A unit of Newport Beach-based KBS Realty Advisors has sold a 101,161-square-foot Irvine office near John Wayne Airport, marking a portfolio departure from the Orange County market for the firm, one of the country’s largest office investors in the past decade.
The Irvine Tech Center was the only local asset in the real estate investment firm’s local portfolio; the closest property is now the Union Bank Plaza tower in downtown Los Angeles. The L.A. property has been on and off the market the past few years; the KBS-overseen real estate investment trust that owns the tower is looking to liquidate its remaining assets.
In 2018, a KBS affiliate bought the 21-story City Tower in Orange for $147 million, among the largest deals of the year. Last year control of the KBS Strategic Opportunity REIT that bought the building was transferred to an L.A.-based real estate management firm whose executive have ties to KBS, Pacific Oak.
LA Buyer
The just-sold Irvine office at 16842 Von Karman Ave., down the street from The District at Tustin Legacy, traded hands for $25.4 million to private Los Angeles law firm, Dayani Partners. The deal works out to about $251 per square foot.
The low-rise property was owned by KBS Growth & Income REIT Inc., one of the firm’s nontraded investment trusts. It was about 90% occupied at the time of sale, including LNH Inc. and Ntirety.
“When KBS purchased this best-in-class office asset, we recognized this area of Irvine for its potential as an up-and-coming area for Orange County’s tech tenants. The area had a significant multifamily development pipeline and other walkable amenities that attract quality tenancy,” KBS Regional President Rod Richerson said.
“I’m thrilled to grow my real estate footprint into Orange County which is home to one of the nation’s most dynamic cluster of tech tenants,” Hooman Dayani said. “Strong rental demand makes the area highly desirable and I plan to add to the already extensive amenity package at the building.”
KBS bought the two-story building in 2015 for $21.3 million, and recently wrapped a multimillion-dollar renovation.
The Growth & Income REIT now has four assets, including one through a joint venture, totaling $184.8 million.
Other Sales
The Orange County sale comes as KBS sheds the remaining office portfolio of KBS REIT II, which has six office tower and other large properties totaling 3.9 million square feet.
It recently closed on a six-building New Jersey office complex totaling 1.2 million square feet for $311 million, and is now seeking shareholder approval for the sale of the remaining five properties, according to a prior statement by Chief Executive Charles Schreiber.
One of those assets expected to hit the market is the 40-story Union Bank Plaza tower, which recently began a nearly $20 million renovation.
Union Bank is the main tenant in the tower, but is downsizing at the property, giving up 143,000 square feet by 2022. It will still lease about 165,000 square feet there.
KBS was under contract to sell the L.A. tower nearly two years ago, but the deal fell through.
