An Aliso Viejo office complex that will next month house the headquarters and other operations of eye-focused device and drugmaker Glaukos Corp. (NYSE: GKOS) has traded hands again, as part of a large portfolio deal between Irvine-based IRA Capital and Chicago-based Nuveen Real Estate.
The 160,000-square-foot Element office campus, which consists of three two-story buildings on Aliso Viejo Parkway, sold as part of a $620.4 million transaction that closed earlier this month.
The 29-building portfolio sale includes one other Orange County asset: a Santa Ana medical office building occupied by Providence St. Joseph.
The individual prices paid for Element or the 56,000-square-foot medical center in Santa Ana was not immediately disclosed.
It’s the second notable buy of late with OC ties for Nuveen, which spent $108.1 million last month for Joule La Floresta, a 204-unit multifamily complex in Brea.
The deal comes amid an active transaction season for IRA Capital, which is expected to use funds from the recent sale to invest $1 billion in the multifamily and hospitality sectors over the next year in California.
Glaukos HQ
The sale of the Element campus comes a little more than a year after IRA paid Newport Beach-based Waterford Property Company $73.5 million for the three-building campus.
That price, which works out to nearly $460 per square foot, is more than double what Waterford paid in 2016 for the property, the one-time home of technology firm QLogic.
IRA’s June 2020 purchase came about two years after Glaukos announced plans to move its headquarters from San Clemente to the Aliso Viejo office project.
Glaukos’ deal for the entirety of the Element campus was the largest office lease in 2018.
The company, whose iStent products are used to treat glaucoma, a major cause of blindness, has yet to move into the facility, with delays caused by the pandemic.
The $2.3 billion-valued company is expected to move its headquarters to the Element campus in September, according to Glaukos’ regulatory filings from earlier this month. In addition to the headquarters, the site will include lab, R&D, and warehouse space.
The Aliso Viejo lease spans 13 years. Despite the move, Glaukos said it plans to retain a significant presence in San Clemente “for the foreseeable future.”
Portfolio Sale
The Element sale is part of a larger transaction that includes 1.7 million square feet across 29 properties.
One other OC property included in the sale is Providence St. Joseph at 2212 E. 4th St. in Santa Ana.
IRA paid $38.4 million for the 56,000-square-foot office in May 2020.
That purchase marked the latest local medical office buy for IRA, which has been diversifying its acquisition strategy over the past year.
The portfolio sale included medical office and life science properties in 13 states, including Arizona, California, Florida, Illinois, Michigan, North Carolina, New Jersey, New York, Ohio, Oklahoma, Pennsylvania, Texas, and Wisconsin.
Medical office property types include surgery centers, micro-hospitals, emergency departments, and single and multi-tenant medical office buildings; the life science properties primarily include pharmaceutical testing and medical device manufacturing.
The transaction trails another portfolio sale made by IRA in early 2020, when it sold an 18-property medical office portfolio to Welltower Inc. (NYSE: WELL).
IRA Strategy
IRA said it’s still opportunistic when it comes to acquiring medical properties, “with a primary focus on shifting its strategy towards health-system transactions,” the company said in a statement.
The company spent $500 million in transactions last year and plans to spend twice that much in the coming year, with a focus on healthcare, multifamily, industrial, net lease and hospitality.
On the multifamily front, it recently closed on 121 units across nearly two dozen buildings in Orange and Costa Mesa in a portfolio deal topping $40 million.
“We have always liked the fundamentals in the multifamily asset class and are excited to grow our investments in this sector,” co-founder and Principal Amer Kasm told the Business Journal last month.
Nuveen Buy
Nuveen, the buyer of the recently traded healthcare portfolio, appears to have its eyes on OC.
Last month, the company made the largest multifamily acquisition in over a decade for the city of Brea, paying $108.1 million, or $530,000 per unit, for Joule La Floresta, a five-story rental project totaling 204 units.
The property is on a 2.9-acre lot at 420 La Crescenta Drive, about 3 miles west of the Brea Mall.
Nuveen Real Estate is one of the largest real estate investment managers in the world with $133 billion of assets under management.
It’s an affiliate of global investment manager Nuveen, a wholly-owned subsidiary of Teachers Insurance and Annuity Association of America, a provider of financial services in the academic, medical, and governmental fields among others.
