A local investor has acquired the QLogic Corp. campus in Aliso Viejo and is planning to rebrand the site in preparation of the networking products maker vacating the three-building property this year.
Irvine-based Stillwater Investment Group—an investor in office, industrial, apartment and retail properties that began operations in 2014—recently completed the purchase of the QLogic campus on Aliso Viejo Parkway.
The campus totals about 161,000 square feet, and the deal includes about 2.5 acres of excess land that could hold additional development.
Stillwater and its financial partner in the deal, CrossHarbor Capital Partners in Boston, paid about $36 million for the property, according to Stillwater’s founder John Drachman.
The deal works out to a price of about $223 per square foot for the buildings, which were built in 1999.
It’s the first Orange County acquisition for Stillwater, which has also bought offices in the San Gabriel Valley, Long Beach, and Inland Empire. Its deals have totaled about $213 million, according to Drachman.
The company has partnered with CrossHarbor Capital—which has an office in Newport Beach—and Irvine-based Greenlaw Partners in some of the deals.
Drachman previously worked for Greenlaw Partners, one of the most active buyers of value-add properties in Orange County in recent years.
Lease
The deal in Aliso Viejo comes about a month after the new Silicon Valley-based owner of QLogic completed a lease that will see the company move its local operations to an office building under construction in the Irvine Spectrum.
San Jose-based Cavium Inc., which acquired QLogic last August for nearly $1.4 billion, completed a lease in late November for all of the space at a four-story office Irvine Company is building on Sand Canyon Boulevard.
The lease at 15485 Sand Canyon Ave. is for 104,500 square feet, or roughly two-thirds of the square footage that QLogic now occupies in Aliso Viejo.
QLogic employed nearly 375 in Orange County through March, according to Business Journal research. It had 782 worldwide through mid-May.
In August, around the time Cavium’s acquisition was completed, QLogic announced it would cut 69 jobs at its Aliso Viejo location, or roughly 18% of its local workforce.
QLogic makes switches, adapter cards and other electronics used to speed the flow of data. The company started operations in 1994 and was long one of the largest publicly traded technology companies based in Orange County.
It plans to move to Irvine in the summer, when the speculative office is scheduled to be completed.
The office is one of two four-story buildings going up at Newport Beach-based Irvine Co.’s midrise Sand Canyon Business Center. The campus also holds five buildings that total 454,000 square feet, some of which are leased to Verizon Wireless for a regional operations hub.
Cavium put the Aliso Viejo offices up for sale in September in preparation for a move elsewhere in the area, according to regulatory filings.
Its quarterly report filed in November said that the two-story buildings at the campus had an appraised value of $38.5 million, slightly above the price that the property changed hands for in December.
Seeking New Tenants
Stillwater is planning to rebrand the Aliso Viejo campus and introduce it to a brokerage marketplace that might not be too familiar with the buildings since they’ve been occupied by QLogic after construction, Drachman said.
The plan is to market the space to larger corporate users that could lease individual buildings. Leasing space on a floor-by-floor basis is also an option, he said.
The new owners are also still exploring development options for the excess land at the space, which is one of the few sites in Aliso Viejo available for commercial development, he said.
Other investments that Stillwater has been a part of include The Lakes at West Covina, a 176,843-square-foot, two-building office campus in the San Gabriel Valley. The property was acquired about a year ago for a reported $34.9 million.
It also was part of the 2015 acquisition of a two-building, 176,000-square-foot office complex in San Dimas previously home to the headquarters of WesCorp Credit Union. The deal was valued at about $18 million.
The company’s acquisition strategy is to target core-plus and value-add offices in California and Arizona, in deals under $50 million.
