A recently renovated four-story office just off the San Diego (I-5) Freeway in Laguna Hills has a new owner.
An affiliate of New York-based private-equity firm Angelo Gordon & Co. headed an investor group that recently bought Oakbrook Plaza at 24422 Avenida de la Carlota.
The venture paid $30 million—or about $250 per square foot—for the 119,927-square-foot multitenant office.
The building was about 79% leased to 28 tenants at the time of the sale.
The property is just down the street from the former Laguna Hills Mall, which now is in the early stages of being redeveloped into a retail project called Five Lagunas.
The property’s location in South Orange County, as well as a number of retail and residential development projects taking place around Five Lagunas, were big draws to the new ownership group, according to Paul Jones, senior managing director with the capital markets team of brokerage Newmark Grubb Knight Frank.
“Angelo Gordon sees this as a core play in South Orange County,” said Jones, who worked with colleagues Kevin Shannon, Robert Griffith and Blake Bokosky to represent the sellers in the transaction.
“The buyer recognized the opportunity to add value by making some minor capital improvements and lease-up of the remaining vacancy,” Jones said. “There is also an extensive amount of residential and retail development in the immediate area, which will be a huge attraction to current and future tenants at the project.”
Lincoln Advisory Group, an affiliate of Dallas-based Lincoln Property Co., sold the office on behalf of a public pension fund.
A different affiliate of Lincoln Property is part of the investor group that bought Oakbrook Plaza, along with Angelo Gordon, according to Parke Miller, senior vice president at Lincoln Property.
The deal “was a true arm’s-length transaction,” according to Miller, who took over the top spot at Lincoln Property’s Orange County office this summer.
Lincoln Property first invested in the office in late 2005, when the building sold for a reported $35.4 million. The prior ownership group completed a renovation of the 32-year-old property last year.
The 2005 deal was Lincoln Property’s first reported investment in OC’s office market during the last real estate cycle.
The commercial property investor, manager and developer has since gone on to buy and sell several hundred million dollars’ worth of buildings across the county, often with large financial partners—including Angelo Gordon.
The two companies partnered to acquire the two-building Griffin Towers office complex in Santa Ana in 2010 for $90 million; they sold the South Coast Metro-area property for a reported $129 million four years later.
Similar Play
The Laguna Hills sale follows a big-dollar office transaction in the city of Orange that the Newmark Grubb team recently worked on—a deal that saw a prior part-owner bring in new financial partners.
A real estate investment affiliate of Bloomfield, Conn.-based healthcare insurance company Cigna Corp. in early August bought a majority stake in the City Parkway Collection office portfolio, a trio of offices that total about 439,000 square feet, along with excess land that was recently entitled for an apartment development.
Cigna bought out ownership stakes in the three buildings from Chicago-based Walton Street Capital LLC.
The deal valued the properties alone at about $108.5 million, or nearly $250 per square foot.
Irvine-based Greenlaw Partners—which bought the three buildings in partnership with Walton Street in separate deals in 2014 and 2015, paying about $75 million altogether—retained an undisclosed stake in them in last month’s deal with Cigna.
The Orange office transaction is the second largest office sale reported in Orange County so far this year, trailing only the recently closed $150 million sale of a portfolio of medical office buildings in Mission Viejo (see story, page 1).
