LRG Capital Group's lease-option acquisition last week of the 66,100-square-foot Fair-Anselm Plaza shopping center and offices in Fairfax is an example of the type of creative deal-making called for when both tenants and financing can be scarce, according to Roger Smith, an agent with Cornish & Carey Commercial who has been marketing the Fairfax property for the Friedman family for years.

"We've been on the market for a couple of years, but financing has been the challenge," he said.

Lenders often look for the ability of property rent revenue to cover debt payments, and sellers often want to walk away after a sale. But the prospects of getting income while a potential buyer considers a purchase of the property can be advantageous when the property has a significant vacancy, according to Mr. Smith.

The center's 22,000-square-foot anchor-tenant space, vacant since the Albertsons grocery store closed in 2006, complicated financing for some potential buyers.

To boot, some redevelopment plans some buyers put forward for the 40-year-old center, such as demolition for housing, sometimes were at odds with community ideas. Larkspur-based LRG's long history with Marin County properties will be key in any revitalization of the property, Mr. Smith said.

The LRG investment fund that purchased the building controlled $30 million worth of mostly Marin office and multifamily properties at the end of last year and had positive net cash flow from them, according to documents posted on the firm's website.

While popular in acquisition of distressed residential real estate, lease-options haven't yet become prevalent in acquiring challenging commercial real estate, according to Mr. Smith.

Other creative options include seller financing, which Kimco Realty Corp. employed when marketing several shopping centers in the North Bay in the past year.


[caption id="attachment_21104" align="alignright" width="324" caption="Gap plans to open a prototype Athleta store in this space in Strawberry Village Shopping Center as soon as this month. (Gap Inc. photo)"][/caption]

San Francisco-based clothier Gap Inc. said it plans to finish construction and open a 2,400-square-foot test store for the Petaluma-based Athleta women's wear brand this spring in Strawberry Village Shopping Center in Mill Valley.

"For almost 10 years, Athleta customers have been asking us to open a retail store where they could 'feel and touch' the product," said spokeswoman Kris Marubio.

Customers who buy from the brand catalog and website will be able to return and exchange purchases in the store rather than via shipments. Gap purchased the brand in 2008 for $150 million.

Gap chose Mill Valley to test the Athleta store concept because the brand started in Marin County in 1997 and because the demographics were a good fit, according to Ms. Marubio.


Basin Street Properties, which acquired the 116,000-square-foot Petaluma Marina Business Center in a December joint venture, announced four new tenants totaling 4,400 square feet in lease terms mostly spanning three years.

Brokerage and investment manager Cantella and Co. Inc. leased 780 square feet and moved in early May. Wine wholesaler and marketer Robert Oatley Vineyards inked a deal for 1,230 square feet. Investment manager REFA Investments LLC leased 3,100 square feet. Financial services company Sequoia Wealth Management leased 820 square feet in April.

Tony Sarno and Mike Thomason of Keegan & Coppin represented Basin Street. Glen Dowling of Cushman & Wakefield represented REFA. Rich Henderson of Cassidy Turley/BT Commercial represented Robert Oatley.


Submit items for this column to Jeff Quackenbush at jquackenbush@busjrnl.com, 707-521-4256 or fax 707-521-5292.