Irvine-based IRA Capital has added to its local portfolio through a $38.4 million medical office buy in Santa Ana.
The privately held real estate firm, which invests in office, medical office, retail, industrial, and student housing properties, recently bought a 56,000-square-foot property at 2212 E. 4th St. The three-story property is about a block west of the Costa Mesa (55) Freeway, and a mile south of the Santa Ana (5) Freeway.
It’s the priciest single-building property sale in OC over the past two months, according to CoStar Group Inc. records.
The building traded for nearly $690 per square foot. On a per square foot basis, that’s the most paid for an OC building larger that 50,000 square feet this year—by nearly $200 per square foot—according to CoStar.
It was sold by St. Joseph Health System, a unit of Orange’s St. Joseph Hospital, OC’s sixth-largest hospital by revenue.
St. Joseph Hospital is an affiliate of Providence, the Southland’s largest healthcare system. Eric Wexler, who runs the Southern California Region for Providence, is a new addition to the Business Journal’s OC 50, featured in this week’s edition, see page 58 for more.
St. Joseph occupies about 98% of the Santa Ana building.
CBRE Group Inc.’s Gary Stache, Anthony DeLorenzo, Doug Mack, Bryan Johnson and Chris Martin represented the seller; IRA Capital was self-represented.
Long-Term Lease
“St. Joseph Hospital has occupied the property since 2008 and is currently on a 10-year, triple-net lease that eliminates significant rollover risks for the new owner,” Stache said.
“This long-term tenancy provides exceptional ease of ownership, durable positive cash flow and inflation-protected income,” he said.
“St. Joseph’s dominance in the local market, along with the specialized build-out and its long history at the property were some of the key factors in our investment decision,” IRA Capital Partner Jay Gangwal said.
The building was built in 1987 and recently underwent an $8.5 million renovation, and has “excess land that can accommodate an additional medical office building,” according to CBRE.
The buyer financed the deal in part by a $29.4 million mortgage loan provided by Siemens Financial Services.
Spectrum Buy
The deal is the second notable office transaction in a year for IRA Capital, whose headquarters are near John Wayne Airport.
Last May, the company bought a 101,000-square-foot office on 15750 Alton Parkway, in the Irvine Spectrum area.
Wells Fargo & Co. sold the three-story Irvine building for $32 million, or about $317 per square foot. The building was reported to be largely empty at the time of sale.
IRA buys property on its own account and for its co-investment partners, which include family offices, opportunity funds, and institutions.
The buyer’s website indicates it owns north of 6 million square feet of commercial space across 25 states valued in excess of $2 billion.
