Irvine-based Pendulum Property Partners, a real estate investment and development firm that started operations in 2016, has made its largest area purchase to date, buying Huntington Beach’s most prominent office complex.
The privately held company was part of a venture that recently closed on the purchase of One Pacific Plaza, a three-building office complex that runs along the San Diego (405) Freeway next to the Bella Terra shopping center.
The three buildings at One Pacific Plaza—one 12-story tower and two six-story buildings—total about 394,000 square feet.
The campus holds the headquarters of casual dining chain BJ’s Restaurants Inc. and the local offices of Woodland Hills-based Health Net Inc., among other tenants. It’s more than 90% occupied.
BJ’s Restaurants (NYSE: BJRI) leases about 56,000 square feet for what it calls its “restaurant support center.”
The $1.2 billion valued restaurant group renewed its lease earlier this year, prior to the complex being listed for sale.
Property records indicated the complex sold a few weeks ago for $124.4 million, or nearly $315 per square foot.
That’s the highest reported per square foot price for a larger-sized office deal in Surf City in the past 10 years, according to data from real estate market tracker CoStar Group Inc.
It’s also the biggest office sale in the city over the same time by total price, and one of just seven office sales in Orange County this year to top the $100 million mark.
Pendulum partnered with an affiliate of Los Angeles-based Ares Management Corp. (NYSE:ARES), a global alternative asset manager with approximately $125 billion of assets under management, on the deal.
It’s the first deal between the two firms, according to Pendulum’s founder and Managing Partner Kevin Hayes.
The buyers took out a $97 million loan with Atlanta-based Suntrust Bank to finance the deal, property records indicate.
An affiliate of Parsippany, N.J.-based Prudential Real Estate Investors sold the complex. PREI paid a reported $95 million for it four years ago, when it was about 80% leased.
The latest transaction represents a nearly 33% jump in value for the complex. The sale was brokered by K.C. Scheipe and Adam Edwards with the Newport Beach office of Eastdil Secured LLC.
The new owners are likely to see rising valuations for their investment going forward, according to Scheipe.
“They have a captive tenant base in Huntington Beach,” and the complex is the largest high-end office project between Seal Beach and Costa Mesa, Scheipe said.