Chicago-based Equity Office Management LLC has bought an office complex near South Coast Plaza in Costa Mesa in a deal valued at nearly $75 million.
The office investor, a unit of New York-based private equity giant Blackstone Group LP, last week closed on the purchase of South Coast Corporate Center, a three-building complex on Bristol Street just south of the San Diego (405) Freeway.
The property, which is next to the Hilton Orange County/Costa Mesa, has three six-story offices at 3070, 3080 and 3090 Bristol St. They total a little more than 370,500 square feet.
Notable tenants at the complex include Anthem Blue Cross, Brookfield Homes, and PBS SoCal, which has its headquarters there.
The complex is reported to be about 83% leased. Monthly rents at the buildings run $1.90 per square foot. Bob Thagard and Rich Essen, brokers with Irvine-based Orion Property Partners, handle leasing for the property.
Terms of the sale were not disclosed. Sources familiar with the deal said Equity Office paid a little less than $75 million, or about $200 per square foot.
Eastdill Secured marketed the property for sale.
The offices were sold by an affiliate of Boston-based TA Associates Realty, which paid a reported $55.5 million for the complex in 2004, when it was about two-thirds occupied.
The just-sold property sits next to the South Coast Executive Center, a two-building office complex owned by Los Angeles-based Arden Realty Inc.
That property, which totals another 166,500 square feet, was not sold.
The South Coast Corporate Center sale marks another sign of Equity Office’s re-emergence in Orange County’s office market after a five-year absence.
Equity Office was once Orange County’s second-largest office landlord before cashing out on its local portfolio near the peak of the last commercial real estate cycle.
The company, previously known as Equity Office Properties Trust, owned about 6 million square feet of offices in OC before its national portfolio was bought by Blackstone in early 2007 in a blockbuster $39 billion deal. Blackstone sold its OC office portfolio to Los Angeles-based Maguire Properties Inc. later that year, part of the latter’s ill-fated $2.9 billion bet on the local market.
Recent Investments
Equity Office began reinvesting in OC’s office market last year, but has made most of its investments here just in the last few months.
It paid about $105 million in June for a four-property office portfolio in Irvine and Newport Beach; those buildings total about 521,000 square feet.
The South Coast Corporate Center acquisition pushes the company’s office buys in OC to more than 1 million square feet over the past year, according to the company.
The latest investment “furthers our strategy to acquire high quality assets in growth-oriented submarkets,” Frank Campbell, managing director for Equity Office’s Southern California operations, said in a statement.
More purchases could be forthcoming. Equity Office is rumored to be considering deals in other parts of OC, including buildings it owned before its 2007 sale to Maguire Properties.
“We look forward to providing additional opportunities to serve our clients in our expanding Orange County portfolio,” Campbell said.
The company also remains an opportunistic seller.
It sold the 300,000-square-foot Fountain Valley City Centre office campus to MemorialCare Health System in an August deal valued at about $67 million.
The landlord picked up the Fountain Valley property in 2012 as part of a larger portfolio deal of buildings in Southern California. MemorialCare had been leasing space at the complex, which holds its headquarters.
