Plano, Texas-based real estate investor Granite Properties has completed the largest single-property office deal of the year in the John Wayne Airport area, snapping up Newport Beach’s 100 Bayview complex.
The six-story property—near the intersection of Jamboree Road and South Bristol Street, about two miles from the airport—sold on Sept. 12 for a little more than $125.6 million, according to property records.
That works out to nearly $363 per square foot for the property, which CoStar Group Inc. records show is about 60% leased.
Granite bought the building from an affiliate of AEW Capital Management LP, a Los Angeles-based investment group, in a deal brokered by Eastdil Secured LLC.
AEW paid about $117 million for the 100 Bayview Circle property in 2005, according to CoStar records.
The deal is the first in Orange County for Granite since 2012, when it paid an estimated $80 million for Orange City Square, a four-building office complex off the Garden Grove (22) Freeway.
Granite currently owns and manages about 1.7 million square feet of office space in Southern California; it also has holdings in Burbank and Glendale.
Nearly $400M of Sales
The 100 Bayview sale marks the third office deal in the airport area to top the $100 million mark in the past month.
Irvine-based Kelemen & Co. paid $106 million for Irvine’s Atrium office complex along Von Karman Avenue earlier this month.
The building, which counts office space as well as the Bistango restaurant, went for about $352 per square foot. It was sold by Charlotte, N.C.-based Barings Real Estate.
In late August, a partnership between the local office of Dallas-based Lincoln Property Co. and New York-based private-equity firm Angelo Gordon paid $160 million for a collection of eight mid-rise buildings in Newport Beach and Irvine.
The portfolio was sold by Chicago-based Equity Office Management LLC and traded for about $307 per square foot.
Hospitality Upgrades
As in the case with the just-sold Atrium property, the new owners of 100 Bayview are planning a fair amount of upgrades to their new investment, which includes a pair of buildings that are connected by a shared, glass-covered lobby.
“The building has undergone a number of recent renovations, and Granite will continue to build on the improvements with activating the lobby and outdoor common spaces, including balconies and private patios to further enhance the experience of current and future customers,” the company said in a statement.
New services will largely be hospitality-driven, the company said.
“We look forward to offering our current and future customers a vibrant community that enhances productivity and supports them in meeting their business objectives,” said Granite Senior Managing Director Jason Purvis, who works out of the company’s Orange office.
Notable tenants currently at the property include wind farm engineering and maintenance firm Diamond WTG Engineering & Services Inc., brokerage Lee & Associates Commercial Real Estate Services, and property management firm RiverRock Real Estate Group.
Fluctuating Prices
The 100 Bayview building is in the same development as the 250-room Newport Beach Marriott Bayview, as well as a nearly identical office property at 3501 Jamboree Road.
The 3501 Jamboree property, also known as Bayview Corporate Center, last sold for $53 million in 2009—a little more than 40% of what Granite paid for 100 Bayview— near the nadir of the last downturn.
It was previously the headquarters of failed savings and loan operator Downey Financial Corp.; the offices were bought by Utah-based S.K. Hart Properties LLC after the Federal Deposit Insurance Corp. seized Downey’s assets.
One new development has been proposed on a site next to the 100 Bayview property, on land that currently holds the popular Kitayama restaurant.
An 85,000-square-foot convalescent and congregate care facility with 120 beds is in the early stages of entitlement work for the 101 Bayview property. A planning commission hearing on the project—which has gotten a fair amount of opposition from locals—was scheduled for this month.
