A trio of office properties near the Outlets at Orange shopping center—along with adjacent land that’s expected to hold a host of apartments—has new ownership after a deal valued in excess of $100 million.
A real estate investment affiliate of Bloomfield, Conn.-based healthcare insurance company Cigna Corp. recently bought a majority stake in the City Parkway Collection office portfolio at 500 and 600 City Parkway W., as well as the 3800 W. Chapman building.
The three Orange offices total about 439,000 square feet.
A proposal to build 490 apartments on extra land next to the buildings is on file, according to city documents.
Cigna bought out ownership stakes in the three buildings from Chicago-based Walton Street Capital LLC.
The deal values the properties alone at about $108.5 million, or nearly $250 per square foot, according to sources familiar with the transaction, which closed in late July.
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—is retaining an undisclosed stake in them.
The 10-story 600 City Parkway office and the four-story 500 City Parkway office sit on 7.9 acres between the Outlets at Orange and the Christ Cathedral campus. The two buildings total 269,395 square feet, and are largely full.
The 169,300-square foot office at 3800 Chapman runs eight stories and is fully leased. It’s north of the Outlets at Orange, the nearly 900,000-square-foot mall that’s Orange County’s eighth largest shopping center by sales.
The excess land at the three offices is part of a development proposal dubbed the “Orange Collection” that also would include apartments and a hotel on land next to the 19-story City Plaza tower, which fronts the Garden Grove (22) Freeway.
Greenlaw Partners is currently part of the ownership group of City Plaza, although the property is up for sale, according to real estate sources.
A timeframe for a potential sale hasn’t been disclosed.
Similar Pattern
Cigna’s investment in the Orange properties mirrors a transaction it completed in 2014, when it bought 18301 Von Karman Ave. in Irvine, an office building near John Wayne Airport.
The 11-story office, part of the four-building Von Karman Towers complex, holds the headquarters of food supplier Golden State Foods Corp., among other tenants.
The sale was reported to be for $69 million, and involved Cigna buying out the stakes of Walton Street and New York-based Westbrook Partners LLC.
As in the Orange deal, Greenlaw Partners—a prior investor in the property—remained a part owner of 18301 Von Karman following the transaction with Cigna, and continues to manage the building.
That was the first reported local partnership between Cigna and Greenlaw, one of the area’s most active commercial real estate investors and developers.
The Business Journal recently reported that the Cigna-Greenlaw Partnership had put the Von Karman building back on the market in one of the largest transactions anticipated this year in the John Wayne Airport-area market.
The 230,615-square-foot, 11-story building last sold for roughly $300 per square foot.
The property could bring closer to $90 million, or $385 per square foot, this time, according to real estate watchers.
The Business Journal reported last month that a venture between Greenlaw, Walton Street and Westbrook Partners had listed for sale another notable property: The Triangle restaurant and entertainment center in Costa Mesa.
A price approaching $100 million is expected for the center, which underwent major redevelopment into a destination center over the past few years and now is largely full.
