Ares and Thompson Dorfman Plan Mixed-use Project in Foster City

Foster City CA The Registry real estate

By Jon Peterson

New York City-based Ares Management, formerly known as AREA Property Partners and Mill Valley-based Thompson Dorfman Partners are planning a redevelopment in Foster City called The Waverly Development located at 1159-166 Triton Drive.

The entire project covers 6.3 acres. The plan according to documents from the city of Foster City are on 3.8 acres is a 220-unit residential development and 5,000 square feet of retail, 1.5-acres for 20 townhomes and on 1 acre 50,000 square feet of commercial.

Thompson Dorfman declined to comment for this story. Ares did not respond to phone calls for comment.

“There is now a review process going on with the proposed redevelopment. There will be a public hearing on this project soon. This is likely to be sometime after the first of the year,” says Leslie Carmichael, a consulting planner for the city of Foster City. She also is a senior planner for Metropolitan Planning Group in Mountain View.

This project would fit in with what Foster City is trying to create. “This project would be a good example of a project that the city is looking for. This is to create new housing, retail and other uses close to transportation hubs to ease the community process. For the Waverly residents there would be shuttles available to the Caltrain stop nearby,” said Carmichael.

The Waverly Development is part of the 20-acre Pilgrim Triton Master Plan. This project has three phases. The first part is the 307-unit The Plaza apartments owned by Northwestern Mutual. The second project in the development is Triton Pointe. This is a $74 million apartment/office/retail mixed-use project now under construction. Los Angeles-based CityView and Thompson Dorfman are constructing this project in a joint venture. It should be completed by third quarter of 2015.

The Waverly project has Ares as the main capital source and Thompson Dorfman as the local operating and development partner.

The land for the Waverly is now the home of around 100,000 square feet of R&D and flex buildings. This property was sold to Ares/Thompson Dorfman from San Francisco-based Prologis during the second quarter.

The sales price was $28 million, according to a document from the San Barbara County Employees Retirement System. The transaction produced an IRR of 6 percent and an equity multiple of 1.3x.

Prologis had owned the property for its commingled fund, the Prologis Targeted U.S. Logistics Fund. The real estate manager established the open-ended fund in 2004. Through the second quarter of this year, the fund had a gross real estate value of $3.96 billion. Santa Barbara County has invested $10 million into the commingled fund.

The U.S. Logistics Fund invests in core industrial properties nationwide that are wholly owned and operational/stabilized. Prologis has invested 50 percent of the portfolio in the Pacific region, which includes California, Oregon and Washington. It has made a total of 149 investments for the commingled fund.

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