Local affordable housing advocates had reason to cheer some recent real estate-related news developments.
The most high-profile was the San Diego City Council’s Oct. 5 decision to move ahead with talks between the city and Connections Housing LP, a nonprofit coalition planning to develop a one-stop rehabilitation center to serve the homeless, at an estimated cost of $34 million.
Discussions will include terms for developers to acquire and convert the aging World Trade Center, a city-owned downtown office building on Sixth Avenue, to provide temporary and permanent housing for up to 225 people. Construction could begin by November 2011, with completion by December 2012.
Elsewhere in the city, the San Diego Housing Commission has purchased the 37-unit Courtyard Condos, a distressed mixed-use property at 4395 El Cajon Blvd., for $7.2 million. The seller was Comerica Bank, which had taken possession of the project from its original developer.
Brokerage firm CB Richard Ellis represented the housing commission in the transaction, and has been retained by the organization to assist it with future acquisitions for its affordable housing program, according to an Oct. 6 statement.
Also, a unit of global financial services giant Citigroup Inc. recently teamed with El Segundo-based investment firm Highridge Partners and multifamily builder Michael Costa to acquire a nationwide portfolio of 275 affordable housing communities.
The newly formed company, Highridge Costa Housing Partners, will manage a $3.4 billion portfolio of existing properties built with low-income housing tax credits, and also pursue new development opportunities in that arena.
According to a list provided by the company, the portfolio includes four San Diego County properties: the 200-unit Potiker Family Senior Apartments on 14th Street and the 42-unit Gateway Family Apartments on Logan Avenue in San Diego; the 133-unit Laurel Park Apartments on Buena Vista Avenue in Santee; and the 52-unit Jamacha Glen Apartments on Jamacha Road in Spring Valley.
Highridge founder John Long said in a statement that the acquired properties were formerly part of a company that was the victim of a “broken capital structure.”
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Changes Could Pave Way for Bay-Front Park: San Diego port commissioners and developers of the stalled Lane Field waterfront development are working out details on plans that would allow for creation of a 150-foot-wide setback park on North Harbor Drive.
Park space has been a major sticking point in efforts by port officials to move forward with Phase 1 of the North Embarcadero Visionary Plan. Earlier this year, the California Coastal Commission rejected a port district development proposal, noting that it was missing a public park contained in original conceptions of the bay-front project.
Port commissioners voted Oct. 5 to work for the next 30 to 60 days with Lane Field Developers LLC, to adjust developers’ two land-option agreements in a way that would set aside space for the park. Financial terms will be negotiated.
On Nov. 9, port commissioners are expected to consider a coastal development permit that may include the setback park. If the permit is approved, Lane Field developers would be required to design and construct the setback park, and also redesign their own project on a smaller footprint.
In 2007, officials approved developers’ plans to convert Lane Field, which was once a minor league ballpark, into a complex that would include two hotels with a total of 800 rooms, along with about 60,000 square feet of retail space. But the project has been delayed by hotel financing and related problems created by the weak economy.
Lane Field developers have said they are amenable to adjusting the project’s footprint to allow for more public space along the North Embarcadero. One plan now being discussed involves reducing the size of the proposed hotels.
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REIT Set to Buy 136 Properties: Escondido-based Realty Income Corp., a real estate investment firm focused primarily on retail and other commercial centers, announced Oct. 6 that it has signed a purchase agreement to acquire 136 retail properties for approximately $250 million.
A company spokeswoman said the company is not divulging the names and locations of the properties until the transaction closes, likely within the next 90 days.
According to a statement, Realty Income expects to fund the purchase with borrowings under its acquisition credit facility and/or cash on hand. The acquisition will bring Realty Income’s total 2010 acquisitions to approximately $690 million.
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Carlsbad Buildings Get New Majority Owner: Kennedy Wilson Inc., a Beverly Hills-based firm that invests internationally in real estate, has acquired a majority interest in One Carlsbad Research Center, consisting of two office buildings on Faraday Avenue totaling 98,928 square feet.
A spokeswoman for Kennedy Wilson said Oct. 8 that the firm is not disclosing financial terms. According to CoStar Group data, the two buildings last sold in 2005 for just over $19.2 million.
Send commercial real estate and development news of general local interest to Lou Hirsh via e-mail at lhirsh@sdbj.com. He can be reached at 858-277-8904.
