Daily Business Report — January 7, 2010

Hacienda Del Mar Office Building Sells for $15.6 Million

The 66,010-square-foot Hacienda Del Mar office building in Del Mar Heights, one of the most prominent buildings in the county’s office corridor, has been acquired by Davlyn Investments for $15.6 million or $236 per-square-foot. ). The property, located at 12625 High Bluff Drive, is the fourth office property owned by Davlyn Investments in Southern California and will be the new location of its corporate headquarters, which are currently located in Mission Valley. It was the county’s largest real estate owned (REO) sale of 2009, according to Michael Roberts of Cushman & Wakefield’s Capital Markets Group.

“This transaction represents the beginning of a trend in San Diego County toward larger, highly sought-after, REO commercial real estate sales,” said Roberts. “Commercial real estate lags the overall economy and the sale of Hacienda Del Mar is a signal the process of foreclosures to REO sales is under way locally. This is an outstanding asset that should perform very well under Davlyn’s oversight.”

The seller of the property is Chinatrust Bank (U.S.A.) of California, represented in the transaction by Roberts and Steve Rowland, Eric Northbrook and Chris High, also with Cushman & Wakefield.

Hacienda Del Mar totals 66,010 square feet of garden atrium boutique office space in three stories. John Hale, Davlyn’s director of office acquisitions, said the company has been trying to acquire property in the Del Mar Heights submarket for more than five years and this sale was possible because of the recession. Hale noted that historically, Hacienda Del Mar always operated at 97 percent to 100 percent occupancy.  “However, because of the prior owner’s plan to sell off the building in pieces as office condominiums, occupancy slipped to 53 percent,” said Hale. “We expect this vacant space to lease up in eight to nine months at some of the highest rates in the county. With its unmatched charm and appeal, Hacienda Del Mar will once again become an exclusive address for businesses such as marquee wealth management firms, law partnerships and entertainment/sports agencies whose owners and clients live in and around neighboring Rancho Santa Fe.”

Davlyn Investments Inc. is a San Diego-based owner/operator of apartment communities, condominium conversion projects and office buildings throughout Southern California. To date, the firm has acquired in excess of $750 million in real estate assets.

Built in 1987, Hacienda Del Mar is situated on one parcel totaling 3.49 acres. Chinatrust Bank (U.S.A.) repossessed the property from Cardinal Investments, which acquired the property in 2007 for $27.5 million ($417 per-square-foot).

Pacific Office Properties Acquires $75 Million Office Complex

Pacific Office Properties Trust Inc., a West Coast office REIT, has acquired the five-building office and biotechnology complex known as Seaview Corporate Center in San Diego. The $75 million acquisition was San Diego’s largest commercial transaction of 2009 and increased Pacific Office’s total portfolio under management to 4.7 million leasable square feet. Pacific Office will co-own Seaview Corporate Center in partnership with an institutional investor, Angelo, Gordon & Co., a privately held investment manager with assets under management of $19 billion.

Seaview Corporate Center was owned from 2002 to 2004 by The Shidler Group’s Western U.S. operations in partnership with Angelo, Gordon & Co. Pacific Office was formed in March 2008 through a merger of The Shidler Group’s Western U.S. operations and management with an existing public entity. The Shidler Group retained the management and leasing of the Seaview Corporate Center, and both it and Pacific Office has made the property its regional headquarters.

“We have been managing, leasing and occupying the Seaview Corporate Center since 2002, and have continued to closely monitor its status,” said Matthew Root, chief investment officer.

The Seaview Corporate Center contains 356,500 leasable square feet of office space situated on 17.95 acres, including a .394-acre parcel available for possible future development. The property is 92 percent occupied with major tenants including Adobe Systems Inc., CA Inc., Accelrys Inc., The Active Network and SAS.

“Seaview Corporate Center, with its campus-like setting, unobstructed ocean views, first-rate tenants and stable cash flows, is considered a trophy property in the desirable San Diego submarket of Sorrento Mesa.” Root said. “The property also offers all of the physical amenities in demand by companies wanting to attract and retain top employees during these difficult economic times – easy access to the freeway system, abundant parking, and recreational features including a fitness center, lap pool, and tennis and basketball courts.”

Pacific Office represented itself in the negotiations. The seller, an affiliate of Principal Real Estate Investors, was represented by Adam Edwards of Eastdil Secured.

SAIC Completes Acquisition of Spectrum San Diego

Science Applications International Corp. has completed the acquisition of Spectrum San Diego, a high-technology security firm specializing in ultra-low-dose X-ray scanning systems. Under the agreement, SAIC acquired Spectrum’s CarScan product line, which scans cars and vans in the normal flow of traffic at vehicle checkpoints such as borders and high security government facilities. CarScan’s X-ray images enable security personnel to look for weapons, drugs, currency, stowaways and other hidden contraband. Spectrum’s customers include U.S. government, law enforcement and military organizations.

CarScan is designed for high throughput and operational flexibility, minimizing its impact on traffic. In typical operations, the driver and passengers remain inside the vehicle as they drive through the system at a vehicle checkpoint. CarScan product will be integrated into SAIC’s Security and Transportation Technology Business Unit led by Alex Preston. The business unit develops VACIS X-ray and gamma-ray inspection systems, radiation-detection systems and other products for scanning vehicles and cargo containers. CarScan expands SAIC’s capabilities for scanning light vehicles.

Prior to the acquisition, Spectrum’s other product lines (including CastScope and SentryScope), residual assets and liabilities were transferred to a new company, Tek84 Engineering Group LLC, owned by Spectrum’s former security holders. Terms of the acquisition were not disclosed.

AT&T Funds Program to Combat School Dropouts

The South County Economic Development Council has received a $19,000 grant from AT&T to fund an educational directive addressing school drop-out rates in South County. Joining forces with Sweetwater Union High School District, San Ysidro School District and key local businesses, SCEDC is developing the UP Link retention project, which addresses schools in South County with the greatest drop-out rates. UP Link will include a mentor program involving peer tutoring on skills for successful learning. The students of the program will produce a graphic novel to encourage their peers to stay in school. Local business leader visits and location tours will foster student career exploration. “The business sector and the education segment working together can provide support and motivation for young students who are the future work force of tomorrow,” said Norma Hernandez, vice president of the SCEDC.

The mentoring program will target students at Sweetwater Union High School District’s three high schools with the highest dropout rates. It will be modeled from Hilltop High School’s Connect Crew program, which trains juniors and seniors as mentors to entering freshman. These mentors will serve as role models and motivators to the at-risk freshman, providing peer tutoring and encouraging school success skills.

Best Buy Stores Leases Space in La Jolla Village Square

Best Buy Stores LP leased 32,571 square feet of retail space at La Jolla Village Square, 8657 Villa La Jolla Drive in La Jolla. The value of the 10-year lease was not disclosed. Reg Kobzi of CB Richard Ellis represented the lessor, 8650 Villa La Jolla Inc. Nancy Johnston of Epstein & Associates represented Best Buy Stores. The Best Buy space was previously occupied by Linens ‘n Things and AT&T. AT&T relocated to a different space in the center. The Best Buy lease brings La Jolla Village Square to 98 percent leased with one suite available.

SunTrust Banks Establishes San Diego Office

SunTrust Banks Inc. has announced that Todd LaRocca and Billy Crafton and their respective teams will join SunTrust Sports and Entertainment Specialty Group, forming a new San Diego office for its Private Wealth Management division. LaRocca, formerly the head of the San Diego office for San Francisco-based CSI Capital Management, has joined SunTrust as a co-head of the San Diego office and Sports practice for SunTrust’s Sports and Entertainment division. Over the past 10 years, LaRocca, a former Baltimore Orioles professional baseball player, has worked as a managing director and principal for CSI Capital Management. Crafton, formerly the principal of San Diego-based Martin Kelly Capital Management LLC, will serve as co-head of the San Diego office and Sports practice with LaRocca. Crafton brings over a decade of experience as an investment adviser to professional athletes and high net worth individuals. Crafton began his career at CSI Capital Management before founding Martin Kelly Capital Management in 2006.

Growth of Indian Gaming Revenues Slows

Gaming revenue at Indian gaming facilities in the U.S. was approximately $26.8 billion in 2008. Gaming revenues grew 1.5 percent, the slowest growth in its reported history. That’s according to Dr. Alan Meister, an economist with Nathan Associates Inc. in his annual study on Indian gaming.

Some of Meister’s findings:

• The top two states, California and Oklahoma, generated 38 percent of total gaming revenue at Indian gaming facilities.

•Oklahoma passed Connecticut to become the second largest state in terms of gaming revenue from Indian gaming facilities.

• There was great disparity in the performance of Indian gaming across states. Nearly one-half of the states with Indian gaming experienced declines in gaming revenue, while the other half experienced growth.

• The states that experienced the most growth in Indian gaming revenue in 2008 were Alaska, Alabama, Nebraska and Wyoming.

• The states that made the greatest contribution to nationwide Indian gaming growth were Oklahoma and Florida, which are large revenue-generating states that continue to grow at a rapid pace.

• Indian gaming continued to make significant contributions to the U.S. economy in terms of output, jobs and wages

Scripps Cancer Center Hosts Cancer-Diet Workshop

San Diegans can learn about the important and often-overlooked link between diet and cancer at a free workshop and cooking demonstration at Scripps Center for Integrative Medicine on Jan. 26 from 6:30 to 8 p.m. People who have cancer, and those who want to prevent cancer, require a nutrient-rich diet that supports healing. In this workshop, attendees will learn about specific foods that can help reduce inflammation, a risk factor for cancer. A cooking demonstration will reveal two delicious and easy-to-make recipes using anti-inflammatory ingredients. The Nutrition and Cancer workshop is presented by Scripps Cancer Center and Scripps Center for Integrative Medicine.

On The Move . . .

Venture Capitalist Joins S.D. Regional Economic Development Corp.

Local venture capitalist David Titus has joined the San Diego Regional Economic Development Corp. as managing director of strategic initiatives. In this role, he is to familiarize company executives in San Diego with EDC’s mission, business development and policy programs to encourage them to remain and grow here. Titus is a founder and managing director of Windward Ventures, an early-stage venture capital firm focused on Southern California. He will continue to manage the Windward portfolio as well as sit on the boards of select private and public companies.

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Traversa Therapeutics Names R&D Vice President

Traversa Therapeutics, a biopharmaceutical company developing novel RNA interference technologies, announced the appointment of Curt W. Bradshaw as the company’s vice president of research and development. Prior to joining Traversa, Bradshaw was the vice president of chemistry at CovX. Bradshaw was a member of the CovX management team before, during and after the company’s acquisition by Pfizer.

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Inovio Biomedical Appoints Chief Medical Officer

Mark L. Bagarazzi, M.D., has been appointed chief medical officer for Inovio Biomedical Corp. He will lead worldwide clinical development and regulatory activities for Inovio’s next-generation vaccines for the treatment and prevention of influenza, HIV, other infectious diseases and cancers. He joins Inovio from Merck & Co., where he was director of worldwide regulatory affairs for vaccines and biologics. Prior to joining Merck in 2001, he was director of the HIV/AIDS program for St. Christopher’s Hospital for Children in Philadelphia.

Federal Contract Awards . . .

Rore Innovative Solutions J.V. in San Diego won a $49.5 million federal contract from the U.S. Army Corps of Engineers, Los Angeles, for the maintenance, repair and alteration of real property.

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Pacific West Builders of National City won a $28,294 federal contract modification from the U.S. Naval Facilities Engineering Command, San Diego, for the repair and modernization of 13 living units at the Bachelor Enlisted Quarters under the American Recovery and Reinvestment Act.

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Tried & True Corporate Cleaning Inc. in El Cajon won an $11,822,612 federal contract from the U.S. Air Force Space Command, Peterson Air Force Base, Colo., for custodial services at the Peterson Air Force Base and Cheyenne Mountain Air Force Station. Place of performance will be in Colorado Springs, Colo.

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Harper Construction Co. Inc. in San Diego won a $22,177,265 federal contract from the U.S. Army Corps of Engineers, Tulsa, Okla., for the construction of a joint Fires and Effects Training Simulation facility. Place of performance will be at Fort Sill, Okla.

(Source: Targeted News Service)

Business Datebook

Jan. 8

SEMINAR: National Association of Women Business Owners (NAWBO) San Diego, continue its monthly seminar series with a program presented by Marguerite Lorenz of Lorenz Fiduciary Services: “Estate Planning and Your Business.” Brandman University, 7460 Mission Valley Rd., noon to 1 p.m. Free for NAWBO members; $25 for others. Pre-registration required. For online registration and more information, visit nawbo-sd.org.

Jan. 11

SEMINAR: Foothills Bar Association’s seventh annual “Hard to Get” MCLE Credits Seminar, 5 to 9 p.m., La Mesa Community Center, 4975 Memorial Drive, La Mesa. Speakers include Brian Forbes, Julie Greenberg, Mattheus Stephens, and M. David Meagher. 3.5 hours MCLE Credit. $50, FBA members, $65, nonmembers. Download registration form at : lawyersclubsandiego.com/associations/4937/files/FBA.MCLE.form.pdf.

Jan. 13

BREAKFAST PANEL: The 2010 San Diego Retail Market Forecast sponsored by the International Council of Shopping Centers. Local retail experts discuss what to expect in 2010 and how to survive. Moderator: Mike Clark, ICSC, San Diego program committee chair. Marriott Del Mar, 11966 El Camino Real, San Diego. 7:30 a.m. registration, program at 8 a.m. Members $45 to $60; nonmembers $60 to $75. Registration information at (646) 728-3800.

Jan. 14

REAL ESTATE PANEL: Residential real estate leaders will gather for an annual forecasting event at 5 p.m. at the Del Mar Hilton, 15575 Jimmy Durante Blvd., Del Mar. The program, “Positive Again in 2010,” is presented by the Sales & Marketing Council of the San Diego Building Industry Association. Moderated by Pete Reeb of Reeb Development Consulting. Cost is $65 for BIA members and $85 for nonmembers. Dinner, 6 p.m., program, 7 p.m. For more information or to register, visit http://www.biasandiego.org/eventsupcoming.php?key=91 or call (858) 450-1221, Ext. 101.

WORKSHOP: CONNECT workshop on “Establishing an Effective Bioscience IP Portfolio,” held in partnership with Pillsbury Winthrop Pittman Shaw LLP. The workshop will cover basic elements of developing a commercially meaningful intellectual property portfolio for a bioscience company. 8 a.m. to 1:30 p.m., offices of Pillsbury Winthrop Shaw Pittman,

12255 El Camino Real, Suite 300, San Diego. Light breakfast will be provided; optional lunch. $45. For more information, call (858) 964-1312.

PRESENTATION: Jeff Morgan, president and CEO of the National Investor Relations Institute (NIRI), speaks to the San Diego NIRI chapter at Leap Wireless, 5887 Copley Dr., San Diego. Networking reception at 5 p.m. presentation, 5:30 to 7 p.m. Morgan will speak on the NIRI and the state of the industry. Admission is $45 for members and $60 for nonmembers if registration is received before 5 p.m. on Jan. 11. The cost for late or on-site registrations is $55 for members and $70 for nonmembers. Register by e-mail at: rsvp@nirisandiego.org.

Jan. 19

BREAKFAST TALK: Jeff Moorad, vice chairman and CEO of the San Diego Padres, will give a talk on the recent Padres franchise deal at the Jan. 19 meeting of the San Diego chapter of the Association for Corporate Growth. It will be from 7 to 9 a.m. at the Doubletree Hotel Hazard Center, 7450 Hazard Center Drive, San Diego. ACG San Diego members are free; others are $50. To reserve, visit acteva.com/go/acgsd. For more information, call (619) 741-7247.

FORUM: San Diego Mayor Jerry Sanders will discuss past, present and future city government reforms that will shape the region in NAOP San Diego’s fourth annual Breakfast with the Mayor program. Marriott San Diego/Del Mar, 11966 El Camino Real, San Diego. Registration at 7:30 a.m., program runs from 8 to 9:15 a.m. $40 for members, $60 for nonmembers. Attendees may pay online at naiopsd.org. NAOP San Diego is a chapter of the Real Estate Development Association.

Jan. 20

WORKSHOP: “Unlocking the Secrets: the Power of Strategic Alliances” sponsored by the San Diego Regional Chamber of Commerce. A 90-minute training course to be successful in the chamber’s complementary referral program, the Business Alliance. Chamber HQ, 402 West Broadway, Suite 1000, San Diego. No charge. Reservations required. To reserve, e-mail Erin Chapman at echapman@sdchamber.org or call (619) 544-1382.

CONFERENCE: San Diego Society for Human Resource Management’s annual Law Day Conference focuses on employment law, compliance and legislative issues facing today’s workplace. 7:30 a.m. to 3:30 p.m., Hilton La Jolla Torrey Pines, 10950 North Torrey Pines Road, La Jolla. $129 for members, $189 for nonmembers. To reserve and for more information, visit sdshrm.org or acteva.com/go/sdshrm.

FORUM: “TelCentris: Generating Revenue from a Market Used to ‘Free,’” 5 to 8 p.m. Salk Institute, 10010 North Torrey Pines Rd., La Jolla. Sponsored by MIT Enterprise Forum San Diego. For more information, visit sdmitforum.org.

Jan. 21

LUNCHEON: Lawyers Club of San Diego monthly luncheon, noon to 1:15 p.m., Bristol Hotel, 1055 First Ave., Downtown San Diego. Doors open at 11:45 a.m. Members $25. Nonmembers $30. Make reservations to rsvp@lawyersclubsandiego.com.

LUNCHEON: Annual installation luncheon of the Downtown San Diego Partnership. 11:30 a.m. check-in, program at noon, Hard Rock Hotel, Downtown San Diego. For information, call Sheri Snead, (619) 234-0201 or e-mail her at ssnead@downtownsandiego.org.

WORKSHOP: Presentation workshop sponsored by BIOCOM, 8:30 a.m. to 5 p.m., at BIOCOM, 4510 Executive Drive Plaza 7, San Diego. Provides opportunity for practice, feedback, videotaping and one-on-one coaching for each participant. Each participant will present three times, be videotaped and receive group and one-on-one feedback. For information, call Kristie Grover, (858) 455-0300.

Jan. 26

WORKSHOP: “Unlocking the Secrets: The Art of Giving a Presentation,” a training course sponsored by the San Diego Regional Chamber of Commerce. 8 to 9:30 a.m., San Diego Regional Chamber of Commerce, 402 West Broadway, Suite 1000, San Diego. Learn how to show off what you do and share what makes your business, product or service unique. For more information, call (619) 544-1382.

Jan. 27

WORKSHOP: The San Diego chapter of the International Association of Business Communicators holds a special workshop/learning session on “The New Rules of Engagement: How Communicators Shape Leaders’ Thoughts and Actions.” Speaker is Mark Schumann, principal of Towers Perrin and 2008-09 chair of the IABC. 11:30 a.m. to 1 p.m., learning session and lunch; 1 to 2 p.m., roundtable workshop. Doubletree Hotel San Diego/Mission Valley, 7450 Hazard Center Drive, San Diego. Register by Jan. 21 and its $40 for members, $50 for nonmembers. Register afterwards, its $50 and $60, respectively.

Feb. 3

ANNUAL DINNER: The 139th annual dinner of the San Diego Regional Chamber of Commerce, 5-8 p.m., Town and Country Resort & Convention Center, 500 Hotel Circle North, Grand Exhibit Hall. $150 individual registration. Highlights include induction of the 2010 chairman of the board, Tom Wornham of Wells Fargo, and the board of directors, and presentations of the Spirit of San Diego, Courageous Leadership and Regional Unity awards. For more information, call Katie at (619) 544-1370.

Feb. 16

CELEBRATION: The Asian Business Association of San Diego holds its 16th annual Lunar New Year Celebration featuring Lucky Lion Dancers, a casino night with prizes and Chinese cuisine. 5:30 to 8:30 p.m., dinner from 6:15 to 7:15 p.m., no-host bar, Fat City Steakhouse/China Camp Restaurant, 2137 Pacific Coast Highway, San Diego. Cost: before Feb. 16, $30 to ABA members, $35 for nonmembers; at the door, $40 members and nonmembers. Register online at abasd.org. For more information, call (858) 277-2822.

Feb. 27

WORKSHOP: The San Diego chapter of the American Society of Interior Designers sponsors a “Day with Designers,” a public workshop to provide information on practical interior design basics and how to select an interior designer, among other tips. 9 a.m. to 2 p.m. at the Art Institute, 7650 Mission Valley Road, San Diego. Advanced tickets available for $35 by visiting ASIDSanDiego.org. Tickets at the door are $45. For more information, call (858) 646-9896.

The Daily Business Report is produced by REP Publishing Inc., publisher of San Diego Metropolitan magazine and the North Park News. (619) 906-4104.