Dornin Investment Group (DIG) has acquired a five-building, class-A office portfolio on the perimeter of Downtown Riverside, California, for $44.25 million, according to a release from Andrew Kurzeka, director of investments for DIG. The release says the seller was a partnership between CarVal Investors EverWest Real Estate Investors, while DIG was self-represented in the transaction.
According to DIG, the purchase includes Riverside Gateway I & II and Market Street Corporate Center, two separate office projects totaling 223,711 rentable square feet located on Vine and Market streets, respectively.
DIG says it is planning to implement an interior and exterior common-area renovation plan that will include updating lobbies and corridors, new lighting packages, artwork, furniture, landscaping, and outdoor seating areas.
“This was an attractive acquisition for us given the going in cap rate, credit tenancy, building quality, separate parcels, and rental-rate buffer versus the core Downtown class-A assets,” Kurzeka says.
DIG reports that a bridge loan for the transaction was secured through Prime Finance and a mezzanine loan was secured through Realty Mogul, both of which DIG has completed transactions with in the past.
“Prime Finance and Realty Mogul have been great partners of ours and their belief and underwriting of the assets’ location, quality, and tenancy, along with us as operators, provided us the opportunity to acquire these institutional quality assets” Eric Entringer, VP of capital markets and investor relations for DIG, is quoted as saying.
Both Kurzeka’s release and a statement from a representative of Newmark Knight Frank (NKF) report that NKF represented the seller, while DIG was self-represented in the transaction. DIG also says Tom Pierik and David Mudge of Lee & Associates will continue marketing the buildings for lease.
NKF reports that Market Street Corporate Center, located at 2190, 2280, and 2300 Market Street, was built between 2005 and 2006. It is situated on 7.01 acres and consists of three class-A office buildings totaling 133,557 square feet, and each is situated on its own parcel, DIG says. The property consists of one single-story office building and two three-story office buildings totaling 133,557 rentable square feet, located adjacent to Downtown Riverside with freeway visibility and immediate access to the SR-60 and I-215 freeways. The buildings each feature steel frame with stucco and high-performance glass exterior, a two-story atrium lobby, energy-efficient HVAC, and a security system. Market Street Corporate Center is situated at the gateway to Downtown Riverside, providing users access to restaurants, lodging, and business-support services. NKF reports that the property offers ample free parking.
DIG reports that Riverside Gateway I & II consists of two class-A office buildings totaling 90,154 square feet, also situated on their own parcels. The property is located directly adjacent to the SR-91 Freeway, and just a half mile south of the SR-60 and I-215 Freeway interchange, as well as proximity to Riverside Amtrak Metrolink station. Riverside Gateway is situated in the historical Mission District of Riverside, also close to restaurants, lodging, and business-support services. The buildings feature the same amenities and construction materials as Market Street Corporate Center. NKF says Riverside Gateway I & II, built between 2003 and 2004, is situated on 4.96 acres at 3480 and 3550 Vine Street, and that the property also offers ample parking.
NKF also reports that the portfolio’s major tenants include County of Riverside, GSA, and Fidelity National Title Insurance. NKF co-head of U.S. Capital Markets Kevin Shannon; executive managing directors Brunson Howard, Ken White, and Paul Jones; and senior managing director Rick Stumm represented the seller.
Howard is quoted in the NKF release as saying the portfolio is of institutional quality portfolio and 85 percent occupied. (Market Street Corporate Center is 75 percent occupied, and Riverside Gateway I & II is 94 percent occupied.) He adds that “the new ownership can add value and capitalize on one of the Inland Empire’s top office markets and one of the top-five job growth markets in the nation.”
NKF also reports that the Riverside market, which includes Corona and Moreno Valley, continues to grow and has a vacancy rate of 10.3 percent and has posted a positive net absorption of 1.46 million net square feet over the past eight years.