COMMERCIAL
There’s a new-to-Orange County suitor rumored to be looking to buy Maguire Properties Inc.’s trophy office tower in Irvine.
In early March, Maguire executives said they were in the “final stages” of the sale of 3161 Michelson, the upscale, 19-story Irvine tower that opened its doors in 2007 next to the San Diego (I-405) Freeway.
At the time, the Los Angeles-based landlord said it had received a deposit for a potential sale and that the undisclosed prospective buyer was conducting due diligence.
No more disclosures about the sale’s progress have been made public since that report, but industry buzz has certainly picked up about the most likely buyer.
Numerous industry sources now are pointing to New York-based Emmes Group of Cos. as the likely new owner of 3161 Michelson,assuming the deal goes through as planned.
Emmes is a privately owned real estate investment company that started operations in 1992. Its modus operandi back then was to buy Resolution Trust Corp. debt portfolios and distressed debt from insolvent financial institutions, the company says on its Web site.
It’s a strategy similar to what many opportunistic investors in the market now are planning to use in the commercial real estate market’s downturn.
A purchase in OC would be the company’s entrance into a new market. Emmes counts a small Newport Beach office, but currently doesn’t have any properties west of Texas, according to the company.
The potential price being bandied about by industry insiders for the 531,000-square-foot tower: about $165 million, or about $310 per square foot.
The building previously was valued at about $244 million, or $460 per square foot. Maguire said it has already taken a $50 million non-cash impairment charge on the property, in connection with its decision to classify it as held for sale.
It should be noted that the rumor mill has not always proven correct with speculation concerning Maguire’s OC portfolio.
Last year, talk centered on Irvine-based LBA Realty as a likely buyer for not just 3161 Michelson, but for the landlord’s entire Park Place complex.
That transaction never panned out.
Grubb Competition
In the April 2 issue of the Business Journal, I wrote about Santa Ana-based Grubb & Ellis Co.’s plans to raise as much as $3 billion to buy healthcare-related real estate through a new fund.
The real estate brokerage and investment company’s in the early stages of registering securities for Grubb & Ellis Healthcare REIT II Inc., a real estate investment trust that is raising money from investors but won’t trade on a stock exchange.
Initially, the new offering seemed to be a replacement for an already existing Grubb & Ellis venture,soon to be called Healthcare Trust of America Inc.,that also was buying healthcare properties but appeared to be winding down its fundraising activities after getting nearly $900 million in investments.
It turns out Healthcare Trust, run by Scott Peters,the former chief executive of Grubb & Ellis,was just winding down its initial round of money-raising activities and is not planning to stop getting investment dollars altogether.
The company,which is planning to become self-managed and is moving its headquarters from Santa Ana to Scottsdale,this month filed a second public offering to raise another $2.2 billion of investments. It will, by all accounts, be looking at the same type of properties to buy as the new Grubb & Ellis REIT will,and presumably will be going after a similar base of investors.
Healthcare Trust will get the first crack at buying and any medical properties presented to it by Grubb & Ellis’ brokers, according to the company’s registration statement.
More KBS Buys
KBS Realty Advisors LLC of Newport Beach said it bought Providence Towers, a high-profile Dallas office building that counts 504,732 square feet of space.
Terms of the deal for the 12-story building, which is 87% full, were not disclosed, although local reports say the property’s valued at about $70 million for tax purposes. CB Richard Ellis Investors LLC sold the property.
Costa Mesa-based Peak Real Estate
RESIDENTIAL
Management Group Inc., a property management company, is taking on work for a portfolio of 90 apartment complexes in San Diego County, totaling about 3,000 apartments.
The properties are owned by San Diego-based Hoban Property Management Co.
Peak Real Estate is privately owned and also does property management for office, industrial and retail buildings, as well as development.
