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Monster Buy Of Yorba Linda Offices

The wealthy local duo that runs Corona-based Monster Beverage Corp. has bought Yorba Linda’s biggest office complex in one of the largest property sales so far this year in Orange County.

A venture headed by Rodney Sacks and Hilton Schlosberg, the top two executives at energy drink company Monster, recently closed on the purchase of Savi Tech Center, a four-building business park just off the Riverside (91) Freeway.

The 376,808-square-foot property complex, part of the Savi Ranch business and retail development, sold for about $95 million, or $252 per square foot, according to brokers with the Irvine office of Cushman & Wakefield Inc. who worked on the deal.

The total price makes it the largest office sale in OC thus far in 2016, according to CoStar Group Inc. records.

A venture operating under the name Savi Ranch Property Holdings was created to buy the building, according to state records.

That entity lists the same address as Monster’s headquarters in Corona, although the drink company is not directly involved in the purchase and isn’t planning to use the buildings for its operations, according to sources familiar with the deal.

The deal was for Sacks’ and Schlosberg’s private investment portfolio, the sources said.

Each of the executives has a personal fortune estimated by the Business Journal at $2.5 billion, which tied for the No. 9 ranking on the Business Journal’s annual OC’s Wealthiest list (see inside pullout section with profiles, related stories page 1).

The two Orange County denizens bought the beverage company—then known as Hansen Natural Corp. and based in Anaheim—in 1992 for $1.7 million, plus the assumption of another $12 million in debt, according to reports.

Sacks serves as chairman and chief executive of Monster Beverage, while Schlosberg is the company’s president and chief operating officer.

The company, best known for its caffeine-fueled Monster Energy drink, is now valued at $32 billion. Its shares are up about 10% since the start of the year.

Orange, Lake Forest

Sacks and Schlosberg have been putting a good amount of their fortunes into OC’s office market over the past year.

The Yorba Linda deal is the third and largest transaction that they’ve been associated with over that time, with deals that total about $155 million.

The duo were part of a venture that late last year bought TriCentre, a 10-story office in Orange at the intersection of the Santa Ana (I-5) and Orange (57) freeways. Irvine-based real estate investment and management firm PRES Cos. also was part of the group.

The building traded hands for an estimated $41.5 million, according to brokerage data.

TriCentre is a mile south of Angel Stadium. Tenants include Farmers Insurance and lender Konduar Capital Corp.

In May, PRES was reported to have paid an additional $19 million for the Lake Forest headquarters of healthcare provider Apria Healthcare Group Inc.

The Monster Energy duo also was part of the group that bought that complex, which is called Enterprise Court, sources said last week.

High-net-worth private investors such as Sacks and Schlosberg have made up an outsized percentage of commercial property purchases in OC recently, particularly for office buildings, said Jeff Cole, executive director for Cushman & Wakefield.

“They’re definitely filling the void” left by institutional investors the past few months, said Cole, who worked on the Savi Tech sale, with colleagues Ed Hernandez and Jeff Chiate.

Cole’s team also worked on the TriCentre and Enterprise Court sales that the Monster duo invested in.

Institutional capital investors, such as pension funds and insurance companies, have been a bit more cautious in deal-making during the past few months, Cole said.

Price Boost

The Yorba Linda sale looks to have been a big money maker for the prior owners of Savi Tech: a venture between Houston-based Hines Interests LP and Oaktree Capital Management LP in Los Angeles that bought the property in 2013 in an online auction for an estimated $55 million.

Hines and Oaktree subsequently put an additional $13 million into the property to upgrade interior and exterior common areas, improve the roof and HVAC systems, and make tenant improvements for all five tenants, according to marketing materials for the property.

The 19-acre campus is now fully leased and includes two of the largest employers in Yorba Linda among its tenants.

San Diego-based medical device maker CareFusion Corp., a developer of healthcare products, occupies a 141,000-square-foot building at the complex as an R&D facility.

Nobel Biocare USA Inc., a maker of dental implant technology, occupies two other buildings that combine for 125,000 square feet for its North American headquarters.

The two companies employed more than 700 in Yorba Linda combined as of a few years ago.

Other tenants include Ashley Furniture, IXI Technology and Vita N.A.

The four two-story buildings at the property bring in about $5.7 million in annual rents, according to Cushman & Wakefield’s marketing materials.

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Mark Mueller
Mark Mueller
Mark is the Editor-in-Chief of the Orange County Business Journal, one of the premier regional business newspapers in the country. He’s the fifth person to hold the editor’s position in the paper’s long history. He oversees a staff of about 15 people. The OCBJ is considered a must-read for area business executives. The print edition of the paper is the primary source of local news for most of the Business Journal’s subscribers, which includes most of OC’s major corporate and community players. Mark’s been with the paper since 2005, and long served as the real estate reporter for the paper, breaking hundreds of commercial and residential real estate stories. He took on the editor’s position in 2018.
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