The largest office campus in Yorba Linda is under contract to be sold for more than $51 million following an online auction of the property.
Savi Tech Center, a four-building business park just off the Riverside (91) Freeway that’s part of the Savi Ranch business and retail development, is expected to be sold to a venture between Hines Interests LP and Oaktree Capital Management LP, according to real estate sources.
The two companies—both of which have been partners for other office buys in Orange County over the past few years—are said to be the winning bidders in an online auction of Savi Tech Center that was completed on Sept. 18.
Records of the auction showed the winning bid for the 19-acre, 372,000-square-foot property coming in at a little more than $51.8 million, or about $139 per square foot.
The price is expected to rise to about $55 million when the deal becomes final in a few weeks after brokerage fees and other expenses are taken into account.
Irvine-based real estate auction site Auction.com, in conjunction with the local office of brokerage Cushman & Wakefield Inc., oversaw the sale.
Officials with Houston-based Hines, one of the country’s larger real estate investors and developers, and Oaktree Capital, a Los Angeles-based private equity firm, were not available for comment regarding the impending acquisition.
The two companies already own one large property in North OC. Late last year, they partnered to buy a two-building site in Fullerton that holds the main local operations of defense contractor Raytheon Co.
Hines and Oaktree also have bought several offices and a development site in the area around John Wayne Airport.
The expected acquisition of Savi Tech Center would appear to be the priciest joint purchase in OC for the two investors.
Savi Tech Center has Yorba Linda’s two largest employers as tenants, according to city records.
San Diego-based medical device maker CareFusion Corp., a developer of healthcare products, occupies a 141,000-square-foot building at the complex. And Nobel Biocare USA Inc., a maker of dental implant technology, occupies another two buildings that combine for 122,000 square feet.
The two companies employed more than 700 people in Yorba Linda combined, as of a few years ago.
Savi Tech Center is about 87% leased, and it currently brings in more than $5.3 million in rents annually.
The two-story buildings at the property have seen a few changes in ownership over the past seven years.
Shidler Group
Shidler Group, a Honolulu-based commercial real estate owner, bought the property in 2007 as part of its buy of a 15-building, 1-million-square-foot portfolio from Los Angeles-based Arden Realty Inc.
That deal was valued at around $187 million.
In 2008, Shidler spun off the same buildings—including other office and flex properties in Orange County—into a new real estate investment trust, Los Angeles-based Pacific Office Properties Trust Inc.
The buildings were eventually foreclosed on; early this year, LNR Property Corp. of Miami paid $41.3 million for the note tied to the Savi Tech Center, according to property records. The Yorba Linda campus had $71.6 million of unpaid debt tied to it at the time of the sale.
LNR and other special servicers have increasingly been using the Auction.com platform to sell commercial real estate properties they’ve taken over via foreclosure.
El Toro Square, a 49,000-square-foot Lake Forest retail center near the Santa Ana (I-5) Freeway, was sold earlier this month by CWC Asset Capital Management LLC, a Maryland-based special servicer, for about $6.9 million in an online auction.
Records show a unit of San Diego-based investor Westcore Properties buying the Lake Forest property. It was one of 20 commercial real estate deals that Auction.com closed during the first week of September, for a combined $65 million, according to the online brokerage.
Online auctioneers are still using traditional brokerages to help market buildings, such as Savi Tech Center and other large commercial properties, to prospective buyers.
The Irvine office of Cushman & Wakefield marketed Savi Tech Center over the summer and got more than 10 initial offers for the property, according to Jeff Cole, executive director for the brokerage.
Four bidding groups were eventually chosen to participate in the online auction portion of the sale.
“Very Effective”
“It’s a very effective platform,” Cole said of the hybrid auction.
Cole, who declined to discuss the results of the Savi Tech Center sale, noted that his group also is helping with several upcoming sales on Auction.com.
They include a sale in Diamond Bar, as well as the sale of another business park in Yorba Linda, the 116,000-square-foot Yorba Linda Business Park.
Both properties are former complexes owned by Pacific Office Properties that were turned over to its lenders.
