Success
Pistoia
17422 Derian Ave, Irvine, CA
Camphor Garden
Hebei, China
7700 Spectrum
7700 Irvine Center Drive, Irvine, CA
Camphor International
Hebei, China
YC Hotel
Hebei, China
Milani
18831 Von Karman Ave, Irvine, CA
Pistoia
17422 Derian Ave, Irvine CA
Opportunity
Camphor Partners acquired this 96,000 square foot industrial building on a 4.8 acre site in 2013 with the intent to entitle the site for multifamily units by 2015. At the time of purchase, the entire project was leased to St. John Knits, allowing for stable cash flow during the entitlement period and a straightforward termination negotiation to pave the path to redevelopment.
During the entitlement process, the DOT’s 2014 Orange County Economic forecast projected healthy increases in population, per capita income growth, employment in professional services, and net migration to the region. The UCLA’s Anderson forecast echoed the same optimism, while suggesting that the new household formation resulting from the projected 2.1% employment growth rate in California would lead to new demand despite the number of multifamily development permits in 2015 rising to pre-recession levels. We saw an opportunity to add value to the development by increasing density (78 units per acre) to address the demand generated by increased household formation while also providing renters with communal green spaces and efficient floor plans.
Results
Camphor Partners worked with our development team to transfer development intensity values, provide attractive, affordable housing, and provide a park plan to the city in exchange for additional density bonus units, and ultimately secure a conditional use permit for 371 units in a five-story wrap. Camphor Partners sold the entitled site in 2016 to a developer. Investors earned an annualized IRR of 35% over the three-year holding period.
Camphor Garden
Hebei, China
Opportunity
Located within a downtown district in the Hebei Province, this 20 acre site was occupied by a school and other buildings with various tenants. The site was a prime location for residential, but many developers were unsure how to properly lay out the site, how to redesign the school that was required to remain, and what the costs would be. Additionally, numerous tenants would require a buy-out prior to redevelopment.
Results
With the Camphor Partners’ first-hand experience with design and construction in the area, we planned, obtained approvals for, and began construction of Camphor Garden, a mixed-use redevelopment in 2011. Built in stages through 2016, the project ultimately contained over 5,000 residential condo units, over 1 million square feet of retail, and a school of over 500,000 square feet. The massive condo towers stood 33 stories above the street with attractive views overlooking the city. The demand for the project was extremely high. The condo units were 95% pre-sold two years prior to construction completion. The project’s investors collected a remarkable return on their capital.
7700 Spectrum
7700 Irvine Center Dr, Irvine, CA
Opportunity
The Irvine Spectrum has traditionally been a strong office submarket due to its central location, exceptional amenities, and low supply of Class A office space. Despite the strong historical occupancy, the project was only 75% leased, with another 30% of existing tenants expiring within 24 months due to poorly capitalized ownership. Camphor Partners saw an opportunity to reintroduce the project to the market by implementing extensive common area renovations and a new aggressive leasing campaign.
Results
Camphor Partners purchased the project in 2011 and began improving the common area corridors, parking areas, conference rooms, and other neglected areas of the property. The renovations, along with new leasing incentives, improved the market’s perception of the project and resulted in increased leasing activity. Camphor Partners leased the building to 95% occupancy within 15 months of closing.
The property remains the only Class A high-rise office building in the Spectrum not controlled by The Irvine Company. Camphor Partners’ world-class property management services and recent investment in designing progressive spec suites with Gensler and SAA have contributed to a 49% increase in average rents since closing and the property’s 97% occupancy rate. Investors are earning a double digit annual yield on the remaining equity
Milani
18831 Von Karman Center, Irvine, CA
Opportunity
In 2010, Camphor Partners acquired this 66,000 square foot, four-story office building on 3.7 acres in the Irvine Business Complex. The office building generated sufficient cash flow, but over time we saw an opportunity to redevelop the site as multi-family residential (MFR) given the demand for residential in the area.
The vacancy rates for MFR were dropping in southern California and had reached just 3.6% in Orange County in 2014, despite the delivery of over 1,800 MFR units coming out of the recession. Average annual rent in Orange County increased for the fourth straight year, with Irvine leading the county with a 9% increase. Additionally, the macro-economic indicators pointed to solid residential growth through 2016.
These market trends, along with the property’s proximity to several large proposed office developments, signaled firm residential demand for a developer willing to commit time and resources to manage both the entitlement process and the existing office’s staggered lease expiration dates. We saw an opportunity to satisfy demand for housing while providing prospective residents and the city with a sustainable, bold architecturally designed property.
Results
Camphor Partners worked with our development team to transfer development intensity values, negotiate six lease buyouts, and ultimately secure a conditional use permit for 287 units in a 5-story wrap. Camphor Partners sold the entitled project in 2017 to a multifamily developer. Investors during the five-year holding period earned an annualized IRR of 18.1% over the seven year holding period.
YC Hotel
Hebei, China
Opportunity
The YC Hotel was a 234 room hotel located on the best intersection in a city of 10 million people in Hebei Province. In 2007, the owner had over-leveraged the property and when the global recession hit, the property was in distress. The lenders required the buyer to purchase the property all cash within 30 days and the governmental regulations required the new owner to guarantee employment for over 800 employees for at least 3 years. Camphor Partners recognized the irreplaceable asset and had the financial position to purchase the property quickly and retain the employee base.
Results
Using the strength of the Camphor Partners reputation, we re-branded the hotel as “YC Hotel” and invested over $10 million in exterior and interior renovations to the property. Within a year after the purchase, we refinanced the property and provided 100% of the equity back to our investors. Today, the value of the project is three times the original purchase price.
Camphor International
Hebei, China
Opportunity
On the second busiest street in a city of 10 million residents in Hebei Province sat 15 acres of aging retail, office, and residential properties. By 2000, the city had modified the general plan for the area to allow higher density and increased the height guidelines to attract redevelopment for quality residencies and retail. The site was primed for redevelopment.
Governmental regulations for the site required a master-planned, mixed-use design with programming between high-rise and low-rise office, retail, and residential at a significant scale. In 2002, we purchased the entire site and set to work planning the redevelopment with experienced architects and engineers, keeping the live/work/shop/dine theme at the forefront of the project.
Results
Within three years following the purchase, Camphor Partners successfully delivered a true mixed-use project where residents can live, dine, play, and work within the master-planned community. The project ultimately held 1,000 residential condo units, over 670,000 square feet of office space, a 216 room hotel, and over 30,000 square feet of street level retail, totaling over 2 million square feet. The condo units were 95% pre-sold, and the commercial space was 90% pre-leased prior to the completion of construction.
