ONTARIO, CA-CIP Real Estate and its institutional investment partner, South Charles Investment Corp. of Baltimore purchased the Empire Towers II and III office buildings as an addition to CIP's earlier acquisition of the Empire Towers I building in June 2002.
Chuck McKenna, a principal of CIP, notes that the Irvine-based firm now owns all three buildings in the Empire Towers development. CIP and South Charles secured both debt for the purchase and the equity investment from South Charles through Buchanan Street Partners of Newport Beach, according to Buchanan Street.
Empire Towers II and III are two class A office buildings, totaling 145,239 sf, which were developed by Lord Baltimore Properties in 1999 and 2001, respectively. The two towers are 97% leased, with commitments out for remainder of the space in a submarket that has a 5% vacancy rate for class A buildings.
Lord Baltimore was represented by Mark Larson, Gary Stache, and Pat Scruggs of the CB Richard Ellis Private Client Group in Newport Beach along with Phil Woodford and Vindar Batoosingh of CB Richard Ellis' Ontario office.
According to Tim Hawthorne and Jared Rogers in Buchanan Street's Newport Beach office, who arranged the financing, the debt is a competitively priced first mortgage for $17.8 million on a floating rate basis with JP Morgan. The mortgage provided for approximately 80% of the purchase price and was paired with a $4.7-million equity investment from South Charles, also arranged by Buchanan.
Last year, CIP acquired the 178,000-sf Empire Towers I from Lord Baltimore for $25 million. The three Empire Towers comprise an office complex at Inland Empire Boulevard and Haven Avenue, one of the premier office campuses in the Inland Empire. The three-story buildings are occupied by a number of credit tenants, including the headquarters for Specialty Brands and regional offices for CB Richard Ellis, Merrill Lynch, Wells Fargo Bank, Boise Cascade and Cardinal Healthcare.
CIP specializes in the acquisition, development, repositioning and management of industrial and business parks primarily located in Orange County, San Diego and the Inland Empire. The company says it plans property acquisitions of $150 million this year, including expansions into other Southern California locations such as the San Fernando Valley and Ventura County. Besides McKenna, the company's principals are Eric Smyth and Robert Strom.
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