Real estate developer Mike Harrah is seeking a financial partner, and perhaps an outright buyer, for his two prized development sites in Santa Ana.
This month he listed for sale the One Broadway Plaza office development site in the heart of the city’s downtown, along with the former headquarters of the Orange County Register at 625 N. Grand Ave.
The properties, about a mile from each other, are being marketed as The Downtown O.C. Collection.
Brokers with the local capital markets team of CBRE Group Inc. have the listing for them; an asking price hasn’t been disclosed.
It’s uncertain that Harrah, whose Santa Ana-based Caribou Industries is one of the largest commercial real estate owners in the city, will ultimately sell the two assets.
Marketing materials for the properties note his company is looking to “identify a buyer for, or joint-venture equity investor to fund the development” of the sites.
It’s possible a prospective investor could buy them or partner with Harrah on just one site, according to CBRE.
Caribou could also remain as the contractor for the two projects, Harrah said last week.
Tall Plans
The offering includes the two largest developments proposed in downtown Santa Ana in the past decade.
One Broadway is Harrah’s long-planned 37-story office. The 493-foot tower would be Orange County’s tallest building by a wide margin.
It would also include many amenities, including “two world-class restaurants on the upper floors, a plaza-level food court with numerous offerings, (and) a first floor presentation theatre,” marketing materials note.
Ground work began on the site next to Caribou’s headquarters more than a year ago, but the 614,953-square-foot tower has yet to go vertical.
Harrah’s spent nearly 20 years and countless dollars to get the project under way. CBRE’s marketing package said the tower has a cost basis of approximately $90 million.
The former Register property, a 20-acre site next to the Santa Ana (5) Freeway, is envisioned as a multibuilding development called 625ive, featuring creative-office space and potentially high-rise residential buildings.
The project “is conceived as a game-changing urban live/work/play project that will provide the region with a much-demanded true urban core,” according to marketing materials.
Harrah bought the Register’s former headquarters, a six-story, 180,000-square-foot building, in 2014 for a reported $27 million.
In 2016, he bought the surrounding land, plus the printing press and other former assets of the Register’s prior owner, Freedom Communications Inc., he said for more than $30 million.
The newspaper’s current owner, Denver-based Digital First Media, announced last week yet another round of job cuts at the Register and other papers it owns. It moved operations to Anaheim last year (see story, page 3), and the Santa Ana building’s now largely vacant.
The 625ive development hasn’t been entitled, and a potential buyer could end up focusing on different uses, depending on their interests, CBRE said.
Uses, as well as long-running questions surrounding likely One Broadway tenants, are among the biggest uncertainties clouding the properties, making estimating a potential sales price for The Downtown O.C. Collection a tricky proposition.
Multiple area real estate developers who talked to the Business Journal last week declined to project how much the two sites could sell for, noting the variables facing both.
A large multifamily development at the old Register site would likely be the safest bet for the 20-acre property, a few commercial and residential developers familiar with the property said.
The properties, along with the Willowick Golf Course, were pitched last year by Harrah as a potential home to Amazon for its second headquarters, or HQ2.
The buildings and other aspects of the Orange County Silicon Cities bid would have been linked by a new $400 million light rail system designed to connect much of downtown Santa Ana with Garden Grove.
Last week Amazon apparently passed on OC when selecting the 20 finalists for HQ2. Irvine and Huntington Beach’s bids also failed to make the cut.
Funding Other Deals
Caribou Industries has acquired and renovated over 71 commercial low-rise and midrise office buildings in Santa Ana, CBRE’s marketing materials say. The projects totaled about 5.5 million square feet and were valued at over $700 million, the brokerage said.
One Broadway and 625ive would tower above those in cost and prominence; Harrah has long said finishing construction of the 37-story tower would be his crowning achievement in the city.
Reached for comment last week, he said he’d prefer to stay on as a partner in both developments but wanted to see the interest the offering would generate.
An outright sale or partial sale would help his firm fund other projects he has planned in OC and other markets, including Hawaii, he said.
CBRE’s Todd Tydlaska, Anthony DeLorenzo and Jake Stickel have the listing for the properties. The group was part of the team that brokered the largest OC office sale of the past few years, Broadcom Ltd.’s $443 million sale and partial leaseback of its new Irvine campus at Great Park Neighborhoods.
