COMMERCIAL
Palo Alto-based real estate investor Menlo Equities LLC this month closed on one of the larger office sales of the year, a $20 million buy of the Cartwright Corporate Center, a five-story building just off Main Street between Jamboree Road and Von Karman Avenue.
It’s the second OC office that Menlo Equities owns, according to the company’s website. The investor bought a similar-sized building in the Irvine Spectrum in 2008.
The sales price for the 143,165-square-foot building, at 17770 Cartwright Road, breaks down to about $140 per square foot.
Sunset Park Business Trust, part of Boston-based Winthrop Realty Trust, was the seller.
The building’s about 70% full, after recently losing its largest tenant, engineering firm Tetra Tech Inc.
Remaining tenants include Grupo SMS USA LLC, a technology services company, media firm Advanstar Communications Inc. and Verify Inc., a supply chain services company.
The Grupo SMS and Verify leases, both signed in mid-2009, are worth a combined $11.7 million, brokers said at the time of those two deals.
The sale of the Cartwright building comes less than two months after Houston’s Hines Interest LP paid nearly the same amount—$20.4 million—for a two-story office about a mile and a half away, at 17600 Gillette Ave., just off MacArthur Blvd.
Hines paid close to $206 per square foot for the 98,925-square-foot building, well above what Menlo Equities paid. But Hines bought a full office—advertising firm Draft FCB Inc. has a lease for the entire building that runs into 2016.
“It’s a totally different investment play. Hines is buying the building for (its) cash flow,” said Jeff Cole, executive director with the capital markets group of Cushman & Wakefield Inc.
Draft FCB’s paying about $2.8 million in rent annually for that building, according to regulatory filings.
The two OC deals highlight a growing trend in commercial sales being seen across the country—buildings with solid tenants are getting more interest and money than those without.
In the case of the Cartwright building, “opportunistic qualities” helped push the price of this month’s sale higher than what might otherwise have been expected for the moderately leased building, according to Cole.
Among factors that helped move the sale along, the building has excess land that can be developed, and the area’s beginning to see an uptick in leasing activity, Cole said.
Cole’s Irvine-based team helped broker the Cartwright sale, and also represented the seller, AJ Irvine Owner Corp., in June’s sale of the Gillette Avenue building to Hines. Janine Padia of JP Realty Services also worked on the Cartwright sale.
Dog House Lease
A Costa Mesa building and lot that previously was a nursery has gone to the dogs.
The Bone Adventure Inc., a Costa Mesa-based daycare center for dogs, recently signed a deal to open a second location in its hometown, according to brokers.
The company just signed a 10-year lease for a 1.3 acre site at 2700 Bristol St., just off the Costa Mesa (55) Freeway. The site, previously used by the shuttered Flowerdale Nursery, also includes a building totaling about 2,900 square feet of space, according to CoStar Group Inc.
The area’s not a paradise for cat lovers. The lot’s a few blocks from Costa Mesa’s Bark Park, a fenced, off-leash park on Arlington Drive.
The Bone Adventure bills itself as a facility for dogs to play all day in an indoor and outdoor environment. Its first location, on Superior Avenue, has about 6,000 square feet of space, according to the company’s website.
Terms of the deal weren’t disclosed. Denny Pender, with the Santa Ana office of Gillett Commercial Real Estate Services, brokered the deal. Financing for the deal was handled by Pacific Enterprise Bank’s Rick Ganulan.
Lincoln Adds
Dallas-based Lincoln Property Co., which made a splash in the office market earlier this year with the $90 million buy of the Griffin Towers complex in Santa Ana, is now adding a brokerage line of business to its Santa Ana operations.
The company recently added vice president Kevin McNeil and Karen Munroe as a newly formed commercial brokerage team at Lincoln Property; they’ll provide investment sales, leasing and property management services.
Both were with the local office of Studley Inc. before moving over to Lincoln Property.
