Another piece of the crumbling IndyMac pie has been divvied up for dispersal as the Federal Deposit Insurance Corp. looks to recoup on the bank's massive losses.

IndyMac Federal Bank, which is being run by the FDIC, has tapped a team of CB Richard Ellis Group Inc. brokers to sell a large chunk of the bank's California real estate portfolio.

The brokers last week brought to market eight assets that IndyMac foreclosed on and now owns. Most of the residential properties are in Northern California and the Inland Empire, but some are local. In total, the portfolio has been valued at roughly $20 million by the FDIC, which took over Pasadena-based IndyMac Bancorp Inc. on July 14.

"The FDIC is not planning on holding on to properties and waiting for their value to rebound, which of course other banks may do," said Evan Wagner, a spokesman for IndyMac. "The FDIC wants to sell properties as soon as possible and recoup as much money as possible."

The assets include a handful of completed homes, hundreds of residential lots and several acres of land. The most valuable asset is a 127-lot development site called Fiddyment Ranch in Roseville, near Sacramento. That property has been valued at about $10 million, said Barbara Emmons, one of the CB Richard Ellis brokers handling the dispositions.

The Southern California assets include a six-lot site in Inglewood, seven acres of residential land in Indio, a four-home site in Redlands and a Lake Elsinore property that includes eight incomplete homes. The properties could be sold piecemeal or as a group.

Darla Longo, a vice chairman at CB Richard Ellis, said that the group is in talks with several other banks about selling similar assets. (For more on the impact the financial crisis is having on the local real estate business, see story page 1.)

"To be honest, we could see the writing was on the wall," Longo said.

Downtown Land Deal

There has been a dearth of downtown dirt deals in the last year, but now a developer has finally cut one getting a discount unimaginable when the area was booming.

JR & K; at 3rd LP, the entity of an unnamed local real estate developer, has purchased a 36,700-square-foot development site in Central City West for about $5 million. The developer bought the land at 1435 W. 3rd St. on Sept. 5 from Beverly Hills-based real estate investor Korsh Financial Group Inc.

According to Richard Ringer, a vice president at Marcus & Millichap Real Estate Investment Services Inc., the buyer paid about $4 million in cash for the property and also got a small loan from a local bank.

The deal breaks down to about $136 per square foot, a significant decline from land prices prior to the credit crisis when the property could have sold for up to $250 a foot, said Mark Tarczynski, a senior vice president at CB Richard Ellis.

The last downtown development deal was completed July 2007. The problem has been predictable: a lack of financing that has stymied big, institutional buyers.

"The real money is going to be made by the real nimble entrepreneurs that have cash," he said.

The buyer has plans for a 100-unit residential development at the property, which is located a few blocks west of the Harbor (110) Freeway, and lacks entitlements. The property includes several long-vacant apartment buildings and a small Third Street-fronting retail building with a handful of month-to-month tenants. Ringer said the buyer could demolish the buildings within six months.

"For someone like the buyer who is a long-term holder, they are viewing it as taking two to three years to entitle and develop the project and they think they will be in a good position and they hope the market will have returned (by then)," Ringer said.

Bobby Khorshidi, president of Korsh Financial, said that after buying the site in June 2006 for $3.7 million, his company put it on the market three months later and received offers for around $6 million, but they ultimately fell through.

"Our expectations were really high with the property," Khorshidi said. "As the market deteriorated and the demand for land decreased it was the right time and the right opportunity."

Adam Tischer of CB Richard Ellis also represented the seller.

Jewelry Sale

The Jewelry Design Center, a 14-story office property at 701 S. Hill St. in downtown L.A., has changed hands. According to industry sources, an Asian syndicate buyer paid about $24 million for the property.

The seller in the June transaction was a group of local real estate investors that used the Jewelry Center LLC name.

According to Richard Plummer of Cushman & Wakefield Inc., who represented those investors, the building is 75 percent occupied with wholesale and retail jewelry tenants. Plummer said the property is a development opportunity because a McDonald's franchise that occupies about 6,000 square feet of ground-floor space has a lease that expires in March. The 126,000-square-foot property has about 120 tenants.

John Eichler, Andrew Harper and Gibran Begum of Cushman & Wakefield also represented the seller.

Staff reporter Daniel Miller can be reached at dmiller@labusinessjournal.com or (323) 549-5225, ext. 263.

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