Panattoni Development Co., one of the country’s largest industrial developers, plans to move its headquarters from Newport Beach to Irvine, after investing in two buildings last owned by Allergan PLC.
The privately-held firm partnered with Newport Beach-based Stillwater Investment Group to buy Dupont Business Center, an office park about a mile from John Wayne Airport near the intersection of Von Karman Avenue and Dupont Drive.
The property is across the street from Allergan’s main, gated campus. The drugmaker paid an estimated $9 million for it in 2015 but never fully occupied the buildings, which have been on and off the market for the past few years.
Allergan bought the property just before its $72.5 billion sale to Actavis PLC. It retained the Allergan name following the sale but is now headquartered in New Jersey. Well over 1,000 local jobs have been cut since the deal was announced.
The buildings at the center total about 49,000 square feet, and sold for about $12.1 million, or $247 per square foot, in a deal that closed last week.
The 1970s-era, single-story offices will get a major makeover by the new ownership group, according to Stillwater principal John Drachman. The real estate investment and development firm has bought and fixed up multiple offices in Orange County over the past three years.
“We will be doing a creative-office repositioning play on it to take advantage of the project’s natural elements [that] today’s tenants are looking for,” Drachman said.
The building “has got a lot of bones that will make for a great creative-office project,” he said. “We’re really going to clean it up.”
Panattoni will occupy about 13,000 square feet at the 18821 Bardeen building for its headquarters once renovations are done.
Existing tenants will remain in some of the space at the center, and about 25,000 square feet will be available for lease after renovations, Drachman said.
Expansion, Retraction
The acquisition marks another sign of local growth for the two buyers, and another example of retrenchment of Allergan’s local operations.
Panattoni has been one of OC’s largest industrial developers over the past decade, largely through its work in Anaheim, where it headed the Anaheim Concourse project on a former Boeing Corp. campus.
The developer built nearly 1.7 million square feet in the city over that time in a combination of for-sale and for-lease projects.
It has a dozen offices across the country and employs about 20 people in Orange County, according to Business Journal data. Local executives include Chief Executive Adon Panattoni and Partner Jacob LeBlanc.
Employees at its Birch Street office in Newport Beach lead about a dozen projects now underway in the region, including the Orange County Commerce Center, a four-building, 232,000-square-foot industrial project underway just off Miraloma Avenue in Placentia.
Stillwater, an investor in office, industrial, apartment and retail properties operating since 2014, also has a growing base of local assets.
In Aliso Viejo, it’s working to lease up the three-building former campus of QLogic Corp. that it bought in 2016 as part of a venture for $36 million. QLogic last year moved its local hub to Irvine, and now operates as Cavium.
Construction has been completed on The Element Aliso Viejo project, said Drachman, who notes a heavy amount of tenant interest in the 161,000-square-foot campus.
“We’re pleased with the activity.”
The Dupont Business Center transaction is Allergan’s second reported office sale this year.
In March, it sold a nearly 20,000-square-foot building next to Dupont Business Center at 18800 Von Karman Ave.
An entity tied to the founders of Irvine-based online real estate auction firm Ten-X LLC paid $8.1 million for the single-story building, property records show. It’s empty and in the early stages of renovation.
Allergan also has three offices on the opposite side of its campus on the market for sale. Like Dupont Business Center, they’re listed by the Newport Beach investment properties group of CBRE Group Inc.
