A former aerospace facility along Red Hill Avenue in Irvine is being refurbished into a new home for growing dental-practice manager Pacific Dental Services Inc.
Irvine-based Pacific Dental, Orange County’s 27th-largest private company by revenue, recently closed on the purchase of 17000 Red Hill Ave., a nearly 140,000-square-foot industrial building.
The building traded hands about a month ago for about $13.6 million, or about $98 per square foot, according to brokerage data. It is among the priciest industrial sales seen in Orange County this year.
The warehouse previously was used by an electronics and communication unit of defense and aerospace manufacturer Rockwell Collins, which sold the property.
Demolition Under Way
The nearly 40-year-old building, located at the intersection of Red Hill and Alton Parkway, 2 miles east of John Wayne Airport, is in the early stages of demolition. The site will be converted into Pacific Dental’s new national headquarters by early next year, company officials said last week.
It’s a rare sign of recent commercial construction in OC (see story, page 26).
In addition to office space, plans for the renovated Red Hill facility call for a working dental office that will be open to Pacific Dental employees as well as to outside patients, company officials said last week.
There are also plans for outdoor amenities, including a covered atrium with meeting space and an area for employee breaks.
The new offices represent a sizable step up in space for Pacific Dental, which now operates out of a 40,268-square-foot building near the intersection of Jamboree Road and the Santa Ana (I-5) Freeway.
It is also the latest sign of growth for the privately held company, which reported earning about $434 million last year, a 23% year-over-year increase.
The company builds and manages offices for dentists, offering services that take care of just about everything except the actual dentistry.
Pacific Dental handles daily office operations, human resources, managed care contracting, billing and collections, and buying supplies.
Other local dental practice management companies include Smile Brands Group Inc. of Irvine, which has about 320 affiliated dental offices in California and 17 other states, and Orange-based Western Dental Services Inc., which has more than 260 offices in California, Arizona and Nevada.
Pacific Dental, founded in 1994, has been rumored as a potential initial public offering candidate.
It counts more than 250 offices in California, Colorado, Arizona, Nevada, New Mexico and Texas. The company said it plans to open new offices in Utah, Oregon, and Idaho this year, with a goal of adding 40 or more affiliated offices per year in existing markets.
Pacific Dental officials told the Business Journal last year that the company has stuck to growing on its own because it’s found a better return there compared to making acquisitions.
“Almost all of our (growth) is organic,” Chief Executive Stephen Thorne said last year. “We either own the facility—own the dirt, the building—or we lease a building. That’s how our business model works.”
Current HQ
Pacific Dental also owns, through an affiliate, its current headquarters at 2860 Michelle Drive in a venture with Dana Point-based Kahl & Goveia Commercial Real Estate. That building, near Irvine Company’s Jamboree Business Center office complex, was put up for sale a few weeks ago.
Kevin Turner with the Irvine office of Voit Real Estate Services Inc. has the listing for the two-story building, which is going to market without a disclosed asking price. The building opened in 2004 and is one of the few offices of its size not owned by Newport Beach-based Irvine Co., Turner said.
