Menlo Equities LLC has added another property to its already sizable holdings in Lake Forest and Foothill Ranch, after snapping up a three-building office complex for $38.8 million.
The Menlo Park-based commercial real estate investor in April completed the purchase of Allred Corporate Center, a trio of two-story buildings along Ranch Parkway, just south of the Foothill (241) Toll Road.
The Lake Forest buildings total 152,880 square feet, and sold for about $250 per square foot, according to property records.
The buildings, just off Bake Parkway and visible from the toll road, are fully leased to U.S. subsidiaries of Paris-based Schneider Electric SE, a maker of energy and building automation products for commercial and home uses.
Schneider Electric’s lease runs for another seven years.
The nearly $39 million paid for the buildings is the largest office sale in Orange County since the start of April, according to data from real estate tracker CoStar Group Inc.
The buildings were sold by EverWest Real Estate Investors of Denver, in a deal brokered by the Newport Beach office of CBRE Group Inc., according to CoStar.
The deal was financed through an existing $750 million credit facility with PNC Bank, according to property records.
5-Year Gap
The purchases add to a string of area deals for Menlo Equities, which was founded in 1994 by Rick Holmstrom and Henry Bullock. The company in 1999 made its first acquisition in Southern California in Irvine.
Since 2012, it has bought more than $160 million of buildings in the adjoining Foothill Ranch and Lake Forest office markets.
The privately held investor now owns nearly 850,000 square feet of office space in those two South County submarkets, which have about 50 leasable buildings totaling about 3 million square feet combined. The market counts monthly rents in the $2.30 per square foot range and ended the first quarter with a vacancy rate of about 13%.
A bulk of Menlo’s area buildings are within a mile or so of the Foothill Ranch Towne Centre shopping center.
Allred Corporate Center is the largest reported acquisition for Menlo Equities in Orange County in several years.
The company previously had sizeable portfolios in Aliso Viejo and Irvine, but shed much of those buildings over the past five or so years.
Notable sales over that time included the 15 and 25 Enterprise buildings in Aliso Viejo, which traded for $108.1 million in 2015, and Irvine’s Intersect office campus, which was also sold in 2015 for a reported $121.5 million.
Among other OC buildings still in Menlo’s portfolio are the 118,000-square-foot Irvine headquarters of Pacific Dental Services, featured in the May 18 print edition of the Business Journal. It bought that site along Red Hill Avenue in 2014.
