Accretive Realty Advisors Inc., an Irvine-based real estate investor and developer that specializes in medical properties, has a new project moving ahead in San Juan Capistrano.
The 10-year-old company recently got city approval to begin construction on San Juan Medical Center, a project that will be a two-story, 42,551-square-foot medical office building next to the Santa Ana (I-5) Freeway and a few blocks north of Ortega Highway.
The project is expected to break ground by the end of the year and should be completed by the end of 2014, according to brokers with the global healthcare services division of Newmark Grubb Knight Frank, the brokerage tasked with leasing the property.
The building is already more than 50% leased to an undisclosed tenant said to be a regional health system provider.
The tenant is taking 25,000 square feet on the top floor. NGKF brokers are marketing the remaining 17,308-square-foot first floor and are targeting large users seeking contiguous space; regional medical groups; and healthcare-related providers, among others.
The project “will be the first exclusively medical, class A office building constructed in San Juan Capistrano in the past 25 years,” said Garth Hogan, executive managing director for NGKF’s Newport Beach office, who’s marketing the space along with colleague John Scruggs.
Accretive Realty acquired the 4.79-acre parcel of city-owned land, at the northwest corner of Rancho Viejo Road and Golf Club Drive and across the street from the Marbella Country Club, this year. It paid the city $3.6 million, or more than $750,000 an acre, according to brokerage data.
The development “offers precisely what the post-Affordable Care Act marketplace is demanding: a highly efficient, visible medical office building that supports an underserved patient population,” said Thomas LeBeau, Accretive Realty’s chief executive.
San Juan Medical Center is the most prominent local Accretive Realty development since it built Providence Center, a combination of medical space and shops next to St. Jude Medical Center in Fullerton, a few years ago.
Accretive Realty has also made several acquisitions in South Orange County over the past two years for properties in Aliso Viejo and San Clemente. Notable purchases include the $10.5 million buy of Oceanview Medical Center, a medical office building near Saddleback Memorial Medical Center’s San Clemente campus.
Fund Finalizing
Newport Beach-based Turner Real Estate Investments has its eyes open for more acquisitions in its hometown as it finalizes its latest investment fund.
The real estate owner and developer is nearing the end of fundraising for its third investment fund in the past four years. It said it expects the fund to raise about $30 million, which it will use to buy upward of $75 million in what the company calls “out-of-favor, distressed, and value-add” industrial and office properties.
Turner’s prior two funds raised more than $55 million combined from a variety of wealthy individuals, most of them Orange County-based, including a large number of fellow real estate executives, according to Chief Executive Rusty Turner.
The prior two funds, which have bought more than $100 million worth of buildings, have thus far provided returns to their investors in the mid- to high teens, and the company said it’s expecting a similar rate of return for the latest fund, which will focus on properties in California, Arizona and Nevada.
Recent local purchases for the company included 1300 Quail St., a 30,027-square-foot office a few blocks from the intersection of Jamboree Road and MacArthur Boulevard in Newport Beach.
Turner paid about $5.7 million for the property, which is getting a makeover expected to appeal to companies looking to retain a Newport Beach address but who are being priced out of offices near Newport Center, Rusty Turner said.
Los Alamitos Sale
Katella Corporate Center, one of the largest offices in Los Alamitos, has traded hands.
An undisclosed local investor paid $17.9 million for the two-story property at 4281 Katella Ave. It’s about 90% leased.
The 80,807-square-foot office building sold for roughly $221 per square foot. Newport Beach-based Davenport Partners Inc., which bought the property in 2006 for about $15.6 million, was the seller.
Nick Brighton of Newport Beach-based Velocity Investment Sales Inc. represented the seller and arranged acquisition financing for the buyer.
“The purchase price equates to a 6% cap at 90% occupancy,” Brighton said. The deal closed in 37 days, “which is pretty quick for an acquisition involving a CMBS loan.”
