Boston-based TA Associates Realty has snapped up a Santa Ana office building for about $52 million, the latest in a string of big-dollar office sales closing in Orange County over the past month.
TA Associates is a privately held real estate investor with an office in Newport Beach. It recently closed on 3 MacArthur Place, an 11-story office building just off the Costa Mesa (55) Freeway, according to brokers with CB Richard Ellis Group Inc. who worked on the deal.
The 246,819-square-foot building, located in the South Coast Metro area of Santa Ana, traded hands for about $210 per square foot.
3 MacArthur is about 85% leased. Tenants include Edison Mission Energy, a unit of Edison International; Englewood, Colo.-based apartment investor Archstone-Smith; and Bellevue, Wash.-based T-Mobile USA Inc., a unit of Deutsche Telekom AG.
El Segundo-based Highridge Partners sold the building, which it had owned for less than two years.
Highridge, a self-described contrarian investor, made a quick profit on its investment. It paid about $31 million, or about $125 per square foot, for the building in late 2009.
That deal came near the low point of Orange County’s office market in terms of prices. The building was in danger of losing a few large tenants at the time.
At the height of the market, in mid-2007, the same building sold for $83 million to New York-based Tishman Speyer Properties LP.
The building is said to bring in close to $3.6 million in rents annually.
The recent sale of 3 MacArthur to TA Associates is the latest sign that the local office sales market is on the upswing in terms of pricing on buildings that are in good shape and have a stable tenant base, according to Kevin Shannon, vice chairman for the Torrance office of CB Richard Ellis.
Other Sales
The bulk of other sales are distressed properties with low occupancy rates, which are getting sold at substantial discounts.
“The only buildings selling right now are trophies and train wrecks,” said Shannon, who worked on the 3 MacArthur deal with colleagues Bob Smith, Paul Jones, Michael Moore and Karen Scholte.
Santa Ana’s Lakeside Tower, a nearby office that’s only about 20% full, sold in May to a foreign investor for about $37 million, or about $170 per square foot.
Shannon’s team has worked sales of both stable and troubled assets in recent weeks. 3 MacArthur is the latest of three office sales that combined for about $178 million.
Spectrum Deal
Last month the group sold 7700 Spectrum, a largely full Irvine Spectrum office that houses the headquarters of restaurant chain Yard House USA Inc., to Great Far East Inc., a Chinese investor with offices in Irvine. The 210,000-square-foot office sold for about $56.5 million, or about $270 per square foot.
Also selling in July was the 2600 Michelson office tower in Irvine, which was about half full and went for about $70 million, roughly two-thirds of its peak-market price.
Partnership
Santa Monica-based Ocean West Capital Partners teamed up with other investors to buy the 308,000-square-foot 2600 Michelson tower from New York-based Torchlight Investors, a special servicer for distressed commercial loans, for nearly $230 per square foot.
2600 Michelson previously was owned by Los Angeles-based MPG Office Trust Inc.
Torchlight last week took over operations of another former MPG property, Orange’s City Tower, a 410,000-square-foot office that had about $140 million of debt tied to it.
There’s no word on Torchlight’s plans for the 21-story City Tower office, although an eventual sale is expected.
