An Irvine-based commercial real estate firm with a growing investment and development pipeline in Southern California has made its largest-ever acquisition in Orange County, picking up an office park in Anaheim.
Privately held CapRock Partners LLC this month completed the purchase of La Palma Business Center, a three-building complex just north of the intersection of the Riverside (91) and Orange (55) freeways.
The property totals about 191,000 square feet on 8.6 acres. It sold for about $30 million, according to Jon Pharris, CapRock co-founder and president.
The deal works out to about $157 per square foot for the nearly full offices.
It’s CapRock’s largest OC purchase by dollar value, according to Pharris, whose company owns properties across Southern California and in Silicon Valley.
The company has its eye on a few other area buildings, despite a more competitive landscape for acquisition of OC properties recently, Pharris said.
“We have some other deals in the pipeline (in OC).”
CapRock formed its first investment fund about six years ago, and has bought some 1.6 million square feet of existing office and industrial properties in Southern California.
It has developed another 1 million square feet over that time, and currently has a development pipeline totaling about 4.7 million square feet.
CapRock bought the Anaheim property—in the Anaheim Canyon submarket—from Irvine-based LBA Realty, which acquired the campus in 2012 as part of a larger portfolio deal of OC industrial properties.
The deal was brokered by Zach Niles and Louis Tomaselli with the Irvine office of JLL.
“It was a unique opportunity—there’s a limited amount of this type of product (on the market) in the area,” Niles said.
La Palma Business Center includes a trio of two-story offices at the intersection of Ritchfield Road and La Palma Avenue.
The buildings were about 98% leased at the time of the purchase. Endress and Hauser Conducta Inc., a Switzerland-based manufacturer of electrochemical sensor technology, is the largest tenant at about 57,000 square feet.
Other large tenants include ADT Security Services Inc. and Kaiser Foundation Health Plan.
The buildings bring in close to $2.5 million in annual rents, according to JLL’s marketing materials for the property. Rents on some of the property’s soon-to-expire leases run under the area average, according to Niles.
The acquisition was a bit of a departure in strategy for CapRock, which in recent years has tended to acquire buildings with more empty space that held the potential for upside, Pharris said.
The La Palma deal “helps protect our downside and gives us some cash flow in place,” he said.
The Anaheim property is in line for improvements over the next few years, which will help the company push rents up a bit, according to Pharris.
Radius Unveiling
The Anaheim purchase comes as CapRock nears the redevelopment of another notable property it owns in Tustin.
The 110,000-square-foot industrial property at 14191 Myford Road, near the intersection of Jamboree Road and the Santa Ana (55) Freeway, is being converted into a two-story creative-office project called Radius.
CapRock bought the property in 2014 for a reported $14.8 million. It’s putting another $2.5 million into its redevelopment, according to CapRock Vice President Jake Loughridge, who is heading up the project.
Work on the project is wrapping up over the next few weeks.
The creative-office portion of the building runs about 70,000 square feet and includes features like indoor-outdoor work space, an interior second-floor flight deck that overlooks the first floor, and a number of outdoor entertainment amenities.
CapRock is looking for a single user to lease or buy the creative-office building, Loughridge said.
A 40,000-square-foot portion of the building that’s not getting interior renovations is leased to Peregrine Pharmaceuticals Inc.
