The Irvine office of real estate developer and investor Hines Interests LP has made its first purchase in the city of Orange, picking up the office campus of Volt Information Sciences Inc.
Hines and financial partner Oaktree Capital Management LP in Los Angeles this month closed on the purchase of the 12-acre Volt Corporate Park, a campus with four two-story buildings that total about 191,000 square feet.
The campus, about a mile west of the Costa Mesa (55) Freeway at 2401 Glassell St., sold for $35.9 million, or nearly $188 per square foot.
New York-based Volt, a provider of staffing services, will lease back the property from the new owners under a long-term deal that ends in March 2031.
The property will continue to house roughly 400 Volt employees, the company said. Its West Coast corporate administrative offices are based there, making it the area’s third largest employment agency, with an estimated $59 million in annual revenues, according to Business Journal data.
The 15-year leaseback’s rents total $2.9 million in the deal’s first year, or monthly rents of about $1.26 per square foot, according to Volt’s latest quarterly financial report.
Rents will increase 3% annually, according to Volt, which received proceeds of $27.1 million from the property sale.
Volt put the campus on the market for sale in August in an effort to raise cash and pay down debt. It sold a smaller property in San Diego this month, raising an additional $2 million.
The company’s market value is about $135 million. The real estate sales helped boost its cash and available funds to nearly $60 million by this month, officials said. It carries about $100 million in debt.
“Our objective (was) to simplify our corporate structure and monetize assets, (including) Volt-owned real estate,” chief executive Micheal Dean told analysts this month after the company’s latest earnings report.
“We were able to gain a market-based price for this asset and couldn’t be more pleased with the outcome,” said Dean, who became interim CEO last June before being named to the post on a permanent basis in October.
Volt’s Orange offices are its largest location in the country by square footage.
Cushman & Wakefield’s Jeff Cole, Ed Hernandez, Michael Kane, Chon Kantikovit and Shawn Lawrence represented Volt in the sale-leaseback of the Orange campus, and Lee & Associate’s Kurt Bruggeman and Ryan Swanson represented Hines and Oaktree.
North, Central OC Push
The Orange purchase adds to a string of transactions for Hines and Oaktree over the past four years.
Hines, which is based in Houston, now has an Orange County office portfolio topping 3 million square feet, making it one of the county’s five biggest office landlords on a square footage basis.
A number of the company’s acquisitions have been in deals with Oaktree, which has more than $100 billion in assets under management. The companies have completed 13 deals in Orange County, including acquisitions in Central and North OC cities, such as Brea, Fullerton, Santa Ana and Yorba Linda.
Hines and Oaktree made their first purchase in Anaheim earlier this year for the Anaheim Canyon Corporate Center, a 155,351-square-foot office at 5515 E. La Palma Ave. near the Riverside (91) Freeway and Imperial (90) Highway.
That property previously served as the headquarters of Fisker Automotive and Technologies Group LLC—now based in Costa Mesa—and was bought for about $26 million.
The Volt campus is the first local sale-leaseback that the two investors have been part of during their recent acquisition push in Orange County.
