Beijing-based Anbang Insurance Group Co.’s recent purchase of two of Orange County’s premier resort properties—Montage Laguna Beach and The Ritz-Carlton, Laguna Niguel—has pushed foreign capital’s investment in the local commercial real estate market past the $2 billion mark over the past two years, according to a new research report by brokerage JLL.
Over the last 24 months, $2.1 billion in foreign capital was placed in Orange County commercial real estate assets, led by China, with $890.4 million; Canada, at $539.5 million; and Singapore, with $505.2 million, according to the report.
More than half of that—$1.2 billion—went for industrial assets, with Canada, at $491.8 million, and Singapore, at $505.2 million, the two biggest foreign investors in that product type.
China’s biggest local commercial real estate investment type has been hotels. Last month’s trades of the local Ritz-Carlton for an estimated $396.3 million and Montage for $252.1 million were the biggest deals in that sector.
Anbang, a Chinese insurance company formed in 2004, struck a deal to buy the properties about five months ago as part of a larger national hotel portfolio in a deal reportedly valued at $6.5 billion. It completed the deal to buy the OC luxe hotels around the end of last month, according to brokerage data.
Other large hotel investments include last year’s $136.1 million buy of Hyatt Regency Garden Grove by SCG America, an affiliate of China-based Shanghai Construction Group.
Office buys made up about 10% of the foreign-backed property purchases here over the report period, and retail deals made up less than 3%, according to JLL’s data.
2nd Flip
New York-based private-equity giant Blackstone Group has sold a second local property it bought last year as part of a portfolio purchase of offices formerly run by Los Angeles-based Arden Realty Inc.
Blackstone—which runs its local office properties under Equity Office Management LLC—this month completed the sale of Newport Irvine Center, a three-story, 76,837-square-foot office in Newport Beach.
The 3300 Irvine Ave. property, about 2 miles from John Wayne Airport, was bought by Newport Beach-based Cress Capital and New York-based C-III.
Financial terms of the deal weren’t immediately disclosed. The sale was brokered by Paul Jones, Kevin Shannon, Blake Bokosky and Robert Griffith of NGKF Capital Markets.
Tenants at Newport Irvine Center include InstaMed Communications, Newport Back & Sport Institute, Klarin & Associates CPA and Cambridge Financial Partners. The property was reported to be 87% leased at the time of the sale.
Cress Capital was formed in 2012; other recent deals it’s been involved in include buys in Colorado and the Inland Empire.
The Newport Irvine Center sales comes a couple of weeks after Blackstone sold another former Arden asset, 17911 Von Karman Ave., a five-story office in the Irvine Concourse office complex. The property was sold to an affiliate of Toronto-based Manulife Financial Corp. for nearly $34 million.
Senior Sale
Four local senior housing properties are among 19 recently bought by Toledo, Ohio-based real estate investment trust Welltower Inc. as part of a $1.15 billion portfolio purchase.
Welltower acquired 2,590 senior housing units on the West Coast from affiliates of Newport Beach-based Vintage Senior Living and its private investor partners for about $445,000 per unit.
The portfolio includes a combination of assisted living, independent living and memory care units. Eighteen communities are in California, and the other one is in Tacoma, Wash., according to CBRE Capital Markets’ National Senior Housing team, which brokered the deal.
Local properties trading hands include: Vintage Mission Viejo, a nearly 150,000-square-foot facility near Mission Hospital; Hacienda de Las Palmas, a 206,000-square-foot facility in Laguna Woods; Bradford Square, a 95,000-square-foot facility in Placentia; and the Regency, a 200,000-square-foot facility in Laguna Hills.
The properties will be managed by existing operating partners of Welltower, according to CBRE, whose Matthew Whitlock, Lisa Widmier and Aron Will represented the sellers.
Welltower invests primarily in assisted living facilities and other forms of housing and medical facilities. Its market value is $25 billion.
