Commercial Property Executive<\/em> looks at some of 2023\u2019s most intriguing deals.<\/p>\n 10545 Production Ave., Fontana, Calif. Image courtesy of Cushman & Wakefield<\/em><\/p><\/div>\n Rexford Industrial Realty<\/strong> acquired 10545 Production, a Class A 1.1 million-square-foot industrial property in the Inland Empire West submarket of Fontana, Calif., in a record sale-leaseback deal with national tire distributor Tireco for $365 million. The transaction marked the highest aggregate sale price for a single industrial asset. The deal included a two-year sale-leaseback with options to extend the lease term with the tenant.<\/p>\n Cushman & Wakefield<\/em><\/strong>\u2019s National Advisory Group based in Southern California marketed the property and was led by Executive Vice Chair Jeff Chiate, Rick Ellison, Jeffrey Cole, Mike Adey, Brad Brandenburg and Matt Leupold. The firm\u2019s Phil Lombardo, Chuck Belden and Andrew Starnes also provided local leasing advisory.<\/em><\/p>\n Chiate told CPE<\/em> that the property\u2019s location\u2014on the West Coast and near Southern California freeways, ports and airports\u2014and size helped boost its value.<\/p>\n \u201cThere is currently also very limited Class A industrial supply available for sale of this magnitude and profile in the market, making this asset even more appealing as an investment both in the near term, given its baked-in rental income via the leaseback, and in the long term to fulfill expected tenant demand in the sought-after Inland Empire,” Chiate said.<\/p>\n The sales team executed a formal marketing process and procured multiple offers from well-capitalized institutional investors and through various rounds of bidding.<\/p>\n 31 Schalks Crossing Road, Plainsboro, N.J. Image courtesy of Fennelly Associates<\/em><\/p><\/div>\n Turkey Island Corp.<\/strong> sold a 31-acre property in Plainsboro, N.J., this year on a site containing the nation\u2019s first privately owned nuclear reactor. Developed in 1957, the property was later transformed into a drug manufacturing facility. Jacobus Pharmaceutical, which manufactured \u201corphan drugs,\u201d pharmaceutical agents that treat very rare conditions, had leased the property but had to shut down after losing a critical patent. The buyer of the 31 Shalks Crossing Road, which includes a 50,150-square-foot building, was Princeton Life Science Park LLC<\/strong>, which acquired the facility for $7.7 million. The buyer also purchased the patents held by Jacobus and equipment and retained the employees. Turkey Island Corp. bought the property after it was decommissioned as a nuclear reactor in 1980. The property had been designed to commercialize isotopes across the country and played an integral role in the United States nuclear power research program for decades.<\/p>\n Jerry Fennelly, president of Fennelly Associates<\/strong> in Hamilton Township, N.J., and Matt Fennelly, corporate real estate specialist, represented seller and procured the buyer. The buyer contacted Fennelly Associates.<\/em><\/p>\n Fennelly said the biggest challenges were dealing with concerns about past radioactivity, equipment limitations and lack of a conventional marketing playbook. The team executed an omnichannel marketing strategy with press releases, social media engagement, immersive videos and ads on various platforms. The buyer, a West Windsor, N.J., private equity firm, contacted the brokerage through a newspaper ad. The entity saw the opportunity to buy both a drug manufacturing company and facility in a competitive life science market.<\/p>\n \u201cSelling a former nuclear reactor is a challenge that few brokers will ever face in their careers,\u201d Fennelly said. \u201cAlthough the assignment was by no means an easy one, we knew we could lean on our time-tested combination of superior local market knowledge paired with our deep marketing expertise across asset types to secure a buyer so our client could achieve their goals with the property.\u201d<\/p>\n 1440-1628 E. Lincoln Ave., Orange, Calif. Image courtesy of Marcus & Millichap<\/em><\/p><\/div>\n Jacksonville, Fla.,-based retail REIT Regency Centers<\/strong> expanded its West Coast holdings with the acquisition of the leasehold interest in a long-term ground lease for Nohl Plaza, a 103,639-square-foot retail center in Orange, Calif., from Nohl Plaza LLC<\/strong> for $25.3 million. The REIT now owns 12 grocery-anchored shopping centers<\/a> totaling more than 1.5 million square feet in Orange County.<\/p>\n Vons anchors Nohl Plaza, which is 95 percent leased with Starbucks, Del Taco, Bank of America, the Tartan Room restaurant and Union 76 gas station and other tenants. Built on 10 acres between 1966 and 1979, the buyer had owned the center since 1989. The property is located at the intersection of Lincoln Avenue and Tustin Boulevard. It is also adjacent to California State Route 55, which records traffic counts of more than 222,000 vehicles per day.<\/p>\n Institutional Property Advisors<\/em><\/strong>, a division of Marcus & Millichap, represented the seller and procured the buyer. The IPA team was led by Executive Director Tom Lagos, IPA\u2019s Patrick Toomey, Jose Carrazana and Joe Linkogle, senior vice president with Marcus & Millichap<\/strong>.The transaction was handled on behalf of Regency Centers by the firm\u2019s senior vice president investments-West, John Mehigan, and Managing Director Barry Argalas. <\/em><\/p>\n \u201cNavigating a marketing campaign for a leasehold offering while interest rates were broadly affecting commercial real estate values was challenging, Toomey said. \u201cWe strategically positioned the asset to appeal to the right investors and highlighted the property\u2019s below-market 80-year ground lease, which has a right of first refusal, and the anchor tenant\u2019s below-market lease,\u201d said Toomey.<\/p>\n 125 S. Clark St., Chicago. Image courtesy of Transwestern Real Estate Services<\/em><\/p><\/div>\n In the largest new lease signed in Chicago\u2019s Central Loop this year, Total Quality Logistics inked a five-year deal for 36,322 square feet at The National, a 20-story, 600,830-square-foot office building located at 125 S. Clark St. owned by Commerz Real<\/strong>.<\/p>\n Previously located at 328 S. Jefferson St., TQL\u2019s new lease represents a 5,000-square-foot expansion in the CBD. Built in 1907, the designated Chicago landmark building was renovated in 2016 and rebranded The National. The renovations added a fitness center, tenant lounge with bar, pool table and collaborative seating, outdoor terrace and Revival Food Hall, a 24,000-square-foot dining marketplace.<\/p>\n Transwestern Real Estate Services<\/em><\/strong>, led by Executive Vice President Eric Myers, Senior Vice President Kathleen Bertrand and Senior Associate John Nelson, represented the building owner. TQL was represented by CBRE<\/strong>\u2019s Jon Milonas and James Otto. <\/em><\/p>\n Brokers involved in the deal told CPE the building\u2019s best-in-class amenities set The National apart from other office buildings in the CBD and helped boost leasing. Nelson said tenants are attracted to The National because of its beauty, history and amenities that fulfill their requirements.<\/p>\n \u201cThe National\u2019s robust food hall gives a plethora of options and brings life and energy into the building. The building also has stable ownership in Commerz Real, strong amenities that give tenants the ability to recharge and socialize, and good access to public transportation,\u201d Nelson said.<\/p>\n 1723-1757 Marshall Drive, Des Plaines, Ill. Image courtesy of Lee & Associates<\/em><\/p><\/div>\n Last spring, Advanced Plastic Corp., a custom plastic extrusion company based in Lincolnwood, Ill., was looking to lease about 30,000 square feet of warehousing space. The company ended up signing a long-term lease in September for an 87,703-square-foot industrial building at 1723-1757 Marshall Drive in Des Plaines, Ill., owned by DRA Advisors, which was split into two spaces of about 30,000 square feet and 60,000 square feet.<\/p>\n Once Advanced Plastic saw the Des Plaines site, they realized they could add production as well as warehousing and distribution at the building. They liked the fact that the building already had a side-load dock for easier loading on flatbed trucks. Advanced Plastic began considering taking the 60,000-square-foot space. After discussions with the landlord, the company agreed to lease the entire building and also use it for overflow office space. In addition to locking down a long-term contract, leasing the full building gives the tenant more control, particularly over parking.<\/p>\n Rick Anesi, senior vice president at Lee & Associates<\/strong> in Rosemont, Ill., was the broker for Advanced Plastic Corp. Brad Simousek, senior vice president at Lee & Associates in Rosemont, along with Lee & Associates Principals Jeff Janda and John Cassidy, represented the landlord, DRA Advisors<\/strong>.<\/p>\n Challenges included finding the space requirements for the client in a tight industrial market<\/a> that needed to be near the firm\u2019s main facility. Once they agreed to expand the lease and add manufacturing at the site, the electrical system needed to be upgraded. Anesi said the company plans to begin operations at the Des Plaines location in early 2024.<\/p>\n \u201cAdvanced Plastic chose this site due to its size and location. The way the building is configured allows them flexibility for manufacturing, inventory and distribution,\u201d Anesi said. \u201cThey also liked the fact that they will be the sole tenant.\u201d<\/p>\n Intersection of Interstate 25 and U.S. 34, Loveland, Colo. Image courtesy of CBRE<\/em><\/p><\/div>\n Schuman Cos.<\/strong> has completed the purchase of the 315,000-square-foot site of the formerly blighted Loveland Outlets in Loveland, Colo., with the $12.3 million acquisition of the south parcel of what is now called Loveland Yards, from owner Craig Realty Group<\/strong>. The 37-acre site at the intersection of Interstate 25 and U.S. 34 was acquired by Schuman for a total of $27.3 million.<\/p>\n Schuman is repositioning the former outlet center into for-sale or for-rent condos for retail, office or flex use with suites available from 1,000 to 120,700 square feet. To date, nearly 95 percent of the north parcel space is sold, leased or in final negotiations with tenants including Avery\u2019s Tea House, Slate Studios, Gold\u2019s Gym, School of Rock, CycleBar, Citipointe Church, Ewing Leavitt Insurance and Trek Bicycles.<\/p>\n Several south parcel tenants have remained, and one new 5,281-square-foot lease has been signed and a 9,925-square-foot lease is in negotiation. The mix is primarily retail, followed by flex and office.<\/p>\n Melissa Moran and Jon Rue with CBRE<\/strong>\u2019s Fort Collins, Colo., office arranged the property sale and are marketing the spaces for sale and lease. There was no broker for the sellers.<\/em><\/p>\n \u201cThis center sat underutilized for decades at one of the best locations in Northern Colorado,\u201d Moran told CPE<\/em>. \u201cRather than a demolition and shift to a new use, they saw an opportunity to leverage the property\u2019s existing strengths and its location to create a new center that met a specific need in the community.\u201d<\/p>\n Moran noted the for-sale offering has been compelling because it allows small businesses to build equity in their real estate.<\/p>\n 6222 Wilshire Blvd., Los Angeles. Image courtesy of Decron Properties<\/em><\/p><\/div>\n It\u2019s not often an international election impedes on a U.S. office lease, but that\u2019s what happened when Decron Properties<\/strong> wanted to lease the entire top penthouse of its 86,736-square-foot Class A building at 6222 Wilshire Blvd. in Los Angeles to Federative Republic of Brazil for Brazil\u2019s Consulate General office. Decron ended up signing a $10.4 million, 10.5-year, 16,477-square-foot lease with Brazil but had to wait until Brazil\u2019s presidential election on Oct. 3, 2022, and subsequent run-off election on Oct. 30, were held. Final approval came in spring 2023.<\/p>\n Brian M. Dunne and Don Hudson of Kidder Mathews<\/strong> and Stan Gerlach of CBRE<\/strong> represented Brazil in the deal. Micheal Geller of JLL<\/strong> represented Decron.<\/em><\/p>\n The lease was notable for its term and size, according to Kidder Mathews. The 10.5-year term is more than double Los Angeles County\u2019s average office lease of 4.25 years since 2022 and more than three times the average size (5,070 square feet).<\/p>\n Waiting for the elections was a major hurdle for the deal to close, Dunne said, and Decron chose to wait about a year with no income from the space until the Brazil lease could be signed because of the tight office leasing market and competition from properties like Century City.<\/p>\n \u201cThey have the German Consulate on the fifth floor, and they know how good this type of tenant can be for the ownership,\u201d Dunne told CPE.<\/em><\/p>\n Other challenges included finding a central location with their space requirements that wasn\u2019t in a luxury market like Beverly Hills because the tenant feared criticism back home from political opponents.<\/p>\n 12250 El Camino Real, San Diego Image courtesy of JLL<\/em><\/p><\/div>\n Phase 3 Real Estate Partners Inc.<\/strong> converted a former office building in the Del Mar Heights submarket of San Diego into an 86,000-square-foot, Class A lab building and quickly signed three tenants for a total of 16,385 square feet. The building at 12250 El Camino Real offers suites ranging from 4,000 to 12,000 square feet, and is aimed at early-stage biotech companies that find it hard to lease smaller Class A lab suites in the market.<\/p>\n The new tenants are Mabwell Therapeutics, which signed a 6,777-square-foot lease; Genece Health, which signed a 5,152-square-foot lease; and Lygos Inc., which signed a 4,511-square-foot lease.<\/p>\n JLL<\/em><\/strong>\u2019s Chad Urie, Grant Schoneman and Taylor DeBerry represented the landlord in all three leases. Tristen Schneider and John Hundley of Kidder Mathews<\/strong> represented Mabwell. Shane Poppen of Hughes Marino<\/strong> represented Genece and Lygos.<\/em><\/p>\n DeBerry said Phase 3 Real Estate partners designed Genesis Del Mar to accommodate early-stage life science companies looking for graduator-sized lab suites.<\/p>\n \u201cThese suites are typically the first commercial space a life science company leases upon \u2018graduating\u2019 from the incubator,\u201d he said. \u201cPhase 3 and JLL were able to capitalize on that demand by delivering highly efficient suites on time.\u201d<\/p>\n 5001 Celebration Pointe, Gainesville, Fla. Image courtesy of Avison Young<\/em><\/p><\/div>\n Constant Contact faced an increasingly common problem when the pandemic ended\u2014too much office space because many workers were working permanently from home. The firm was looking to sublease about 25,000 square feet at its office at 5001 Celebration Pointe in Gainesville, Fla., owned by Celebration Pointe Office Partners II LLC.<\/p>\n Avison Young<\/strong> Principal Rick Cain knew it would be challenging in a tertiary market like Gainesville to find a single company that could take that much square footage at Class A lease rates. After marketing the property for several months, Cain was contacted by Gas South, an Atlanta-based energy provider that had opened a Gainesville office but was not happy with the space.<\/p>\n Cain represented both Constant Contact and Gas South. <\/em><\/p>\n While Gas South\u2019s executives liked the sublease space, they were still committed to a year on their current lease. Cain negotiated a reasonable period of rent abatement to help offset a portion of Gas South\u2019s remaining term freeing them up for the subleased space.<\/p>\n \u201cIn my experience, when you are dealing with a sublease situation it can be a complicated process, Cain said, noting his prior relationship with the landlord as the original leasing agent for the building helped in this deal.<\/p>\nC&W Brokers Record $365M SoCal Industrial Asset<\/h2>\n
![\"10545](\"https:\/\/www.commercialsearch.com\/news\/wp-content\/uploads\/sites\/46\/2023\/11\/10545-Production-Avenue-Deal-Photo.jpg\")
<\/a>Fennelly Sells Former N.J. Nuclear Reactor Repurposed as Drug Manufacturing Facility<\/h2>\n
![\"31](\"https:\/\/www.commercialsearch.com\/news\/wp-content\/uploads\/sites\/46\/2023\/11\/31-Schalks-Crossing-Road.jpg\")
<\/a>IPA Arranges Leasehold Sale of Ground Lease for Orange County Retail Center<\/h2>\n
![\"1440-1628](\"https:\/\/www.commercialsearch.com\/news\/wp-content\/uploads\/sites\/46\/2023\/11\/Nohl-Plaza-Image-courtesy-of-Marcus-Millichap.jpg\")
<\/a>36 KSF Lease Brokered at Historic Chicago Loop Office Building<\/h2>\n
![\"125](\"https:\/\/www.commercialsearch.com\/news\/wp-content\/uploads\/sites\/46\/2023\/11\/TheNational.jpg\")
<\/a>Tenant Takes Full Industrial Building in Chicagoland<\/h2>\n
![\"1723-1757](\"https:\/\/www.commercialsearch.com\/news\/wp-content\/uploads\/sites\/46\/2023\/11\/1723-Marshall-Des-Plaines.jpg\")
<\/a>Repositioning Blighted Colorado Mall for Sales, Leases<\/h2>\n
![\"Intersection](\"https:\/\/www.commercialsearch.com\/news\/wp-content\/uploads\/sites\/46\/2023\/11\/Loveland-Yards-Colo._-aerial-view.jpg\")
<\/a>Federative Republic of Brazil Signs Long-Term LA Lease<\/h2>\n
![\"6222](\"https:\/\/www.commercialsearch.com\/news\/wp-content\/uploads\/sites\/46\/2023\/11\/6222-Wilshire-Blvd.-Decron-Headquarters.jpg\")
<\/a>Former San Diego Office Property Signs 3 Life Science Tenants<\/h2>\n
![\"12250](\"https:\/\/www.commercialsearch.com\/news\/wp-content\/uploads\/sites\/46\/2023\/11\/Genesis-Del-Mar.jpg\")
<\/a>Complex Sublease Deal Signed at Florida\u2019s Celebration Pointe<\/h2>\n
![\"5001](\"https:\/\/www.commercialsearch.com\/news\/wp-content\/uploads\/sites\/46\/2023\/11\/5001_Celebration_Pointe_Ave.jpg\")
<\/a>Madison Avenue Bank Branch Converted to Luxury Retail Spaces<\/h2>\n
![\"540](\"https:\/\/www.commercialsearch.com\/news\/wp-content\/uploads\/sites\/46\/2023\/11\/540-Madison_entire-building.jpeg\")
<\/a>