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J.H. Snyder Co. is heading for the suburbs in its latest development deal, a $35 million shopping center in Granada Hills at the site of the former Coast Savings Bank administrative headquarters.

Snyder partner Cliff Goldstein said the company has closed escrow on the purchase of the 16.44-acre site, at Chatsworth Street and Zelzah Avenue, where the developer will build what Goldstein says could be one of the “trendier” types of shopping centers.

“The trend and I’m not sure it’s even going on enough yet to call it a trend is to combine elements of power centers and neighborhood centers,” Goldstein said.

He explained that the new Granada Hills center will include an Office Max and an Orchard Supply Hardware store, two retailers that typically are found in so-called power centers occupied by huge tenants. They’re also known as “big box” and “category killer” retailers.

But the center will also include tenants typically found in a neighborhood center: a Ralphs supermarket, a Longs Drugs store, a dry cleaner and other small shops and fast food restaurants.

Goldstein calls the mix a “powerhood” center, a term he may have originated. He said he hasn’t heard anyone else use it.

Goldstein said the hope is that the neighborhood center tenants will help bring more customers into the power center stores. He said customers typically visit power center retailers only once or twice a month, usually making a special trip, while they pop into smaller shops and grocery stores much more often.

But someone shopping for groceries is more likely to drop into an office supply store if it’s located right next door, he said.

The new center is already 90 percent committed with 15- to 20-year leases with Ralphs, Longs Drugs, Orchard Supply, Office Max, a craft shop and two fast food restaurants, Goldstein said.

Allen Young, a CB Commercial Real Estate Group Inc. senior vice president who represented Snyder and seller Coast Savings in the deal, said construction began recently at the site in an unusual agreement that allowed Snyder to start before escrow closed. Goldstein said Nov. 1 is the target date to open the center.

More cash for Arden

Beverly Hills-based Arden Realty Inc. sold about 3.75 million more shares of its recent secondary stock offering than originally planned, according to Diana Laing, chief financial officer.

Laing said Arden originally planned to sell 10 million new shares, but the issue was increased to 13.75 million shares due to strong demand. The new shares sold for $26.125 each, and edged up slightly afterward. Early last week, the shares were trading at $27.125.

Arden, which has already spent $245 million acquiring properties so far this year, is one of the many real estate investment trusts that are diving headlong into the L.A. investment market.

Among the others is Greenville, S.C.-based Insignia Financial Group Inc., which struck a deal last week to merge its privately held REIT, Insignia Properties Trust, with Westlake Village-based Angeles Mortgage Investment Trust, a publicly traded REIT.

Driving the deal is Insignia’s desire to convert its privately held REIT to a public REIT.

Ann Merguerian, chief financial officer at Angeles Mortgage, said the deal involves a stock swap in which Insignia will be the surviving company. Each of Angeles’ 2.6 million outstanding shares will be valued at $16.25 per share and exchanged for 1.625 shares of Insignia common stock, which puts the value of the deal at approximately $42.5 million.

Angeles and Insignia had earlier this year announced a letter of intent to execute last week’s definitive agreement, so Angeles’ stock had already moved up in price in recent months and the market didn’t react much to last week’s announcement. Angeles stock moved up about one-eighth of a point on the announcement.

Merguerian explained that Insignia was looking for an existing public REIT as a vehicle for buying more properties, rather than going through the more time-consuming process of launching a new public REIT.

Angeles is a mortgage-backed REIT with net assets of about $43 million in real estate loans. After the merger, Insignia plans to continue purchasing primarily properties rather than mortgages.

The Angeles-Insignia deal, which is subject to approval by regulators, would result in a REIT with $280 million in assets.

Industrial buy

Newport Beach-based REIT Pacific Gulf Properties said it paid $11.5 million for four industrial buildings in Downey totaling 289,000 square feet part of a $67.2 million deal in which it bought 1.5 million square feet of industrial space at five locations throughout California.

Pacific said the Downey buildings are 94 percent leased, and the other properties, all of which are outside the L.A. area, also have high occupancy rates.

High occupancy rates mean the buildings are more likely to be generating positive cash flows, and hence profits, a switch from the scenario just a few years ago when many buildings were mostly empty. In those days, industrial properties were more likely to be sold by distressed owners or by lenders who had foreclosed on them and just wanted to get the properties off of their balance sheets.

More industrial action

San Diego-based The Shidler Group said it recently bought $50 million worth of industrial properties in 33 separate buildings totaling 1.8 million square feet, with 80 percent of the space spread throughout Los Angeles County and the rest in Orange and Alameda counties and Phoenix, Ariz.

Marc Brutten, Shidler managing partner, said in an announcement that the company expects a strong cash flow from the properties because they are fully leased. He said Shidler has acquired 5.1 million square feet of office and industrial properties in the West over the last two years and has financial backers for its plans to spend $400 million on properties in the West over the next 18 months.

Bob Howard covers real estate for the Los Angeles Business Journal.