Irvine-based commercial real estate developer Greenlaw Partners, backed by two local high-net-worth investors, capped off an active year of acquisitions with office buys in Santa Ana and Irvine for nearly $120 million.
The privately held company, one of Orange County’s most active investors over the past few years, in late December completed the buy of Tustin Centre, a two-building office complex overlooking the Costa Mesa (55) Freeway near East 17th Street.
The property traded hands for a little more than $80 million, according to CoStar Group Inc. records.
Greenlaw and its investment partners paid an additional $39.5 million for 18401 Von Karman, a five-story office that’s part of the Von Karman Towers office complex a few blocks from John Wayne Airport.
The deals brought its 2016 investments to about $390 million, a number of them in Orange County, according to Greenlaw principal Wil Smith.
The firm also sold close to $240 million worth of property over that time and plans to sell a few more sizeable area properties this year, according to Smith.
Greenlaw often partners with large institutional investors to buy existing commercial property and development sites, but the firm pursued a different approach with the two latest deals, real estate sources not directly involved in the transactions told the Business Journal.
Rodney Sacks and Hilton Schlosberg, the top two executives at Corona-based energy drink company Monster Beverage Corp., were investors in the Santa Ana and Irvine buys, according to the sources.
The business partners, each of whom has a personal fortune estimated by the Business Journal at $2.5 billion, have been among the most active buyers of OC offices in the past two years, with some $155 million of reported acquisitions prior to the deals with Greenlaw.
Their largest reported deal took place last year when they paid $95 million for Savi Tech Center, a four-building business park just off the Riverside (91) Freeway in Yorba Linda.
They also are the primary owners of TriCentre, a 10-story office at the intersection of the Santa Ana (I-5) and Orange (57) freeways in Orange. The building was bought a little more than a year ago for a reported $41.5 million.
Greenlaw officials declined to disclose the partners for the Santa Ana and Irvine purchases, as did the brokers who worked on the transactions.
Familiar Grounds
The latest purchases are located on familiar ground for Greenlaw.
It was an owner of the taller Tustin Centre building about 11 years ago through a venture with Boston-based Guggenheim Real Estate LLC. The 10-story office tower was built in the early 1990s, while the four-story building there opened in 2009.
The property has since changed hands a few times over the past dozen years, and at one point the taller office held the headquarters of Grubb & Ellis when the brokerage was based in Santa Ana from 2007 to 2012.
An investment affiliate of a different commercial brokerage, Los Angeles-based CBRE Group Inc., sold Tustin Centre this time. The firm’s CBRE Global Investors affiliate paid a reported $65 million for the property three years ago when it was less than 70% full.
The complex now is about 96% occupied, according to marketing materials for the property, which was sold by CBRE’s Anthony DeLorenzo, Todd Tydlaska, and Sean Sullivan.
The latest sale came to about $286 per square foot combined. The 10-story building, at 1551 N. Tustin Ave., is close to 197,000 square feet, and the four-story building at 1525 N. Tustin Ave. is about 83,000 square feet.
Greenlaw paid a reported $45 million, or about $227 per square foot, for the taller building when it bought it in 2004.
3 Offices
Its buy of 18401 Von Karman marks another return home of sorts for the company. The deal gives it ownership of three of the four buildings at the Von Karman Towers complex at the intersection of Michelson Drive and Von Karman Avenue where it keeps its headquarters.
Greenlaw owns the 18301 Von Karman Ave. office at the complex, which runs 230,615 square feet, through a venture with Bloomfield, Conn.-based healthcare insurance company Cigna Corp. The 11-story building, which holds the headquarters of Golden State Foods Corp., among other tenants, was listed for sale last year but didn’t trade hands.
Greenlaw also owns an 11-story building at 18201 Von Karman that it bought in late 2015 through a venture with New York Life Insurance Co.
The recent Von Karman buy was a smart move for the company, said Paul Jones, senior managing director with the capital markets team of brokerage Newmark Grubb Knight Frank.
“The 18401 Von Karman building offered the buyer the opportunity to expand its holdings from two to three properties within the Von Karman Towers office park.”
“This asset allows the new ownership to strategically target tenants looking for space in a mid-rise building versus their two existing high-rise towers directly across the central courtyard,” said Jones, who worked on the deal with colleagues Kevin Shannon, Blake Bokosky, and Rick Stumm.
The office was last owned by an affiliate of American Realty Advisors, which bought it in 2004, according to CoStar Group records.
The five-story building’s tenants include RSM McGladrey, IBI Group, Fragomen Worldwide and Harbottle Law Group. It was about 77% leased at the time of the sale to Greenlaw, according to CoStar.
