The 4000 MacArthur office complex in Newport Beach is for sale again in what could prove to be Orange County’s largest office transaction so far this year.
The site is home to two 10-story buildings near MacArthur Boulevard and Jamboree Road and could fetch nearly $200 million, according to real estate sources familiar with the property.
It’s less than a mile from John Wayne Airport and arguably the premier office property in Newport Beach not owned by Irvine Company.
It’s also had several ownership changes at varying prices in a dozen years, the most recent buyer a venture between Houston real estate investor Hines Interests LP and Oaktree Capital Management LP in Los Angeles, which bought it in early 2015 for a reported $120 million.
The property’s undergone nearly $40 million in upgrades over the past few years, according to marketing materials from brokerage Eastdil Secured, whose Adam Edwards and K.C. Scheipe have the listing.
The buildings total about 376,000 square feet, and the property is more than 90% leased.
Auto finance company Hyundai Capital America is the largest tenant, with just under half the space—177,000 square feet. Other large tenants include semiconductor maker Macom Technology Solutions and healthcare firm Lifescript.
A sale approaching $200 million translates to nearly $530 per square foot, well above the going rate for high-end offices in the airport area. The five-building Google Center across the street, which carries an Irvine address, was sold by billionaire Jack Dangermond for about $440 per foot in a roughly $260 million deal that was the biggest office sale in OC last year. Dangermond founded digital mapping company ESRI in Redlands in San Bernardino County.
The Newport Beach address of 4000 MacArthur brings benefits, Eastdil’s marketing materials say.
“As an alternative to Fashion Island, 4000 MacArthur can attract tenants looking for a Newport Beach address, with direct access to the airport and freeways, at a significant rent discount” to Irvine Co.’s Newport Center offices, where space can rent for more than $6.50 per square foot, according to Eastdil.
The complex is part of the 179-acre Koll Center Newport business park next to Bill Shopoff’s Uptown Newport mixed-use development, which is in the early stages of construction.
Busy Dozen
Another sale of the site would add a chapter to the history of the office complex, which has seen its share of occupant and ownership changes over the past decade.
The buildings long held the headquarters of two of OC’s best-known chipmakers, Conexant Systems Inc. and spinoff Mindspeed Technologies Inc.
Mindspeed was bought by Lowell, Mass.-based Macom in 2013 and has cut back on its space in recent years.
Conexant, a one-time owner of the complex and of the Uptown Newport land, moved from 4000 MacArthur to a smaller location in Irvine following its 2013 bankruptcy. In 2005 it signed a sale-leaseback deal with Newport Beach-based KBS Realty Advisors, which paid $110 million for it.
KBS sold the property a year later to New York-based Tishman Speyer Properties LP for just under $134 million, or $365 per square foot.
New York-based Emmes Group of Cos. in 2011 reportedly bought a $40 million junior portion of a $100 million mortgage tied to the property for 80 cents on the dollar and moved to foreclose on it from Tishman. It took over the property later that year in a deal valued at about $94 million, or about $249 per square foot.
The Hines-Oaktree partnership bought it from Emmes in early 2015 for $120 million, or $320 per square foot.
Emmes has its eyes on another notable pair of buildings in the airport area—the Main Plaza offices, which are part of the Irvine Concourse office complex. Real estate watchers say that deal should close soon and could also approach $200 million.
The Main Plaza buildings, at 1920 and 2010 Main St., total 656,000 square feet. They’re currently owned by San Francisco-based Shorenstein Properties LLC.
