LBA Realty, fresh off a big financing deal for its Park Place mixed-use campus in Irvine, has snapped up an 18-acre property in Anaheim from AT&T Inc.
The Irvine-based real estate investor recently completed the purchase of the three-building office and industrial campus used by the telecommunications company in the Anaheim Canyon district just north of the Riverside (91) Freeway.
The roughly 224,400 square feet of buildings on the campus sold for $30 million in a deal brokered by Cushman & Wakefield Inc., according to market tracker CoStar.
The deal works out to a price of about $134 per square foot for the campus, which is at Coronado and Van Buren streets.
AT&T is expected to lease back the property’s two smaller buildings, which total 73,773 square feet, under a short-term deal.
The largest building, which runs 150,625 square feet, was expected to be vacated at the time of the sale, according to marketing materials for the property.
LBA is said to be exploring a potential redevelopment of that empty property, which is located on an 8-acre parcel that’s part of the 18-acre property.
When AT&T put the campus on the market for sale last year, it was proposed that the larger building could be razed to make way for one or more new industrial properties.
The new owner has yet to file any redevelopment plans with Anaheim’s planning department for the site, according to city officials.
Other Sale
The sale is the second prominent sale in Anaheim for AT&T in as many years.
The telecom giant completed the sale of its onetime regional headquarters in downtown Anaheim in early 2014. That property is about six miles from the Anaheim Canyon property.
Irvine-based PRES Cos. paid $18 million for the eight-story office, which has about 191,556 square feet of leasable space that AT&T vacated after the sale.
PRES has since leased the space to St. Joseph Heritage Healthcare, a primary care medical group.
Cushman & Wakefield’s Jeff Chiate, Rick Ellison and Randy Ellison brokered the sale of the Anaheim Canyon property, which closed in the early part of this summer, according to CoStar records.
LBA owns nine other office and industrial properties in Anaheim, according to the company’s website.
Its office portfolio in Orange County runs nearly 3 million square feet, and the company is one of the county’s five largest landlords by square footage, according to brokerage data.
Privately held LBA would appear to have plenty of cash on hand to finance the Anaheim Canyon purchase and any other deals it is looking to make.
In May the company completed the sale of a minority stake of its holdings at Park Place, the 105-acre office, retail and residential campus near the intersection of Jamboree Road and the San Diego (I-405) Freeway in Irvine, about a mile from John Wayne Airport.
Principal Real Estate Investors, a Des Moines, Iowa-based institutional investor, paid nearly $381 million for a 45% interest in LBA’s holdings at Park Place, according to CoStar records.
The deal was completed at a 5% capitalization rate and implies a value of $824 million for the mixed-use campus, according to CoStar.
LBA took over ownership of a bulk of the low- and midrise portion of Park Place—virtually everything except a pair of condo towers and the Michelson office tower—from Maguire Properties in a series of transactions in 2009 and 2010.
The investor has since undertaken a major renovation and expansion of the 2.5-million-square-foot campus, reportedly spending more than $40 million to upgrade the property’s low-rise office space and shopping center, among other changes.
LBA’s offices on the campus are now nearly full, with larger tenants including Western Digital Corp., St. Joseph Health and Caltrans.
A flagship LA Fitness gym opened at the campus in 2013, and last year Newport Beach-based Irvine Company opened a 990-unit apartment complex at the eastern end of the campus.
Second Complex
Irvine-based Sares-Regis is now working on a second, 520-unit apartment complex at Park Place, next to the future home of a new AC Hotels by Marriott that will soon be built by Woodbine Development Corp. of Dallas.
Irvine Co. is exploring building another 267 rental units on the campus, as well, according to city planning documents.
The deal with Principal Real Estate Investors, on top of its land sales to the apartment and hotel developers, likely means that LBA has already turned a sizeable profit on its investment in Park Place, even while retaining a majority interest in the property’s offices and retail buildings, according to real estate sources familiar with the deal.
