Huntington Beach’s Ocean Plaza office and retail center has traded hands for $97.3 million, the second-largest commercial property sale of the year in Surf City.
Vancouver, Canada-based Onni Group bought the property from Los Angeles-based Decron Properties Corp.
The 8.6-acre complex includes a 208,836-square-foot office tower—at 14 stories, among the tallest properties in Huntington Beach—and another 108,785 square feet of retail and restaurant space.
It traded for about $305 per square foot. It’s among the priciest office deals in Orange County this year. In Huntington Beach, it only trails Boeing Co.’s $113 million sale of a 56-acre property to Irvine developer Sares Regis Group in March.
The deal appears to be Onni’s only commercial property holding in OC; it has numerous office investments in Los Angeles, including the former downtown campus of the L.A. Times.
Hit by Recession
Ocean Plaza is about a mile west of the San Diego (405) Freeway, at the intersection of Warner Avenue and Beach Boulevard.
Decron bought the property at 17011 Beach Blvd. in 2006 as part of a $66 million, eight-building portfolio sale.
In the next five years, the property’s occupancy dropped from 90% to less than 60%, coming in the wake of the Great Recession.
Decron invested $17 million “to reposition and restabilize the campus,” it said, and added anchor tenants such as Ocean Media and UFC Gym.
The office portion of the property was about 85% leased at the time of sale, while the retail component was 95% leased.
The sale is part of Decron’s push to decrease its office and commercial assets. It has a goal to decrease the share of commercial properties in its portfolio from 40% to 15% by year-end “to focus almost exclusively on multifamily.”
Decron Chief Executive David Nagel said the firm has “made a concerted effort to focus more on building our multifamily portfolio where cash flows are more consistent and growing at a faster pace than commercial by expanding into new markets throughout the western United States.”
Decron’s other Orange County holdings include a 349-unit apartment complex in Santa Ana, called Adagio at South Coast.
It bought that complex in 2016 for $96 million and has since invested about $20 million in the property.
The company plans on looking for future value-add multifamily deals in Orange County moving forward, like others in Santa Ana or Costa Mesa.
