Knobbe, Martens, Olson & Bear LLP beat out former landlord The Irvine Company to pay an estimated $100 million for the Irvine high-rise that serves as the law firm’s headquarters.
The deal was one of two big sales in the John Wayne Airport area this month.
In the other, Los Angeles-based Maguire Propertieys Inc. agreed to pay $151 million for Seattle-based Washington Mutual Inc.’s Irvine campus on Von Karman Avenue.
Knobbe is believed to have paid top dollar for its high-rise on the corner of MacArthur Boulevard and Main Street after the Irvine Co. bid on the building.
As the building’s main tenant, Knobbe exercised an option to match the highest bid and buy the building, according to brokers familiar with the deal.
Knobbe moved to the building in 2002 from the Irvine Co.’s Newport Center near Fashion Island.
The Irvine office of Phoenix-based Opus West Corp., which developed and owned the high-rise, confirmed the sale but didn’t disclose the price.
Knobbe officials didn’t return calls for this story.
Brokers said the 308,000-square-foot tower sold in the range of $315 to $325 per square foot. That price is the highest paid so far this year for a high-rise.
“Buyers are more aggressive than they have been in five years,” said George Economos, senior vice president with NAI Capital Commercial in Newport Beach.
Low interest rates have pushed up prices for office buildings, Economos said, just as in the housing market.
Other brokers said they see higher prices as a sign that rents are on an upswing and the economy is expanding.
The law firm likely decided to buy the 14-story building at 2040 Main to avoid future rent increases and for the tax benefits from depreciation, according to brokers.
The Irvine Co. had bid on the tower and was set to buy it, brokers said. Irvine Co. officials declined to comment.
In last week’s other big deal, Maguire Properties made another buy here, after paying $475 million for Irvine’s Park Place in two deals earlier this year.
Washington Mutual is set to lease back four buildings on the 16-acre campus. Two buildings are at 17875 and 17877 Von Karman. The other two are at 17838 and 17872 Gillette Ave.
The four low-rise buildings total 415,597 square feet. The sale also included land zoned for another 145,270-square-foot building as well as 2,610 parking spaces.
Washington Mutual isn’t using about 1,000 parking spaces, according to Maguire.
Those spaces could be used to shuttle people to Park Place down the street, where parking is tighter.
After factoring out the value of the additional land and parking spaces, the sale price per square foot of existing buildings at the Washington Mutual campus works out to $291, according to Maguire.
“We believe that the John Wayne submarket is a really strong market,” said Peggy Moretti, a Maguire spokeswoman.
Ken Barry, Bob Smith, Rick Warner, and Mike Kane of CB Richard Ellis Group Inc. represented Washington Mutual in the sale. Maguire, a real estate investment trust, represented itself.
Other office sales this year have been closer to $200 per square foot.
In March, Glendale-based pension fund adviser American Realty Advisors paid $77 million, or $233 per square foot, for two Koll Center Irvine office buildings on Von Karman.
That price was the highest at the time.
