Bailard Completes the Disposition of Orange County Office Asset and Baltimore Data Center

Bailard achieved its value-enhancement business plan for both assets and sold as core, stabilized properties

SAN FRANCISCO–(BUSINESS WIRE)–Bailard is pleased to announce that it completed the disposition of two assets in the second quarter: Palm Terrace, a Class A office campus consisting of three two-story office buildings in Lake Forest, CA and 8031 Corporate Drive, a data center and office building in White Marsh, MD.

“As an active asset and portfolio manager, Bailard is laser-focused on adding value to its property portfolio,” said Preston Sargent, President and CEO of the Bailard Real Estate Fund. “These dispositions both represent well-executed business plans, where Bailard was able to ultimately market the properties as core, stabilized assets that proved very attractive for buyers seeking stability in this environment.”

On June 1, the Fund closed on the disposition of Palm Terrace at a gross sale price of $40.45 million. Bailard purchased the 155,795 square-foot campus in 2015 to take advantage of the improving south Orange County office market fundamentals given the property’s existing vacancy and near-term lease rollover (40% of total square feet in the first two years). Since that time, Bailard enhanced the landscaping and building signage, added an outdoor courtyard, installed energy-efficient lighting, and also renovated common areas. By the end of Bailard’s six-year hold, the market rent was 20% higher than originally underwritten and the property was fully leased. Brian Urback, Asset Manager for Bailard, Inc., noted that the lengthy weighted average lease term and strong cash flow made the property appealing during the sales process.

The following week, on June 7, the Bailard Real Estate Fund completed the sale of 8031 Corporate Drive at a gross price of $14.85 million. The asset—a 66,000 square-foot data center and office property consisting of a single, two-story building—is located in White Marsh, MD approximately 14 miles northeast of downtown Baltimore. Bailard purchased the property in 2017 as a value-add opportunity to solve the in-place, short-term lease. The single tenant uses the site as its regional headend: a mission-critical switchboard for all cable and internet broadcasting in the eastern Maryland and southern Pennsylvania region. With the tenant’s lease renewal secured in late 2020, Bailard brought the asset to market in the first quarter of 2021, focused on cash-flow oriented investors.

“Having underwritten a four-year hold, it was a pleasure to secure the lease renewal, successfully execute the property’s business plan, and sell Corporate Drive as a stabilized asset,” said James Pinkerton, SVP of Acquisitions & Portfolio Management, Bailard, Inc. Speaking of both property sales, Pinkerton added that “The team was also proud that both deals closed at purchase prices higher than their estimated current valuations, reflecting what we believe to be strong buyer demand for quality properties.”

About the Bailard Real Estate Fund

The Fund is an actively-managed open-end, core equity real estate vehicle with a strategy to maintain and grow a portfolio of high-quality assets diversified across property types, major metro areas, and investment life cycles. As of June 30, 2021, the Fund’s Gross Asset Value was $1.1 billion, invested in 29 properties across 18 U.S. markets. An investor in the Bailard Real Estate Fund must be an “accredited investor” as defined in Regulation D and provide documentation verifying such status as requested by the Fund.

About Bailard, Inc.

Founded in 1969, Bailard is an independent wealth and investment management firm that offers proprietary and innovative investment strategies that drive success for clients. For individuals and institutions alike, Bailard proudly serves as a trusted partner focused on achieving long-term results aligned with client values and goals. Throughout its 50+ years, Bailard has remained independent and fiercely committed to the highest ethical standards and best-in-class fiduciary principles. With over $5 billion of AUM as of June 30, 2021, Bailard’s high-touch client service and proven track record are grounded in the firm’s core values including accountability, compassion, and excellence.

Disclosures

Bailard, Inc. (“Bailard”) is the investment and operating manager of the Bailard Real Estate Investment Trust, Inc. (the “Bailard Real Estate Fund” or the “Fund”); Bailard receives annual fees from the Fund, which are based on the Net Asset Value. The Fund invests primarily in real estate and, as a result, an investment in the Fund entails significant risks that are customarily associated with the development and ownership of income-producing real estate, including illiquidity, changes in supply and demand, and inexact valuation. The Fund’s shares fluctuate in value and may be illiquid due to a lack of redemption, the lack of a secondary market and restrictions on transfer. Fees and expenses may offset the return on the investment. The Fund may be leveraged. While projections utilized for acquisitions are based on assumptions that Bailard believes are reasonable under the circumstances, they are subject to uncertainties, changes (e.g., changes in public health, economic, operational, political, legal, tax, and other circumstances), and other risks including, but not limited to, future operating results including rents, occupancy, and other property cash flows, and other expenses. Investors may lose all or a substantial portion of their investment. For a more thorough discussion of the fees and the risks involved in making an investment in the Fund, please refer to its Offering Memorandum. Past performance is no indication of future results. All investments have the risk of loss.

Contacts

Emma Clarke

Vested for Bailard

bailard@fullyvested.com
917-765-8720