The most prominent office complex in Huntington Beach has become the latest large property snapped up by a national real estate investor eager to invest in Orange County’s rebounding office market.
The three-building office portion of One Pacific Plaza—which runs along the San Diego (405) Freeway next to the Bella Terra shopping center—last week sold for a little less than $95 million, according to real estate sources.
The 383,000-square-foot office campus houses the headquarters of casual dining chain BJ’s Restaurants Inc. and local offices for Woodland Hills-based Health Net Inc., among other tenants.
An affiliate of Parsippany, N.J.-based Prudential Real Estate Investors, or PREI, bought the complex. The property was sold by a partnership of Dallas-based Lincoln Property Co. and GEM Realty Capital Inc., a real estate investor based in Chicago.
Records show an affiliate of PREI, listed as PR One Pacific Plaza LLC, being registered last month with the state.
The sale price of nearly $95 million, or a little under $250 per square foot, is the second largest office transaction in OC so far this year.
String of Deals
Prudential’s purchase continues a string of big-dollar local office deals involving pension funds, private equity firms, and other institutional investors.
Nearly $1.3 billion in larger office sales were completed here over the past year—the busiest year in OC for office deals since 2007—and another $400 million of sales took place in the first quarter, according to data from the Newport Beach office of CBRE Group Inc.
A majority of those deals involved national investors looking to capitalize on an OC office market widely predicted to begin seeing rental appreciation over the next year or two.
The sale looks to be a winner for Lincoln Property and GEM Realty, which paid about $76 million for the office complex—then known as Bella Terra Towers—in October 2011.
That sale also included a pair of adjoining retail buildings totaling 46,000 square feet, which isn’t the case this time around.
The office complex was about 60% occupied at the time of the 2011 sale, when the property was operating out of receivership after prior ownership reportedly fell behind on a $105 million loan tied to the property.
The offices of One Pacific Plaza are now closer to 80% leased, according to CoStar Group Inc. data.
Monthly rents at One Pacific Plaza run from $2.35 per square foot to $2.85 per square foot, according to marketing materials for the complex, where leasing is handled by Cushman & Wakefield Inc.
One Pacific Plaza consists of a 12-story tower and two six-story buildings, along with two retail buildings. It’s part of the larger 70-acre Bella Terra mixed-use area near the intersection of the 405 and Beach Boulevard, which has seen a good deal of development, including apartment construction, of late.
Property records show a 36,000-square-foot retail building at the complex that holds a 24 Hour Fitness was sold by the property’s current owners in 2012 for $13.8 million, while a nearly 10,000-square-foot building that’s used by restaurant chain Buca di Beppo sold last year for about $4.8 million to separate investors.
Second Sale
The deal is the second large office sale in OC involving Lincoln Property this year.
Last month, Lincoln and partner Angelo, Gordon & Co. sold Griffin Towers, a two-tower office complex in Santa Ana, to an affiliate of private equity firm Blackstone for $129 million.
That deal is the priciest office sale in Orange County so far this year. Lincoln and Angelo, Gordon & Co. paid a little under $90 million for the South Coast Metro property in 2010.
Prudential and its PREI investment arm aren’t known to have made any other large OC acquisitions of late. The company’s most prominent local office property is the 2020 Main office in the Irvine Concourse complex near John Wayne Airport.
