Great Far East Inc.—a local commercial real estate investor with funding from China—has bought a portion of the Colton Plaza office campus that is next to John Wayne Airport.
Irvine-based Great Far East recently completed the purchase of office buildings at 18952 and 18872 MacArthur Blvd., a vacant restaurant, and a few acres of excess land surrounding the properties.
The two office buildings total about 100,000 square feet and hold the headquarters of automobile marketing company Autobytel Inc., among other tenants.
The offices, which are four stories each, were about 85% leased at the time of the sale, which was completed last month, according to property records.
CoStar Group Inc. records put the sale price at about $35.2 million, or roughly $320 per square foot for the three buildings at the site.
Great Far East got a $20.5 million loan from Cathay Bank to help fund the deal, according to property records.
Other Properties
It is the largest local reported purchase for Great Far East since 2011, when it paid $56.5 million for a nine-story building in the Irvine Spectrum that holds the headquarters of restaurant chain Yard House USA Inc.
Great Far East also has a four-story office about a block from the Colton Plaza buildings, along Von Karman Avenue, among its Irvine investments.
Most of the company’s disclosed purchases beyond Irvine have been in China, where it has acquired a variety of residential and commercial properties, according to the company’s website.
Affiliates of Irvine-based Colton Co., developer of the namesake office campus, sold the MacArthur Boulevard buildings to Great Far East.
Colton remains the owner of several other low-rise buildings at Colton Plaza, a mixed-use office development that is about 500,000 square feet and located between MacArthur Boulevard and Von Karman Avenue, immediately north of Campus Drive.
The campus has had a good amount of residential development in recent years on former commercial sites. Recent additions include the Carlyle at Colton Plaza, a new 156-unit rental project built by Beverly Hills-based New Pacific Realty Corp. that is across the street from the buildings that Great Far East just bought.
Apartments
Colton Co. has been working with the city of Irvine to get approvals to build another 876 apartment units on 12.6 acres it still owns at the campus. Those sites now hold offices, which would be razed to make way for any new residential development.
Irvine’s city council in January agreed to the real estate investor’s request to negotiate an agreement for the proposed development, and negotiations are ongoing.
The MacArthur Boulevard buildings that Great Far East bought are not part of those negotiations.
It is not known whether Great Far East is interested in redeveloping part of its property into multifamily or other uses. The excess land that the company purchased appears large enough to hold additional buildings.
Last year, Great Far East got city approvals to build a 288-unit apartment project on excess land it owns next to its office at 18831 Von Karman Ave., which it bought in 2010 for nearly $12 million.
There has been no time frame given for construction of that rental project—dubbed Milani—to move ahead.
Legal Decision
The sale of the MacArthur Boulevard buildings by Colton comes about a month after a legal decision was handed down to the company and its founder, David Colton.
Investors in several Colton Co.-run funds that own office properties in Orange County had alleged “numerous acts of mismanagement” and fraud against the real estate company and its executives, according to Daniel Callahan, a lawyer with Santa Ana-based Callahan & Blaine who has represented the investors in recent litigation.
In April, as a result of those legal proceedings, David Colton and his related entities were removed as the investment fund manager for funds tied to a bulk of the company’s local properties.
The ruling affects six commercial real estate funds that purchased 74 office buildings totaling nearly 4 million square feet of space, mostly in Orange County, according to Callahan & Blaine.
It is not known whether the sale of the MacArthur Boulevard properties was directly related to that judgment or if any other sales of Colton Co.-owned property are expected as a result of the ruling.
Colton Co. officials could not be reached for comment.
CoStar records show Colton-related affiliates selling only one other local property this year, a 37,400-square-foot office in Mission Viejo that sold for about $9.1 million.
