Santa Ana’s 4 Hutton Centre office building, one of the more prominent buildings at the city’s southwestern edge next to Costa Mesa, has traded hands for about $64 million.
Legacy Partners Commercial, a Foster City-based real estate investor, was the buyer of the 10-story building at the San Diego (I-405) and Costa Mesa (55) freeways.
Santa Ana’s Triple Net Properties LLC, which uses the about three floors of the offices for its own operations, was the seller.
Value Appreciated
Like much of the county’s higher-end office buildings, the value of the 210,041-square-foot building, which is part of several buildings at Hutton Centre, has shot up dramatically in recent years.
Triple Net bought the building two years ago for about $49 million, or $233 per square foot.
This time around, it sold for about $305 per square foot.
Much of that has to do with the building’s location in an area that’s seeing high-rise condominium development and retail projects, said Robert Smith, executive vice president for the Newport Beach-based office of CB Richard Ellis Group Inc.
“I think this is the best transitioning submarket in Orange County,” said Smith, who along with CB Richard Ellis’ Michael Kane represented both parties in the sale.
The Hutton Centre campus, which is being renamed MacArthur Place, is seeing two upscale condo towers being built by Nexus Cos. of Santa Ana, at a price of $350 million.
The 4 Hutton office building is on 2.7 acres, including a lake.
It’s the second big Santa Ana office sale Triple Net has made recently.
In early 2006, it sold the Xerox Centre office tower to Newport Beach-based real estate investor WCB Properties LP for $77.5 million.
Triple Net pooled together a group of investors to buy Xerox Centre, Santa Ana’s premier office building, for $60 million in 2003.
The real estate investor is “not exiting the California market by any stretch,” said Jeff Hanson, chief executive of Triple Net Properties Realty, which handles acquisitions and sales nationally for the company.
Triple Net counts a portfolio of about $4.6 billion, spread across about 30 states.
“We have been a net seller (locally) in the past (few) years. It’s just been a harder market to buy in than to sell,” Hanson said.
In 4 Hutton’s case, the company’s pool of investors “saw this as an opportunity to sell in a very strong market,” he said.
The building counts about 18 tenants, including the headquarters of mortgage company Stearns Cos., Fort Worth, Texas-based architect and engineer Carter & Burgess Inc., Scotts Valley-based Borland Software Corp. and Richmond, Va.-based LandAmerica Financial Group Inc.
The building is about 85% full.
Hutton Centre “is positioned well to capitalize on rent growth in the market,” said Ted Tapfer, senior vice president for Legacy Partners.
Other Deals
The deal is the third big transaction between Triple Net and Legacy Partners.
Last month, Legacy paid $149 million for the 27-story One World Trade Center in downtown Long Beach. G REIT Inc., a company managed by Triple Net, was the seller.
Last July, Legacy paid $96 million to buy 600 B Street, a San Diego office tower, from G REIT.
Are more Orange County deals in the works for Legacy?
“We like the long-term outlook,” Tapfer said. “It’s high on our list.”
