89.3 F
San Fernando
Thursday, Aug 18, 2022
-Advertisement-

Broker Finds Dealmaking in China Surprisingly Familiar

Ever wonder how real estate gets done in China? John DeGrinis, senior vice president at Colliers-Seeley had the chance to experience it firsthand as a participant in Gov. Arnold Schwarzenegger’s trade mission to China. DeGrinis made the trip in connection with his role representing Tejon Ranch, perhaps the only location in California that can accommodate the amount of space Chinese companies would need were they to locate distribution, warehousing or manufacturing operations here. Tejon Ranch’s Tejon Industrial Complex is a center with a whopping 1,450 acres of space master-planned for industrial and commercial use about 60 miles north of Los Angeles along Interstate 5. DeGrinis told me that he cannot discuss the specifics of the negotiations because deals had not been finalized. But he did share some of the experience, in many ways very different from the landscape here in Southern California, but with some unexpected similarities as well. “You have to see it to really understand it,” DeGrinis said. “It’s no wonder that a third of the world’s cranes are in China. Everywhere you look there is something under construction.” DeGrinis visited a number of cities and his tour included aspects of economic development underway (“Chinese workers work for $100 a month, but the average worker has increased his income threefold in the last 15 years.”); manufacturing plants (“These are some of the most sophisticated operations out there.”); and real estate (“We stayed in Jin Mao Tower in Pudong. It’s 96 stories tall. The first 54 floors are office and the rest is hotel. It’s amazing to see the architecture. They used Skidmore, Owings & Merrill out of Chicago.”) Negotiations were typically done over a meal. “We had several meetings with folks before we actually talked about business,” said DeGrinis. “Meals are a big part of it. Alcohol is a big part of it. There’s a lot of toasting.” Negotiating teams usually include five or six people from the Chinese side and the Tejon entourage, which included another handful of executives. Conversations were often personal, about families and interests. “When we do business, we all strive for trying to understand the person across the table,” DeGrinis said. “You do a lot of the same things. I suppose that’s a common thread that all businesses have.” Still, DeGrinis said, there was an air of formality that doesn’t typically exist here in the U.S.A. Take the little ceremony that accompanied the exchange of business cards. They are offered and received using two hands to hold the card and accompanied with a small bow. DeGrinis also viewed some of the country’s ports, both the Port of Shanghai at WaiGaoQiao and the newer addition under construction, a feat that involves connecting the Yangshan Islands by bridge to the mainland and will cost upwards of $10 billion. “It’s an amazing society,” DeGrinis said. “And I think that it gives pause to what we’re going to have to think about to remain competitive.” Warner Center Sale A Warner Center retail property has sold for $52 million, a nearly 40 percent increase over the sale price when the center last changed hands two years ago. The center, Warner Marketplace, was sold to UBS Realty Investors, which was among 20 initial bidders for the power center. Warner Marketplace, comprised of about 160,075 square feet and anchored by Pier 1 and Borders, garnered such interest and its high selling price despite the fact that one of its major tenants, Good Guys! will be closing as a result of the retailer’s acquisition by CompUSA. “As much as somebody might say UBS paid a lot more in two years than (the previous owner) purchased it for, there were probably 10 buyers behind them that wanted to purchase it very close to the same price,” said Michael C. Ross, managing director of Colliers Seeley International, who represented the buyer and the seller in the deal. Ross estimates that it took about 60 days from the time the property went on the market to select a buyer. The field was whittled from an initial list of about 20 interested parties, mostly investment companies like UBS, a real estate advisory with about $10 billion in properties under management. Warner Marketplace, located at Victory Boulevard and Canoga Avenue, was built by J.H. Snyder Co. in 1999. The developer had planned to divest the property in 2002 but one of the tenants, Zany Brainy, filed bankruptcy and closed down. When the property was put on the market for sale, it was acquired by Bisno Development Co. Although Good Guys! will be vacating the center, its lease obliges the company to continue to pay rent. “It was definitely an issue,” said Ross, “but (the buyers) felt very comfortable that they would find another tenant because there is so little available in the San Fernando Valley.” Duly Noted As readers have likely already read, Colliers Seeley was acquired last week by the largest member of the Colliers International global network. Colliers Macaulay Nicolls Inc., which is based in Toronto, acquired a majority stake in the operation, a move that the shareholders of the Southern Cal Colliers group seemed to welcome. They will retain their partial ownership in the company. CMN is expected to provide additional resources to the local offices here, including three in the greater San Fernando Valley area, to allow the company to expand its services. Colliers Seeley will be known as Colliers. Chatsworth Deal A 16,000-square-foot industrial building in Chatsworth was sold for $3.1 million. The building, at 9119 DeSoto Ave., is partially occupied by Bally’s Fitness Center. Scott Caswell, a broker with Delphi Business Properties, represented the seller, ITC Electronics. Eli Anishban, a broker with Precision Properties, represented the buyers, who are private investors. Senior reporter Shelly Garcia can be reached at (818) 316-3123 or by e-mail at sgarcia@sfvbj.com.

-Advertisement-

Featured Articles

-Advertisement-
-Advertisement-

Related Articles

-Advertisement-
-Advertisement-