Orange County Business Journal

Lakeside Tower Sale Part of Foreign Trend

REAL ESTATE: Asian trust gets 10-story office; gateways heat up Mark Mueller Sunday, May 15, 2011
Lakeside Tower: Liu Living Trust paid estimated $37 million

Lakeside Tower: Liu Living Trust paid estimated $37 million

Building’s History

The sale of Lakeside Tower is the latest chapter in a commercial real estate market that’s seen its share of ups and downs on prices in the past few years.

Santa Ana’s Triple Net Properties LLC bought the building in 2005 for about $49 million.

It sold it for about $65.5 million in 2007 to Legacy Partners Commercial Inc., a Foster City-based real estate investor.

The building was about 85% full at the time of Legacy Partners’ purchase.

Since that deal, Lakeside Tower has lost two large tenants: Triple Net (which now operates as Grubb & Ellis Co. elsewhere in Santa Ana) and Jacobs Engineering Group Inc.

The building’s now about 20% full. Monthly rents are listed at about $1.90 per square foot, according to brokerage data.

Legacy Partners paid about $37 million in cash and got an additional $29 million in financing when it bought the building in 2007, according to regulatory filings.

This month’s sale to the Liu Living Trust included the assumption of a $31.5 million loan, according to CB Richard Ellis officials. The total sale price was not disclosed. It is believed to include an additional $5 million or so cash payment.

CB Richard Ellis’ Bob Smith, Paul Jones and Karen Scholte represented Legacy Partners.

Kevin Shannon and Todd Tydlaska of CB Richard Ellis’ South Bay office represented the buyer.

Other buildings in the area have seen values fall in the past few years.

The Griffin Towers complex, a pair of buildings next to Lakeside Towers, sold for $90 million last year as part of an ongoing purge of local offices by Los Angeles-based Maguire Property Inc., now MPG Office Trust Inc.

Griffin Towers sold for about $164 per square foot to Dallas-based Lincoln Property Co. and New York-based private equity firm Angelo Gordon & Co. The sale price is less than half of the debt that was held on the property by MPG Office Trust.

The nearby Skyline at MacArthur Place, a pair of high-rise towers developed a few years ago as condominiums, were sold to apartment owner Essex Property Trust Inc. of Palo Alto last year for $128 million.

That price is believed to be about half the upscale project’s construction cost.

Flippers

Some investors who bought properties during the recession appear poised to turn profits as values rise amid ongoing signs of a recovery.

Across MacArthur Boulevard from Lakeside Tower, El Segundo-based Highridge Partners paid about $31 million, or about $125 per square foot, for the 3 MacArthur Place office in 2009.

The building’s previous owner, New York-based Tishman Speyer Properties LP, paid about $83 million for 3 MacArthur in mid-2007.

Highridge now is looking to sell the leased-up property for nearly $60 million.

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