The Lake Forest office campus that holds the headquarters for Del Taco Restaurants Inc. (Nasdaq: TACO) and others has traded in a deal totaling $40.5 million.
Las Vegas-based Kingsbarn Realty Capital bought Palm Terrace, a three-building campus just off Bake Parkway near the Baker Ranch residential development.
The three two-story buildings total 155,795 square feet, and sold for about $260 per square foot.
The deal marks a nearly 35% premium over its prior sale in 2015, when a venture between Newport Beach-based CT Realty and Foster City real estate investor Bailard acquired the site for $30 million, or $195 per square foot.
The acquisition is the second local office investment for Kingsbarn, which invests on behalf of high-net-worth individuals, family trusts, foundations, and institutional investors.
In 2019, Kingsbarn bought the nearby Foothill Corporate Center in Foothill Ranch, according to the company’s website. It runs about 83,000 square feet.
97% Leased
Newmark’s Co-Head of U.S. Capital Markets Kevin Shannon, Executive Managing Director Paul Jones and Senior Associate Brandon White represented the sellers in the deal.
“Palm Terrace is a stabilized office investment with a strong, diversified rent roll that offers an attractive going-in yield,” Jones said in a statement. The deal “aligns with their plan to capitalize on the flight to low-rise product with an attractive weighted average lease term and strong cash flow.”
The property, located at 25521, 25531 and 25541 Commercentre Drive, was built in 2000.
It was 97% leased at the time of sale, with tenants including Del Taco, PGM Holdings, Hometown Equity, Citadel Servicing and Anyone Home.
Del Taco, Orange County’s fifth-largest restaurant chain with nearly $860 million in systemwide sales last year, occupies about 40,000 square feet in the 25521 building, which has been its headquarters for about two decades. Del Taco’s lease there runs through 2026, with an option to extend an additional five years, according to regulatory filings.
Newmark’s Senior Managing Directors Jay Nugent and Greg Puccinelli are the leasing agents for the property.
2021 Deals
Only a handful of offices in OC have sold for more than $40 million in 2021.
The priciest deal to occur in the county this year is the $92 million sale of two buildings at the Summit Office Campus in Aliso Viejo.
Harbor Associates LLC paired with Singerman Real Estate in March to buy 15 and 25 Enterprise, which each run five stories.
Other larger-sized offices in Lake Forest that have sold of late, last used by Panasonic Avionics, are expected to be razed to make way for industrial development.
