VTA closes purchase of San Jose's Mitchell block

The Mitchell block, a downtown San Jose parcel seen as key to redevelopment efforts, has been sold to the Valley Transportation Authority for $39.6 million.

The VTA board approved the purchase in November and the deal closed Dec. 14.

The property lies between Market and First streets and between Santa Clara and St. John streets, although it does not include the buildings that front Santa Clara Street.

Jeffrey Kuhn, spokesman for the family, confirmed that the sale closed. Kuhn is the grandson of Warren Holmes, who along with E.B. Gross owned the San Jose Hardware Co., which stood where the so-called Knight-Ridder building stands now on West San Fernando Street.

"The Holmes family has been involved heavily in San Jose since the 1880s," Kuhn says. "There is some wistfulness about selling the last of the family's properties."

The VTA plans to use the land as a staging area for the construction of the BART extension to San Jose. Ultimately the property also will have an entrance to a downtown BART station.

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source: bizjournals.com

Davis apartment vacancy rate less than one percent

The apartment vacancy rate in Davis was 0.7 percent in the fall of 2007, the lowest rate since 2002, according to the University of California Davis.

The Student Housing department at UC Davis conducts an annual vacancy and rental rate survey for the city.

The university attributes the low vacancy rate, in part, to the large freshman class that enrolled in the fall of 2006 -- 5,511 students -- that are now moving off campus.

Last fall, the apartment vacancy rate was 1.8 percent. Economists consider a 5 percent vacancy rate to be the ideal balance between landlords and tenants, the survey reported.

The rental rate in fall 2007 increased by an average of 4.2 percent, almost double the 2.6 percent increase in 2006.

The survey found the average monthly rent for a two-bedroom unfurnished apartment -- the most abundant type of rental housing -- was $1,172, a 5.4 percent increase over last year.

The department surveyed 187 apartment complexes; 172 responded. Out of 8,634 total units, 63 were vacant.

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source: bizjournals.com

City votes to use eminent domain on K Street

The City Council on Tuesday voted unanimously in favor of using eminent domain to kick-start redevelopment on K Street.

The vote means the city can begin the legal process of forcing property owner Mohammed "Moe" Mohanna to sell his properties. The city hopes to then complete a land swap between Mohanna and businessman Joe Zeiden, who has plans to redevelop the 700 block of K Street with upscale shops. Mohanna would control much of the 800 block of K and L streets.

Lawyers for Mohanna threatened a drawn-out legal battle in response to the vote, and the events leading up to it.

Earlier Tuesay, a group of property owners and business leaders, including Mohanna, sent a formal letter to Mayor Heather Fargo and the City Council challenging the legality of subcommittee meetings regarding downtown development. The group charges the meetings violate the state's open meetings law. It also requested documents from the meetings.

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source: bizjournals.com

Downtown Phoenix Renaissance towers in escrow for $273 million

One of Denver's premier real estate investors and developers stands to make a tidy profit when he closes on One and Two Renaissance Square in downtown Phoenix, most likely before the end of the year.

According to CoStar real estate reports, Bill Pauls, chairman of Aurora, Colo.-based The Pauls Corp., has sold the two-building signature property located between Central Avenue and First Avenue, Washington and Monroe streets, for almost $273 million. That would make it the second biggest commercial transaction of the year in the Valley.

The buyer is Hines-Sumisei US Core Office Fund LP, showing an address in Los Angeles. The owner of the fund, however, is The Hines Co., a Houston-based real estate investment firm and developer with interests throughout the U.S. and internationally.

A contract was signed Nov. 15, but the deal remains in escrow. According to transaction notes, if the buyer cancels, it will forfeit $10 million in earnest money.

Pauls Corp. purchased the 963,000-square-foot Renaissance Square twin towers in September 2005. Reports then said the Colorado firm paid $120 million.

Pauls once owned the Denver Tech Center, a major Denver employment center on the southeast side of town. He is now developing the 1,300-acre Gateway Park business center near Denver International Airport. It doesn't appear that the Pauls Corp. has any other holdings in Arizona.

Renaissance Square was built in 1987 and 1988. It has 1,050 underground parking spaces.

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Eola Capital donates $500,000 to CityArts Factory

Eola Capital LLC is donating $500,000 to CityArts Factory for the continued development of an arts district in downtown.

The Orlando-based real estate investment firm is making the donation over five years. The money will be used to support activities in the CityArts Factory, located at 29 S. Orange Ave.

"This donation addresses a vital need in the long-term strategic plan for the venue and the Downtown Arts District, and in achieving our mission of growing the arts in the heart of Orlando," says Kurt Bauerle, chairman of the Downtown Arts District, in a prepared statement.

Originally the Phillips Theatre [1923 to 1929], CityArts Factory is a four-story, 19,135-square-foot public gallery and venue space. Opened in June 2006, CityArts Factory has hosted more than 180 art events and exhibits, traveling galleries and educational classes. It is home to five separate art galleries, a classroom, an artist studio, and an 8,000 square-foot events and performance space -- renamed the Eola Capital Loft at CityArts Factory in appreciation of the company's donation.

"Orlando is a growing community, rich in art and culture, and we're honored to assist in the continued revitalization efforts in the City," says Jim Heistand, CEO of Eola Capital. "Our investment is representative of our commitment to Orlando."

Headquartered in Orlando, Eola Capital is a privately held real estate investment company that owns, operates and manages 115 office buildings throughout the Southeastern United States.

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source: bizjournals.com