Select Investments
China Basin
The Opportunity
In 1997, MCC identified, through existing relationships, an opportunity to acquire China Basin, a 732,000 square foot, two-building office complex in San Francisco. The property was approximately 75% leased upon acquisition.
MCC’s objective was to stabilize occupancy, construct a new underground parking facility, obtain entitlements for expansion and to position the property to benefit from the billions of dollars of improvements to be undertaken in the South of Market and Mission Bay submarkets by the San Francisco Giants, Catellus and the City of San Francisco.
Performance Highlights
- Constructed a highly complicated, 225-stall parking garage beneath one existing building.
- Obtained entitlements for 50,000 square feet of new office space and 120 apartments and successfully converted the entitlements to 175,000 square feet of R&D/Life Science space.
- Designed a first-of-its-kind base-isolated structure atop a fixed-base building.
- Commenced and completed the development of the 175,000 square foot Berry Building addition on-time and within budget.
- Completed numerous extensive common area renovations and building upgrades at the project.
- Completed over 1.3 million square feet of leases since acquisition, including over 200,000 square feet to the University of California, San Francisco.
Current Status
MCC is currently joint venture owner, property manager, development manager and leasing agent for China Basin.
Metro Center at South Coast
The Opportunity
In 1998, MCC acquired Metro Center at South Coast, a 480,000 square foot, 82% leased, Class A office project on 40 acres located at the intersection of the 55 and 405 freeways in the John Wayne Airport area of Orange County. MCC purchased 2 of the 3 existing 12 story buildings on the site and 40 acres of land comprising common areas, parking and adjacent developable parcels. Metro Center presented an opportunity to reposition this Class A project as the first high and low-rise integrated office campus in the Airport submarket. The effort involved the lease-up of the existing high-rise buildings and the creation of a new campus design requiring the re-entitlement of the common areas and vacant land.
In September 2005, MCC purchased the fee in Metro Center at South Coast from the ground lessor, allowing the partnership to receive approval from the City of Costa Mesa to amend the lot lines of the property’s land parcels. The lot line adjustment was effectuated in order to create a separate parcel that was ultimately entitled for residential development.
Performance Highlights
- Successfully re-master-planned and re-entitled the entire 40 acre campus adding 780,000 square feet of new office, retail and hotel entitlements.
- Sold vacant land with over 500,000 square feet of office entitlements to Experian Information Systems for construction of its North American headquarters. The transaction was the second largest headquarters deal in Orange County history.
- Completed approximately 70,000 square feet of new retail development and two parking facilities serving 1,000 cars.
- Acquired leasehold interested in 555 Anton in May 2005, bringing the entire Metro Center campus under one ownership.
- Won approval from the City of Costa Mesa for a lot line adjustment of the land parcels at Metro Center and created a residential parcel that will be developed by MCC and its partners.
- Completed over 880,000 square feet of leases throughout the ownership period.
Current Status
Metro Center at South Coast was sold in September of 2005. MCC and its partners retained ownership of the newly created residential development parcel for future development.
MCC has successfully converted 200,000 square feet of hotel entitlements into 1,000,000 square feet of
residential entitlements.
Wilshire Courtyard
The Opportunity
In 1997, MCC together with its partners Blackstone Real Estate Advisors and Merrill Lynch acquired the first mortgage debt on Wilshire Courtyard, a 1 million square foot Class A office campus in Los Angeles. Prior to closing the acquisition, the borrower filed for bankruptcy protection. The first mortgage together with a $200 million second mortgage held by other parties made Wilshire Courtyard, at $365 million, the largest single asset bankruptcy case in Los Angeles County history. The bankruptcy notwithstanding, MCC and its investors elected to proceed with the acquisition.
The opportunity presented by Wilshire Courtyard was to prevail in bankruptcy and take control of the property. At the time of the bankruptcy, the project was 50% leased and only 40% occupied. In early 1998, a bankruptcy settlement was reached with the borrower whereby ownership of the asset was transferred to the MCC led partnership. Subsequently, MCC led the acquisition of six other minority interests. MCC then leased over 800,000 square feet to credit tenants in less than two years, bringing occupancy to nearly 100%.
Performance Highlights
- Implemented a successful bankruptcy strategy that led to the transfer of fee ownership to MCC and its
partners. - Negotiated the buyout of a long-term, $170 million lease for 505,000 square feet which provided additional capital to the partners to re-tenant the project.
- Leased over 800,000 square feet during the first 24 months of ownership to bring the project from 50% leased to nearly 100% leased.
- Completed over $30 million in interior improvements and capital expenditures.
- MCC’s management team captured the 2000 BOMA Building of the Year Award for Wilshire Courtyard.
- Repositioned Wilshire Courtyard into one of the preeminent media/entertainment campuses in Los Angeles.
- Completed over 1.6 million square feet of leases throughout the ownership period.
Current Status
Wilshire Courtyard was sold in September of 2005