Irvine Co. has bought one of the largest commercial properties in the Irvine Spectrum that it didn’t already own, an office used by the in-flight entertainment division of Thales USA Inc. for its domestic headquarters.
Last week the Newport Beach-based landlord and developer closed on the purchase of 58 Discovery, a 127,030-square-foot building fronting the Laguna (133) Freeway.
Terms of the sale weren’t immediately disclosed. Sources familiar with the deal said the price was likely in the $35 million range, or $275 per square foot.
The property was sold by an affiliate of Hartford, Conn.-based Cornerstone Real Estate Advisers LLC, which paid a reported $29.3 million for the two-story building five years ago.
It sits about halfway between the San Diego (405) and Santa Ana (5) freeways on 8 acres next to the headquarters of medical monitor maker Masimo Inc. It has a mix of office and research and development space.
Thales’ avionics division makes a variety of communication systems for airliners, including seat-back screens and satellite-based connectivity products. It has a deep presence in Irvine, local operations employing nearly 1,500, according to Business Journal data.
Thales’ USA is the American division of France-based Thales Group, which designs and builds electrical systems and provides services to the aerospace, defense, transportation and security markets.
Thales Avionics has been at the property for more than a decade, and has a lease through 2025, according to brokerage materials from the Irvine office of Cushman & Wakefield Inc., whose brokers worked on the deal.
The buy “reflects a premier institutional-quality corporate headquarters facility in a strategic location leased to a global high-tech company in Thales,” said Cushman Vice Chairman Jeff Cole, who worked on the deal with colleagues Ed Hernandez, Nico Napolitano, John Harty and Jason Ward.
“We were fortunate to secure a buyer like The Irvine Company who brings their deep knowledge and experience to this Irvine Spectrum facility as they enhance their own portfolio in this world-class market,” Cole said.
Thales USA also occupies space in three other nearby buildings, 48, 51 and 53 Discovery, all owned by Irvine Co., which has an office portfolio in the Irvine Spectrum area that tops 12 million square feet.
The purchase “further deepens our commitment to Irvine Spectrum as a nationally-recognized center of innovation and highly desirable place to work, live, shop and play,” said Doug Holte, president of Irvine Co.’s office properties division, in a statement.
“It also enables us to better serve and deepen our relationship with an outstanding customer.”
The four buildings Thales leases from Irvine Co. total nearly 300,000 square feet, which makes it one of the largest Spectrum-area tenants of Orange County’s dominant landlord by square feet.
Online gaming company Blizzard Entertainment leases a similar number of square feet from Irvine Co. at a nearby office campus, and had been its largest area tenant.
The purchase of 58 Discovery is Irvine Co.’s biggest Spectrum-area acquisition since April 2017, when it paid a reported $58 million for Alton Plaza, a 19-building office campus next to the city’s train station and the recently built Five Point Gateway office park.
Alton Plaza has been getting a facelift since the deal, with a variety of upgrades to the property’s exteriors and entryways, hardscape, landscaping and outdoor workspaces.
In addition to acquisitions, Irvine Co. has added a few million square feet to its Spectrum-area portfolio through ground-up development over the past two years.
Construction on the next project on tap, Spectrum Terrace, a nine-building, 1-million-square-foot office complex, is scheduled to begin in earnest in the next few months.
The speculative development site is just south of the San Diego (405) Freeway next to Laguna Canyon Road.