The intersection of Main Street and Von Karman Avenue in Irvine, already one of the busiest in the city, is now one of the busiest for real estate transactions.
Germany-based GLL Real Estate Partners, a real estate investment firm with a West Coast hub in San Francisco, recently closed on the purchase of 2300 Main St., a five-story office of about 132,000 square feet.
The building was sold last month for $46.6 million, or about $350 per square foot. It was sold by Houston-based investment manager Hines Global REIT.
Hines put the office up for sale earlier this year as part of a portfolio of seven buildings across the country. The buildings were later listed for sale individually and marketed by Eastdil Secured LLC.
K.C. Scheipe and Adam Edwards, brokers with Eastdil’s Newport Beach office, handled the 2300 Main transaction.
The building is about a mile from John Wayne Airport. It’s fully leased to OptumRX Inc., the mail-order prescription and drug benefit management arm of UnitedHealth Group Inc.
OptumRX recently renewed its lease for the entire building.
The office sits next to the Hyatt House Irvine/John Wayne Airport, a 149-unit hotel property that opened this year.
I profiled the hotel in the Business Journal’s Oct. 29 issue, when the seven-story property was sold to McWhinney Real Estate Services Inc., the Loveland, Colo.-based developer of Great Wolf Lodge in Garden Grove.
The roughly 84,000-square-foot hotel sold for $42.1 million, about $282,500 per room and $500 per square foot.
Hines Global REIT’s assets are owned separately from other area investments of commercial real estate giant Hines Interest LP, whose largest Irvine project—the five-building Intersect office campus—sits on the opposite corner of the 2300 Main St. office.
Hines Interests is also part of a venture with Los Angeles-based private equity firm Oaktree Capital Management LP, which owns an undeveloped land site next to the 2300 Main building.
The two firms a few years ago proposed building a nine-story office at that site, dubbed 17850 Von Karman. It would total 242,000 square feet; the owners aren’t planning to break ground without tenants signed up first, however. No tenant news has been announced.
Centerview Recapitalization
A few blocks from the 2300 Main building, Eastdil’s local brokerage team is shopping around a portion of another office project: the roughly 625,000-square-foot Centerview complex.
New York-based Emmes Group of Cos. bought the two-tower complex at 1920 and 2010 Main St. in mid-2017 for a reported $200 million. Factoring in extra restaurant and retail space at the property, the deal went for about $325 per square foot.
Emmes is looking to bring in additional investors into the project, along with some other office properties it owns outside Orange County, according to a report in real estate trade publication Real Estate Alert.
Emmes now values Centerview—which it’s been upgrading since the sale—at around $265 million, or more than $460 per square foot.
At the time of the 2017 sale, other area investors that looked to buy the offices—then called Main Plaza—told the Business Journal that they underwrote the deal under the expectation that they’d have to put in about $25 million to renovate the office and increase leasing at the site, whose occupancy rates were in the 75% range.
The mahogany-colored offices are part of the 48-acre Irvine Concourse development, a 10-building campus that also has two hotels and an Equinox Sports Club.
A large tenant at the Centerview complex is healthcare real estate investor HCP Inc. (NYSE: HCP), one of Orange County’s most valuable public companies, with a market capitalization of about $14 billion as of press time.
