Harbor Associates, LLC in joint venture with Taconic Capital Advisors has closed on a $41.7 million off-market acquisition of a five-building commercial office portfolio totaling 368,000 square feet in San Bernardino, CA.
All five of the assets, ranging in size from 70,000 – 115,000 square feet, are located in the Tri City Corporate Center, a 153-acre master planned mixed-use office park with one million square feet of commercial office and 390,000 square feet of retail space. Tri City Corporate Center, which was developed in several phases between 1986 through 2008, also offers lush landscaped setbacks and green belts, wide streets, distinctive project signage and extensive public art. The portfolio benefits from its visibility, accessibility and transit-oriented location. The development fronts the San Bernardino (I-10) Freeway and is strategically located one mile from the Riverside (I-215) Freeway.
The portfolio, which is collectively 55% leased to 28 different tenants, represents the only block of contiguous office space of more than 75,000 square feet in the Inland Empire. Commercial office vacancy rates in the Inland Empire have been dropping dramatically and currently stands at 8.6%, lower than Los Angeles, Orange County or San Diego.
“The Inland Empire has a pretty dramatic supply/demand imbalance of large contiguous blocks of space,” said Harbor Principal Paul Miszkowicz, “Moreover, the market hasn’t seen any new office construction since 2009 in an environment where vacancy has dropped from 21.2% to 8.6% over the last six years. We think there’s unmet demand in this space and look forward to executing on our lease-up strategy.”
Harbor plans to re-position and lease-up the assets through a renovation program across the portfolio that includes upgraded building entries and lobby experiences, elevator improvements, new roofs, and replacement of the original HVAC units. The portfolio will debut rent-ready spec suites, EV charging stations, LED lighting retrofit along with new building and project signage.
“Our plan is to breathe fresh energy and reintroduce the renovated projects to the tenant and brokerage communities,” added Harbor Vice President Brad Johnson. “Our focus is on meeting our tenant’s real estate objectives and delivering efficient solutions in a Class A master planned environment.”
The joint venture is the first between Harbor and Taconic.
“The acquisition presented us with an attractive value-add opportunity with an experienced local sponsorship team in a market where there remains signifant runway for growth,” added Taconic Director Eric Sitman.
The buy for Harbor is the firm’s 23rd value add office acquisition in the last five years and expands the company’s Southern California office portfolio to 19 projects totaling more than 2.4 million square feet, according to Harbor Principal Justin Loiacono.
“We intend on building on our recent momentum by sourcing new opportunities and pursuing similar strategies in the Inland Empire office markets with interesting demand drivers with the goal of acquiring $250M over the next 12 months,” said Loiacono. “We have a robust pipeline of activity behind this transaction and look forward to continuing to build our Southern California portfolio.”
Anthony Delorenzo, Todd Tydlaska, and Sammy Cemo of CBRE advised the seller in the off-market transaction. The acquisition was leveraged with short-term financing from a subsidiary of Granite Point Mortgage Trust Inc., which is externally managed by Pine River Capital Management L.P.
About Harbor: Harbor Associates, LLC (www.harborassociates.com) is a value-add operating platform focused on acquiring and repositioning under-performing commercial real estate assets throughout Southern California and Denver. Harbor has been involved in the renovation, repositioning and development of 23 office projects totaling over 3 million square feet with a portfolio value in excess of $1.0B. The company is a joint venture with The Bascom Group, LLC.
About Taconic Capital Advisors: Founded in 1999, Taconic Capital Advisors, LP is a global institutional investment firm dedicated to generating strong risk-adjusted returns with an emphasis on capital preservation. The firm has offices in New York, London and Hong Kong. Taconic’s commercial real estate business focuses on sourcing value-add opportunities by leveraging its relationships with CMBS special servicers, lenders and local operating partners, Taconic seeks to generate attractive risk-adjusted returns through the strategic repositioning and re-introduction of well-located real estate assets.
About Granite Point: Granite Point Mortgage Trust Inc. (www.gpmortgagetrust.com) is a publicly-listed (NYSE:GPMT) commercial mortgage REIT that focuses primarily on originating and investing in senior floating-rate commercial mortgage loans and other debt and debt-like commercial real estate investments.
About Pine River: Pine River Capital Management L.P. (www.pinerivercapital.com) is a global alternative investment firm founded in 2002 that focuses on relative value trading.
The buy for Harbor is the firm’s 23rd value add office acquisition in the last five years and expands the company’s Southern California office portfolio to 19 projects totaling more than 2.4 million square feet, according to Harbor Principal Justin Loiacono.
“We intend on building on our recent momentum by sourcing new opportunities and pursuing similar strategies in the Inland Empire office markets with interesting demand drivers with the goal of acquiring $250M over the next 12 months,” said Loiacono. “We have a robust pipeline of activity behind this transaction and look forward to continuing to build our Southern California portfolio.”
Anthony Delorenzo, Todd Tydlaska, and Sammy Cemo of CBRE advised the seller in the off-market transaction. The acquisition was leveraged with short-term financing from a subsidiary of Granite Point Mortgage Trust Inc., which is externally managed by Pine River Capital Management L.P.
About Harbor: Harbor Associates, LLC (www.harborassociates.com) is a value-add operating platform focused on acquiring and repositioning under-performing commercial real estate assets throughout Southern California and Denver. Harbor has been involved in the renovation, repositioning and development of 23 office projects totaling over 3 million square feet with a portfolio value in excess of $1.0B. The company is a joint venture with The Bascom Group, LLC.
About Taconic Capital Advisors: Founded in 1999, Taconic Capital Advisors, LP is a global institutional investment firm dedicated to generating strong risk-adjusted returns with an emphasis on capital preservation. The firm has offices in New York, London and Hong Kong. Taconic’s commercial real estate business focuses on sourcing value-add opportunities by leveraging its relationships with CMBS special servicers, lenders and local operating partners, Taconic seeks to generate attractive risk-adjusted returns through the strategic repositioning and re-introduction of well-located real estate assets.
About Granite Point: Granite Point Mortgage Trust Inc. (www.gpmortgagetrust.com) is a publicly-listed (NYSE:GPMT) commercial mortgage REIT that focuses primarily on originating and investing in senior floating-rate commercial mortgage loans and other debt and debt-like commercial real estate investments.
About Pine River: Pine River Capital Management L.P. (www.pinerivercapital.com) is a global alternative investment firm founded in 2002 that focuses on relative value trading.
