NORTH BAY BUSINESS JOURNAL EVENT

Best Places to Work 2008 Awards Reception

September 25, 2008, 5:30-7:30 p.m., Doubletree Hotel, Rohnert Park

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Real estate, wine, medical deals mark '05

YEAR'S TOP STORIES DOMINATED BY BUYOUTS, MERGERS

NORTH BAY – Call 2005 "The year of the deal."

Four of the top five stories of 2005 chosen by the BUSINESS JOURNAL involved record sales and mergers in the region's booming commercial real estate industry, in medical devices and among some of Wine Country's biggest players. The North Bay has not seen such large transactions since a series of record telecom and medical device buyouts in the late 1990s.

It was Basin Street Properties' $270.4 million sale of more than a third of its commercial office buildings to Chicago-based Equity Office Partners that topped the list and was viewed as a sign of a healthy North Bay economy.

“The fact that the largest owner of office buildings in the nation has done the studies and fully validated this as a market they want to invest in makes other serious institutions comfortable in seeking investments in the North Bay,” said Greg Moss, managing partner of NAI BT Commercial, who co-represented Basin Street Properties along with Cushman & Wakefield in the sale to Equity Office Partners. “I think it’s a very positive thing. It stabilizes the commercial economy and tends to bring a higher care for the customer or tenant.”

The purchase of the 710,000-square-foot Fireman’s Fund campus in Novato for $283.5 million was the largest transaction of the year in dollar terms in the North Bay.

What made the Equity Office deal so powerful was that it generated new cash for Basin Street to immediately reinvest in new projects in the North Bay.

The deal “frees developers like Basin Street to do what they’re really good at, creating other new products and projects,” said Al Coppin, president of real estate brokerage Keegan & Coppin Company Inc.

Meanwhile, the wine industry experienced a series of huge mergers.

Coming on the heels of Constellation Brands' purchase of Mondavi, Fortune Brands purchased Clos Du Bois, Buena Vista, William Hill and Gary Farrell and Australia-based Foster’s Group scooped up several wineries under Southcorp.

Those wineries and the entire industry are expected to benefit from another major wine industry story of the year: The U.S. Supreme Court ruling on direct shipping.

In one of the most anticipated shopping center transactions of the year, Simon Property purchased of 50 percent of Coddingtown Mall in Santa Rosa, a prelude to a major renovation of the property.

Among the North Bay's growing cluster of medical device companies, TriVascular made news with its purchase by industry giant Boston Scientific. The stage is now set for TriVascular to make a rapid expansion.

Seven new banks in 2005

And in what some bankers also are calling an indicator of a strong economy, seven new banks opened in the North Bay in 2005.

“It suggests that investors … must have a pretty optimistic view of the economic future in the North Bay in order to commit the capital required to start those banks,” said Glen Terry, president of Napa-based Vintage Bank. “They’re pretty optimistic about the economic future of the North Bay. And the evidence is that they’re willing to put money into an industry that really rises and falls with the economy.”

In other major stories of the year: The cost to practice medicine didn’t get any more affordable in 2005, with two big stories earning multiple headlines.

Sutter Medical Center of Santa Rosa, which plans to build a 124-bed hospital next to the Luther Burbank Center for the Arts, had to scale back some plans for the building when construction costs doubled in fewer than two years from the time the original plans were drawn and budgeted.

And Sonoma County doctors didn’t get the reimbursement increases that would have put them on par with doctors in surrounding counties even though the cost to practice medicine in Sonoma County is arguably as, if not more, expensive.

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