20 Jun 2016

Industrial Is On The Precipice Of Major Change

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NEWPORT BEACH, CA—Primarily concerned with fast and efficient last-mile delivery, infill industrial buildings are housing sophisticated sorting and delivery systems for getting product in consumers’ hands, Hager Pacific Properties’ managing partner Rob Neal tells GlobeSt.com. The privately owned real estate investment firm has invested $35 million in four strategic corporate real estate properties in California and Wisconsin, including a 41,715-square-foot ice cream plant on 5.49 acres and a 42,988-square-foot milk plant on 4.69 acres in Buena Park, CA; a 119,000-square-foot industrial property on 4.62 acres in Oakland, CA; and Brown Deer Business Park, a 585,292-square-foot business park on 32.41 acres in Milwaukee. We spoke exclusively with Neal about his firm’s investment strategy, maintaining an edge in such a highly competitive sector and the future of industrial properties.

GlobeSt.com: How would you describe your firm’s investment strategy?

Neal: We invest in unique industrial assets with very strong growth potential. We’ve been doing this in one form or another for more than 30 years, and we own more than $2 billion of properties. But the firm is different from its peers. It’s completely privately held—there’s no outside capital, no institutional capital; we do it the old-fashioned way. The four partners, of which I am one, acquire the properties for their own account, and we can move more quickly than others might because having an executive committee to determine if you’re going to move forward is less efficient than getting a few people on the phone and pushing on.

We work with the value-added industrial buyer principally. There’s a virtual rainbow of opportunities, from environmental issues to properties that need to be repositioned in the marketplace to physical renovations or assets that simply need to be sold quickly and can be acquired at a discount. We’ve had the opportunity in the last 36 months to work with sellers of distressed assets as well as corporate sellers who sell surplus properties and want to make sure they have a buyer who is experienced in dealing with those properties and the special issues they have.

Each of the properties we recently purchased were represented individually—they’re not a portfolio. three of the four were acquired from corporate sellers who had operated the properties and could sell the surplus and then move on to other facilities. These properties needed to be sold, and we’ve had experience with the seller.

GlobeSt.com: How else do you maintain an edge in such a highly competitive investment sector as industrial?

Neal: Because we have our own capital, we’re able to move very rapidly. Being able to simply involve our own funds already on hand gives us tremendous latitude. Also, it gives us a perspective I think other owners don’t have. Most real estate owners today that own institutional-grade or institutional-sized industrial property are funds with a finite life. It’s necessary to be able to develop the full cycle of investment within three to five years, so they buy, add value and sell. That can be a very attractive investment strategy, but it forces you to look short term, whereas we hold our properties for a long time. When we do renovations on properties, we hold them for between 20 and 25 years. It’s considerably more expensive to do that, but it’s the right way to do it if you have a long arc on investment. If your horizon is three to five years, you won’t put a new roof on a property—you’ll maintain it—but if you’re holding it for 20 years, you will. You’ll also look for the finest state-of-the-art materials, fire-suppressing equipment and lighting. Our tenants are becoming increasingly concerned about energy and the environment. It pays off, but it does require a longer-term perspective. This is what we’ve been doing, and it’s not something we would do if we were looking to get out of a property in the customary three to five years.

GlobeSt.com: How do you envision the future of industrial properties?

Neal: It’s fascinating because industrial has sort of been at the bottom of the food chain in terms of glamour, but it’s really at the center of so many important cycles. Everything that we understand in terms of where value creation is occurring in merchandising is really occurring on the supply-chain side. The ability of any retailer to be able to squeeze costs out of their produce line is coming as a result of the savings they’re engineering in the supply chain and the logistics of moving things around. This involves the timing and sizing of goods coming from overseas, the trucks are becoming more aerodynamic, and buildings are becoming bigger. Industrial plays an incredibly important role in the world economy. With the rise of e-retailers, they’re putting a fancy twist on it because so many of the brick-and-mortar showrooms are being eliminated or reconfigured so they’re a distribution endpoint for the materials. I can go to the store and have my jeans sent to my house, or I can order them online and have them sent to the store where I can try them on.

Also, infill is starting to get more requirements for smaller industrial buildings that are well situated with very quick commute times to rooftops. Distribution used to be the science of warehouses getting bigger and getting into big markets like the Inland Empire, but now it’s looking to distribute effectively to the last mile. We’re seeing different requirements for smaller buildings with really sophisticated delivery and sorting equipment. It’s about how to get products economically to the last mile. Amazon is talking about drones, and Uber and Lyft drivers are delivering for Amazon within two hours. We’re on the precipice of things really changing in industrial buildings.

One of the problems is industrial buildings and land are being cannibalized for higher and better uses in infill areas. It’s astounding that 10 to 15 years ago, you’d buy a property and think it would remain industrial for a lifetime, but times have changed dramatically—that’s jobs lost out of that industrial building.

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16 Jun 2016

Demand For E-Commerce Centers Fuels Rent Hikes

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OAKLAND, CA—Rapacious global demand for e-commerce fulfillment centers and distribution centers fueled a 2.8% year-over-year increase in prime logistics rents globally, led by double-digit percentage gains in US coastal markets, according to CBRE Group Inc.’s global prime logistics rents report. Six of the top 10 markets with the fastest growing prime logistics rents globally were in the US, led by Oakland, CA, with a nearly 30% gain. Despite the high cost, the desire for quality premises is the dominant factor for inner-bay logistics users here.

American seaports and inland ports aren’t among the world’s most expensive for logistics rents, but there were the largest gains in those areas in 2015, due mostly to the increasing flow of goods into and throughout the region from online sales. The sharp rise in prime rents in the Americas was largely due to massive growth in US coastal markets, where occupier demand drove up pricing.

Much of the upward pressure in rents in logistics markets is stoked by a supply chain arms race of sorts among retailers, shippers and suppliers seeking to accommodate the continued growth of e-commerce. In heavy demand are modern distribution centers and fulfillment centers with features such as a high loading dock ratio and clear ceiling heights of at least 26 feet to accommodate high-tech stacking racks and automated storage-and-retrieval systems. Many of those facilities are being built close to large population centers, where land costs are high, says CBRE.

One such Oakland property that fits the demand bill has been acquired by Hager Pacific Properties: a 119,000-square-foot industrial property on 4.62 acres at 955 Kennedy St., as part of a four-asset portfolio in California and Wisconsin valued at $35 million.

“We are pleased with the volume of our recent acquisitions and our team’s ability to capitalize on four strategic opportunities to invest in unique industrial assets with very strong growth potential,” said Robert Neal, Hager Pacific Properties’ managing partner. “The assets’ desirable locations in the thriving Oakland, Orange County and Milwaukee markets offer an exciting challenge for our firm.”

The Kennedy Street asset boasts almost 500 feet of direct frontage on the 880 freeway making the property prime for usage as a freeway showroom, industrial warehouse or manufacturing facility. Property features will include multiple dock doors, fenced yards and an upgraded fire protection system. Michael Walker, Doug Norton and Austin Hinder of CBRE represented both the buyer and seller in the transaction and will be listing the property for lease. Hager plans to complete more than $2 million in renovations and Bruce Haas of Industrial Redevelopment will oversee the leasing, asset management and renovation of the property.

Neal tells GlobeSt.com: “The Oakland market has been a real beneficiary of all the growth in the Bay Area in terms of a greatly reduced vacancy rate and rents that are now rapidly escalating. The bakery property we purchased represented a unique opportunity to acquire a functional industrial building that enjoys a remarkable 500 feet of frontage along one of the busiest freeways in Northern California.”

The other three properties were a 41,715-square-foot ice cream plant on 5.49 acres at 6400 Regio Ave. and a 42,988-square-foot milk plant on 4.69 acres at 6408 Regio Ave., both in Buena Park, CA and a 585,292-square-foot business park on 32.41 acres at North Green Bay Road and West Brown Deer Road in Brown Deer (Milwaukee), WI.

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11 Jun 2016

Real Estate Briefs: Hager Makes $35 Million Deal In Two States; Bacchus Building Sells For $2.2 Million

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Newport Beach-based real estate investment firm Hager Pacific Properties has acquired four properties for $35 million in California and Wisconsin. Two properties are in Buena Park: a 41,715-square-foot ice cream plant on 5.5 acres of land at 6400 Regio Ave.; and a 42,988-square-foot milk plant on nearly 5 acres of land at 6408 Regio Ave. The milk plant is leased for seven years. The ice cream plant will be leased for a short term. The remaining properties are in Oakland and Milwaukee. Hager Pacific is a $2 billion real estate investment firm that owns 110 properties in the U.S., including six in Orange County.

A Bacchus Office Park building at 9150 Irvine Center Drive has sold for $2.2 million. Irvine-based Wind Water Realty represented the seller, Kwikcash Inc. The buyer, represented by Investment R/E Source, was Gerayli LLC. The two-story, 4,960-square-foot office building was owner-occupied. The previous owners signed a one-year lease for the upper floor. The buyer will occupy the ground floor. The Bacchus Office Park, near the Irvine Spectrum, was built by Bacchus Development in 2007. Bacchus has developed roughly 1 million square feet of office buildings in Irvine since 2003.

The Bendetti Co., an Irvine-based commercial real estate investment company, has acquired two new properties in Nevada. The first acquisition was Southern Way, a three-building center consisting of 631,115 square feet in Sparks. The second acquisition was Spice Island, a 165,000-square-foot building also located in Sparks. Bendetti’s portfolio now totals more than two million square feet of industrial property. Terms of the deals were not disclosed.

PEOPLE ON THE MOVE

Tim Markel has been promoted to president of Murow|CM, an Irvine-based land development consulting company. Markel joined the team in 2013 as the chief operating officer. He will continue in his current responsibilities. In his new role, Markel will oversee accounting and operations functions and seek opportunities outside the Southern California market.

Melissa Lancaster has joined Seattle-based Kidder Mathews as a senior property manager in the firm’s Irvine office. Before joining Kidder Mathews, Lancaster was with Essex Realty Management where she managed a 300,000-square-foot portfolio consisting of office, retail, and mixed use properties. Before that, she was with The Irvine Company where she managed a 900,000-square-foot single-tenant building.

CBRE Group has hired Mark Seferian as a first vice president. He joins the company’s national restaurant practice and will be based at the company’s Newport Beach office. Seferian previously worked for Bloomin’ Brands Inc. where he was real estate director. In his position he oversaw all real estate development activity in the western U.S. for core brands such as Outback Steakhouse, Bonefish Grill, Carrabba’s Italian Grill and Fleming’s Prime Steakhouse & Wine Bar. Seferian’s prior positions also include director of real estate development for Darden Restaurants Inc.

Travis Fidel has been hired as an associate at SRS Real Estate Partners’ Newport Beach office. He will focus on single-tenant, net-lease investment properties, 1031 exchange buyer tracking and fulfillment, and cross-selling NNLG listed inventory. Fidel previously worked at CBRE Inc.

HOTEL NEWS

Laguna Beach-based Montage Hotels & Resorts has named its Baltimore hotel Sagamore Pendry Baltimore. The Pendry is a boutique urban brand that started in 2014. The Baltimore hotel will open in 2017. Montage manages several luxury resorts, including the Montage Laguna Beach.

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10 Jun 2016

Newport’s Hager Pacific Invests In 4 Properties

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Newport Beach-based Hager Pacific Properties recently invested $35 million in four properties in California and Wisconsin.

The company acquired a 41,715-square-foot ice cream plant and a 42,988-square-foot milk plant, both in Buena Park, as well as an industrial property in Oakland and a business park in Milwaukee.

"We are pleased with the volume of our recent acquisitions and our team's ability to capitalize on four strategic opportunities to invest in unique industrial assets with very strong growth potential," Robert Neal, Hager Pacific Properties' managing partner, said in a statement.

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06 Jun 2016

Hager Pacific Acquires Four Assets For $35 Million

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Newport Beach, CA-based Hager Pacific Properties acquired four assets in California and Wisconsin for $35 million. The additions include a 41,715-square-foot ice cream plant on 5.49 acres in Buena Park, CA, a 42,988-square-foot milk plant on 4.69 acres in Buena Park, a 119,000-square-foot industrial property on 4.62 acres in Oakland, CA and a 585,292-square-foot business park on 32.41 acres near Milwaukee, WI.

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06 Jun 2016

Newport Beach Firm Acquires Four Properties, Two In OC For $35 Million

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Newport Beach-based real estate investment firm Hager Pacific Properties has acquired four properties for $35 million in California and Wisconsin.

Two properties are in Buena Park: a 41,715-square-foot ice cream plant on 5.5 acres of land at 6400 Regio Ave.; and a 42,988-square-foot milk plant on nearly 5 acres of land at 6408 Regio Ave.

The milk plant is leased for seven years. The ice cream plant will be leased for a short term.

The remaining properties are in Oakland and Milwaukee.

Hager Pacific is a $2 billion real estate investment firm that owns 110 properties in the U.S., including six in Orange County.

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05 Jun 2016

Brown Deer Business Park Sold In $35 Million Portfolio Deal

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California investor Hager Pacific Properties bought the Brown Deer Business Park in a $35 million portfolio deal.

The 32.4-acre Brown Deer Business Park at West Brown Deer and North Green Bay roads was the largest property involved in the deal. It has eight buildings with a combined 585,292 square feet.

The business park formerly belonged to an affiliate of HSA Commercial Real Estate, which lost it to a lender in 2014 through a foreclosure lawsuit, according to court records. The mortgage for the business park was part of a broader loan pool. U.S. Bank, which was listed as the property’s previous owner, was the trustee for that loan pool.

The business park was valued at $16.5 million in March 2014 when it sold through the foreclosure lawsuit.

Hager Pacific Properties, which announced the deal on June 1, said it is the company’s first Milwaukee-area acquisition. Hager Pacific is a $2 billion private real estate investor.

Companies leasing buildings in the business park include Pitney Bowes, Otis Elevators, OTR Engineering and Kleen Test.

The Brown Deer Business Park sold along with ice cream and milk plants in Buena Park, Calif., and an Oakland industrial building. Hagar Pacific did not list individual prices for the four properties involved in the portfolio deal.

Robert Neal, Hager Pacific Properties managing partner, said the four properties have strong growth potential.

“The assets’ desirable locations in the thriving Oakland, Orange County and Milwaukee markets offer an exciting challenge for our firm,” Neal said.

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10 Nov 2015

Hager Pacific Buys San Marcos Building

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A 208,570-suare foot industrial property at 260 S. Pacific Street, San Marcos 92078, has been sold for $9 million, cash.

The buyer was Hager Pacific Properties, one of the largest privately owned real estate investment firms in the West, and this marks the firm's second acquisition in San Diego County.

The seller was MacDermid Group, Inc. According to the CoStar Group, MacDermid had previously occupied the property, but is relocating.

The building sits on 8.6 acres. Features include multiple dock-high and ground-level loading positions, a fenced two-acre storage yard and a colossal 10,000 amps of power.

HPP plans to complete more than $2 million in renovations, including new roofing, lighting, loading, landscaping, offices and floors, and then put the property back on the market for leasing.

"We are pleased to have been able to capitalize on this opportunity to reinvest in a property that will be quickly absorbed by the market," said Jason Schirn, the firm's chief investment officer. "We feel especially confident about the investment as there is a shortage of functional space in the region."

HPP purchased the property through Colliers International in an all-cash transaction, which required only 25 days for inspection and close of escrow. The sale was recorded Sept. 30.

Mike Erwin and Tucker Hohenstein of Colliers International represented both the buyer and the seller, and will be listing the property for lease.

HPP also owns the 180-unit Woodside Apartments in Lakeside.

The recorded buyers were Pacific Industrial Partners LLC, SoCal Industrial Partners LLC, and the Huberman Family Trust.

The seller of the property (assessor's parcel 219-089-02) was recorded as NAPP Systems Inc.

The asking price for the property - after a price reduction - had been $16.25 million.

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03 Nov 2015

Don’t Cut Corners Just To Close Quickly

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NEWPORT BEACH, CA—The ability to close transactions faster is becoming more necessary in this competitive market, but that doesn’t mean you shouldn’t dot your I’s and cross your T’s, Hager Pacific Properties’ managing partner Rob Neal tells GlobeSt.com. The firm recently acquired a 208,570-square-foot industrial property in San Marcos, CA, via Colliers International for $9 million in an all-cash transaction that required only 25 days for inspection and close of escrow. We spoke exclusively with Neal about the trend of shorter closing times and other trends he is noticing with closings.

GlobeSt.com: What is allowing for shorter closing times in real estate transactions?

Neal: It’s hard to say. Of course, it’s become a trend, and now we expect every buyer to do this going forward, although buyers are never asked by a seller, “Hey, can you close more quickly?”

GlobeSt.com: Why is it especially important for buyers and sellers to be able to close quickly today?

Neal: For a buyer like us that can close quickly, it can tilt the table our way and allow us to get the deal. In order to do this, you have to have unique capabilities. Everybody in the real estate business at every level is extraordinarily busy right now, but the vendors we’ve worked with in due diligence we’ve worked with for the last 20 years, so we are able to call on them and they will drop other jobs and turn their attention to us. They recognize that they can bring real value to us. Many buyers, while they wish they could do due diligence, are probably not in the position to do it quickly.

We use all our own capital; we don’t have outside equity partners and we don’t have to bring anyone else into the decision-making process. No matter how streamlined the institutional model may be, it’s another level of approvals that have to be secured. That means a lot of reports and presentations, and that all takes time. We don’t do that. The four of us partners get on the phone, and we can get down to business and make a decision very rapidly. While this recent deal in San Marcos was short, it’s not our record—our record is four days on an industrial building in Orange, CA. We were able to do it because of what I just described, which is lost on a lot of buyers.

As the market becomes more competitive, there are more buyers than there are properties for sale. Buyers look for ways to distinguish themselves from the pack, and one of the ways is to pay more, which we’re not anxious to do. If you demonstrate certainty of close, if you have a track record and the seller can talk to other sellers who can vouch for you, that will help. So will a shorter due-diligence period. This is important because once the due diligence is done, the buyer goes for hard money which is non-refundable. At that point, the seller knows they have a deal; prior to that, it’s just a negotiated price and the buyer still needs to do inspections—it’s contingent. But knowing you have a done deal is compelling for a seller.

GlobeSt.com: What other trends are you noticing with closings?

Neal: More closings are occurring without financing being arranged; there’s not the time for it. It all comes back to time. When the market is in an earlier cycle, sellers can’t be quite as picky, so buyers are able to arrange financing in the due-diligence and escrow period. No one really has the time to arrange financing for desirable properties in the current part of the cycle, so there’s a proliferation of all-cash deals—someone has to have the cash in pocket and has to have things lined up before they’re too far along in the transaction. No matter how quickly you can arrange for third-party financing, it’s too long for most deals these days. During the topping out of a cycle, more and more deals accelerate, and a known player always wins.

GlobeSt.com: What else should our readers know about shorter closing times?

Neal: Just because you close quicker doesn’t mean you don’t have to check all the boxes. These are large transactions, and if you’re sacrificing your accuracy for the sake of tying up a property and closing quickly, that’s reckless. It’s incumbent upon any buyer to be competitive by accelerating the due diligence, but not to the detriment of the deal. It’s a tremendous amount of work, but systems and processes are important. Don’t turn situations into problems by not having the internal systems to thoroughly vet the property.

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25 Oct 2015

Real Estate Briefly: Hager Pacific Acquires Industrial Property In San Marcos

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Newport Beach-based real estate investment firm Hager Pacific Properties has acquired a 208,570-square-foot industrial property at 260 S. Pacific St. in San Marcos. The all-cash transaction was made through Colliers International. The property is HPP’s first acquisition in north San Diego and its second acquisition in San Diego County, the other being the 180-unit Woodside Apartments complex in Lakeside. The new property features multiple loading positions, a fenced 2-acre storage yard and 10,000 amps of power. HPP hopes to complete $2 million in renovations that will include new roofing, lighting, loading, landscaping, offices and floors.

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18 Feb 2014

The Deal Sheet

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Now's the time for buy-and-hold, Hager Pacific Properties managing partner Rob Neal tells us. That's because it's always the right time, if the deal is good, whether the economy's getting better or not. (That's a business lesson from romance novels: "If it's love, don't let anything get in your way.")

“Everything we acquire we expect to hold for the long term,” Rob says. (With that kind of patience, don't expect to beat him at a staring contest.) If a deal meets the company's acquisition criteria, it will close regardless of macroeconomic conditions. Lately Newport Beach-based Hager Properties has been in an accelerated buying mode, spending about $20M to add eight properties to its portfolio in the last three months, including a distribution building in Central LA, an R&D complex in Pasadena, two SoCal land sites near ports, and four multi-tenant industrial buildings in Texas.

The R&D facility is the 68k SF 2900 Bradley St building. The seller, Avery Dennison Corp, used the property as its research center since it was built in 1987. DTZ's Brian Denton repped Hager Pacific in the deal, and is currently marketing the property. Rob says the facility offers lab space as well as high-clearance warehouse space, offices, and excess land for parking, so he expects it to be absorbed quickly.

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03 Feb 2014

HPP Buys Land From Hanson Aggregates

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Newport Beach-based real estate investment company Hager Pacific Properties said that it has acquired two properties from Hanson Aggregates LLC.

The terms of the transaction were not disclosed.

The first property is a roughly 3-acre site in the corridor adjacent to the Los Angeles and Long Beach ports at 2811 Grant St. in Wilmington, according to an announcement made by Hager Pacific on Jan. 28. Hager Pacific renewed the existing lease with Fast Lane Transportation. The second property, which has been put on the market for lease, is a 4-acre site visible from Interstate 405 at 1660 E. 32nd St. in Long Beach.

Lary Carlton of Colliers International represented Hager Pacific in both sale transactions.

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29 Jan 2014

Hager Pacific Targets Texas Border Town

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MCALLEN, TX— In a strategic buy spree, California-based Hager Pacific Properties (HPP), acquired eight properties in 90 days, of which four are in border town McAllen, Texas.

HPP’s recent acquisitions include a distribution building in Central Los Angeles, a R&D complex in Pasadena, Calif., two land sites near the Ports of Los Angeles and Long Beach, and four multi-tenant industrial buildings in McAllen for a total investment of $20 million.

The firm owns approximately 700,000 square feet in McAllen, making it the largest private investor of industrial real estate in the market.

“Demand in McAllen is directly correlated to the strength of the Mexican economy which we believe has great potential,” Rob Neal, Managing Partner with HPP. “The majority of our tenants are suppliers to companies manufacturing in Mexico. We are thrilled with the performance of our assets in McAllen.”

Since 2010, HPP has acquired 32 separate properties and operates with the annual goal to buy at least 1 million square feet of industrial property per year regardless of market conditions. “We are not market timers. Everything we acquire we expect to hold for the long term so if a deal meets our acquisition criteria, we will close the deal regardless of the macroeconomic environment,” added Neal.

Hager Pacific currently owns in excess of 110 properties across the western United States valued at nearly $2 billion. The firm targets value-add properties, as well as self-funds its real estate acquisitions without outside capital.

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27 Jan 2014

Hager Pacific Additions

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Newport Beach-based industrial real estate investor Hager Pacific Properties has been on an acquisition kick in Southern California and Texas.

The privately held company said it has made about $20 million worth of purchases over the past three months, adding to its portfolio six buildings, as well as 7 acres of land used for storage near the Long Beach and Los Angeles ports. 

Deals in Los Angeles County included a 70,000-square-foot industrial building at 7630 Industry Ave., in Pico Rivera and a 68,000-square-foot research and development facility at 2900 Bradley St. in Pasadena.

In Texas, the company completed the purchase of four buildings near the border town of McAllen. It first invested in the town's industrial market last April and also began buying in El Paso around the same time.

It now owns about 700,000 square feet of buildings in McAllen and is the largest private investor in industrial real estate in that market. 

Hager Pacific's portfolio is now values at about $2 billion; it said it plans to buy about 1 million square feet of property in 2014. 

"We are not market timers," Managing Partner Rob Neal said. "Everything we acquire we expect to hold for the long term, so if a deal meets our acquisition criteria, we will close the deal regardless of the macroeconomic environment." 

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06 May 2013

Hager Pacific To Texas Border For Industrial Deal

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Hager Pacific Properties’ search for industrial property investments with strong upside potential has taken the company to a pair of Texas cities next to Mexico. The Newport Beach-based real estate owner and investor said last week that it had closed on the purchase of a 16-building industrial portfolio in the cities of McAllen and El Paso, located at opposite ends of the Lone Star state.

The buildings total about 800,000 square feet and were purchased for about $17 million in an all-cash transaction.

The deal works out to a price of a little more than $21 a square foot—roughly 20% of what a well-leased industrial building in Orange County can sell for these days.

The Texas portfolio was valued closer to $40 million near the peak of the last real estate cycle.

It fell into financial distress, thanks to heavy debt load under prior ownership, said Rob Neal, a managing partner at Hager Pacific.

“It was the poster child for 2006 excess,” Neal said.

Hager Pacific bought the buildings from New York-based-based C-III Capital Partners LLC, which was acting as the special servicer for the portfolio. It bought the Texas buildings in a venture with Houston-based Interra Capital Group.

The purchase is the first for Hager Pacific in either of the two cities, which are more than 700 miles apart along the Texas border with Mexico.

More deals in the two cities are expected, according to Neal.

Hager Pacific aims to have between 1 million and 3 million square feet of property in each of its core markets in order to get “a good, solid mass,” Neal said.

The investor isn’t necessarily looking at larger cities in Texas for industrial investments.

“Houston and Dallas are pretty well played out,” Neal said.

McAllen and El Paso, meanwhile, are seen as growing industrial markets, thanks to trends in international trade—in particular, moves by some U.S.-based companies to bring manufacturing operations closer to home by shifting factories from China, according to Neal.

The industrial real estate market in El Paso, which straddles the Rio Grande river, is said to be growing, with a lot of warehouses used to hold either raw materials bound for maquiladoras—Mexican assembly or manufacturing operations on the other side of the border—or to store outbound finished products.

McAllen, where 11 of the 16 buildings in Hager Pacific’s new portfolio are located, ranked seventh on CNN’s 2012 list of the fastest-growing cities in the U.S.

“Many U.S. companies are currently modifying their supply chains to take advantage of ‘near-shoring’ as Mexico becomes a more viable alternative to China as a low-cost manufacturer,” Neal said.

Hager Pacific’s total industrial portfolio now totals about 13.5 million square feet in the U.S., with 110 properties. It also owns 2,300 apartments, primarily in California.

A bulk of its recent industrial buys—it’s made more than 30 deals over the last three years—are of the opportunistic variety. The company aims to buy, renovate and lease up buildings that other investors tend to shy away from, focusing on deals priced at $3 million and up.

Strategic Shift

The company has long used its own capital to buy properties, but its venture with Interra Capital marks a shift in strategy. Hager Pacific now is looking to partner with other investors in select markets in order to get access to properties it might not otherwise come across.

“Our problem is that we have more capital than properties to invest in,” Neal said.

A few more joint venture investments are expected to close soon, including deals in Orange County, according to Neal, who in addition to his role at Hager Pacific had spent much of the last year acting as the interim chief operating officer for the Roman Catholic Diocese of Orange’s Christ Cathedral in Garden Grove.

He recently turned over the COO role at Christ Cathedral, but remains on its architectural renovation committee, where he’s heading up the $55 million refurbishment of the iconic campus, which the diocese acquired from Crystal Cathedral Ministries last year.

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10 Apr 2013

L.A. Port Goes Deep

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SAN PEDRO, CA-The Port of Los Angeles has completed what some term its most important infrastructure project, a 10-year, $370 million deepening of its main navigational channel and turning basins.

The deepening of the port’s Main Channel, West Basin Channel and East Basin Channel, which increases the depth from 45 feet to 53 feet, will allow the Port to be one of the few that can accommodate so-called cargo “megaships,” the bigger boats predicted to dominate world trade. Megaships can be a quarter-mile in length and
contain over 13,000 containers.

The Port is in the midst of a five year, $1.3 billion capital improvement program that also seeks to modernize and upgrade terminals, to increase rail capacity and improve roadways in and around the Port.

“The number of ships and the volume of goods they will bring, the number of jobs that will result, and the economic impact on the local area and throughout the nation are important numbers,” said a statement from Col. Mark Toy, commander of the U.S. Army Corps of Engineers Los Angeles District, which conducted the deepening project.

Los Angeles is one of several North American ports making a significant capital investment in order to prevent obsolescence. The Panama Canal is being deepened from 42 feet to 60 feet by the end of 2015, while a few U.S. ports, including New York City, Norfolk, and Baltimore, have already increased their depth to at least 50 feet.

Jason Schirns, chief investment officer for Hager Pacific Properties, tells GlobeSt.com that the Port of Los Angeles also faces legitimate competition closer to home from the Port of Prince Rupert in British Columbia and the Port of Lazaro Cardenas in Mexico.

“The Port of Prince Rupert is 60 feet deep and claims to be the fastest way to deliver goods from Asian manufacturing centers to consuming markets in the U.S. Midwest,” Schirns says. “Prince Rupert officials claim that goods arriving there can reach Chicago three days faster than if they were routed through Los Angeles. The Mexican Port of Lazaro Cardenas is also making a major investment by building a second container terminal that will almost double its cargo volume (TEU) capacity of 6.5 million by 2020. The Port of Los Angeles had over 8 million TEUs in 2012, Schirns notes.

Shipping companies have already started changing their shipping patterns in order to become more efficient by moving away from smaller ports and focusing on fewer, larger ports that can accommodate modern vessels, Schirns added.

Heger Industrial’s president and CEO Robert Thornburgh echoed that analysis, saying the deepening is the answer to the expansion of the Panama Canal, set for 2015.

“West coast ports will continue their unyielding approach to become more efficient in order to protect their cargo base,” Thornburgh tells GlobeSt.com. “It is widely felt that these types of projects will help protect jobs and have a long reaching, positive impact on our economy. “

As previously reported in GlobeSt.com, the port has also been improving access roads.

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07 Feb 2013

Hager Pacific Aquires San Fernando Valley Industrial Property

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February 7, 2013 – Hager Pacific Properties, one of the largest industrial real estate investors in the San Fernando Valley, has acquired a 55,000 square foot industrial building on 3.67 acres in Sun Valley. The firm purchased the property for $3.7 million dollars from a private party.

Following the acquisition, HPP owns over 1 million square feet of industrial property in the San Fernando Valley. “For over twenty years, our firm has maintained a very active presence in the San Fernando Valley. With a low vacancy rate of less than 3% and extremely limited land for new development, the San Fernando Valley is a submarket we target,” said Jason Schirn, the Chief Investment Officer with Hager Pacific Properties. Located near four major freeways at 11912 Sheldon Avenue, the M-2 zoned property is 100% leased to Nupla Corporation, which has operated out of the property for more than 50 years. Building features include 13’-16’ clearance heights, calculated sprinkler systems, ground level loading and heavy power.

Greg Barsamian of Coldwell Banker Commercial represented both the Buyer and Seller in this transaction.

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18 Apr 2012

Hager Pacific Purchases Former Dow Chemical Plant In South Bay

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A former plastic manufacturing plant in Torrance was purchased by real estate investment firm Hager Pacific Properties, which expects to see the 28-acre site converted to an upscale industrial and office park in the years ahead.

The plant at 19500 Mariner Ave. was built by Union Carbide Corp.in 1956 to manufacture polyethylene, a common plastic used for shampoo bottles, packaging, children’s toys and many other products. Antifreeze, made from ethylene glycol, was also produced and canned there.

Over the years, the once-remote South Bay neighborhood filled in around the plant, said Rob Neal, managing partner of Hager Pacific. The property near Hawthorne and Del Amo boulevards now has neighbors such as shopping centers and modern warehouses that separate the plant from blocks of single-family homes.

“The community grew up around it,” Neal said.

Encino-based Hager Pacific bought the property from Dow Chemical Co., which took over Union Carbide in 2001. Terms of the sale were not released, but real estate broker Chuck Littell of Colliers International estimated its value at between $25 million and $27 million based on Torrance land prices.

“The size and location of the property bode very well for its future development,” Littell said.

The property is 60% leased to former Dow subsidiaries that make latex and industrial gases. Dow is cleaning up environmental contamination on part of the site, Neal said.

Hager plans to immediately lease about 45,000 square of metal buildings to tenants who may store automobiles or other goods passing through the ports of Los Angeles and Long Beach.

“We look forward to repositioning this property in incremental stages throughout the next decade,” Neal said.

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25 Sep 2011

Hager Pacific Digs Deeper For ‘Value Add’ Buys

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There are value-added real estate industrial investors—and then there’s Hager Pacific Properties.

The Newport Beach-based real estate owner and investor has carved out a niche in the industrial market of late by buying, renovating and leasing up buildings that other investors tend to shy away from.

The past two weeks has seen the company buy about 230,000 square feet of empty industrial buildings here and in Los Angeles County, where it also has offices, at steep discounts to their peak-market prices.

The company has been targeting a combination of vacant industrial buildings, older properties that need renovations, and warehouses that might require environmental remediation.

It’s made close to $50 million worth of so-called “value-add” investments over the past two years—many of those deals local.

The prices of the properties are just part of the privately held company’s costs, said Rob Neal, one of three managing partners at the company.

Extensive renovations, remodeling efforts, and leasing costs can add another 25% or so to Hager Pacific’s investment—more than a typical institutional industrial investor is willing to make in today’s market, he said.

“We can take on more risk (than other investors), but we think it’s a calculated risk,” Neal said.

The privately held company has the ability to buy upward of $100 million of property every year.

It hasn’t hit that limit, mostly due to the difficulty in tracking down suitable investments, even amid a commercial real estate market that still counts its share of distressed assets.

“This is our time of the cycle,” Neal said. “The challenge is finding the deals.”

Hager’s recent deals include an empty Garden Grove property that was at one time leased to upscale auto wheel maker MHT Luxury Alloys, which is based in Rancho Dominguez.

The building’s prior owner saw the 46,180-square-foot industrial building go back to the bank.

Hager Pacific paid an affiliate of Long Beach-based Farmers & Merchants Bank roughly $3 million, or about $65 per square foot, for the property, at 12300 Industry St.

After making some improvements to the property, the new owners are hoping to lease the property to a small manufacturing or logistics firm.

The Garden Grove buy comes about two weeks after Hager Pacific bought an empty 184,455-square-foot industrial property in Pomona.

The 15-acre site previously served as a commercial bakery for Interstate Bakeries Corp., which makes Wonder bread and other food.

Fully leased, the Pomona building was likely worth $15 million or more, based on comparable sales of late in Los Angeles County. Hager Pacific is believed to have paid a fraction of that amount for the empty property.

Hager Pacific is auctioning off existing equipment at the Pomona site on the edge of the Inland Empire and exploring various redevelopment options for the property.

Both acquisitions were all-cash deals.

In contrast to many property buyers, Hager Pacific spends its own money on deals. It also hasn’t bought a property using a loan in nearly two years, Neal said.

The company values its portfolio, which totals about 100 buildings and apartment complexes, at about $1 billion.

Besides industrial buildings, it also owns offices, shopping centers and more than 2,300 apartments.

The strength of the local industrial market, with vacancy rates in the Los Angeles area and Orange County both well under 6%, has drawn the company’s focus for deals of late.

There’s still a fair share of risk in the industrial leasing market, according to Neal, a self-described student of the economy.

In OC, where the industrial market has seen positive absorption during the last five quarters, “leasing has been spotty, people have pulled back (on signing deals) recently,” Neal said.

“We’re not seeing too much of a bump” for pricing in recent leases signed of late, he said.

The company has still managed to attract a lot of tenants.

Hager Pacific estimates it has made close to $13 million worth of industrial leases for some of its larger Southern California properties since the start of summer.

Among local deals, it recently renewed a lease for 75,000 square feet of space in Orange to Commercial Metal Forming Inc., a supplier of tank heads and accessories for a variety of manufacturers at 341 W. Collins Ave.

The 10-year lease is valued at about $6 million, according to Hager Pacific.

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11 Aug 2011

Six Questions For Hager Pacific’s Rob Neal

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NEWPORT BEACH, CA-There is a growing number of institutional industrial buyers taking on more risk and considering value-added acquisitions as opposed to pursuing a traditional strategy of acquiring core and core-plus properties, says Rob Neal, a principal with Hager Pacific Properties. GlobeSt.com recently chatted with the locally based real estate investment firm that owns and manages nearly 100 properties across the nation, which are valued in excess of $1 billion.

GlobeSt.com: What is Hager Pacific currently working on and what are some trends you are seeing in the industrial and office sector?

Rob Neal: We just sold a property in La Mirada and are looking to fill a $20-million exchange requirement. One interesting aspect about the La Mirada property is that we received substantial interest from end users looking to buy, although there was very modest interest in leasing this modern, fully renovated 85,000-square-foot property. This speaks to California’s high unemployment rate, where companies are still very cautious about expansion and growth, compared to the few companies that are making strategic moves to own their own building as opposed to securing a long-term lease.

Another key trend we are watching closely is the growing number of institutional industrial buyers taking on more risk and considering value-added acquisitions as opposed to pursuing a traditional strategy of acquiring core and core-plus properties.

GlobeSt.com: As we move into Q3, is Hager Pacific seeing acquisition and leasing activity increase across the board? Are you seeing any particular sectors or geographic regions faring better than others? Why?

Neal: Acquisitions continue to ramp up, primarily because of the tremendous amount of money that was raised within the last two years. Many institutional investors initially invested in core and core-plus opportunities, but have since started to take advantage of value-add opportunities. Despite this, there continues to be a lack of high yield opportunities for all investors.

Leasing activity for big box industrial properties more than 500,000 square feet or larger remains steady. Activity for smaller properties is very slow and inconsistent, especially since leasing activity has been cannibalized by user-sales facilitated by business lending through the Small Business Administration.

The coastal cities on the East and West coasts continue to exhibit high investor demand, but their performance and unemployment rates are often no better and perhaps worse than Midwestern cities. In the interior of the country’s primary cities such as Chicago, are showing signs of increased investment activity and are propelling a commercial real estate rebound in these non-coastal markets.

GlobeSt.com: How is the influx of institutional capital impacting the industry regionally and nationally?

Neal: Values for class A properties are rapidly rising in core markets. In the Inland Empire, for example, values are within 10% of market highs but rents are still off 25% or more, demonstrating that property yields have dropped substantially. Once interest rates rise, cap rates and overall yields are expected to increase while values decrease. The question remains whether or not rental growth will more than offset these yield increases.

GlobeSt.com: What role is cash playing in acquisitions and how do firms like Hager Pacific benefit from this position?

Neal: The debt markets continue to improve, but lenders are still cautious to provide financing for properties that are not stabilized. There are also a large number of all cash institutional buyers looking to acquire stabilized, core properties. As a result, low acquisition leverage has now become the new normal. Hager Pacific Properties’ advantage is our ability to acquire value-add properties on an all-cash basis.

GlobeSt.com: There are a number of value-add opportunities in major markets throughout the nation. What opportunities is Hager Pacific paying attention to?

Neal: We are watching our core markets—California and the Northeast—very closely. These markets continue to provide Hager Pacific Properties with the best value-add acquisition opportunities.  

GlobeSt.com: Speculative industrial development has started up again in the Inland Empire. How will these developments positively impact the regional market? Do you see infill development and/or renovations starting to increase in the coming months?

Neal: Speculative industrial development, especially in the Inland Empire, will begin to benefit the construction industry by creating jobs. It is also increasing confidence within the build-to-suit industry as regional demand for big box spaces larger than 500,000 square feet is expected to continue. This large box demand is a direct result of the strength of primarily foreign, but also domestic manufacturing and distribution in the US.

Industrial vacancy rates in the overall Southern California market are among the lowest in the nation, but many markets are built out and cannot support large, new developments. This has and will continue to lead to ongoing renovation of existing facilities.

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11 Jun 2011

Inland Rebound Real Estate Forum

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09 Aug 2010

Hager Pacific Properties Leases Property In Carson

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MV Transportation Inc., a Bay Area passenger transportation services company, was awarded a contract of up to $86 million to service Los Angeles Metropolitan Transit Authority buses in late June.

After that, all MV Transportation needed was a service location, but finding one wasn't easy. The Fairfield company finally settled on a 5.5-acre parcel at 21222 S. Wilmington Ave. in Carson after looking at several sites. The company leased the property July 1 for 10 years from owners Hager Pacific Properties and SoCal Industrial Partners LLC.

The $5.5 million deal will start Oct. 1, and the company will begin servicing buses at the end of that month. The property includes a 22,000-square-foot maintenance and office building, and a 5-acre secured and paved yard.

Broker Jeff Smart of Grubb & Ellis Co., who represented the tenant, said MV Transportation was in a bind because there were few properties large enough to meet the company's needs while also offering a modest amount of office space.

"We were extremely lucky, it's a good deal and everybody wins," Smart said.

He said that MV Transportation is known as a "surface user": an industrial tenant that needs a large land parcel and some office space.

"You can't just have land," Smart said.

Rob Neal, a managing partner with Newport Beach-based Hager Pacific, said that the current tenant, industrial services firm Harsco Corp., would vacate the property by Oct. 1.

Patent Construction Systems, a Harsco subsidiary, uses the site to assemble scaffolding systems for construction projects.

Neal's company and SoCal Industrial Partners purchased the property from Harsco in March for an undisclosed sum and leased it back to the company while seeking another tenant.

Frank Hillebrand and John Lassiter of Lee & Associates represented Hager Pacific. Kyle Degener of Grubb & Ellis also represented MV Transportation.

Hollywood Residential

High-end apartment developer JPI Partners LLC has leased 33 units of its newly opened 270-unit project in Hollywood. The complex at 1724 N. Highland Ave., called Jefferson at Hollywood, opened in late June.

It joins a field of other large apartment buildings that have opened in Hollywood this year, including 1600 Vine and Sunset Vine Tower.

Jefferson at Hollywood includes one- and two bedroom units, and eight live-work lofts. Prices range from about $1,900 to about $3,800 per month, including a $300 per-month discount.

The prices are about 20 percent below what Irving, Texas-based JPI had planned when it began construction on the $130 million project in 2007, said Heidi Mather, the company’s senior area vice president.

"Many of the projects that have opened recently – none of us are performing as we thought we would have three years ago," Mather said. "But rents are holding steady and we are all getting our share of the market."

The project includes 8,500 square feet of ground-floor retail space – large enough for four tenants – that has yet to be leased.

"We are looking at a wide range of tenants," Mather said. "We are exploring all avenues at this point."

Guitar Lease

Guitar manufacturer Line 6 Inc. has renewed its headquarters lease at a Calabasas property owned by commercial real estate developer Hines Interests LP. The six-year deal for the building at 26580 Agoura Road is valued at about $8 million.

The transaction includes two parts: a three-year extension of Line 6's existing lease of 45,143 square feet and a new six-year lease for the remaining 12,012 square feet of the property, according to broker Matt Heyn of CB Richard Ellis Group Inc., who represented the Houston-based landlord.

The single-story office building is part of Hines' seven-building, 300,000-square-foot Calabasas Tech Center project.

The transaction includes a few months of free rent and a tenant improvement allowance that is valued in the $5-$10-per-square-foot range.

"In this market, it's imperative to retain all your tenants, but especially good, solid companies that are growing," Heyn said. "It was a priority for us to accommodate them."

Broker Andrew Lustgarten of Studley, who represented the tenant, said the lease, all provisions considered, starts at about $1.20 per square foot per month, triple net. He said Line 6’s three-year extension was lower than the original lease rate.

"I would consider this a better than market rate deal for my client because they were provided with significant rental relief on their existing 45,000 square feet and (were) able to take on expansion space at bottom of the market pricing," said Lustgarten in an e-mail interview.

The deal will start Sept. 1, with both parts of the lease ending concurrently.

David Solomon and Troy Pollet of CB Richard Ellis also represented the landlord.

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18 Apr 2010

Values Slashed At Warehouses, Factories

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Newport Beach-based Hager Pacific Properties invests in a variety of commercial properties throughout the country. Its portfolio consists of more than 100 assets ranging from 25,000 square feet to over a million. They include office buildings, research and development complexes, apartment buildings, community shopping centers, warehouses, 3,000 apartments and 10 million square feet of industrial space.

Rob Neal, a managing partner at the firm, is Hager’s industrial specialist. We asked him recently what’s going on with that segment of the market that includes factories and warehouses.

Q: While all the commercial properties have had falling rents and rising vacancies, the impact appears to be much less on industrial properties in O.C. How come?

A: Industrial availability – not vacancy – in Orange County has actually doubled from 2007 through 2009, but still stands at a fairly manageable level of 11 percent. Comparably, office and retail availabilities have soared. As Orange County has been essentially built out for years from an industrial perspective, it is very difficult to add to the stock of industrial. Hence, market vacancies in industrial tend to be lower than other product types.

Q: How is industrial different from other real estate segments?

A: Industrial differs from other real estate segments by catering to users’ different needs. This segment’s owners generally have less debt on their buildings than office or retail. Also, capital expenditure per square foot is low in industrial properties because of the low amount of office space. Office and retail properties also tend to incur large upfront expenses, such as higher commissions and increased concessions.

Q: Despite the relative strength, how is the industrial marketing holding up with regard to falling property values, loan defaults, receiverships and foreclosures?

A: The industrial marketing is another property segment that is not faring well. Property values are estimated to have declined by at least one-third and some have experienced up to 50 percent decrease in land values. Industrial property values may be holding up better as whole than other product types, but by any measure, there has been a significant reduction in industrial rents and values.

Q: When will the industrial market hit bottom? When will things turn around?

A: I suspect we will see industrial rents being to turn upward at the end of this year or in the first quarter of 2011; however, they will still be well below 2007 rents. I also hope to see an increase in leasing activity in late 2010 as many legitimate leasing needs have been curtailed and some pent-up demand is building. Activity will continue to increase as new jobs are created, unemployment stabilizes, and consumer confidence returns.

Q: What are the prospects for this sector over the long term?

A: I expect to see rent growth resume and keep pace with the economy’s pace of inflation. Values are expected to rise along with inflation, but not nearly to the same degree we saw in the period of 2004-07.

Rob Neal

Title: Managing Partner

Company: Hager Pacific Properties

Background: Before joining Hager Pacific, Neal held senior posts with national real estate companies. He has been responsible for the acquisition and disposition of industrial and multifamily properties valued at more than $1 billion. He has an MBA from USC and is responsible for Hager Pacific’s acquisitions, renovations and dispositions.

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04 Mar 2010

Hager Pacific Closes 112,500-Square-Foot Lease In Michigan

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DEARBORN, MICH. — Newport Beach, Calif.-based Hager Pacific Properties has leased an 112,500-square-foot property in Dearborn to California-based Paul’s TV, an electronics retailer. The 5-year lease is valued at approximately $3 million. Located at 15080-15090 N. Commerce Drive within Fairlane Commerce Park North, the property offers warehouse, office and distribution space. The park provides immediate access to the Detroit Industrial Expressway, Southfield Freeway and U.S. Route 12. Randall Allman of CB Richard Ellis represented Hager Pacific; Marty Seltzer of Core Real Estate Services represented Paul’s TV in the transaction.

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23 Jul 2009

Vangent Takes 131,000 SF For Call Center

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SANDY, UT-Vangent Inc. has taken down a 131,000-square-foot office building here that is on the market for sale. The Arlington, VA-based workforce solutions company signed a one-year lease and will use the space as a call center for the 2010 US Census.

The lease, which commences this fall, is valued at approximately $2.2 million, fully serviced, or $16.79 per square foot, according to a statement by the building owner, Southern California-based Hager Pacific Properties. A recent flyer created to lease up the property shows a triple-net asking rent of $12 per square foot. Vangent is believed to have paid a slight premium for the short-term lease.

An online sale listing for the property that was updated this week shows an asking price of $17.5 million or $134.62 per square foot. It also states that the building will be available again on Oct. 1, 2010.

The property, situated on 14-acres, is located at 8475 S. Sandy Pkwy., near Interstate 15 and the State Route 209. Amenities include a kitchen with seating for 800, a fully equipped workout facility with an outdoor patio. If only temporarily, the lease will bring as many as 1,200 jobs to Sandy, a source with Vangent tells GlobeSt.com.

Mark Larsen and Dan Brenan of Larsen Commercial Real Estate Services Inc. represented Vangent. Commerce CRG represented HPP.

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29 Jun 2009

108,703-Square-Foot Industrial Facility Leased

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ONTARIO, CALIF. — Hager Pacific Properties has leased a 108,703-square-foot office/industrial property, which is located at 2400 E. Francis St. in Ontario, to Kim Lighting, a division of South Carolina-based Hubbell Lighting Inc. The 5-year lease renewal was valued at $2.8 million. Kim Lighting plans to use the facility to manufacture high-performance, architecturally relevant, outdoor lighting solutions for commercial, industrial, residential and institutional clients.

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25 Jun 2009

Kim Lighting Signed A Five-Year, $2.8 Million Lease

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INDUSTRIAL

ONTARIO - Kim Lighting signed a five-year, $2.8 million lease for a 108,703-square-foot office/industrial property at 2400 E. Francis St. from Hager Pacific Properties.

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25 Jun 2009

Inland Region Industrial Deals Top 1M SF

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CHINO, CA-The Inland Empire has tallied more than 1.4 million square feet of industrial sales and leases in recently closed transactions here and in two other cities in the region. The deals include three leases here for 690,000 square feet, a 651,000-square-foot sale in Fontana and a 108,703-square-foot lease that landlord Hager Pacific Properties signed with a division of Hubbell Lighting in Ontario.

Colliers International reports that the 690,000 square feet of leases in Chino were signed by Motivational Marketing, a company that delivers a comprehensive range of fulfillment and logistics services. The firm executed one new lease at Watson Commerce Center-Chino, as well as two lease extensions--one at Watson Commerce Center-Chino and another at AEW South Chino Industrial Center.

The transactions at Watson Commerce Center-Chino included a new lease for 121,390 square feet of industrial pace at 6911 Bickmore Ave. as well as a lease extension in 297,107 square feet at 6910 Bickmore Ave. The second lease extension at AEW South Chino Industrial Center was for 271,435 square feet at 15820-15880 Euclid Ave. The 690,000 square feet of leases were valued at approximately $5.05 million.

Watson Commerce Center-Chino is a new master-planned LEED-certified big-box industrial business park owned and developed by Watson Land Co. South Chino Industrial Center is a 500,617-square-foot big-box industrial park owned by AEW Capital Management.

Both the property owners and Motivational Marketing were represented in all of the leases by the Colliers team of SVPs Thomas E. Taylor and Steven J. Bellitti, along with VP Josh Hayes, all in the Colliers Diamond Bar office.

In the 651,000-square-foot sale in Fontana, an affiliate of New York City-based KTR Capital Partners acquired the 100% lease, three-building Jasmine Distribution Center at 13003-13169 Slover Ave. According to VP Brian Gagne of KTR, the acquisition represented "a great opportunity to acquire a class A, stabilized project in the high-barrier-to-entry Inland Empire West submarket." The deal is KTR’s second acquisition in Southern California in the last two months and brings its portfolio in the market to more than 1.7 million square feet.

In the deal by Hager Pacific, the Los Angeles- and Orange County-based investment firm leased a 108,703-square-foot office/industrial property at 2400 E. Francis St. in Ontario to Kim Lighting, a division of South Carolina-based Hubbell Lighting Inc., in a five-year renewal valued at nearly $2.8 million. Kim Lighting will use the building, which is owned by managing partners David Hager and Adam Milstein, to manufacture high-performance outdoor lighting for commercial, industrial, residential and institutional clients.

Hager Pacific managing partner Rob Neal says that the facility provides Kim Lighting with a "prime strategic location and abundant space for product development and storage” that will help the lighting firm to expand its customer base.

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24 Jun 2009

Firm Closes Lease Deal In Ontario

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Hager Pacific Properties, a real estate investment firm, has leased a 108,703-square-foot office/industrial property in Ontario to Kim Lighting, a division of South Carolina-based Hubbell Lighting Inc., according to a news release. The five-year lease renewal is valued at nearly $2.8million. "Kim Lighting will use the facility to manufacture high-performance, architecturally relevant, outdoor lighting solutions for commercial, industrial, residential and institutional clients," it stated. The Ontario space is at 2400 E. Francis St.

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23 Jun 2009

Hager Pacific Leases Out 108,000 SF Of California Industrial Space

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Southern California-based private real estate investment firm Hager Pacific Properties has leased a 108,700-square-foot office/industrial property in Ontario, Calif., to Kim Lighting, a division of Hubbell Lighting Inc. The five-year lease renewal is valued at nearly $2.8 million. Kim Lighting will use the facility to manufacture outdoor lighting products for commercial, industrial, residential and institutional clients. The Ontario space is located at 2400 East Francis St. and is in close proximity to Ontario International Airport, as well as several major highways.

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30 Mar 2009

Triview Glass Inc. Signed A Five Year, $1.6 Million Lease

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Industrial Lease: Triview Glass Inc., a glass fabrication and distribution firm, has leased a City of Industry industrial property from Hager Pacific Properties, a real estate investment firm in Newport Beach. The five-year lease of the 48,288-square-foot property, at 711 S. Stimson Ave., is valued at more than $1.6 million.

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20 Aug 2007

Stater Bros. Opts To Retain Control Of Colton Hq

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Stater Bros. Markets has signed a 15-year lease on its corporate headquarters and logistics facility in Colton, despite its plans to vacate that operation starting next month.

The supermarket chain, the largest private employer in the Inland region with 17,500 employees, will sublease the 788,000-square-foot facility, said Bruce Varner, Stater Bros.' general counsel and a member of its board of directors.

The transaction, announced Aug. 8, is worth more than $35 million, according to a Stater Bros. release.

Hager-Pacific Properties in Newport Beach will still own the property at 21700 Barton Road, but by subleasing the property, Stater Bros. will have some say in who locates there, Varner said.

In turn, Stater Bros. signed a sublease agreement during the first week of August with Sares-Regis Group in Irvine. Sares Regis paid Stater Bros. $2 million to complete that deal, Varner said.

Sares-Regis, which develops and manages commercial and office real estate, will be responsible for finding occupants for the Colton property, Varner said.

Hager-Pacific Properties will continue to collect rent on the Colton operation once Stater Bros. is replaced there.

"The rent will be a pass-through," Varner said. "It will go from Sares-Regis to Stater Bros. to Hager Pacific."

By extending its lease, Stater Bros. is making good on a promise it made to Colton officials that it would help find a proper use for the Barton Road buildings after it moves to new facilities in San Bernardino, Varner said.

"This is the correct thing to do," Varner said. "When Stater Bros. sold the property to Hager-Pacific it structured the deal so that Stater Bros. would have some influence over who ended up there."

Stater Bros. will suspend its move to the former Norton Air Force Base in San Bernardino shortly before Thanksgiving so it won't interfere with holiday deliveries, then resume the move after Jan.

1. The transition, which will involve all of the company's 2,000 employees, is expected to be finished by September 2008, said Jack Brown, chairman and chief executive officer.

In March, Brown said his goal was to retain some control over the Colton site, which has been Stater Bros.' corporate headquarters since the 1960s.

"If anyone leases it, they will lease it from Stater Bros.," Brown said in March. "The mother-in-law comes with the bride."

No tenants have signed, but the site next to Interstate 215 is expected to generate interest among food companies because of its large refrigeration facilities, said Larry Lukanish, vice president of commercial investment for Sares-Regis.

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16 Oct 2006

5 Fairlane Commerce Buildings Sold for $10M To Calif. Firm

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Newport Beach, Calif.-based Hager Pacific Properties acquired five buildings in the Fairlane Commerce Center in a $10 million deal.

The Dearborn properties total 190,000 square feet and include tenants Ford Motor Co. and Penske Logistics. The previous owner was the Harbor Cos., according to CoStar Group.

NAI Farbman, Southfield, was the broker on the sale. Sterling Group, Detroit, will manage the properties, Hager said.

- Jennette Smith

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16 Aug 2006

Hager Pacific Expands Reach To East Coast

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Harrisburg, PA—Hager Pacific Properties, a Costa Mesa, CA-based firm that owns more than $1 billion worth of real estate, made its first foray into the Northeast and its first industrial buy east of Michigan with the $90-million acquisition of a portfolio near this Pennsylvania state capital. The portfolio includes 11 single-tenant industrial buildings totaling about 2.2 million sf on 109 acres. The buildings are fully leased to Arnold Logistics LLC, a third party logistics firm which uses the space for clients that include: the Hershey Co., International Business Machines Corp., Simon & Schuster Inc., Quaker Oats Co., Pfizer Inc., Fuji Photo Film USA and Molson Coors Brewing Co.

The seller was a joint venture between an equity fund sponsored by Chicago-based Blue Vista Capital Partners LLC and another fund sponsored by Walton Street Capital LLC, also of Chicago. James Vesey, senior director of Cushman & Wakefield Inc. in Philadelphia, represented both the seller and buyer.

It's been only nine months since Hager Pacific ventured beyond the Western US to purchase the 1.2 million-sf Gateway Industrial Park in Detroit. Until then, the company's holdings consisted entirely of properties in California and Arizona. But between the Detroit and Harrisburg deals, the company picked up multifamily, retail and office properties in Utah, Illinois, Texas and Georgia. All told, the company spent more than $240 million on acquisitions since December, all of it away from its traditional base. At the same time, it sold Baldwin Hills Crenshaw Plaza, an 850,000-sf Los Angeles shopping mall, for $130 million.

"We have clearly been expanding our reach eastward," Hager Pacific managing partner Robert Neal tells IPJ. "We own about 100 assets, the majority of them still in California. But we have started to expand nationally in search of opportunities. California is very limited right now."

Neal says Central Pennsylvania reminds him and his partners of California's Inland Empire. "This area developed as an off-price alternative to New Jersey distribution markets, the same way the Inland Empire developed as an off-price alternative to Los Angeles. But here, it's earlier in the process," he remarks.

Neal says the market's 200 million sf of space makes it large enough to generate internal demand through expansion of existing tenants rather than relying exclusively on re-locations. It's also large enough to give Hager Pacific the option of buying additional property. "Every market we go to we try to build some mass, as much for management efficiency as anything else," he explains.

In addition, Neal notes, the region has constraints on land supply, partly due to the geography of the Appalachian Mountains, but also because Mennonite and Amish farmers own large tracts of land. "They don't sell their land. They keep their land on an intergenerational basis. It's something we haven't run into before, but it's the key to their culture," he says.

The constraints, he says, will inevitably force rents upward by capping development. Rents are already beginning to rise. Nonetheless, Hager Pacific managing partner Adam Milstein concedes initial yields from the recent purchase will be low because existing leases set the rent rolls. But over the long term, he emphasizes, rapid business and population growth will insure significant rent increases.

Neal says Hager Pacific is looking at several other buys in the Pennsylvania market. He says the size of the transaction gave the company immediate legitimacy in the eyes of local brokers, providing access to some properties before they hit the market. Even so, he adds, the pickings are slim because owners recognize the potential for future escalation in value. In the meantime, Neal continues, the company is exploring other markets. "We're looking at some of the larger metro areas. We traditionally like to look at the major markets," he notes. He says Hager Pacific remains open to new California acquisitions, but is concentrating on regions where pricing makes more sense.

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01 Aug 2006

Hager Moves East With $90M Industrial Buy

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CAMP HILL, PA-Newport Beach, CA-based Hager Pacific Properties has acquired the 2.2-million-sf Arnold Logistics portfolio for $90 million, or nearly $41 per sf. The portfolio consists of 11 buildings on 109 acres.

The seller is a venture between Chicago-based Blue Vista Sponsor Equity Fund LLC and an affiliate of Walton Street Real Estate Fund IV LP, which acquired the property in a sale/leaseback agreement with Arnold several years ago for an undisclosed price. Jim Vesey, senior director of the Philadelphia office of Cushman & Wakefield, represented the seller and there was no other broker involved in the transaction with Hager Pacific, Vesey tells GlobeSt.com. The purchase price included assumption of a $55-million mortgage "at a very good rate," Rob Neal, a Hager managing partner, tells GlobeSt.com.

The entire portfolio is 100% leased to Arnold, a third-party logistics supplier for numerous major companies. Neal says Hager worked with the seller to extend Arnold’s lease for 20 years.

According to GlobeSt.com research, the market rate for second-generation distribution space in this market is in the range of $3.75 per sf. Without disclosing the rate for Arnold, Neal says, "we don't mind taking a lower initial rate. We were very sensitive about getting in at a good price per sf. We think this area of Central Pennsylvania has great infrastructure and easy access to a massive population."

This is Hager's first acquisition in Pennsylvania, and Neal says, "this location reminded us of the Inland Empire," referring to the larger California industrial area. "We see this location along the I-81/78 corridor as a slightly newer, slightly smaller phenomenon in the world of logistics and distribution that represents a lower-price, competitive alternative to New Jersey in the same way the Inland Empire did to Los Angeles."

A few of the buildings were completed in the 1960s, according to Neal, with the others phased in between the late 1980s and mid-1960s. "We could do some expansion," he says, "but that would erode yard space, which Arnold is currently using. We are talking with them, however, about potential expansion down the road."

Hager owns properties in California and the Midwest and is currently investing between $300 million and $400 million in commercial real estate throughout major metropolitan markets nationwide.

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31 Jul 2006

Hager Pacific Properties Stepping Up Out-Of-State Buys

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Newport Beach-based Hager Pacific Properties is stepping up the number – and size – of its out-of-state deals.

The privately owned real estate investment company recently bought three office complexes in the Salt Lake City, Chicago and Dallas areas. The acquisitions were Hager Pacific’s first in each market.

The company paid $48 million to Levitt Properties Trust of Hamburg, N.J., for the portfolio, which totals 490,000 square feet.

The deal includes a 209,000 square foot building in the Dallas area used by Cingular Wireless LLC as a service center; a 153,000 square foot office in Sandy, Utah, that Discover Financial Services LLC uses as a service center.

Investment Realty Advisors of Bellevue, Wash., represented both parties in the deal.

The acquisition is the largest non-California deal for Hager Pacific, but probably not for long. The company is expected to close on an apartment building in Atlanta and an industrial building near Philadelphia this week.

Hager Pacific, which buys, redevelops and then sells shopping centers, office and industrial buildings, and apartments, is in the midst of an estimated $300 million to $400 million buying spree.

The company has focused on Southern California for most of its deals until recently. It recently bought an industrial complex in Detroit and an office building in Atlanta.

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31 May 2006

Hager Pacific Buys Two Atlanta Properties

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Hager Pacific Properties has entered the metro Atlanta market by acquiring two Garden Ridge stores for $18.5 million.

The seller was a trust in which CW Capital Asset Management LLC is the special servicer, Los Angeles-based and privately owned Hager Pacific said.

The Garden Ridge home décor and crafts outlet stores are in Kennesaw and Norcross. The Kennesaw store is at 2875 George Busbee Parkway near Interstate 75. The Norcross building is adjacent to Interstate 85 at 1887 Willowtrail Parkway. Each store is 142,000 square feet and each sits on 12 acres.

"Finding markets with significant leasing activity is fundamental to our overall investment strategy," said Adam Milstein, managing partner of Hager Pacific. "Atlanta's leasing activity is comparable to the Orange County and San Diego submarkets and we believe that it will continue to remain strong."

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01 Feb 2006

Baldwin Hills Crenshaw Plaza Sold For $136 Million

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Hager Pacific Properties has sold the 860,000 square-foot Baldwin Hills Crenshaw Plaza for about $136 million to Capri Capital Advisors LLC, a minority-owned firm that invests in African-American and Hispanic areas.

Chicago-based Capri Capital purchased the mall on behalf of an undisclosed institutional client. Hager Pacific, a real estate investment firm with offices in Encino, L.A. and Newport Beach, originally acquired the property in 2003 as part of an exchange for a mall it owned in Escondido.

Reza Etedali, chief executive of Irvine-based Reza of Reza Investment Group, which represented the buyer and seller in the transaction, said the property had been in escrow for three months and closed several days ago.

"We have a very healthy investment market and there is a lot of demand for assets like this," Etedali said. "There is a large demand for assets where investors can park a large amount of money."

Built in 1947 on a 42.8-acre site at the intersection of Crenshaw and Martin Luther King boulevards, the Baldwin Hills Crenshaw Plaza is one of the largest enclosed malls in greater Los Angeles. It is anchored by Sears, Robinsons-May, Magic Johnson Theaters, Albertson's, T.J. Maxx, and the first three-story Wal-Mart in the United States.

The Wal-Mart opened in 2003, attracting high-volume traffic to the mall and helping to spur sales at its other tenants, said Adam Milstein, managing partner of Hager Pacific. Booming real estate prices also improved the value the property, but the mall wasn't a core business for Hager Pacific. The company is now looking to invest $300 million to $400 million in commercial real estate in major U.S. markets.

Capri, the new owner, specializes in retail properties, including malls and large shopping centers, and has assets of about $2.7 billion.

"As a minority-owned firm, we are looking to find more opportunities to invest and re-position real estate assets in predominately African-American and Hispanic communities around the country that are not performing at their highest potential and improve the quality of their shopping and entertainment experience," said Quintin E. Primo III, chairman and chief executive of Capri, in a statement.

Capri intends to focus on attracting the nearly 2 million people who live within a seven-mile radius of the mall, but who tend to spend their money outside of the Baldwin Hills/Crenshaw neighborhood.

Festival Cos. of Los Angeles will be retained as the property’s leasing and management firm.

*Reporter Andy Fixmer contributed to this story.

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21 Dec 2005

Hager Acquires 1M-SF Gateway Industrial For $13M

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DETROIT-In a quick due diligence and underwriting turnaround of less than one month, Hager Pacific Properties of Newport Beach, CA, in a joint venture with Sterling Group of Detroit, has acquired the 1.2-million-sf Gateway Industrial Center for more than $13 million in cash.

Located on 69 acres at 1206 Southfield Rd., at the intersection of Southfield Road and Interstate 96, the 1960-constructed property has an occupancy of nearly 50%, with current tenants including Technicolor Videocassettes, Cast North American Trucking, Detroit Newspapers and VLS, a vendor of DaimlerChrysler Corp. The annual rent quoted is $4.50 per sf, triple net.

According to a statement issued by Robert Neal, executive vice president of Hager Pacific, Detroit tends to be an overlooked area for investment, due to recent negative publicity from the automotive industry. However, Neal notes in a release issued on the sale that "this area will experience additional growth as the domestic auto business rebounds."

The plan for the property is to move it toward stabilization through renovation and re-positioning, as well as boosting lease activity. Gateway Industrial meets Hager Pacific's criteria for investment, which focuses on acquisition of under-utilized properties in competitive markets, then fixing them up and moving them toward stabilization. Sterling Group will manage the property. William Bubniak and Paul DeBono of locally based NAI Farbman represented both Hager and the local seller in the transaction.

Copyright © 2005 Real Estate Media. All rights reserved. Reproduction in whole or in part without permission is prohibited.

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17 Oct 2005

Hager Pacific Sells $20M Freezer Building

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CARSON, CA-Newport Beach-based Hager Pacific Properties has sold a 177,465-sf industrial building for more than $20 million to Mission Hills-based HB & Sons. The building, at 1065 E. Walnut, is a freezer facility that Hager Pacific spent approximately $1 million on during a yearlong renovation to bring the property back to class A status.

The key to the rehabilitation of the property, according to Hager Pacific EVP Robert Neal, was improving the refrigeration system to ensure reliable cooling. Hager Pacific completely replaced the refrigeration control system to provide for remote monitoring and control of the physical plant.

Neal notes that the improvements also allowed for energy management that saves more than 40% on utility costs, or approximately $200,000 in annual electricity savings. Other upgrades to the property included repairs to components of the refrigeration system, a new roof, renewal of the building's exterior surfaces, landscaping, rehabilitation of the parking areas, and remodeling of the main lobby.

Demand is high for freezer and cooling space that is close to the ports of Long Beach and Los Angeles as this property is with its location near the 91 and 710 freeways, Neal points out. The building includes 96,494 sf of freezer and cooler space plus a 28,315-sf FDA-compliant food processing plant, 30,000 sf of office space and 22,656 sf of high bay warehouse.

Michael Ross and Fred Cordova of Colliers Seeley represented both the seller and the buyer in the building sale. The property was part of a Hager Pacific portfolio of more than 100 assets including office buildings, warehouses, research and development complexes, apartment buildings, community shopping centers and other properties ranging from 25,000 sf to 800,000 sf.

Copyright © 2005 Real Estate Media. All rights reserved. Reproduction in whole or in part without permission is prohibited.

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29 Aug 2005

California Investor Aims For $400Mln Of Acquisitions

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Hager Pacific Properties plans to acquire $400 million of assets within the next year, seeking to expand its 100-property portfolio.

The Newport Beach, Calif., real estate investment firm acquires and rehabilitates undervalued properties in Southern California. Hager funds its acquisitions through the private of capital of its three principals, David Hager, Adam Milstein, and Robert Neal, who formed the company some 20 years ago.

Although Hager's portfolio includes retail, office and apartment properties, it is mostly an industrial buyer.

The company generally operates without partners, preferring a hands-on approach to its investments. It will oversee a property's redevelopment and remain as property manager after its re-positioning is complete. The company generally holds properties for the long-haul, often owning a property for more than 10 years.

Hager has already embarked on its ambitious plan. Earlier this month, the firm paid $30 million for an 800,000-square-foot industrial property in Colton, Calif., that is leased to Stater Bros. through 2008, when the company moves to its new headquarters at the former Norton Air Force Base. Once Stater vacates, Hager plan is to redevelop the complex and would offer several vacant parcels for sale or lease.

Other acquisitions are currently in the works.

To fuel some of its activity, Hager has placed a retail property on the block and is in negotiations on a sale, which could be completed within six months. It could generate $100 million of additional equity.

Hager will pursue properties as small as $5 million and up to more than $100 million.

Hager is typically a cash buyer. Its portfolio is less than 50 percent leveraged.

Its portfolio consists of 8 million sf of industrial, retail and office space as well as about 3,000 residential units.

Among the largest properties in the company's portfolio is Baldwin Hills Crenshaw Plaza mall, an 850,000 sf retail property in Los Angeles. It also owns 1291 S. Vintage Ave., a 273,000 sf industrial property in Ontario, Calif.

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29 Aug 2005

Newport Beach Firm Buys Stater Bros. Base In Colton

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A Newport Beach company has purchased the Stater Bros. corporate headquarters in Colton for nearly $30 million in cash.

Hager Pacific Properties, a privately owned investment firm, closed escrow on the complex at 21700 Barton Road Aug. 24, said Rob Neal, executive vice president of Hager Pacific Properties.

The seller was Newkirk Colane, a group of private investors in New York.

Stater Bros., the largest private company in the Inland Empire, is building a corporate headquarters and warehouse-distribution facility at the former Norton Air Force Base in San Bernardino.

That facility is expected to be ready in September 2006, said Jack Brown, Stater Bros. chairman and chief executive officer. Employees won't start moving into the new facility until early 2007 so deliveries won't be interrupted during the holiday season, Brown said.

Stater Bros.' lease runs through 2008, so some financial arrangement will need to be made until the supermarket chain vacates the site.

Meanwhile, Hager Pacific - which plans to manage the property and act as its landlord - will look for tenants.

"I see it as a nice industrial/ warehouse/ distribution operation," Neal said. "But it's going to be difficult to talk to anyone about a deal as long as Stater Bros. is still working out of there."

The Colton property, which Stater Bros. has occupied since the early 1960s, includes 500,000 square feet of warehouse/distribution space, 245,000 square feet of freezer space and 55,000 square feet of offices.

The facility is ideally located for a major warehouse/ distribution operation: within sight of Interstate 215 and close to the 60, 91 and 10 freeways.

But it is the freezers that make the facility a perfect fit for another food distributor to locate there, Neal said.

"We expect to get a lot of interest because refrigeration facilities are so expensive to build," he said. "All of the buildings there are expensive to build. One of the reasons we were attracted to this site was because Colton is no longer on the perimeter of the Inland Empire. It's in the middle of the Inland Empire's east end, and everything there is growing rapidly."

The facility occupies 50 acres. Neal estimates that 650,00 to 700,000 square feet of property there can accommodate new buildings.

Hager Pacific officials want to renovate the six existing structures and build other office and warehouse/ distribution buildings there.

"We won't know for sure what we're going to do until Stater Bros. leaves," Neal said. "But there is a lot of space we can backfill. There are a lot of ways we can present that property."

Hager Pacific works without bringing in equity partners. Its portfolio includes more than 100 properties that total more than 8 million square feet, according to a company release.

In February 2003, Hager Pacific bought the former Heilig-Meyers furniture distribution center next to Interstate 15 in Hesperia for $10 million. Last September, Hager Pacific sold the 435,000 square-foot building to ICO Investment Group for an undisclosed sum.

STATER BROS BUYS PHARMACIES

This has been a busy year for Stater Bros., the largest private company in the Inland Empire. By the end of the year Stater Bros. will have opened stores in south Fontana and Adelanto. That will bring the chain's store count to 165 and its number of employees to approximately 17,000.

Stater Bros. has also purchased California Pharmacy Systems Inc., owner of 16 pharmacies located inside Stater Bros. markets. Stater Bros. paid $2.6 million for the company's assets plus inventory costs, according to documents filed June 26 with the Securities and Exchange Commission.

FORECLOSURE DATA MIXED

Riverside County recorded one foreclosure for every 1,690 households in July, a 21.2% decline from June, according to the RealtyTrac Monthly U.S. Foreclosure Market Report.

Foreclosures in San Bernardino County, however, rose during July: 439 households entered some form of foreclosure during July, or one foreclosure for every 1,370 households, a rate more than twice the national average, according to RealtyTrac.

Nationwide nearly 79,000 properties were foreclosed on in July, a 4.7% increase from June and the most foreclosures reported in any month this year.

Foreclosures have increased more than 12% during the last two months, raising the national foreclosure rate to one in every 1,465 households, according to the RealtyTrac report.

Copyright (c) 2005 Bell & Howell Information and Learning Company. All rights reserved.

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25 Aug 2005

Hager Pacific Acquires Stater Bros HQ Campus

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Hager Pacific Properties has acquired the Stater Bros corporate HQ and campus, located in Colton, for approximately $30 mil, in an all-cash deal. The complex totals more than 800k sf ($37.50/sf) of improvements and is located at 21700 Barton Rd, 280 De Berry St, and 375 De Berry St, in close proximity to the 215, 60, and 91 freeways, with visibility from the 215 freeway.

The entire property encompasses 50 acres and contains six buildings, including 245k sf of freezer/cooler space. The Stater Bros campus also features 500k sf of high bay warehouse distribution space and 55k sf of office space. The property is leased to Stater Bros through 2008, when Stater Bros is planning to move to its new headquarters currently under construction at the former Norton Air Force Base. At that time, Hager Pacific Properties plans to redevelop the campus, providing a variety of building options for sale or for lease, as well as offering several vacant parcels of land for sale and/or build-to-suit. These options should prove attractive to companies looking for a prime location with freeway access and visibility.

"This location is ideally situated for future redevelopment in the rapidly growing Inland Empire East Market," commented Robert Neal, Executive Vice President of Hager Pacific Properties. "The market is mature enough that older, renovated buildings will be welcomed as a low-cost alternative to newly constructed properties."

He added, "The type of building product found on the Stater Bros campus is extremely costly to build – particularly the freezer and cooler facilities – which make the property even more attractive to companies looking to capitalize on the tremendous growth this area has experienced in recent years."

The corporate campus is located in the growing Inland Empire east submarket that includes the cities of Rialto, Colton, San Bernardino, Moreno Valley, Perris, and Riverside, and has recently emerged as an important component to the region's job growth.

The area has continued to grow around the City of Colton, located between the cities of San Bernardino and Riverside, reflecting a wider variety of housing and business opportunities. Colton is also one of the few municipalities to have its own public utilities company, providing electric, water, and wastewater service to property owners within the city.

Chuck Belden and Barry Gail of Cushman & Wakefield, and Janine Padia of JP Realty Services represented the buyer and seller.

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