Capital Pacific has closed the Tanasbourne Corporate Park II, a 42,000 SF Class A office building in Hillsboro, OR for $6.3M. The transaction closed within 35 days from start to finish, which included an assumption of an existing life insurance loan. Capital Pacific sourced a private equity 1031 exchange buyer from out of state and closed the transaction during the typically quiet holiday period.

Capital Pacific previously represented the sellers in the disposition of Tanasbourne Corporate Park I in 2004.

Capital Pacific has closed the $75.5M Portfolio disposition of 7 Shopko locations totaling over 700,000 square feet. The properties were located in Utah, Idaho, Oregon and Washington. Capital Pacific structured the sale and disposition of the sale-leaseback transaction that successfully closed within the seller’s pricing and timing expectations. The recent acquisition of Shopko, resulting in the company being taken from a publicly traded company to private required Capital Pacific to create a story focusing on the re-positioning and re-branding of the company moving forward.

Capital Pacific recently closed a $9 M Gordmans store, located within a 30-acre Power Center in Peoria, IL.

What made the deal challenging was a non-credit tenant, unfamiliar to most investors outside of the mid-west. In reality, Gordmans is a low-cost department store with annual sales of over $350 M, and 63 locations in 15 states. It took some grit, but Capital Pacific was able to identify a semi-institutional West Coast buyer.

Capital Pacific recently represented the buyer and seller in the sale of a Santa Rosa Office Park, which closed for $5.1 M.

The two buildings were well situated across from a newly redeveloped Safeway-anchored shopping center, and enjoyed excellent visibility with 1.5 acres of land on one of the main traffic arteries through Santa Rosa.

The buildings had a history of high occupancy rates; the majority tenant (who now comprises 85% of the square footage) first moved into the building twenty years ago.

Prior to the sale, the building underwent considerable renovation to the roof and exterior to increase the sale value. Each of the two buildings is located on a separate legal parcel with a private parking area, allowing the subsequent owner unusual flexibility.

Commentary by Bill Brizendine of Melody Capital Markets

After a rough week two of ’07, the Treasury bond market settled down in week three. The benchmark 10-year UST did move around – down 2 bps, then up 4, then down 4 and finally, up 2 - but ended at 4.78% on Friday, the same as the previous Friday. LIBOR continued a trend of remaining essentially flat on the short end. Remember when short term rates were the most volatile? Not so any more.

It turned out that the CPI increased by a mere 2.5% in 2006, its best showing since 2003 when it rose only 1.9%. On the other hand, the core CPI - which excludes food and energy and is the index the Fed seems most concerned with - didn’t fare as well: 2.6% in 2006, above the 2.2% in each of the previous two years. This doesn’t strike us as good news on the rate-cutting front (and puzzles us as to why the big yawn last week in the debt markets).

We have a bonus attachment this week entitled, “Capital Markets Presentation,” a review of several years of key interest rates.



Download The RateWatch: A one-page analysis of institutional lending rates

Download the Capital Markets Presentation

Commentary by Bill Brizendine of Melody Capital Markets

The short first week of 2007 produced mixed signals on the economy. On Wednesday and Thursday we found out that: (1) construction spending continued to fall; (2) preliminary indications showed December retail sales falling short of expectation after posting strong gains in November; and, (3) Initial Jobless Claims for the last week of December were higher than expected. Then along came Friday with reports that the unemployment rate remained at a low 4.5% rate while December Employment Growth was higher than anticipated.

All these numbers will, of course, be revised later. Nonetheless, all bets came off for a near-term interest rate cut by the Fed and all the equity market indices suffered losses as traders began to fret about the potential for a rate increase. On the other hand, curiously, the Treasury bond market seemed to take it all in stride as the benchmark 10-year UST yield fell 5 bps for the week, closing at 4.64% on Friday.



Download The RateWatch: A one-page analysis of institutional lending rates

Last Friday, Capital Pacific’s San Francisco office celebrated a year of success with a holiday party at the San Francisco Art Institute’s dining room.

After unwinding with some cocktails, our team sat down to delectable meal of Filet Mignon. As tradition dictates, the newest member of the team began the evening’s entertainment with a solo Christmas carol. Not to be outdone, everyone else soon took to the stage.

Thank you to all of our clients and contacts for helping to make 2006 a fantastic year for Capital Pacific San Francisco!

Capital Pacific expands its West Coast presence with the recent closing of the ground floor retail component within the Elleven building in downtown Los Angeles. Elleven is part of a three tier mixed-use development in the up and coming South Park neighborhood of LA. The residential component of this mixed-use development is Los Angeles’ first downtown building to be certified by the U.S. Green Building Council (USGBC) for Leadership in Energy and Environmental Design (LEED). Capital Pacific represented Portland, OR based developers in the disposition of the asset.