El Segundo-based Highridge Partners is looking to make a quick, sizeable profit on a Santa Ana office building it bought on the cheap in 2009.
Highridge, a self-described contrarian investor, recently put its 3 MacArthur Place office building up for sale, according to several real estate sources.
Market watchers are expecting the 246,819-square-foot building to trade hands in the $60 million or higher range, or close to $250 per square foot, assuming a deal is made.
If that price is met, it would be nearly double the price for the 11-story building since its last sale.
Highridge paid about $31 million, or about $125 per square foot, for the building in late 2009.
That deal was struck near the low point of Orange County’s office market in terms of prices.
The building’s prior owner, New York-based Tishman Speyer Properties LP, paid about $83 million for 3 MacArthur near the peak of the market, in mid-2007.
The building was about 75% full at the time of the last sale and was expected to lose a few tenants.
Since the deal, Highridge has put about $1 million worth of renovations into the building and has struck a couple large deals to bring 3 MacArthur’s occupancy up to about 85%.
The building is said to bring in close to $3.6 million in rents annually.
Last summer, Edison Mission Energy, an owner and operator of power plants and a unit of Edison International, said it would move its headquarters from Irvine to the building. It signed an 85,339-square-foot lease that starts this year and runs for 10 years.
Other large tenants include apartment investor Archstone-Smith, which leases about 21,000 square feet of space, and a unit of Deutsche Telekom AG’s T-Mobile USA Inc., which last year signed a seven-year renewal for 20,377 square feet of space.
Officials for Highridge told the Business Journal last year they expected to hold on to the building for five to seven years. But the company’s known for striking deals when the market’s hot.
Highridge sold its entire portfolio for about $1 billion in 2006 and 2007 when real estate values were last peaking.
It’s made a few acquisitions in the past couple years. In 2009 it said it was targeting close to $500 million in office buys.
Brokers with CB Richard Ellis Group Inc. have the listing on 3 MacArthur. They declined to comment on a potential sale of the building.
Way To Cash Out?
Axxcess Capital Ventures LLC, a Newport Beach-based real estate services and asset management firm that started up last year, said it has a new program to help provide liquidity to struggling investors of tenant-in-common deals and other complex investments.
Axxcess Capital said it has struck a deal with Boston-based Winthrop Realty Trust to provide cash for sponsors, managers and investors in fractional ownership investments, including tenant-in-common deals and private non-traded real estate investment trusts.
“We can provide options for cash strapped operators and investors that may not be unable to provide the capital necessary to enable the property to succeed in a tough market,” said Tim Snodgrass, president of Axxcess Capital, in a statement.
The two companies haven’t disclosed how much money they’re planning to invest in the program.
Snodgrass and Axxcess Capital Chairman Dick Gee previously ran San Clemente-based Argus Realty Investors LP, which during the peak of the market was OC’s second-largest investor in tenant-in-common deals, where individuals pool together money to buy properties. Argus now is shuttered.
The largest local tenant-in-common investor at the peak of the market was Santa Ana’s Triple Net Realty, whose business now is part of Grubb & Ellis Co.
Grubb said in February it was starting up a new venture, Daymark Realty Advisors Inc., as an independent subsidiary to manage 33 million square feet of tenant-in-common assets. That company could also provide services and money to other investors in the industry, officials said.
Investment bank Friedman, Billings and Ramsey helped set up the recent deals for Axxcess and Daymark.
Brea Sales
The developers of Blackstone, a master planned community in Brea, said they have closed 27 home sales since the project’s opening weekend in late March.
Blackstone, an 800-acre project in the hills between Brea and Fullerton, is expected to hold nearly 360 homes in total. They’ll range in price from around $550,000 to nearly $1 million.
The project’s being developed by Irvine’s Standard Pacific Homes Inc. and Walnut’s Shea Homes.
