One of the better-known office buildings in the area around John Wayne Airport is up for sale and expected to fetch a price approaching $100 million, according to real estate sources.
A deal for the 12-story Oracle Tower at 17901 Von Karman Ave. could come in the next month or so, according to multiple sources familiar with the transaction.
Estimates put a price for the 273,000-square-foot, glassed-walled tower—which is near the San Diego (405) Freeway in the Irvine Concourse office campus—in the range of $340 to $350 per square foot. That would come to about $96 million on the high end of the range.
The priciest single-building office sale reported in the airport area so far this year has been for the nearby 18301 Von Karman building, which traded hands in January for about $67.9 million, or $300 per square foot.
It is not known whether the Oracle Tower’s current owner, Irvine-based LBA Realty LLC, has settled on a buyer yet.
Manulife
Sources point to Toronto-based Manulife Financial Corp., owner of the nearby Michelson office tower in the Park Place mixed-use campus, as a potential buyer of the Oracle building.
The financial services company, best known in the U.S. for its John Hancock Life Insurance Co. division, paid $277 million for the 19-story Michelson tower in 2012. It is said to be looking to add another prominent office in the airport area to its portfolio.
Officials with privately held LBA declined to comment on the potential sale of the Oracle Tower. The company has been a longtime owner of the building. It bought out its financial partner in the building four years ago, giving it full ownership of the building, according to property records.
Real estate sources estimate that 2010 deal, struck during a down period for OC’s office market, valued the building closer to $55 million. LBA landed Redwood City-based Oracle Corp. to lease about 47,000 square feet at the building at about the same time, and put the business software company’s name atop the building.
The tower was previously known as the longtime home of Taco Bell Corp. The restaurant company moved its headquarters to the Irvine Spectrum in 2010.
The Oracle Tower is about 84% leased, according to CoStar Group Inc. records. Other large tenants include Pacific Premier Bancorp, the third-largest bank based in OC, which moved its headquarters to the building about two years ago.
NorCal Sale Too?
A sale of the Irvine tower is one of several notable transactions rumored to be in the works or recently completed involving LBA, which owns and operates some 13 million square feet of office space in the western U.S. and another 26 million square feet of industrial space.
LBA is said to have recently listed its three-building Towers office complex in Emeryville for sale.
The waterfront property, located near the San Francisco Bay Bridge, runs about 800,000 square feet and could sell for $245 million, according to a recent report in trade publication Real Estate Alert.
LBA and Greenwich, Conn.-based Starwood Capital paid a reported $130 million to buy the buildings out of receivership in 2010.
Los Angeles-based Rexford Industrial Realty Inc. said this month that it bought a 320,000-square-foot industrial building in Chatsworth from LBA, in a $30.5 million deal.
LBA also is said to be nearing a deal to buy a 170,466-square-foot industrial building a few blocks from John Wayne Airport at the intersection of Michelson Drive and Jamboree Road.
Irvine-based St. John Knits was a longtime occupant of the building until it vacated the property in 2011; it’s now occupied by Irvine-based apparel maker Obey Clothing.
Affiliates of New York-based insurer American International Group Inc. own the property, but several real estate sources say LBA is nearing a deal to acquire and develop it.
Park Place
LBA owns much of the Park Place mixed-used campus on the opposite corner of the property.
Office, retail or hospitality are the most likely development types for the site due to restrictions on residential development next to the headquarters of drug maker Allergan Inc.
