Executives at Newport Beach-based WCB Properties still see some good real estate buys in Orange County, even with escalating land prices and declining capitalization rates.
The trick, they say, is having the deep pockets to buy here in the first place.
WCB just bought a five-property portfolio of office, retail and research and development buildings from Denver-based ProLogis for a reported $100 million.
The buildings, totaling about 600,000 square feet, are in OC and Los Angeles.
ProLogis, the nation’s largest developer of warehouses and other industrial buildings, acquired them when it bought Catellus Development Corp. late last year.
For Terry Thompson, WCB vice president of acquisitions, the crown jewel in the deal is the 15.5-acre Pacificenter Anaheim in Anaheim Hills.
It includes a five-story, 100,000-square-foot office tower, a 23,000-square-foot flex office building and a 21,000-square-foot shopping center.
Fremont Investment & Loan, an Anaheim-based subprime lender that’s part of Santa Monica’s Fremont General Corp., is the main office tenant.
The site also includes land for development.
WCB is considering a project mixing homes and other uses next to a train station at the site.
Other OC properties trading hands in the deal: the 48,000-square-foot Commercenter-Newport office building in Newport Beach and Pacificenter-Tustin, which includes a 70,000-square-foot office building and a 40,000-square-foot store occupied by Micro Center.
WCB likes to buy underutilized buildings in overlooked areas, Thompson said.
There are a number of these types of buildings in OC, he said.
“We like to focus on properties in our back yard,” Thompson said.
The company freed up about $350 million for acquisitions this year by selling office and other properties in Southern California and Denver.
The company’s January buy of Santa Ana’s Xerox Centre for $78 million is paying off, according to Thompson.
With new leases, the building is about 95% full, 10% higher than when WCB bought the building in January.
Rents at Xerox Centre averaged about $2.40 per square foot when the sale was made. Starting rents now are at $2.55 per square foot, Thompson said.
Fluor to Research Park
Fluor Corp. moved its headquarters from Aliso Viejo to Irving, Texas, in April. But the engineering services company still is big here.
At Irvine’s University Research Park, Fluor just signed up for 63,400 square feet of space. That’s an entire building at 5211 California.
University Research Park is a venture of The Irvine Company and the University of California, Irvine.
Terms of the lease weren’t disclosed.
With the Fluor lease, University Research Park is effectively full, Irvine Co. officials said.
Construction on an eight-building, 700,000-square-foot headquarters for Broadcom Corp. is under way at University Research Park.
Fluor left behind about 1,200 workers, mostly engineers, in Aliso Viejo and Long Beach.
Hopkins Buys in Palm Springs
Irvine-based Hopkins Real Estate Group has bought the 315,000-square-foot Palm Springs Mall near downtown Palm Springs.
Terms of the deal weren’t disclosed.
Hopkins officials hope to lure upscale retailers to the 26-acre property, which counts about 35 tenants and is anchored by Gottschalks, Vons, Ross, True Value and Rite-Aid.
The company also is looking at possibly adding homes to the center.
The Palm Springs Mall “provides an excellent example of how in-fill opportunities are surfacing in areas of California that have been overtaken by suburban residential growth,” Chief Executive Stephen Hopkins said.
Look out Henry.
The Irvine Company has made its first deal in Costa Mesa.
The city’s Planning Commission approved a plan by the Irvine Co. to build an 890-unit apartment complex along Anton Boulevard, near South Coast Plaza Town Center.
The next step is for the City Council to take up the matter, which is likely in the next month.
The move marks the Irvine Co.’s first move into Costa Mesa, where Henry Segerstrom has dominated with development of South Coast Plaza, the Performing Arts Center and office buildings.
Construction for the apartment complex, called The Enclave, could begin by early next year, Irvine Co. officials said.
The 40-acre project is slated for undeveloped land held by the Sakioka family. The Irvine Co. would lease the land and be responsible for paying the city about $1.7 million in park fees.
The Irvine Co. is likely to model the design of the Costa Mesa apartments after other Irvine Co. complexes, like the company’s Villa Sienna project along Jamboree Road.
Plans call for one-, two-bedroom and studio apartments. The average size of an apartment would run about 1,000 square feet.
The apartments are the first proposed in Costa Mesa in some time.
A number of developers are planning condominium towers in the area around South Coast Plaza. Environmental studies for those projects are set to be finished soon.
