Crystal Cathedral Campus Could See ApartmentsREAL ESTATE: Greenlaw bids $46M with lease deal for church Sunday, June 5, 2011
Newport Beach-based real estate developer and owner Greenlaw Partners is looking to add one of the county’s most distinctive properties—the Crystal Cathedral in Garden Grove—to a portfolio that’s grown with acquisitions of distressed buildings in the past two years,
Greenlaw has agreed to pay $46 million for Crystal Cathedral Ministries’ iconic glass church and surrounding office buildings, according to court documents filed late last month with a federal bankruptcy court in Santa Ana.
The seven buildings on the campus total about 329,000 square feet, including close to 140,000 square feet of offices.
The office space is used by the church and could be leased to other tenants in a few years, according to court filings.
The proposed sale price works out to about $140 per square feet for the entire property, which was built in 1980.
If completed at the current price, it would be the largest sale of a North Orange County commercial property so far this year.
The proposal calls for Greenlaw to lease back the cathedral and other parts of the 30-acre property to the church, which uses the campus for services, ministries and its “Hour of Power” television show.
The sale and leaseback is seen by leaders of the church—founded by Rev. Robert Schuller in 1955—as the best way to dig its way out of debt.
Crystal Cathedral Ministries, considered by many to be the country’s first modern megachurch, listed more than $40 million in debts when it filed for bankruptcy protection in October.
Ministry officials cited the economy and dwindling contributions as the reasons behind the filing.
Initially, the church would pay more than $300,000 a month to lease back the bulk of the campus from Greenlaw, under a 15-year deal.
Payments would decrease to $212,000 per month after two years, assuming Greenlaw decides to seek other tenants for the office portion of the campus, which appears likely.
The developer has had success leasing up another office it recently acquired near the Crystal Cathedral campus—4000 Metropolitan Ave., next to the Block at Orange shopping center.
Greenlaw recently struck a nearly 100,000-square-foot lease with the Federal Bureau of Investigation for the 4000 Metropolitan building, according to sources. That’s one of the larger office leases signed so far this year.
The FBI’s local operations had been based in Santa Ana.
In addition to its office uses, the Crystal Cathedral sale also includes a development play. Greenlaw could build up to 400 apartments and a parking structure on the church campus, according to court filings.