Los Angeles-based landlord Arden Realty Inc. has sold two of its largest Orange County office campuses,in La Palma and Orange,at a combined price believed to be more than $150 million.
The sales,two of the biggest deals seen here this year amid the credit crunch and slow office market,include the majority of the 600,000-square-foot Centerpointe La Palma complex.
Centerpointe had been Arden’s biggest property in OC and also is one of the largest office complexes in North County.
The La Palma office complex is just off the Artesia (91) Freeway near the OC and Los Angeles county line. The sale involved nine offices, including two six-story buildings, and one retail building. Tenants at the 12-building complex, which is 92% full, include Honeywell International Inc. and BP PLC’s Arco.
Two smaller buildings at Centerpointe, totaling about 70,000 square feet, weren’t included in the deal. Kaiser Permanente bought one of the smaller buildings, at 5 Centerpointe, in August for its own use.
The buyer for the rest of the La Palma complex was identified as an East Coast pension fund adviser.
Sources said that a real estate fund managed by Boston-based TA Associates Realty, which has a Newport Beach office, is the buyer. Officials from the investment advisory firm couldn’t be reached for comment.
Newport Beach-based Davis Partners LLC will be acting as the property manager for the La Palma complex.
TA Associates Realty acquired several OC offices last year, including the Bank of the West office building in Newport Beach.
Last month, it paid $56 million for an industrial portfolio in Los Angeles County.
Arden Realty bought Centerpointe in 1997 from Mutual Life Insurance Co. of New York for $80 million.
Orange Financial Center
Also trading hands is Arden’s Orange Financial Center, a three-building office campus near the Garden Grove (22) Freeway, at Town and Country Road and Parker Street.
Anaheim-based Milan Capital Management Inc. arranged the sale for a group of investors that are transferring proceeds from another sale.
Along with Orange Financial Center, Milan Capital now counts five other office properties in its portfolio, including one OC building in Anaheim, according to the company’s Web site.
Orange Financial Center includes an eight-story main tower and two adjacent three-story buildings, totaling about 312,000 square feet.
The buildings are 98% full with tenants including Word & Brown Insurance Administrators Inc. and Calsurance & Lancer Claims Services, a division of Brown & Brown of California Inc.
The Newport Beach office of CB Richard Ellis Group Inc. represented Arden in the sales.
The deals demonstrate “the confidence that investors continue to have in the OC office market, particularly for core, stabilized assets,” CB Richard Ellis’ Bob Smith said.
Arden still counts about 2.1 million square feet of local office space following the two sales. It owns 13 office properties and complexes in OC. Its largest local property now is the nine-building, 440,000-square-foot Von Karman Corporate Center in Irvine.
A sale price for Centerpointe and Orange Financial Center wasn’t disclosed, but they likely are to be among the priciest deals seen in OC this year as the credit crunch has kept the trading of big commercial real estate properties at a minimum.
Real estate brokers put the likely sales price for the 532,000-square-foot La Palma property well above $100 million, which would make it only the second OC property to trade hands for more than that amount so far this year.
The Centerpointe property was valued at close to $90 million at the end of 2005, the last year Arden reported financial results to the Securities and Exchange Commission. The real estate arm of GE Commercial Finance bought Arden in 2006.
The Orange Financial Center was valued by Arden at about $56 million at the end of 2005.
While a handful of OC offices that were bought at the peak of the commercial real estate market in 2006 and 2007 have recently been re-sold at below their book values, this wasn’t likely the case for the two Arden properties, brokers said.
For Orange Financial Center, the buyer was able to get financing through an insurance company, CB Richard Ellis officials said.
Main Plaza
To date, the biggest 2008 office sale in OC was the $211 million sale of Maguire Properties Inc.’s Main Plaza office campus in Irvine to San Francisco-based real estate investor Shorenstein Properties LLC.
The Main Street property includes two 12-story towers totaling 607,000 square feet, and it sold for about $348 per square foot. Despite the high price, Maguire still took a $51.9 million charge on the Main Plaza sale, based on the carrying value of the property, which it acquired from the Blackstone Group LP in early 2007.
