The 2600 Michelson office tower in Irvine reportedly has traded hands for a little more than $70 million in the priciest sale of an individual building so far this year in Orange County.
Ocean West Capital Partners, a Santa Mon-ica-based real estate investor, bought the 308,000-square-foot office off Jamboree Road near John Wayne Airport, according to brokers with CB Richard Ellis Group Inc. who worked on the deal.
Financial terms of the deal, which closed in late June, weren’t disclosed.
Sources familiar with the sale put its price at close to $230 per square foot. That values the building at about two-thirds of its peak-market price, seen in 2007.
The 16-story building is about 50% full and holds the 60,000-square-foot headquarters of health club chain LA Fitness Inc., among other tenants.
Ocean West is expected to remodel the tower, according to brokers.
The sale marks the last property in the airport area previously owned by Los Angeles-based Maguire Properties Inc.
Maguire, which now operates as MPG Office Trust Inc., was the county’s second-largest office landlord at the peak of the last real estate boom, behind Newport Beach-based Irvine Company.
Peak Price
Maguire bought the 2600 Michelson building as part of a $2.9 billion portfolio it acquired from Equity Office Properties Trust in 2007. The deal included buildings here and in Los Angeles.
2600 Michelson was about 85% full when Maguire bought the building. It counted several mortgage businesses as tenants at the time.
Maguire has been shedding area properties—including Irvine’s Park Place and Quintana campuses, Santa Ana’s Griffin Towers office complex and Costa Mesa’s Pacific Arts Plaza—in a bid to reduce its debt load and focus on its core downtown Los Angeles portfolio.
Its remaining properties here are in Central Orange County and Brea.
Maguire defaulted on nearly $110 million of debt tied to the 2600 Michelson property in 2009.
The building was placed under control of a court-appointed receiver in late 2009 and put on the market late last year.
New York-based Torchlight Investors, a special servicer for distressed commercial loans, was the seller of 2600 Michelson.
The complex structure of the commercial mortgage backed loans tied to the building, rather than a lack of interested buyers, made it one of the lengthier sales seen here of late, according to CB Richard Ellis Vice Chairman Kevin Shannon.
Offers
There were more than 20 offers made on the property, according to Shannon, who worked on the deal with colleagues Bob Smith, Paul Jones, Todd Tydlaska and Karen Scholte.
Other potential buyers rumored to be interested in the building were Allergan Inc., which owns its headquarters building and nearly everything else on the block around 2600 Michelson.
Ocean West is a relatively new investor to OC and its four-person executive team includes three principals with ties to Maguire.
Ted Bischak, who focuses on operations and property management for Ocean West, previously was a senior vice president of asset management for Maguire.
Russ Allegrette—who works on acquisitions, asset management and raising capital for Ocean West—is the former president of Maguire Investments, an investment arm created by one-time Maguire Properties chief executive Rob Maguire.
Phil Choi, another principal at Ocean West, served as a vice president at Maguire Investments.
Rob Maguire is not believed to have any involvement in the new ownership of 2600 Michelson.
Ocean West has reported making one other local buy, an eight-building, 295-unit portfolio of apartments in Costa Mesa.
Its most notable purchase prior to the deal for 2600 Michelson was a $58 million buy of the Tribeca West film and TV campus in West Los Angeles, which closed in February.
Ocean West’s website said the company targets office and apartment investments ranging in size from $10 to $100 million.
