Expressing a vote of confidence in the county and a large employer despite a bleak economy, East Coast investors have quietly bought the 60-acre parcel leased by Thomson Grass Valley for $16.75 million, The Union has learned.
It is one of the largest real estate deals in the county in years and provides a psychological boost to the business community during a deep and prolonged economic slump.
"We looked around the country for a single-tenant building like this," said Ivan Kaplan, managing partner of Kenmawr Real Estate Investments, a 38-year-old real estate limited partnership out of Pittsburgh in confirming the deal. "We found the right tenant in a good sector, and we liked the quaintness and relaxed atmosphere of the town."
Kaplan's group was looking for a long-term stable tenant in a growing industry who also was committed to the area, and said he found it in Thomson Grass Valley. The company, one of the area's best known private employers, makes a wide range of broadcast and TV film equipment with an estimated workforce of about 300 people.
The company's executives have said it has no plans to relocate from its offices at 400 Providence Mine Road in Nevada City.
The region's other attributes include its solid tech base, neighboring Nevada City Tech Center, quality of schools and lifestyle, Kaplan said.
The land was sold by JMA Ventures of San Francisco and leased to Thomson under a long-term arrangement. As reported in February, the land had been up for sale, with a pricetag in the range of $17 million. JMA sold the parcel to cash out and concentrate on other projects, including one at Homewood Ski resort in Lake Tahoe.
A deal of this size hinges on the buyer having confidence that the tenant will stay put and pay their lease on time. Otherwise, the investment can quickly unravel.
"We did our homework," Kaplan said.
It is their first purchase in California. The deal, structured as a tax-deferred exchange, stemmed from the sale of a 241-unit apartment complex in Pittsburgh, Kaplan said.
The big real-estate transaction closed earlier this month. The selling agent was Lock Richards of Sperry Van Ness"Highland Commercial in Nevada City.
"This demonstrates the viability and attractiveness of our area, even from a national perspective," Richards said. "It also reflects on the strength and continued success of Thomson Grass Valley."
The deal also included $11 million in long-term assumable financing, clearing another hurdle during the ongoing credit crisis.
Despite the closure of some longtime businesses in Nevada City and Grass Valley, some bright spots exist:
- A deal for the California Organics market and restaurant to occupy the Broad Street Furnishings building in downtown Nevada City remains in escrow and is expected to close by year-end.
- A Mountain View high-tech firm is considering relocating here to build a $4 million manufacturing plant.
The real estate market and some local businesses have been suffering for a long time, however. Others are expected to close as well if the economy doesn't rebound soon.
The list of businesses that have closed during the slump include The Stonehouse restaurant and Broad Street Furnishings in Nevada City, as well as Dave's Shoes and Dovetail Designs in Grass Valley, among others.