COMMERCIAL
If you grab a plane to Houston out of Irvine’s John Wayne Airport, there’s a good chance you’ll be sitting next to a local real estate investor on your flight. The number of Orange County companies making plays in that part of Texas has grown recently.
Newport Beach’s Koll Co. is the latest OC real estate investor to start buying in the country’s fourth-largest city.
The long-time area developer just grabbed a four-property portfolio in Houston of office and flex buildings from Invesco Real Estate Advisors of Dallas. The 380,101-square-foot portfolio traded for $24.4 million, or about $64 per square foot.
The portfolio totals 13 buildings. It was bought by Koll/PER, a venture between Koll and investment partner, the Public Employee Retirement System of Idaho. The partnership now owns 5.9 million square feet of multitenant, light industrial and suburban office space in six states, including California.
Each of the four properties in the latest acquisition is located in Houston’s northwest submarket, and is made up of single-story, concrete tilt-up buildings. Westport Business Center, a seven-building park totaling 176,864 square feet, was the largest property in the deal.
The buildings in the portfolio were only 66.2% full, which likely played a part in the low sales price. Occupancy was impacted by a heavy amount of road construction in the area the past few years, according to Koll officials. That construction now is complete.
Bill Larkin, acquisition and development manager for Koll, says the company is looking to buy more in the Houston region.
Houston appears to have become the No. 1 area for out-of-state buys for OC companies in the past six months or so, eclipsing recent hot spots such as Phoenix, Las Vegas and Austin, Texas. OC companies aren’t the only ones buying. Investment activity in the city is up nearly 75% year-over-year in the past six months, according to local reports.
The city’s industrial and office markets are seeing the lowest vacancy rates in eight years, according to Grubb & Ellis Co.
Recent OC-related deals in the area include Newport Beach’s Buchanan Street Partners and Los Angeles-based Lowe Enterprises buying 3D/International Tower, a 21-story office tower, in Houston’s Galleria submarket in October.
In November, Chase Merritt Investments LLC of Newport Beach bought 314,000 square feet of office space in Houston, in a venture with Los Angeles’ Pacific Coast Capital Partners LLC.
And in August, Newport Beach-based developer Carson Cos. bought a 191,000-square-foot industrial building in the area, bringing its portfolio in the area up to 750,000 square feet. It entered the market about 18 months ago.
Harsch Hires Local
Harsch Investment Properties, a privately held real estate investment and development company headquartered in Portland, hired a local to head up its largest division.
The company brought on Al Beaudette as a senior vice president to be based in Portland. He’ll be handling office and industrial development for six of Harsch’s offices, in Portland, Seattle, San Francisco, Sacramento, San Diego and Las Vegas, and will travel to them extensively.
Beaudette has more than 20 years of experience in real estate, most of it in OC. Most recently, he worked for the Newport Beach office of Lowe Enterprises Real Estate Group Services. Before that, he was a managing director for a local office of CB Richard Ellis Group Inc. He’s also the incoming National Chairman of the National Association of Industrial and Office Properties.
Harsch’s office and industrial portfolio totals about 15 million square feet. The company has about $700 million of projects under construction and development.
Garden Grove Opens Doors
Costa Mesa developer Burke Real Estate Group has wrapped up construction of Monarch Corporate Center, a four-building industrial complex in Garden Grove totaling 68,457 square feet.
The four-building property is located along Monarch Street, near the intersection of Knott and Orangewood avenues. It includes three buildings under 14,000 square feet, which include two units for sale each.
It also has another 25,000-square-foot building that has 16 units, available for lease. That building is the only new small industrial/research and development construction in western Orange County to offer for-lease units under 2,500 square feet, the company says. About a quarter of the building is leased right now.
David Baker and Gary Marquis of Newport Beach’s Collins Commercial are the leasing and sales agents for the project.
Burke’s specialty as of late has been office, research and development and industrial properties that target small to medium businesses. Its biggest local project was the 220,000-square-foot Astronautics Corporate Center in Huntington Beach, which it completed in 2004.
