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Sunday, Aug 7, 2022

Back to OC Buying for Buchanan Street Partners

Buchanan Street Partners has had a busy start to the year, with transactions including the company’s first Orange County acquisition in six years.

The Newport Beach real estate investment firm said it recently closed on nearly $140 million of real estate-related deals, including three commercial acquisitions and two construction loans.

Among the buys: Buchanan bought a two-building office property along Bristol Street in Newport Beach for $11.5 million. The 42,697-square-foot office project at 1400 & 1420 Bristol Street North is about 2 miles from John Wayne Airport, and a few blocks from Jamboree Road. The two-story buildings, which are 100% leased, sold for about $269 per square foot.

CBRE’s Anthony DeLorenzo, Gary Stache, Doug Mack and Bryan Johnson represented the seller, Davis Partners, a longtime area commercial real estate firm that has its headquarters in the complex.

The Jetty

Buchanan officials said they are planning upgrades for the property, including exterior, interior and infrastructure renovations.

The new buy is down the street from Buchanan’s headquarters, and is even closer to the company’s other Newport Beach holding: The Jetty, a multibuilding complex next to Newport Beach Golf Course.

Buchanan bought that six-building office project in 2014 for $15.5 million, or $175 per square foot.

The company has since converted the project into office condos, and has been selling off the buildings in individual transactions.

The final three condo units are expected to close soon, according to Vice President Matthew Haugen.

Life Sciences

Outside OC, Buchanan recently snapped up a 99,716-square-foot, two-building office project in San Francisco for $26.2 million.

It also acquired a 293,000-square-foot, eight-building flex/office project in Houston, 3 miles south of Texas Medical Center, the largest medical center in the world, according to Buchanan.

Both acquisitions represent a growing sector for Buchanan: life sciences.

“There’s a growing demand for biotech and medical office use, specifically in California and Texas,” co-founder and Chairman Robert Brunswick told the Business Journal. “We are looking at opportunities that speak to that demand.”

The company will make upgrades to both properties to better appeal to “life science and tech users.”

“We are always looking to evolve our business and not just be reliant on one industry,” Haugen said. “This is a new sector we feel very strongly about.”

Lending Boom

Loan-related business is also driving growth at the company, with Brunswick pointing to strong demand for private lenders as a catalyst for the firm’s recent activity.

“Banks have much more regulations, and private lenders are stepping up to backfill the space that institutional lenders can’t satisfy,” Brunswick said. “Borrowers are looking for more flexibility on recourse provisions, certainty of close and more predictability.”

The company’s mortgage business tops more than $1 billion.

Recent loan activity includes $55 million in construction financing for The Orchard, a 177,000-square-foot mixed-use development in Azusa that will have 163 apartments and 31,700 square feet of retail.

It’s the second construction loan between Buchanan and the developer, Glendale-based Serrano Development Group, in the last two years.

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