One of Orange County’s largest office complexes, Koll Center Irvine, is up for sale.
The owner, Cigna Investments, is offering to sell part or all of its ownership in the airport-area property, which includes four eleven-story towers totaling 900,000 square feet, the Prego and Remicks restaurants, entitlements to add another 200,000 square feet of space and the ground lease for the land under the Irvine Marriott hotel.
A Cigna official said the company wants to keep control of the property. “Our current goal is to retain an ownership position,” said Cigna spokesman Ken Ferraro. “We are looking for a partner.”
Ferraro did not return subsequent phone calls, after other real estate sources said Cigna is now considering selling 100% of the complex.
Real estate sources report that there are about a half-dozen entities in the hunt for the property. Two of the names being mentioned as potential buyers are McCarthy Cook & Company (see related page 1 story), Transwestern and Irvine-based Gale & Wentworth California LLC. Pat Murphy, a principal of Gale & Wentworth, was previously the leasing agent at Koll Center Irvine.
McCarthy Cook and Transwestern declined to comment. Murphy had not returned calls as of press time.
The project was built by Koll Development Company, with Cigna providing the financing for the project.
Marty Krupoff, executive vice president of Koll, said that Koll sold its partnership interest in the property to Cigna last year as an accommodation to Cigna, which wanted to own the property 100%.
“They wanted to control the direction of the property,” Krupoff said. “They’ll sell to a third party to reduce their investment.”
Buying out Koll “was the appropriate thing to do under the buy/sell rights,” said Ferraro.
Parker Pension Trust owned the ground lease on the project, but Cigna bought an option to buy the land earlier this year.
Ferraro said that Cigna now is looking for a partner because a partnership will “enhance our flexibility because it will leverage our assets, and having local ownership is a benefit.”
But sources said Cigna is having problems selling only a share in project, and probably would have better luck selling the whole thing.
Broker Wayne Lamb of CB Richard Ellis said, “When Cigna tried to sell half the partnership, it was not received as well as Cigna would have liked, so now they are just selling it out.”
Cigna originally set out to sell the complex as a partnership-package deal that also included a complex in White Plains, N.Y., and one in Chicago, according to sources. One source said Cigna decided to split the package up after no buyer surfaced.
Industry experts said the Koll Center North is worth about $200 per square foot. A similar property, the Wells Fargo building in Irvine, recently sold for $260 a square foot.
The Koll Center Irvine complex is 89.5% leased and the tenants include Sprint, Ernst & Young, Union Bank, and Century Mortgage.
“I think it will sell. It is a good product and a good asset,” said Peter Adams of Equity Office Properties Trust in Los Angeles.
Cigna has $65 billion in real estate assets across the country.
