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Wednesday, 26 November 2014

Cassidy Turley Unit Brings Asian Money to U.S. Property Deals

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Commercial Real Estate Direct Staff Report

An investment advisory unit in Cassidy Turley's San Jose, Calif., office has arranged for Chinese investment groups to acquire two Los Angeles-area office properties with 202,783 square feet in separate deals for $58.4 million.

The unit has several more deals brewing on behalf of Chinese buyers, and expects to complete about $86 million of U.S. deals for Asian investors for all of this year.

Most recently, a Chinese family, operating as 21st Century Techbanq, paid Embarcadero Capital Partners $36.4 million, or $296/sf, for a 123,110-sf building 234 East Colorado Blvd. in Pasadena, Calif.

Thrivent Financial of Minneapolis loaned the family about $18 million against the building, which is 96 percent occupied by tenants that include the headquarters of Lawry's Restaurants Inc., along with the National Association for Hispanic Elderly and lobbying firm Strategy Group, among many others.

Madison Partners represented Embarcadero Capital in the sale. The San Francisco investment manager had acquired the Pasadena building in 2006 on behalf of an investment fund that's in its disposition phase.

And in September, Cassidy Turley's unit, which specializes in bringing capital from investors in Asia into U.S. properties, represented another Chinese group, Creative International Investments Inc., in its $22 million, or $287/sf, acquisition of a 76,698-sf building at 250 East Olive Ave. in Burbank, Calif. A local partnership sold that property, which is 91 percent occupied.

Meanwhile, 21st Century Techbanq is interested in additional acquisitions and is reviewing a possible office building purchase in Boston. Cassidy Turley's Boston office brought the property to the Asian unit's attention.

The unit, called Asian-American Strategic Investment Advisors, is led by Tenny Tsai, a 20-year brokerage professional who emigrated from Taiwan roughly 40 years ago. She has relationships with various Chinese investor groups with preferences for U.S. properties. And as she learns of offerings here, matches them to fit each group's tastes.

She first became familiar with Asian investors by helping her family sell a mixed-use property it had developed in China. The Tsai family fled communist mainland China for Taiwan in the 1950s, and later moved with her to the U.S.

After the opening of the Chinese market in the 1980s, the family, which has been in the hotel business, returned to China to develop properties. It has homes in the U.S. and Taiwan.

"Because I have first-hand experience by helping my family, I understand what investors in China have to deal with and what they want to do," Tsai said. "I can make them feel more comfortable about doing business here."

She expects to arrange deals with values that range from about $6 million to $50 million, with most being between $20 million and $25 million. In most cases, the groups she puts together will look for debt financing at levels of less than 50 percent of their property acquisition prices.

Initially, she expects her overseas investors to favor office properties, but said they may also expand into retail or multifamily in 2015. While the completed and brewing deals are in California and Boston, Tsai is open to arranging deals in other markets, particularly Washington, D.C., and New York.

She noted, however, that U.S. sellers can be skittish about selling to overseas investors for fear they may not be able to follow through on their purchase agreements. That issue is often addressed by paying premium prices that result in capitalization rates of about 50 basis points less than other investors might have paid.

"I have developed a good reputation and am getting plenty of word-of-mouth referrals," Tsai said. She also has tapped foreign capital through Hanhai Investment Management, a Chinese company that arranges venture-capital financing.

She has a built-in framework for accessing prospective deals in Cassidy Turley, which has 4,000 employees in 60 offices and manages about 400 million sf of properties throughout the country. The brokerage is being acquired by DTZ Holdings, in a deal that would create a company with 28,200 employees in more than 50 countries.

Her unit also is seeking off-market transactions with other brokers. For example, Madison Partners led the Pasadena deal.

Comments? E-mail John Covaleski or call him at (267) 247-0112, Ext. 208.



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Data Digest

 

CMBS DELINQUENCY VOLUME

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CMBS SPECIAL SERVICING VOLUME

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Top Bookrunners Domestic, Private-Label CMBS - 2017
Investment Bank #Deals Vol$mln MktShr%
Goldman Sachs 17.59 11,819.34 13.68
JPMorgan Securities 14.52 10,968.11 12.70
Citigroup 12.04 10,012.71 11.59
Wells Fargo Securities 14.02 9,936.06 11.50
Deutsche Bank 12.55 9,879.74 11.44

 

RCA CPPI

 

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CMBS 2.0 Spreads

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Top CMBS Loan Contributors - 2017
Lender #Loans Vol$mln MktShr%
Goldman Sachs 146.89 11,719.34 13.63
JPMorgan Chase Bank 117.68 10,114.14 11.76
Deutsche Bank 198.48 9,689.97 11.27
Morgan Stanley 166.18 8,539.78 9.93
Citigroup 199.05 8,088.24 9.41

 

 

 

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