The Aliso Viejo headquarters of chipmaker Microsemi Corp. has been sold to a Boston-based institutional investor.
AEW Capital Management LP recently completed the purchase of One Enterprise Drive, a four-story, 109,000-square-foot building at the Summit office campus.
Terms of the sale weren’t immediately disclosed, and brokers directly involved in the transaction declined to say how much AEW paid for the office, located just off the San Joaquin Hills (73) Toll Road.
Sources familiar with the transaction said the building is believed to have sold for about $39 million, or about $354 per square foot.
RREEF
San Francisco-based RREEF Funds LLC sold the building. It paid a reported $27.5 million for it, or about $250 per square foot.
One Enterprise was built in 1999 for construction and engineering firm Fluor Corp., which sold it to RREEF after moving its headquarters from Aliso Viejo to Dallas in 2006.
The building subsequently was leased to drug maker Valeant Pharmaceuticals International, which in 2006 struck a deal to move its headquarters to Aliso Viejo from Costa Mesa.
Valeant left the building in 2010 after Canada-based Biovail Corp. acquired the company and took the Valeant name.
Microsemi moved its headquarters from Irvine to the Aliso Viejo office in 2011. The company, which employs nearly 300 people in Orange County, occupies the entire building on a lease that extends into early 2021 and includes annual rent increases, according to marketing materials for the building.
Having what’s considered a high-quality tenant in place on a long-term basis made the building an attractive investment for AEW, according to brokers with the Newport Beach office of CBRE Group Inc. who worked on the sale.
CBRE Executive Vice President Bob Smith called the property an “exceptionally high-quality, low-risk, core investment opportunity with a recently completed long-term lease.”
“It provides AEW with a strong, secure and growing income stream,” said Smith, who worked on the deal with colleagues Paul Jones, Kevin Shannon and Ken White.
The “contractual rents provide the investor with capital preservation and the annual rent escalations provide a hedge against further inflation,” CBRE’s first vice president Jones said.
Microsemi is Orange County’s second-largest chipmaker and passed the $1 billion revenue mark last year. The company makes silicon and silicon carbide semiconductors for analog, mixed signal, switching power, RF power and microwave applications.
Its former headquarters in Irvine were torn down over the summer to make way for a hotel development on Morse Road next to the San Diego (405) Freeway.
Institutional interest
AEW, which manages about $26.5 billion in real estate assets and securities in North America on behalf of institutional and private investors, has been an active investor in Orange County over the years, including in other nearby Summit buildings during the course of the Aliso Viejo office campus’ development.
It also has familiarity with local buildings with ties to Valaent. An affiliate of the company once was a part owner of the Costa Mesa office that served as Valeant’s headquarters prior to its move to Aliso Viejo.
The investor’s largest purchase in recent years was for Irvine’s 2050 Main St. office. It paid about $108.5 million for the 13-story building—part of the Irvine Concourse office campus near John Wayne Airport—in late 2011.
Institutional investors such as AEW have made some of the largest commercial real estate purchases in OC in the past few months.
Other notable deals of late include Hartford, Conn.-based Cornerstone Real Estate Advisors Inc.’s $55 million purchase of the Mission Ridge office complex in Mission Viejo, and Goldman Sachs Asset Management’s $38.8 million purchase of Newport Beach’s 895 Dove St. building.
