COMMERCIAL
Irvine’s 2600 Michelson office tower is officially on the sales block.
Brokers with Los Angeles-based CB Richard Ellis Group Inc. said they’ve been tapped to handle a sale of the 16-story, 307,662 square foot office off Jamboree Road near John Wayne Airport.
The distressed building—the former home to the Business Journal—previously was owned by Los Angeles-based Maguire Properties Inc.
It was placed under control of a court-appointed receiver late last year after the landlord—now known as MPG Office Trust—defaulted on nearly $110 million of debt tied to the property.
CB Richard Ellis’ Kevin Shannon, Bob Smith, Paul Jones, Todd Tydlaska and Karen Scholte are handling the sale, with colleague Chapin Hunt advising on financing for the deal.
The property, which is 52% full and holds the headquarters of health club chain LA Fitness Inc., is going to market unpriced, according to brokers. Based on other Orange County distressed sales of late, a price in the range of $50 million to $60 million appears likely.
Recent interest among institutional investors for offices could push that price up a little. The building could prove attractive to bargain hunters because of the “availability of attractive assumable financing, which would be impossible to duplicate in the conventional loan market,” Shannon said in a statement.
Irvine’s Allergan Inc. had been rumored as a potential buyer. Last year, I reported on industry speculation that the drug maker—which owns its headquarters building and nearly everything else on the block around 2600 Michelson—might be looking to acquire the office building.
There’s been no sign that Allergan is considering making a bid for the building now.
Another KBS Buy
Newport Beach’s KBS Realty Advisors is paying $115 million for a prominent office building in Louisville, Ky.
An affiliate of KBS is buying National City Tower, the Wall Street Journal reported in late October.
It’s an all-cash deal for the 38-story, 712,533 square foot building. The price works out to $161 per square foot.
The building’s about 94% leased and last sold for $95 million in 2005, according to the report.
The deal is set to be the highest overall price paid for a Louisville office building since 2004, when another tower there went for $128.5 million.
The seller of National City Tower is an affiliate of Meridian Investments Inc., which is based in Louisville.
Big price tags are nothing new to KBS, whose real estate trusts have been behind some blockbuster office deals this year. In two of its largest deals, a pair of skyscrapers in Chicago and Los Angeles bought by KBS affiliates from affiliates of Houston’s Hines Interests LP went for a combined $863 million.
Hines and KBS recently completed another deal in which the Newport Beach investor was the seller.
Hines Global REIT paid $31.3 million for a four-building office park in Austin, Texas, called Southpark Commerce Center II.
The center has 372,125 square feet and is 94% full. The seller was KBS Southpark Commerce Center II, LLC, according to regulatory filings. Hines assumed an $18 million loan as part of the deal.
Broker Switch
The Irvine office of Colliers International has beefed up its office brokerage operations by hiring away a prominent team from Grubb & Ellis Co.
Colliers said it’s hired brokers Robert Caudill, Matt Didier and Ryan Ward, who will represent landlords and tenants of office properties throughout Southern California, and marketing coordinator Amanda Mann. They’re moving from the Orange office of Grubb & Ellis.
Caudill, a 25-year commercial real estate veteran and former Grubb senior vice president, will serve as a director at Colliers International. He’s worked on deals totaling more than 15 million square feet of office space.
Caudill represented the Federal Deposit Insurance Corp. in one of the county’s most notable office deals in the past few years, when it leased 207,000 square feet of space in the Irvine Spectrum in 2008.
Didier has completed some 3 million square feet of leases and sales. He was the top office broker in Grubb & Ellis’ Orange office in 2007 and 2009, and will be a senior vice president at Colliers.
Collier’s office brokerage operations in the Greater Los Angeles area are overseen by another former Grubb official, managing director Hans Mumper, who switched companies earlier this year. He works out of the company’s L.A. office.
