Over his lifetime, the late Sacramento developer Joe Benvenuti assembled an empire of commercial real estate, including millions of square feet of warehouses and office buildings in California and the Midwest.
When he died in May 2012, his heirs sold the majority of his holdings –110 buildings with 11 million square feet of space –for $600 million to Westcore Properties of San Diego. The total square footage was about four times the size of the Empire State Building.
The deal included 8 million square feet of industrial and office space in Sacramento, West Sacramento, Rancho Cordova and Roseville. It was the second-largest commercial real estate transaction in Sacramento history, topped only by the sale in 2007 of the Wells Fargo office tower on Capitol Mall for $760 million.
Today the former Benvenuti buildings, many of which were vacant or run-down, are getting fresh paint, landscaping and other upgrades that cost about $12 million. Westcore officials said the company has been on a mission to make a good impression on existing and potential tenants.
“It’s not a portfolio where you just buy it and forget about it,” said Westcore president Don Ankeny. “It’s required a fair amount of work, and … we’re excited about being a part of the Sacramento community.”
The result of the company’s two-year effort, Westcore officials said, is that new tenants have signed leases for 1.2 million square feet of Sacramento-area real estate, and existing clients have renewed leases for 2.1 million square feet. There have been 213 leases signed here in the past two years. Occupancy is now 87 percent.
“My right hand has gotten numb from signing leases,” Ankeny said.
Benvenuti was one of a small group of local developers – including his contemporary, the late Marvin L. “Buzz” Oates – who amassed fortunes covering fields near major freeways with warehouses and light industrial buildings.
Benvenuti helped bring the Sacramento Kings to town, building them an arena surrounded by his warehouses in North Natomas. That first arena, on North Market Boulevard, is now an office building that’s the headquarters of the state Department of Consumer Affairs.
Other massive, nondescript buildings house state and federal agencies, pet food distributors, auto parts manufacturers, huge data centers and dozens of other businesses that help drive the region’s economy.
The hub of Benvenuti’s empire was a large swath of North Natomas, where Westcore now has its local offices.
Upon taking over, Westcore found that many of the properties had deferred maintenance, Ankeny said.
“I don’t want to disparage the seller, but their focus was on maximizing cash flow and minimizing investment,” he said.
Westcore outsourced day-to-day building maintenance to commercial real estate services company Cassidy Turley, Ankeny said. Tenants who were experiencing problems such as broken air conditioning have had those problems fixed, he said.
Parking lots were repaved. Beige buildings streaked with rust stains have been repainted Westcore’s trademark gray with a blue stripe along the roof line. So far the company has painted 42 buildings using between 9,000 and 10,000 gallons of paint, officials said.
Suzanne Arrighini, president of Berr Pet Supply, said she considered moving her company’s headquarters from North Market Boulevard in Sacramento to another location or even another city once its lease was up. But Westcore’s efforts helped change her mind, she said.
“They put on a nice new roof so it doesn’t leak on my product anymore,” Arrighini said.
“All the buildings had been a bit neglected for quite a while,” she said. “They came in and upgraded the carpeting and painted. They seem to be very easy to work with.”
Westcore also has tried to improve its relations with the commercial brokers who bring in clients.
Brokers’ commissions are paid within 48 hours of invoicing, Ankeny said. “That’s markedly different from before,” he said.
The company takes select brokers on golf outings to Carmel, and flies its biggest deal-makers to Montana for a “gold rush” event of golf, fishing and mountain biking. Each broker invited receives $10,000 in gold, Ankeny said.
“That’s something fairly unique, we feel,” he said. “They feel like they’re valued by Westcore.”
Randy Getz, executive vice president with commercial brokerage CBRE in Sacramento, said Westcore’s efforts are “standard operating procedure” for a landlord seeking to do business in a new market. But he said it’s been an effective strategy for the company, which has made strides since buying the Benvenuti portfolio.
Brokers are more inclined to show their clients properties if they enjoy doing business with the owner – especially if the landlord is willing to negotiate favorable lease terms with tenants, he said.
“You want to work with someone who acts as if they care about having your client in the building, Getz said. “That’s what Westcore is demonstrating to the brokerage community. They’re saying, ‘We want to be on your tour.’”
Call The Bee’s Hudson Sangree, (916) 321-1191.