The largest office campus in Cypress has sold to a big New York-based investor.
A fund managed by DRA Advisors LLC, a firm that invests in real estate on behalf of institutional and private investors, last month closed on the purchase of the Cypress Corporate Campus, a two-building property near the intersection of Katella Avenue and Valley View Street.
The 26-acre campus is a few blocks east of the Los Alamitos Race Course, also in Cypress.
It totals about 482,000 square feet across two buildings: a five-story steel frame office building and a two-story mix of office and industrial space.
Property records show the multitenant buildings sold for about $73.4 million combined, or roughly $152 per square foot.
The five-story office sold individually for about $30 million—just under $200 per square foot—while the two-story multiuse building fetched $43.4 million, or about $131 per square foot, property records show.
It’s the largest deal reported this year in the West Orange County office market—a submarket that comprises roughly five million square feet of space and 88 buildings—according to records from real estate market tracker CoStar Group Inc.
The property was sold by an affiliate of RREEF America, a unit of Germany’s Deutsche Asset & Wealth Management. The deal was brokered by the local Investment Services Group of Colliers International.
DRA Advisors bought the buildings under its Growth & Income IX fund, according to property records. The fund’s administrators are looking to raise several hundred million dollars from state pension funds and other institutional investors to buy value-add properties in select markets across the U.S., according to public records.
It’s the first notable reported acquisition in OC involving DRA Advisors since 2010, when it partnered with Irvine-based Shopoff Realty Investments to buy the land on Jamboree Road in Newport Beach where the Uptown Newport mixed-use development is planned.
DRA Advisors has since sold off its interest in that 1,244-unit project, whose first phase of development will be an apartment complex.
The privately owned investment adviser had about $7 billion in assets under management at the end of last year, according to public filings.
Mitsubishi Ties
The Cypress campus was 92% leased as of a few months ago, according to Colliers’ marketing materials for the property.
The largest tenant by rent paid is insurance company United Healthcare, according to the brokerage’s marketing materials for the property. United Healthcare also has significant operations in other nearby buildings in Cypress.
Hybrid Apparel, a clothing designer and distributor, took 173,000 square feet of industrial and office space at the larger 5757 Plaza Drive building in 2013. The company, which has its headquarters elsewhere in the city, uses the space as a distribution center.
Trident University International signed a 37,800-square-foot lease for the 5757 building last quarter in one of the largest West County office leases of the past three months, according to a report from the Irvine office of brokerage Savills Studley.
Other tenants at the two buildings include Beacon Health Strategies, a behavioral health company, and Toyo Tires.
The five-story office at the campus, at 5665 Plaza, runs about 151,000 square feet. It was built in 1991 by the U.S division of Mitsubishi Heavy Industries, a Tokyo-based firm that has other business units in the area.
The two-story building was constructed in 1988 and renovated by RREEF a few years ago.
Irvine-based LBA Realty bought the buildings as part of a larger portfolio deal in 1999.
LBA— which last week closed on the buy of a big Irvine campus used by the affiliates of another Japanese firm, Toshiba Corp. —sold the Cypress buildings to RREEF in 2002 (see story, page 3).
