Tustin Centre, the Santa Ana office campus that previously held the headquarters of Grubb & Ellis Co., is close to being sold to an offshoot of a different commercial brokerage.
The two-building office complex, which overlooks the Costa Mesa (55) Freeway near East 17th Street, is under contract to be sold to an affiliate of CBRE Global Investors, an investment unit of L.A.-based brokerage CBRE Group Inc.
The sale is expected to close as soon as this week, according to real estate sources.
Terms of the impending deal haven’t been disclosed.
It was expected that the buildings could trade hands for close to a combined $65 million when the roughly 280,000-square-foot campus was listed for sale late this past summer.
That works out to a price of about $233 per square foot.
New York-based investment giant Blackrock Inc. is selling the North Tustin Avenue campus.
Two Buildings
Tustin Centre has a 10-story office tower built in the early 1990s and a four-story building that opened in 2009.
The taller of the two held the headquarters of Grubb & Ellis when the brokerage was based in Santa Ana from 2007 to 2012.
Grubb & Ellis had long been based in Chicago but moved its headquarters to Tustin Centre when the brokerage merged with Santa Ana-based NNN Realty Advisors.
That company’s commercial brokerage operations now operate as New York-based Newmark Grubb Knight Frank after merging much of the operations with a second brokerage based in New York. The combined company’s main local office is now in Newport Beach.
CBRE’s Paul Jones, Robert Smith and Kevin Shannon, as well as Newmark Grubb Knight Frank’s Greg May and John Desper, had the listing for Tustin Centre, according to marketing materials.
The brokers declined to comment on the impending sale.
Marketing materials report the 10-story building, which is about 196,458 square feet, to be 69% leased; tenants include Universal Protection Services, Ronald Blue & Co., and Watten, Discoe, Bassett & McMains.
Monthly rents run about $1.95 per square foot, according to CoStar Group Inc. data.
Smaller Building
The smaller, 82,042-square-foot Tustin Centre building is fully leased under a long-term deal to Regional Center of Orange County Inc., a nonprofit organization that provides services and support for people with developmental disabilities.
The building was one of the few local offices built during the thick of the last recession.
The Tustin Centre buildings were offered for sale as a pair, as well as individually.
The purchase would be the first Orange County acquisition in three years for CBRE Global, which, according to its website, sponsors a variety of real estate investment programs for pension funds, insurance companies, sovereign wealth funds, foundations, endowments and private investors.
The investor had nearly $16 billion in North American real estate assets under management as of June, according to its website.
Its last local deal was for Orange City Square, a four-building office complex off the Garden Grove (22) Freeway in Orange, just south of The Outlets at Orange shopping center.
CBRE Global took over ownership of the then-financially distressed Orange property in 2010 in a deal reportedly worth $63.5 million.
It upgraded the property and boosted its occupancy rate, then sold the complex to Granite Properties, a Texas-based real estate investor, in a deal said to be more than $80 million.
The Santa Ana purchase is expected to be funded under CBRE Global Investor’s Strategic Partners U.S. investment fund, which aims to “purchase, reposition and sell institutional-quality real estate in select U.S. markets,” according to the company’s website.
Office Sales
The deal for Tustin Centre continues a string of large office sales in Orange County over the latter part of 2013, with a bulk of the buildings acquired by larger institutional investors that appear confident that the area’s office market is due for an increase in rents.
Eight office deals in excess of $50 million have been completed since July, one of the busier stretches of investment sales not featuring distressed properties that OC’s office market has seen in years.
Other large national investors taking an interest in OC of late include AEW Capital Management LP, Cornerstone Real Estate Advisors Inc., Equity Office Management LLC, Goldman Sachs Asset Management, Griffin Capital Corp., and Praedium Group LLC.
