Chapman University is looking to relocate and expand the presence of its Brandman University affiliate in the Irvine Spectrum through two real estate transactions likely to top $60 million combined.
The Orange-based school is under contract to buy 7755 Irvine Center Drive, a five-story office next to the Santa Ana (I-5) Freeway, according to real estate sources.
The 126,326-square-foot building is one of the few large office buildings in the immediate vicinity of the Spectrum shopping center not owned by Newport Beach-based Irvine Company. It’s long been home to Mazda North America Operations, though the automaker is in the process of moving its sizeable local presence a few blocks down the street to the new, 21-story 200 Spectrum Center office tower, an Irvine Co. development and Orange County’s tallest building.
The owner of 7755 Irvine Center Drive, Palo Alto-based Menlo Equities, listed the property for sale this year with expectations of an owner-user or value-add investor buying it.
Chapman plans to buy the five-story office for sister institution Brandman University, real estate sources told the Business Journal.
A sale price hasn’t been disclosed. A deal of at least $40 million appears likely, based on recent comparable property sales in the area.
Brokers with the local offices of Eastdil Secured and Cushman & Wakefield have the listing for the building, which is on 8.2 acres next to a 15-story, full-service Marriott hotel in the early stages of construction.
Brandman, a nonprofit school that serves adult learners, currently operates from 16355 Laguna Canyon Road, a three-story office in the Spectrum that’s a little over a mile from 7755 Irvine Center Drive, where it also holds classes. Chapman paid a reported $22 million, or about $191 per square foot, for the 115,000-square-foot building in 2009 during a period of depressed local office prices.
Blizzard Swap
Chapman, in order to finance the 7755 Irvine Center Drive purchase, is looking to sell the Laguna Canyon property for well above what it paid, sources told the Business Journal.
The likely buyer, the sources say, is online gaming company Blizzard Entertainment Inc., whose sprawling Irvine operations are next to Brandman’s current location.
Blizzard is the largest software company based in Orange County, with an estimated 2,000 local employees. Its “World of Warcraft” series has made it the world’s largest online game maker.
The company currently leases approximately 450,000 square feet in the immediate area, according to brokerage data.
Irvine Co. owns the game maker’s main three-building, 235,000-square-foot Alton Corporate Center campus, and Blizzard also leases space in several buildings across the street at the Irvine Oaks office campus owned by Olen Properties Corp. in Newport Beach.
Brandman’s current building would be the Activision unit’s first known real estate buy in Orange County. Blizzard renewed its leases for the Irvine Co. and Olen buildings last year in what was reported to be a 10-year deal. The company has been adding space at Irvine Oaks as other tenant leases there expire, according to Igor Olenicoff, Olen’s president.
“Their stated intent is to have the whole park as other leases there terminate,” he said.
Irvine Oaks’ 16-building campus totals about 322,000 square feet. Olen has begun building a parking structure there to accommodate Blizzard’s growth at the location.
Busy School
The pending deal for 7755 Irvine Center Drive would be the latest in a recent string of notable real estate purchases by Chapman University and its affiliates in the Spectrum.
The university in 2012 paid about $20 million for a pair of nearby office buildings on Jeronimo Road that hold its Harry and Diane Rinker Health Science Campus, which opened in 2014. The buildings together encompass about 166,000 square feet.
The campus is home to Chapman’s pharmacy, physical therapy and physician assistant graduate programs.
Chapman this summer bought an undeveloped 4.7-acre parcel down the street from the health science campus for about $10.5 million. Specific plans for the site haven’t been disclosed. It likely will be used as excess Chapman parking in the near term, according to sources familiar with the transaction.
