Newport Beach-based Cress Capital has sold a Tustin office building about a year after acquiring it, at a 31% premium to its 2019 value.
The firm said this month that it sold a 51,588-square-foot property at 2742 Dow Avenue for $20.9 million, or $404 per square foot; it paid a reported $15.9 million for the two-story building in July 2019.
The office, situated on a 2.8-acre site at 2742 Dow Avenue, is located near the intersection of Jamboree Road and Edinger Ave. It’s not far from the new headquarters of EV truck maker Rivian, which is under construction.
The building was fully leased at the time of sale to MemorialCare Health Services, a regional health system, under a long-term lease. Earlier this year, Fountain Valley-based MemorialCare chose to sublease the building, which motivated Cress to sell.
“We were attracted to this property as a long-term, cash-flowing investment with a high-credit tenant,” said Cress Managing Partner Ryan Parkin. “With MemorialCare vacating and market disruptions due to COVID-19, we reevaluated our investment plans and chose to exit earlier.”
Richard Schwartz of Colliers and Jim DeRegt of Lee & Associates represented the buyer, a Corona-based private investor that operates under the Padma Laxmi LLC name.
Anthony DeLorenzo of CBRE represented Cress.
RevOZ Ties
“Knowing when to exit a property is as equally important as making the decision to buy,” said Cress Managing Partner Tom Parnell. “We were pleased to achieve this successful exit during a challenging time.”
Parkin and Parnell are also partners in Newport Beach-based RevOZ Capital, which launched in late 2017 following the creation of the Opportunity Zone program by the 2017 Tax Cuts and Jobs Act. The law is designed to revitalize economically distressed communities through private investment. It allows investors to defer and avoid capital gains taxes on funds invested in designated communities.
That firm is continuing its investment swing, recently taking over ownership of a 124,471-square-foot office building in downtown Sacramento.
It’s the fifth buy for RevOZ, which formed a joint venture with Argosy Real Estate Partners to acquire the four-story building at 660 J St., within the city’s Downtown Commons sports and entertainment district, an area which includes the Golden 1 Center, home of the Sacramento Kings.
The Bhathal family, co-owners of the Kings and one of OC’s wealthier families, also is a part of RevOZ.
Cress owns and manages a portfolio of 1.7 million square feet of office and industrial in Southern California and Colorado. The company said it is “actively looking for additional acquisitions, focusing on well-located and well-positioned office and industrial properties in the Western U.S.”
