San Diego-based real estate investor Westcore Properties has bought one of the last remaining Orange County assets of Kilroy Realty Corp.
Westcore said this month that it paid $25.3 million for 999 W. Town and Country Road, a 98,000-square-foot office in Orange.
The sale works out to $258 per square foot for the office, which is fully leased to engineering company Aecom Technology Corp.
Aecom’s lease at the four-story building runs through 2018, and the tenant has two five-year extension options, according to brokerage data.
The office “provides a great investment opportunity as a [class A] office building purchased below replacement cost in the Orange County market. It also offers intriguing future mixed-use development opportunities,” said Don Ankeny, Westcore’s president and chief executive.
The building comes with 6 acres that are entitled for future medical office development, according to brokerage data. The property is close to regional medical centers, including St. Joseph Hospital-Orange and Children’s Hospital of Orange County.
JLL brokers Baker Morphy and Bob Prendergast represented Kilroy in the sale.
Kilroy bought the building in 2010 for $22.3 million, but it was earmarked for a sale a few years later as the Los Angeles-based landlord—one of the West Coast’s largest office owners—opted to scale back its OC holdings.
At the time of the 2010 purchase, Kilroy owned about 650,000 square feet of office space in OC, plus another 3.5 million square feet of industrial space in the area.
It has sold most of the space in the past two years.
Company officials previously cited Newport Beach-based Irvine Company’s dominance in the local market, particularly for higher-end buildings, as a factor in Kilroy’s decision not to build a larger presence here.
Kilroy will head into 2015 with only one OC office to its name: the 2211 Michelson office tower near John Wayne Airport in Irvine, which it paid $103 million for in 2010.
There’s been no word on whether the company is looking to sell the trophy property.
Westcore said it now owns 11.7 million square feet of commercial space in California but has only a few OC holdings, according to its website.
It sold its last big local office property in September, a two-building complex overlooking the San Diego (I-5) Freeway known as the Westcore Executive Center, to Irvine-based Greenlaw Partners for $23.8 million.
Johnson Capital Details
A few more details have emerged about the recent sale of Irvine-based Johnson Capital, one of the area’s largest commercial property mortgage lenders, to Walker & Dunlop Inc.
Johnson Capital announced in October that it was selling its core business, its loan origination and servicing platform, to Walker & Dunlop, a Bethesda, Md.-based commercial real estate financial services company with a market value of about $550 million.
Terms of the cash-and-stock transaction weren’t disclosed at the time, but Walker & Dunlap’s earnings report released last month put a value on the deal.
It said it paid $18 million in cash and $6.6 million in stock to buy Johnson Capital. The deal closed last month.
A total of 34 Johnson Capital loan originators, including founder Guy Johnson, are joining Walker & Dunlop in a move that Chairman and Chief Executive Willy Walker said will “more than double the size of our capital markets group.”
Guy Johnson now serves as vice chairman of the capital markets group for the combined companies.
“Commercial loan maturities are set to increase over 70% between 2014 and 2015, and we will continue to focus on expanding our platform to capture as much deal flow over the coming years as we possibly can,” Walker said.
Johnson Capital, prior to the acquisition, provided commercial real estate loan origination and loan servicing, focusing primarily in the Western U.S. Its main activities included serving as a loan broker and originating, selling, and servicing U.S. Department of Housing and Urban Development commercial loans.
The company, which still has an Irvine office, has “been a correspondent to Walker & Dunlop and fed us with a significant amount of Fannie Mae deal flow over the years,” Walker said.
