Founding in Los Angeles:

Pacifica began in 1980 as a Los Angeles-based firm that specialized in investing in commercial real estate. From its inception, the organization was committed to implementing its value-based investment philosophy:

• Buy real estate at a discount to replacement cost, in markets and product types where we have superior knowledge and expertise; hold for the long term; and consider selling when markets reach price levels that are not sustainable and/or when excess new supply threatens market rents and values.

With its private investors Pacifica began acquiring, improving, developing, and managing commercial income properties. Its affiliate provided commercial brokerage services for its independent landlord and tenant clientele as well as for Pacifica’s properties.

In the early 1980’s, Southern California began recovering from a deep recession that had resulted in depressed prices for commercial real estate. Pacifica seized on the opportunity to acquire income properties at below their replacement cost and assembled a portfolio extending from West LA to the South Bay Area of Los Angeles County. As the market improved, selective properties were added where development and re-development could create value. When prices became inflated in the late 1980’s, Pacifica began selling its holdings and looking elsewhere for investment opportunities.

Signature Portfolio in Denver:

A regional search led us to Denver in 1988 where severely depressed real estate prices followed the regional energy and real estate boom and bust cycle of the early 1980’s. Repeating its successful Southern California business plan, Pacifica began acquiring commercial income property with its private clients as the local economy was rebounding. To provide a hands-on presence, it soon opened offices in Denver that accommodated some of Pacifica’s top executives – including Steve Leonard – who relocated from Los Angeles to take full advantage of the opportunity. As the cycle continued and the market improved, Pacifica began partnering with institutional investors on both acquisitions and development opportunities. (Some of those same institutional partners, including the Mack Family of New York/previously “Apollo”, have resumed investing with us after Pacifica returned to Southern California.)

By 1997, Pacifica became the largest private owner of commercial space in Colorado, the 2nd biggest commercial property manager in the state, and its 4th largest commercial brokerage firm.

As the cycle matured and commercial markets became strong in the mid-1990’s, additional investors with large amounts of capital arrived, and new developments were planned that would likely exceed the increase in demand. So, in 1997 and 1998, Pacifica sold its 8 million square feet of industrial, retail and office product for approximately $750 million. Those sales resulted in an attractive IRR for the portfolio. As they were exiting the Denver market, principals in the Pacifica portfolio began to pursue opportunities in other markets.

Modest Portfolio in Las Vegas:

With a local partner, Blake Isaacson took his portion of the Denver portfolio to Southern Nevada to establish new industrial and retail holdings initially funded in part by 1031 exchange money generated from sales in Colorado. The portfolio was assembled early in the strong part of the cycle before being liquidated in approximately 2004 and 2005 as prices began to reach their cyclical highpoints.

Resume Investing in Los Angeles:

Meanwhile, Steve Leonard with Pacifica’s LA partners developed again in Southern California, from 1996 through 1999, when they built a portfolio of approximately 4 million square feet of commercial product. Those efforts culminated in 2004 when Pacifica sold the last facilities built in that phase of the cycle for approximately $400 million, again resulting in an impressive IRR on the equity invested.

Other than that selective activity, Pacifica had generally paused investing in commercial real estate in the early 2000’s, as it was concerned that too much capital – public, private and institutional – was being deployed in the sector. Those concerns proved justified as The Great Recession decimated real estate markets, creating new opportunities to find value for Pacifica’s capital and that of its investors.

Multi-Family Development in Gateway Cities:

The upheaval in housing markets and other demographic, economic and regulatory dynamics following the financial crisis created strong demand for urban apartments – both among renters and institutional investors, including public REITs. The lack of building to meet that demand in the early years of this decade created a unique development opportunity to build and sell, or to hold the projects.

Cyrene high-rise project in downtown Seattle.

Pacifica joined forces with Matt Burton (now with Pacifica) and Paul Keller of Urban Partners along with the Mack Family of New York (Apollo Real Estate Advisors, “AREA”) to capitalize developments in key cities up and down the West Coast that were experiencing strong growth in high-paying jobs. That portfolio was anchored by a number of developments in Seattle as well as projects in Southern California and Portland. The total development cost of building out that portfolio will be in excess of $1 billion when they are completed (not all by Pacifica). Institutional investment partners have included Carlyle, Pritzker, AECOM Capital, LA County Public Employee Pension, and Cigna Insurance.

San Diego Industrial/ Office/Showroom:

Carlsbad Research Center, Carlsbad, CA

By 2013, the San Diego economy was experiencing sustainable growth and Pacifica anticipated that the recovery cycle for commercial real estate would follow. Sure enough, vacancy rates began to fall as the local economy expanded, creating ideal conditions for investing in a market that had not seen speculative construction for many years. Pacifica teamed with local partners, primarily RAF Pacifica Group (founded by Adam Robinson), and began buying existing product at attractive discounts to replacement cost. As we gained confidence in the market and our local


Lionshead Ave, Carlsbad, CA

capabilities, Pacifica took on lease up risk in exchange for deeper discounts from sellers. We also initiated the redevelopment of projects where value could be created.

The portfolio of existing product has grown to include 2 million square feet of commercial buildings acquired for approximately $250 million. We are particularly focused on industrial/office/R&D/ showroom product in and around Central and North San Diego County where two principals of the firm reside: Steve Leonard and Blake Isaacson.


el*e*vate Creative Industrial Development, Carlsbad, CA

San Diego Development:

We are now also developing among the first speculative projects in North County. The industrial/R&D market for existing buildings is very tight as the local economy continues to grow, and new construction is minimal (just over 1% planned in a market with a low 4% vacancy rate). Pacifica has seen similar conditions when it started development


in*sti*gate Creative Industrial Development, Carlsbad, CA

in other markets throughout its history. Those factors, when combined with the strength of our local partners’ capabilities and our deep penetration and knowledge of the San Diego real estate market, lead us to be confident about the investment potential of our new construction projects.

Our institutional partners include Carlyle in this portfolio. Our plan is to take advantage of favorable supply and demand conditions to build and lease high end industrial/R&D buildings. We then plan to sell them at attractive prices to institutional who are particularly interested in buying new buildings that are leased in strong markets like San Diego. We will also be constructing more traditional industrial buildings for sale to owner/users who will pay high prices at this point in the cycle.

Santa Barbara Portfolio:

The Leonards decided to relocate to Montecito, and Steve has established relationships with local real estate professionals. Those connections have led to new development opportunities, including a 24-unti multi-family project in Santa Barbara. We are attracted to these dynamics for the development of commercial real estate in and around Santa Barbara: a strong local economy, healthy demand among tenants, and limited competitions from new construction due to the difficulty in securing the approval for new developments.

Pacifica Senior Living:

It is no secret that the huge Baby Boomer Generation is heading towards retirement and old age, and its members and their families are making arrangements accordingly. Senior housing is experiencing among the fastest growing demand among all real estate sectors. Indeed, demographic, life span, and aging patterns suggest that senior housing will be part of a growth industry for decades to come – a very desirable feature for any investment.

We have had our eye on those attractive dynamics as they have become more compelling and recently pulled the trigger when the right ingredients came together: a specific land opportunity in the Roaring Fork River Valley with a local development partner we know, an experienced operator of senior communities whom we trust, and in related markets where we have a familiarity and history.

In early 2017, Pacifica Real Estate Senior Living Fund I, LLC acquired 3.88 acres of land in Carbondale, Colorado, to develop and operate a 78-unit Senior Living Center: Sopris Lodge. This fund also broke ground on a new 138 unit project in the Ken Caryl development in the City of Littleton, a Denver suburb. And it appears we will soon move forward with another Senior Living Community in Grand Junction, Colorado.

Our projects will accommodate three key needs during the typical aging cycle: initially, independent living, assisted living options as the residents slow down, and memory care. Our expectation is to hold most of these investments for the long term for cash flow and appreciation magnified by modest leverage – though some may be sold soon after stabilization. We hope to add to the fund additional senior living communities in the Denver Metro Area and in other locations in the Colorado Rockies, including the Front Range, the Roaring Fork River Valley, and the Western Slope where the Leonards have had a “second home” (Aspen) since the 1990s.