Acacia Buys Seagate Building; Principal Capital Looks to Buy in OC
COMMERCIAL
Hillwood Development, the real estate company controlled by Ross Perot Jr., is moving forward on several projects from its West Coast regional offices in San Clemente.
Besides a joint venture with Crown Realty and Investments for the recently completed Stadium Crossings four-story office complex in Anaheim, Hillwood is negotiating to develop some 650,000 square feet of new Orange County office and industrial projects in the coming year.
L.M. Cummings, president of Hillwood’s Western division, says he isn’t ready to divulge specifics about those deals just yet. But he is talking about the company’s move into Hawaii, which is being overseen by staff based in Orange County. Some of the developments Hillwood’s San Clemente office is working on include:
n Forty-nine lots along Black Sand Beach on the big island of Hawaii. Each lot is selling for $2.5 million. “Those lots are primarily being sold to high-tech entrepreneurs from California,” said Cummings.
n Development of a 155,000-square-foot luxury shopping center on Maui.
n Marketing and development of 225 residential lots on Maui. The average asking price for each parcel is about $175 a square foot, with lots averaging around 9,000 square feet apiece.
n In Simi Valley, the San Clemente office is managing development of a 36-hole public golf course with 100 homes. The venture is being undertaken in partnership with Landmark Golf.
Hillwood’s representatives in Orange County also are making plans to build another 500,000 square feet to 1 million square feet in 2000 in San Diego County.
“It’s going to be a busy year for us,” said Cummings.
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Besides developing three new office buildings at A.J. West Ranch, David Pittman of Acacia Properties is working on a project in Anaheim.
The former partner of Los Angeles-based Zelman Development has purchased a 67,500-square-foot industrial warehouse from Seagate Technologies at 3839 East Coronado St.
The building has about 6,000 square feet of office space. It also has extra mezzanine facilities that Pittman figures he’ll be able to market in several different ways to future tenants.
“Seagate has a large facility right next to this one,” said Pittman. “They’ve been using this building for excess storage, which they don’t really need.”
So Pittman, who now is based in Newport Beach, made a deal for a building he will improve and put on the market sometime after negotiations conclude around the end of the first quarter.
Jeff Read, senior vice president of Grubb & Ellis in Anaheim, will handle the listing. Initial asking prices are expected to be around $72 a square foot to buy and 52 cents a square foot to lease on a triple net basis.
A Des Moines-based pension fund advisor, which has been active in Orange County for nearly three decades, has decided to increase its exposure in the local market during 2000.
Principal Capital Management, which has a portfolio of 1,100 properties valued at more than $5.5 billion nationwide, is searching for new buildings. Officials at the company won’t say how much they would like to acquire, but brokers in Orange County believe the amount could be significant.
“They are upgrading their portfolio and looking for better properties throughout the county,” said Jeff Jennison of the Charles Dunn Co. in Irvine, who is helping Principal sell one of its current OC holdings, Executive Plaza in Orange. The company has earmarked $500 million for acquisitions in the coming year nationwide.
“They haven’t broken it down by region,” said Jennison. “But they are committed to building a larger presence in this area. They are looking for Class A and Class B properties that are well-located.”
Principal is focusing its search on industrial, multi-family, retail and suburban office product in the area, he added.
“If they can find those types of properties at the right price, they have the funds to make purchases,” said Jennison.
Executive Plaza, which was built in 1984, is one of eight buildings the company is putting on the market in six states. The office complexes being sold by Principal total 1.5 million square feet and are valued at a combined $135 million.
Executive Plaza is at 13252 Garden Grove Blvd., a half-mile west of the Block at Orange. The 40,000-plus square foot building is 66% leased at the moment. But Jennison feels that with Spieker Properties planning to build some 1.2 million square feet of new offices in the area and to refurbish buildings being vacated by Experian in 2002, Executive Plaza offers an opportunity for new owners to invest in an improving submarket.
“We were pretty stable until we lost a couple of tenants who needed more space than was available last fall,” said Jennison. “We have some leasing work to do but it provides a great opportunity for a new user to come in and realize greater (rental) values.”
The asking price for the two-story, courtyard office building is nearly $3 million.
Among Principal’s most recent moves here was purchasing the former OC Business Journal building at 4590 MacArthur Blvd.
“Principal has been in the Southern California market since the 1960s,” said Jennison. “They have 25 million square feet in California and are very interested in the Orange County market.”
RESIDENTIAL
The Hoffman Co. of Irvine has been active recently, brokering several deals.
Included in the land moves was the $20 million acquisition by San Diego-based The Brehm Cos. of 457 subdivided and improved lots in Murrietta.
“This will be the first project developed by The Brehm Cos. outside of San Diego,” said Norman Scheel, vice president of Hoffman.
Brehm will be developing the entire Warm Springs masterplanned community with 12 model homes scheduled to open in April.
The seller of the property was Richland Communities of Santa Ana.
