Transpacific’s Curci May Sell Large Parcel to Spieker
One of Southern California’s most active office developers over the last quarter-century, Transpacific Development Co.’s Shurl Curci, is about to sell the bulk of his portfolio to aggressive West Coast real estate investment trust Spieker Properties Inc., according to several knowledgeable real estate sources.
The deal for the Curci/Transpacific portfolio, apparently covering more than 3.3 million square feet of office buildings and expected to fetch well over $500 million, is said be in the “due diligence” stage and could close as early as next January. Included in the transaction are Santa Monica Business Park and Cerritos Towne Center.
“When Shurl Curci sells, you know it’s time to sell,” said one local office investment broker of veteran developer Curci.
Tom Irish, president of Torrance-based Transpacific, declined to comment on any specific transactions. However, he did confirm that Curci and the Transpacific team have engaged investment banking giant Morgan Stanley, Dean Witter, Discover & Co. to help them consider various scenarios under which they would take advantage of today’s “aggressive” commercial real estate capital environment.
The strategies given most consideration, Irish said, include a sale of a stake in the portfolio through a public stock offering, a refinancing of the portfolio’s mortgage debt through an issue of commercial mortgage-backed securities and a merger with another major property owner such as a REIT.
Sources familiar with the Transpacific portfolio said Curci and partners would likely minimize tax liabilities by exchanging interests in their properties for units of Spieker’s operating partnership rather than accepting cash. A spokeswoman for Menlo Park, Calif.-based Spieker, whose shares are traded on the New York Stock Exchange, declined to comment.
A summary of Transpacific projects distributed to prospective buyers identifies 38 buildings in California, Arizona and Hawaii. The total anticipated 1997 net operating income (not including debt-service obligations) generated by the buildings in the Transpacific “package” amounts to about $44.33 million--a level that would almost certainly generate a valuation beyond $500 million today, real estate sources said.
“The portfolio Shurl has put together is a very solid group of office buildings” in terms of quality, locations and occupancy levels, said veteran broker Howard Sadowsky of Julien J. Studley Inc. “Whoever ends up owning the portfolio gets an excellent package with a good amount of upside” as markets continue to improve, said Sadowsky, who also stressed that he’s not privy to any discussions that his old friend Curci is having with prospective buyers and finance specialists.
Spieker, which specializes in suburban office buildings in major West Coast markets, primarily California and the Pacific Northwest, is among the nation’s fastest-growing office and industrial REITs. The company, which has been busy in San Diego and Orange counties for about two years, entered the Los Angeles market with a bang earlier this year, acquiring two Pasadena office buildings for $70 million.
Spieker also recently came to terms in September on an even larger portfolio acquisition, a $725-million deal that includes 44 properties controlled by Goldman, Sachs & Co.
