COMMERCIAL
Coin buff turned real estate buff John Saunders recently closed a $42 million deal in Mission Viejo.
Saunders, who owns London Coin Galleries Inc. in Newport Beach, bought a 303,000-square-foot building on 27 acres of land from Newport Beach-based real estate developer Steadfast Cos.
The building is home to the local operation of Unisys Corp.
“This is the biggest (property) I have ever bought,” said Saunders, who runs Saunders Property Co. in Newport Beach.
Other investors chipped in on the Mission Viejo buy, but Saunders said he is the managing partner.
Saunders still runs his coins business. But these days, he’s more interested in real estate deals.
To be sure, Saunders steadily has been doing larger deals,a sign he’s racked up the confidence of bankers and real estate brokers. The former for money, the latter for dibs on deals.
Indeed, Saunders learned of the Mission Viejo deal from brokers at Lee & Associates Commercial Real Estate Services Inc., who initially were representing Unisys in leasing out some extra space.
Lee brokers Kenneth Johnson, John Matus, Christine Bowen and Allen Basso learned Steadfast wanted to sell. So Saunders said they called him to arrange a deal. The brokers represented Steadfast in the sale.
About 75% of the money to buy the building came from Bank of America Corp., Saunders said.
Unisys has four years left on its contract, including two five-year options, Saunders said.
Steadfast is debating what to do with land it owns nearby, according to sources.
The developer previously tried to develop housing on some 23.4 acres near the intersection of Los Alisos Boulevard and Jeronimo Road.
But when Steadfast included some affordable housing units, as required by state law, some residents objected. The city denied
the zone change from commercial to residential.
Real Estate Quest
Irvine-based Quest Software Inc. decided it would rather own than lease.
The company recently said it’s paying $18.6 million to Fluor Corp. for an 89,000-square-foot building that previously served as part of Fluor’s headquarters in Aliso Viejo.
In March, I wrote that Quest planned to lease 57,000 square feet at the building with the option to buy it. Quest also paid Fluor $14 million for another 78,000-square-foot office building at the campus.
A maker of business software, Quest recently moved from Irvine and Lake Forest to Aliso Viejo. Engineering services provider Fluor still is based in Aliso Viejo but needed less space after job cuts in the past year.
Early last year, Fluor spokeswoman Leann Vandergrift said the company has cut back at its headquarters with a falloff in oil, gas and power work.
The entire deal is unusual in that it involved two big publicly traded Orange County companies.
Royce Sharf of Studley Inc. helped Quest set up the deal. Jeff Osborn of Cushman & Wakefield Inc. worked with Fluor.
Relocation costs and upgrades to the new building should total about $10 million, Quest said in a statement.
RESIDENTIAL
I don’t think the daily newspapers provided the right context to housing data released in early December by La Jolla-based market tracker DataQuick Information Systems.
Both area dailies proclaimed a rebound in housing prices in November, versus a year ago. That’s true. According to DataQuick, OC’s median price hit $541,000 in November, up 1.7% from October and 23.8% versus a year ago.
November’s median was shy of this year’s peak $543,000 set in May and hit again in August.
But the papers glossed over the subtext, which was a 4.6% decline in sales in November to 3,560 houses and condominiums, versus a year ago. A less than 5% decline doesn’t sound like much. But sales in the county have hovered around 3,500 for months.
In October, total sales of 3,508 homes signaled a decline of 24.6% from a year earlier.
Conclusion: sales prices are moving sideways and the pace of sales remains significantly slower than last year.
MBK Office Opens
Irvine-based MBK Homes Ltd., a unit of Japan’s Mitsui & Co., earlier this month announced the opening of a Burbank office.
The builder has four projects in the works in the Los Angeles area, with about 100 homes done in 2004.
MBK hopes to triple home production in L.A. in the next couple of years, according to MBK President Tim Kane.
MBK hired Jim Worden to head the Burbank office. He recently served as a project manager for Centex Corp.
