Acquired in November of 1999, the 45-acre former corporate campus of CF Braun Engineering in Alhambra, California consisted of approximately 950,000 square feet of office space which was roughly 35% vacant and 20-acres of open parking lots. The development strategy was to protect, enhance and expand the campus, creating a vision of a modern urban community.
The first step was to brand the project providing an identity to the office campus (â€śThe Alhambraâ€ť) which would lead to increased occupancy, beginning with a 200,000 square foot lease to the County of Los Angeles. The second step was to entitle the entire 45-acres to allow for retail uses on the seven acre site known as the West Lot and a mix of uses on the main 38-acre campus, including schools, retail (including a fitness center) and residential. The third step was to develop the campus in accordance with those entitlements, beginning with the development of the 120,000 square foot, Kholâ€™s-anchored, â€śShops at The Alhambraâ€ť on the West Lot. Next, over 200,000 square feet of leases were executed on the office campus with various education institutions like USCâ€™s Keck School of Medicine, in addition over 200,000 square feet of office space to multiple other corporate tenants resulting in the campus achieving a 94% occupancy of its office space in late 2006. Then a specific plan was approved allowing for the construction of 311 residential units (townhouses and flats) on the north-easterly portion of the site. Lastly, a 50,000 square foot LA Fitness building was construction along with a new 760 car parking structure on the north-westerly portion of the campus.
With the construction of the residential project, we will have truly achieved our vision of an urban community.
Originally financed with $59 million of debt provided by iStar Financial and $19 million of equity provided by a partnership between The Ratkovich Company, Lehman Brothers and Wachovia. Sold to a new partnership between The Ratkovich Company and CIGNA in June of 2006, iStar Financial provided a new loan in the amount of $84 million, with the partnership providing equity of $30.5 million. Once the office space was substantially leased and the retail developed, iStar was taken out with new debt provided by MassMutual in the amount of $98.6 million. In June of 2006, the project was sold to a new partnership between The Ratkovich Company and AIG-GRE. Debt in the amount of $130 million for the office campus was provided by Goldman Sachs, and $6.2 million provided by CSFB for the retail center. The new partnership contributed $60 million of equity.
Over all, The Ratkovich Company and its partners received an IRR of over 23.21% since the acquisition in 1999 while the project increased in value from $78,000,000 to $202,000,000 today.go to THE ALHAMBRA website >>