes Colliers Professional........................................................... 4 `` Top OC Transactions.......................................... 4 ``
Colliers Around Town Colliers International professionals have been making their rounds around town at various industry events during the first half of 2009. Colliers sponsored Real Estate 2009, an incisive media™ event, which attracted nearly 1,000 attendees. Each attendee received a bag that contained Colliers’ national property magazine, Knowledge Leader. In addition, Martin Pupil, senior managing director of Colliers in the Greater Los Angeles region, spoke on the panel, Brokerage Update: How to Adapt to the Changing Demands in the Market, with other industry leaders. Lee McCullough, associate vice president in Colliers Irvine office, moderated a panel of distinguished experts in a discussion about the future of Orange County and national commercial real estate markets during 2009 at the Annual CREW (Commercial Real Estate (See Colliers Around Town on page 3)
One Park Plaza, Suite 900 Irvine, CA 92614
Executive
Colliers OCPerspective, Summer 2009
Corner
Working Together During Tough Times
It’s difficult to write about anything else but the economy during times like this, especially when it has affected our industry so severely. The times are challenging and the discouraging part is we don’t know when the recession will subside. The effects of a slow economy has translated into negative side effects such as market inactivity, brokerage firms downsizing their staff, and brokerage professionals jumping ship with hopes for
greener grass on the other side. The fact is, the commercial real estate industry needs to work together as a team to pull through these trying times. The livelihood of our industry depends on it because, really, we are all in this together. As you will read on page three in Pat Swanson’s column, ambitious brokers are doing what it takes to give their clients the best service necessary by providing market insight and vital knowledge needed for wise business decisions. Savvy business executives are also doing more networking and working hard to survive this downturn. However, they are not doing it alone, they are doing it with their clients as partners and their fellow
commercial real estate associates across the County, not just at Colliers. After this downturn takes a turn for the better, those hard-working professionals are the ones who will see and smell greener grass and enjoy a meaningful career. However, there is good news in the works. Transactions are happening and activity, while very slowly, is picking up. While our industry will have to adjust to new realities, the right attitude and hard work will get us back to fruitful times.
Martin Pupil Senior Managing Director
Keeping Your Finger on the Pulse “We are in a moment of incredible opportunity,” explained Richard Frick, vice president of real estate at 99¢ Only Stores, in a recent panel hosted by Incisive Media’s Real Estate Southern California magazine. “Those who will have the most difficulty surviving this transformation are the people who try to hold onto what they thought they had a year ago.” As editor of the West Coast region, Frick’s words resonated with me both personally and professionally. As a company, we understand that the market is changing not only economically, but also in terms of publishing and new
directions in reader demand. And in order to better serve those readers, we are not only looking for that “light at the end of the tunnel,” so to speak, but are looking to make that light brighter once we get there. The major firms—our primary reader base—long ago cast their nets over the national and international waters. Whether you’re in Los Angeles or New York, your focus today is probably as much national—or at least multiregional—as it is local. The globalization of business and finance and events taking place, both in Washington, DC and on Wall Street, and thousands of miles away
have dramatically revolutionized the real estate industry. So, as Michael Desiato, group publisher of the real estate group, recently revealed, in keeping with the industry’s increasingly national focus, Real Estate Southern California will now appear as a special editorial addition to Real Estate Forum. We are really excited about this new approach of going national, on the wings of our flagship publication. But bundling the content doesn’t mean lessening that content, and you’ll find in every issue of RESoCal the features, the insight, the market intelligence (See Finger on the Pulse on page 4)
Colliers Welcomes New Executives to Orange County Colliers International has recruited several top-notch brokerage professionals to its Orange County office. Please join us in welcoming… `` Ian Devries, Senior Vice President, Industrial Properties Group specializing in Inland Empire `` Mehran Foroughi, Senior Vice President, Retail Investment Sales `` Maurice Nieman, Vice President, Retail Investment Sales `` Ian Schroeder, Vice President, Retail Investment Sales `` Pat Swanson, Vice president, Multifamily Investment Group specializing in Orange County
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Colliers Around Town Woman) Forecast. Other panelists includes Brenda Benter, Retail Specialist of Craig Realty Group; Kathe Morgan, Office Specialist with Lee & Associates; and Robert Bach, SVP Research & Client Services of Grubb & Ellis. The 16th Annual “Market Review & Forecast” hosted by AIR (Association of Industrial Realtor) in Los Angeles featured Senior Vice Presidents Clyde Stauff, of Colliers’ Irvine
office, and Steve Calhoun, of Colliers’ Commerce office, discussing the Southern California industrial markets.
C O L L I E R S Recognizing Our Top Producers For 2008
In the Orange County Market
Patrick Remolacio Senior Vice President
John Wadsworth Vice President
Positioning Now for Future Success term investment strategy for a financially successful future.
Look for Colliers at NAIOP’s ICON Industrial event on June 23-24 as the firm is a headlining sponsor for the event, which will attract approximately 250 industry leaders from around Southern California.
5Martin Pupil (far right) featured on Real Estate 2009’s Brokerage Panel along with other industry leaders.
Clyde Stauff Senior Vice President
Broker Column
Brad Christian Senior Vice President
Steve Schloemer Senior Vice President
Congratulations to our top producers of 2008 in Orange County and beyond. The top producers were recently recognized in the Orange County and Los Angeles Business Journals as well as the Business Press in the Inland Empire.
The woes felt in the multifamily sector are the same as with any other commercial property type right now. Vacancies are pushing upward while rental rates are headed in the opposite direction; cap rates are increasing; and pricing has dropped significantly. The fairytale land we lived in circa 2006 is long gone and we are all well aware of this fact. In this type of market climate, there is only one thing investors can rely on to get through the smog and into the clear blue sky – planning for the next great real estate cycle. Timing the market is a tricky thing to do. I’ve always advised my clients that if they can acquire more units or replace and upgrade their current units while the market is 10% above or below the market bottom, they are going to reflect back one day and be thrilled about the decision they made. That is what I am focused on now, consulting and advising my clients on how to make decisions that will improve their current real estate situation and create a long-
For example, today’s market holds tremendous opportunity for owners to look at their portfolio and trade up from a Class-C property and invest in a higher-grade asset in order to upgrade their overall portfolio. While financing is tight, there are still some opportunities for investors who are well-positioned to acquire Class-A or B property for a steal right now. Luckily, Orange County owners will experience a steady and growing population that is poised for future multifamily demand. In addition, with the threats of inflation on the horizon, investors will look to apartments as a viable asset class for investment, given that it is one of the only investments that can combat inflation. Until that happens, the best thing an advisor can do for their clients is to be a true service and knowledge provider. Pat Swanson is a vice president within Colliers International’s Multifamily Investment group in Irvine, Calif.
Colliers OCPerspective, Summer 2009
Top
Industrial Sale - Newport
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Grocer Leases 21.6 Acres “This transaction marks the sign of a hopeful recovery in the commercial real estate industry,” said Clyde Stauff, senior vice president in Colliers International’s Irvine office who represented Bircher Development & Investments and Cornerstone Real Estate Advisers, LLC, in the land acquisition as well as the lease
agreement with the grocer. Along with Stauff, Senior Vice Presidents Patrick Remolacio and Bret Hardy, who head Colliers Integrated Real Estate Solutions group, also represented the Bircher/Cornerstone joint venture.
`` 16,047 sq. ft. `` $5.5 million `` Steve Schloemer
Industrial Lease - Irvine `` 25,000 sq. ft. `` $2.2 million `` Steve Schloemer
Office Lease - Santa Ana `` 12,593 sq. ft. `` $1.25 million `` Andrew Herron & Jeff England
Industrial Lease - Irvine `` 17,675 sq. ft.
Industry Organization Recognizes Colliers Professional The Society of Industrial and Office Realtors (SIOR) Orange County/Inland Empire Chapter held its annual awards banquet at The Ritz in Newport Beach, Calif. Clyde Stauff, senior vice president, was honored with the award of Largest Industrial Investment Sale in 2008. The award was given for Stauff’s direction in the sale of a 620,000 square-foot industrial property at 9400 Santa Fe Springs, Calif., representing both the
buyer and the seller of the property. The property traded from Northwestern Mutual to Birtcher Development & Investments and Cornerstone Real Estate Advisers, LLC. The property serves as Liz Claiborne’s West Coast distribution hub. This was Stauff’s second time receiving an SIOR honor. In 2006, he was recognized with the award for the Largest Industrial Lease.
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Finger on the Pulse you’ve come to expect from what has become recognized as the leading real estate publication in the Southland. We hope you’ll enjoy all of the exciting changes taking place at Real Estate Southern California and at Incisive Media. Please don’t hesitate to drop me a line with any questions you might have.
Natalie Dolce was recently made editor of the West Coast region at Incisive Media’s real estate group. She can be reached at Natalie.dolce@ incisivemedia.com
`` $1.34 million `` Chuck Wilson This document has been prepared by Colliers International for advertising and general information only. Colliers International makes no guarantees, representations or warranties of any kind, expressed or implied, regarding the information including, but not limited to, warranties of content, accuracy and reliability. Any interested party should undertake their own inquiries as to the accuracy of the information. Colliers International excludes unequivocally all inferred or implied terms, conditions and warranties arising out of this document and excludes all liability for loss and damages arising there from. Colliers International is a worldwide affiliation of independently owned and operated companies.
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