Chesapeake Sells for $17M

SAN DIEGO-The Shidler Group has been extremely active with its portfolio over the past 12 months with more than $1 billion in deals. The latest repositioning is the sale of Chesapeake I & II to Lomas Santa Fe Group for $17 million. The Shidler Group had acquired the property in May 2003 for $13.5 million. Chesapeake I & II are two three-story buildings totaling 88,260 sf. The property is 97% leased, with major tenants including Scripps Home Health, California Bank & Trust, Kelly Staffing and HDR Engineering. “The sale allows us to continue our capital recycling and portfolio repositioning program as we move into 2005,” says Matt Root, a partner in the Shidler Group. Built in 1985, the facilities are located on 1.9-acre and 2.1-acre lots. In the deal, Root represented the Shidler Group. Gaylon Neustel, vice president of operations with the Lomas Santa Fe Group, represented the buyer. This latest deal adds to a strong end of year for the Shidler Group, which saw the company complete some $200 million worth of transactions in December alone. “With historically low interest rates, strong property appreciation, tempered economic growth and tremendous amounts of capital flowing into the sector, last year was an exceptional year for commercial real estate,” says Root. Over the past year, the company counted 12 sales or purchases and signed nearly 50 leases. Deals were completed in San Diego, Los Angeles, Phoenix, Houston, Dallas, Austin, TX and Honolulu. “For most of our 32-year history, our business model was built on buying, improving, leasing and then selling buildings one or two at a time,” says Root. “Over the last 18 months, we focused on opportunities with properties that we thought were not being efficiently marketed, and we became involved in larger deals with portfolios of properties grouped by type or location.”One example, as reported on Globest.com, is the deal last month when the Shidler Group acquired a portfolio of office buildings from Los Angeles-based REIT Arden Realty Inc. In that deal, the Shidler Group paid $142 million for a 19-building, 1.1-million-sf portfolio of office buildings in San Diego and Los Angeles. At closing, the portfolio counted roughly 90% occupancy with tenants including Jacobs Engineering, General Electric, Fairfield Properties, Smith Barney and Verizon. With favorable market conditions in play, according to Root, he expects more aggressive activity from the Shidler Group in the coming year. “With well proportioned and balanced growth in our core markets and more robust growth in our recovery markets, we anticipate another substantial year in 2005.”