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Monday, October 11, 2010

Investors From Mumbai, Houston, L.A., Behind $2.33B purchase of State Buildings

Posted By on Mon, Oct 11, 2010 at 5:15 PM

click to enlarge Meet the new landlord
  • Meet the new landlord
Meet the new landlord
The California Public Utilities Commission's San Francisco headquarters is among 11 state buildings that will soon be owned by a consortium made up of investment groups hailing from Houston, Los Angeles and Mumbai, the state Department of General Services Reported today.

The buildings will be sold and will now be leased back for 20 years, under a deal designed to provide a short-term budget fix for California at great long-term cost. Critics, who say the deal will add an extra $1 billion to state administration costs, have included members of California Building Authority groups in San Francisco and Los Angeles, who oversee the to financing and operation of state buildings in those cities.

"The people's representatives, to correct their own mistakes, have

sold off the people's assets. In this case, the people's representative

have not been good stewards," said Donald Casper, a San Francisco State

Building Authority member who was fired after he criticized the planned

sale this spring. "Only if you have enough money to permanently rent a

hotel suite, as Arnold Schwarzenegger does, can you believe in a virtual

government that does not own buildings, or would you consider rent

payments to be a no-problem situation."

The buyers, calling themselves California First, LLC, include Hines Interests, a Houston-based real estate investment and management company; and Antarctica Capital Real Estate LLC, a partnership including L.A. real estate broker Rich Mayo and Chandra Patel, of Antarctica Capital. According to an online bio, Patel worked on establishing real estate investment trusts in India during the 1990s, before founding his current firm. We phoned him Monday afternoon, and will report on his comments when he calls back.

For now, it might be worth getting to know the guys who'll carry out Schwarzenegger's vision, which says the

government is less expert at managing buildings than the real estate

sharpies. Per the program of a 2007 New Delhi real estate conference attended by Patel:

Mr. Patel is a Managing Director of Antarctica India

Real Estate Advisors (AIREA). AIREA is a real estate investment

management company focused upon India. He is also a founder and Managing

Director of the Antarctica Group. Prior to Antarctica, Mr. Patel headed

a variety of technology and information services companies, including

Ostara AEC and Asian Business Advisers. He was also an Associate at

Rogers & Wells. Mr. Patel worked upon the establishment of REITs in

India in the mid-90s, and has been involved in a number of pioneering

initiatives in US-India relations.

Mayo, meanwhile, has been brokering office building sales from LA for the past quarter century.

Rich Mayo has over 25 years experience in the real estate industry and has been personally responsible for nearly $5 billion in real estate transactions, including nearly 20 million square feet of commercial office properties. He also has extensive experience in retail, hospitality and multi-family investments and developments.

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