DLJ Real Estate Capital Partners Inc.’s second fund to invest in real estate globally, now in the process of being closed, is even larger than the first at $1.2 billion.
Like the first fund, which was $680 million, the second will invest in a broad range of real estate in the United States and overseas. The second fund already has committed $170 million of equity and should acquire $4 billion to $5 billion worth of real estate altogether, said Barry Sholem, co-chairman of the Century City-based Capital Partners with David Weil.
“We’ve raised the bar and we’ll be doing even larger transactions in fund two,” Sholem said.
The first fund achieved a rate of return of 40 percent and acquired $2.5 billion worth of real estate. Investments included downtown office buildings in Dallas, Denver and Tokyo; resort hotels in Puerto Rico and the Napa Valley; ground-up office developments in Boston and California; multifamily projects in Colorado and Virginia; regional shopping centers in Madrid, Barcelona and Montreal and other suburban office and industrial projects.
Among the local investments were 180,000 square feet of shops in Westwood Village that are being renovated and leased to new retailers.
The second fund will target under-performing assets, corporate divestitures, international acquisitions, rehabs, ground-up development and real estate companies.
DLJ also made two recent personnel changes. Robert Cavanaugh, who was with Bankers Trust’s real estate finance department, came in as a partner in the fund and will handle West Coast acquisitions,
And Andrew Kassoy, a senior vice president responsible for many West Coast investments, has been promoted to partner in the fund. He is moving to New York, where he will be responsible for international investments.
Project Retooled
Regent Properties has revised its Hollywood Marketplace project, in light of the “crippling effect” of a lawsuit brought by a neighboring property owner.
The new plan cuts the retail space from 225,000 square feet to 110,000, and adds 300 apartment units above the stores and restaurants. A multi-level parking structure remains, but the movie theaters have been cut.
The revised project at Sunset Boulevard and Vine Street promotes “the feeling of living in a village, within an urban environment,” said Doug Brown, a partner at Regent.
“It’s a smaller version of what we had before,” Brown said. “It’s a great marketplace for apartments. There are not many in the Hollywood area and there’s a real void we would like to fill.”
The lawsuit, filed by Meringoff Equities, concerned parking. It was recently settled and Regent closed on its acquisition of the main portion of the property.
Meanwhile, tenants that had committed to the project bailed and replacements declined to sign up because of the uncertainty. Brown said Regent is talking to some of the same tenants, along with new ones.
Green Building Bought
Spieker Properties has closed on its purchase of the green glass building that has sat unfinished by the San Diego Freeway for more than a decade.
The purchase price was in excess of $10 million and sources estimate the total investment will reach $18-$20 million once the building is completed.
Formerly known as Cotner Plaza, Spieker has re-christened the 73,000-square-foot building Santa Monica Gateway.
Thomas Herta, vice president at Spieker, said the building should be completed in May. Work includes the electrical, mechanical and plumbing systems and installing “wiring for every conceivable need,” Herta said. Travertine will be placed on the exterior of the first two floors and in the lobby.
“It’s a brand-new building,” Herta said.
The building is in the midst of one of the region’s hottest office markets and next to the Westwood Gateway, on Santa Monica Boulevard. Yet it has sat unfinished and unoccupied for the past 13 years. It was built by Jim Shuemaker during the mid-1980s boom. Amid legal disputes, it was taken over by its lender, which eventually sold it for about $2 million to real estate veteran Don Greenwood.
Herta said the rebirth of Spieker’s project has already stirred a lot of interest among prospective tenants.
New Beginnings
John Barganski is moving from PacTen Partners in West L.A. to Costa Mesa-based C.J. Segerstrom & Sons, where he will help oversee a 2 million-square-foot commercial office portfolio.
Barganski has been vice president of marketing and leasing at PacTen for the past couple of years. He has marketed Glendale Plaza, which he said is about to be 80 percent leased, and Valencia Corporate Point, a 700,000-square-foot campus begun last fall.
“Only with that (leasing in Glendale) behind me is this any easier,” he said. “We put the project on the map.”
Portfolio Sale
Did Insignia/ESG recently buy an office portfolio of L.A.-area properties for in excess of $50 million?
Several real estate sources say yes. But Robert Shibuya, executive managing director of Insignia’s West division, said Insignia was not the buyer, but only represented the buyer. A title report for one of the buildings lists the owner as Pacific State Investors LLC.
Shibuya said it was a private transaction and he is forbidden to specify the buyer or the price. He said Insignia has done the leasing and management for the buildings and will continue to do so.
Other sources said an offshore entity purchased the properties from the Japanese investment firm Tohshin Corp.
The portfolio consists of: Carlton Plaza in Woodland Hills, 977 N. Broadway in Chinatown, a two-story office building in Studio City and 200 N. Los Robles Ave. in Pasadena.
Staff reporter Elizabeth Hayes can be reached at (323) 549-5225, ext. 229, or at [email protected].
