Investment Group Targets $300M in Acquisitions

NEWPORT BEACH, CA-Investment Group WCB Properties plans to buy $300 million worth of Southern California properties over the next 12 months and has hired Terry Thompson, formerly of PM Realty Group, as VP of acquisitions to execute the plan. Thompson tells GlobeSt.com that WCB, which has divested about $250 million worth of assets over the past year, will be looking at a variety of deals but is especially interested in class B office properties that can be turned into value-added plays. Thompson says that WCB, which typically buys on an all-cash basis and takes on institutional investors as capital partners, believes that it will find more opportunities in class B office because prices of class A product have been bid up so high that it’s harder to make them pencil out. “We will do class A, but we feel there are a lot more class B opportunities,” says Thompson, who explains that WCB sees upside in filling vacant space, signing higher quality tenants and upgrading buildings to attract better quality tenants who will pay higher rents. Among the factors pointing to opportunities in class B buildings, Thompson says, is that a number of tenants in class A office parks, as class A rents rise, will look for a class B building in a similar location. WCB’s plan is to have that class B space to offer. The types of assets that WCB is looking for “need some sort of work,” Thompson says. “They need to have some sort of asset plan, whether it is re-leasing, or making them more operationally efficient.” WCB will also look at mixed-use projects, most likely office and retail mixed use. “The key point on mixed-use for us would be to find projects where office is the primary component of the asset,” Thompson says. Finding properties for sale “isn’t really so difficult,” Thompson says, explaining that the challenge is making them work. He says WCB feels that it can identify the properties and make them work because “The team here is a small and nimble entrepreneurial” and is very familiar with the Southern California markets. “Even though we know it’s very competitive, the reason it’s very competitive is that investors know and like the market here,” Thompson says. “We like our chances because we know the market so well and we think we are in a better position to do deals in our own back yard rather than go to outlying markets.” In general, WCB is looking for properties in the range of $15 million to $75 million and expects to hold them anywhere from about four to eight years. The company will also consider development opportunities, although Thompson says, “Our initial focus is acquisition of existing assets.” WCB and its capital partners have invested more than $1.2 billion in principally office-related properties throughout the US since 1994. The firm, headed by Mike Chase, has acquired or developed more than 11 million sf of income-producing properties throughout the country.Among the Southern California assets that WCB has sold in the past year were the 608,000-sf Sorrento Mesa Corporate Center in San Diego County that L.A.-based Arden Realty acquired for $185 million and a three-building office project in Sorrento Mesa that Layton-Belling associates of Newport Beach bought for $27.4 million. Sean Tabor, WCB Properties’ SVP of operations, says that the hiring of Thompson to identify properties for acquisition indicates the company’s “continued bullish position on the Southern California market.”