Irvine developer Citivest Inc. is looking to turn a 10-story office building in Santa Ana into Orange County’s first high-rise office condominium project.
Citivest plans to sell offices in a recently acquired 110,000-square-foot building at 1600 N. Broadway to lawyers and other professionals working with government agencies in Santa Ana, said Jim Nichols, a partner with the developer.
The company bought the building as part of a roughly $30 million, two-building sale by Mike Harrah’s Caribou Industries Inc.
Citivest also bought a 143,456-square-foot building at 1200 N. Main St., which serves as Caribou’s headquarters. The county of Orange also is a tenant.
Gil Marrero, Al Pekarcik and Dan Vittone of Voit Commercial Brokerage LP’s Irvine office represented Caribou Industries and Citivest.
Sales of smaller offices and upscale industrial condos have thrived in the past five years in Costa Mesa, Orange and the Irvine Spectrum.
Until the recent boom in high-rise office tower building in Irvine, for-sale condos have been the biggest source of commercial construction in the county this decade.
Low interest rates have fueled demand, allowing small-business owners to buy their own space rather than rent.
Up to now, for-sale condos have been in low-rise buildings. That makes Citivest’s bid to convert an office tower unique.
“None of them have the view that we do,” Nichols said.
The building had been occupied by the Department of Housing and Urban Development for the past eight years. The federal agency recently left the building.
Citivest plans to work with Santa Ana officials in the next six to eight months to get approvals to redevelop the building as office condos, Nichols said.
The developer plans to lease offices in the meantime.
A third, 60,000-square-foot Santa Ana office sale also is in the works between Citivest and Harrah. The deal could close within three months, according to Nichols.
The buys are Citivest’s first foray into Santa Ana, as well as its first big push into the office market. The company primarily has developed apartments and retail space for the past 20 years.
Nichols said he expects his company to make more deals in Santa Ana, where buildings are relatively affordable compared to other areas in the county.
Citivest buys buildings with private equity and institutional investors and should be able to handle deals in the $50 million range, he said.
Condos at the North Broadway building are expected to sell for about $235 per square foot on lower floors and about $325 per square foot on the top floors. That’s about $75 per square foot below some of the newer for-sale condos elsewhere in the county.
“A lot of people have shied away from the area, but Santa Ana is undergoing a big revitalization,” Nichols said.
Citivest has gotten interest from prospective buyers for about 70,000 square feet of space at North Broadway, Nichols said.
The building is ripe for condo redevelopment, Nichols said. Each floor has a lobby and floor-to-ceiling glass that could appeal to buyers, he said.
Citivest initially toyed with the idea of turning the building into condo homes when a sale first was considered. Changing fortunes in the local housing market put the kibosh on that plan.
“That turned out to be a fleeting thought,” Nichols said.
The acquired buildings are near the site of Harrah’s planned 37-story One Broadway Plaza office tower. That project could break ground in June, according to Harrah, though he doesn’t have any tenants lined up yet as required by the city.
