An Irvine office tower built in 2007 by bankrupt developer Opus West Corp. of Phoenix is nearing a sale at a fraction of what it cost to build, according to real estate sources.
Newport Beach’s Greenlaw Partners and Westbrook Partners, a San Francisco-based real estate investment management company, are under contract to buy the Opus Center Irvine III tower at 2050 Main St. near John Wayne Airport.
The price for the 314,000-square-foot office building is believed to be about $56 million, or roughly $177 per square foot, according to multiple sources familiar with the proceedings.
Bank of America Corp., the property’s main lender, is directing the sale.
The per-square-foot price reportedly being paid for the tower is on par with some other local distressed assets that have sold recently. But the price is believed to be well below what was paid for the only other new Irvine office tower that’s traded hands this year.
In June, New York-based Emmes Group of Cos. paid close to $300 per square foot, or $160 million, for the Park Place high-rise built in 2007 by Los Angeles-based Maguire Properties Inc.
Among older trophy office buildings, the 332,000-square-foot former Newport Beach headquarters of Downey Financial Corp. was sold last month in a Federal Insurance Deposit Corp. deal for about $157 per square foot, or a little more than $50 million.
Also last month, El Segundo-based Highridge Partners bought Santa Ana’s 3 MacArthur tower for $31 million, or about $125 per square foot. The MacArthur Place building had last sold for $83 million in mid-2007.
Among the two sales of newly built office towers, vacancy rates played a large part in the discrepancy in pricing, according to sources.
Maguire’s office was about 60% full at the time of its sale. The Opus tower is about third full, according to data from CoStar Group Inc.
That’s at the low end of vacancy rates for the six office towers built in Irvine during the construction boom of 2006 and 2007.
Tenants at the 13-story 2050 Main St. building include Atlanta-based law firm Fisher & Phillips LLP, Texas-based Guaranty Bank and Los Angeles-based accounting and management consulting firm SingerLewak.
Monthly asking rents at the building are listed at $3 per square foot, according to CoStar.
A sale of the Opus tower is expected to be done in a few weeks, according to sources familiar with the proceedings.
Westbrook would be the primary investor in the building, with Greenlaw acting as a minority partner, according to sources. The rumored buyers, who have teamed together for several deals in the past, couldn’t be reached for comment.
Portfolio
Assuming the sale is completed, the building would be one of the largest assets among Greenlaw’s investments, as well as its highest-profile office in OC.
The real estate investor and developer counts a portfolio of about 22 properties and 3 million square feet of office, industrial and retail space, much of it local. Those buildings are valued at about $700 million, according to the company’s Web site.
Other buildings Greenlaw owns include Costa Mesa’s Triangle Square mall and Anaheim’s Stadium Centre office building.
Westbrook is one of Greenlaw’s larger institutional investor partners, along with Guggenheim Real Estate LLC.
It’s no surprise that Opus West’s tower would be sold a few years after its completion, although the circumstances surrounding the latest sale aren’t what the company expected when it broke ground in 2006.
Opus West’s strategy was to develop properties and then sell them to investors within a few years of a project’s completion.
Opus Center Irvine I, a 268,000-square-foot, 12-story high-rise building, was sold to the real estate investment arm of Prudential Financial Inc. in 2001 for about $70 million.
Opus Center Irvine II, a 14-story, 307,559-square-foot building, sold in late 2004 to law firm and main tenant Knobbe, Martens, Olson & Bear LLP for more than $100 million.
Opus West, part of Minnesota’s Opus Corp., filed for Chapter 11 bankruptcy in July, listing close to $1.5 billion in liabilities.
The 2050 Main St. tower had about $81 million of debt tied to it at the time of the bankruptcy filing, according to the developer’s data. Opus West had a 65% stake in the building, according to the company’s marketing materials.
