Real Estate Forum - December 2010

any new construction for another six to
12 months. “The best hope we have is in
the larger building sector, where we are
experiencing a rise in demand and
increased rents,” he says. “Much of this is
due to increased consolidation by compa-
nies—saving money and gaining efficien-
cies to weather the recession.”
But these current concerns aren’t
deterring some from investing in
Southern California’s logistics industry
in and around the ports for the long
term. Australian REIT Dexus believes
that when the recovery comes, the logis-
tics market will be among the first to
show it. Dexus revealed this past summer
that this is the reason it is investing in
California industrial properties near the
state’s ports. The company plans to
invest at least $600 million in three West
Coast port markets, primarily in the
Greater Los Angeles area.

Dexus CEO Victor Hoog Antink says that the strategy involves selling the company’s East Coast and Central US holdings over the next few years in order to concentrate its portfolio on the West Coast. That plan is intended to replicate the company’s Australian strategy of investing in a very few markets but with a high concentration of holdings in each.

Hoog Antink says that, although the Dexus strategy involves selling its Eastern and Central US assets, it will not need to wait to sell them before buying on the West Coast, where it has a team based in Newport Beach. He adds that the firm will allocate capital so that the West Coast team will be able to acquire assets before the properties in other regions are sold. He points out that the company has

“Traditionally,
the US is so
resilient that
recovery
usually
happens
sooner and with more
velocity than people in the
rest of the world expect.”

VICTOR HOOG ANTINK

Dexus

“plenty of financial capability and flexibil-
ity,” with more than $1 billion available in
credit lines today and low leverage, less
than 30%. In addition to acquisitions, its
West Coast investments could also include
build-to-suit projects, he notes. Regarding
the dispositions of properties in the east-
ern and central markets, he adds, “We’re
not in a hurry.”
Dexus will concentrate its investments
in the Greater Los Angeles, Seattle-
Tacoma and Oakland, CA areas because
of the huge volume of trade that comes
through the ports in those markets. The
company will be among the top five indus-
trial investors on the West Coast once it
executes its strategy, he says.

Now is certainly a good time to buy, Hoog Antink says. Dexus believes the market is at bottom and that occupancies and rental rates will increase as the US economy recovers. “Traditionally, the US is so resilient that the recovery usually happens sooner and with more velocity than people in the rest of the world expect,” he says. Dexus, however, is “not trying to play the cycles,” Hoog Antink explains. “We think it’s a good time to buy, but we are here for the long term.” ◆

Reprint orders: www.remreprints.com

We’ve Got California Covered

California’s current housing market is ripe with opportunity for
REO PURCHASES

LONE OAK FUND, California’s Bridge Lender will:

Finance REO residential acquisitions throughout California

Lone Oak’s bridge is a necessary and fair opportunity cost .. .
essential to moving deals forward!
Leverage and facilitate buyers’ purchases of houses
from banks and trustee sales
t l
New LINE OF CREDIT program

$1.5M to $10M • 8.9% Interest Only
Loan amounts up to 60% of purchase price
Ask about our distressed commercial & apartment financing

www.loneoakfund.com
A Portfolio Lender Larger than Many Banks
TO GET YOUR LOAN STARTED,
CALL STEPHAN KACHANI
Lone Oak Fund, LLC is licensed as a California Finance Lender under Department of Corporations license number 603B623. ©2010 Lone Oak Fund, LLC All rights reserved.