In a rarity, Newport Beach-based Irvine Co. has put an office property it owns in Orange County up for sale.
Investors looking to get their hands on a trophy office tower or other glitzy property owned by OC’s dominant landlord take note, though: The listing is for one of the privately held firm’s more humble area office holdings.
SkyPark Business Center, a three-building office campus about a mile north of John Wayne Airport near the intersection of Main Street and MacArthur Boulevard, was recently listed for sale.
The collection of two-story buildings at the 81,551-square-foot property is one of Irvine Co.’s older office holdings; it built the campus in 1975, according to marketing materials from the capital markets team of Newmark Knight Frank, whose brokers have the listing for the property.
An asking price wasn’t listed in the offering, and Newmark Knight Frank brokers declined to comment on the sale, as did representatives of Irvine Co.
A price approaching about $25 million appears likely, according to other real estate investors who have seen the listing.
It’s doubtful that Irvine Co. needs the cash. The Business Journal last month estimated Irvine Co. chairman and owner Donald Bren to have a nearly $17 billion fortune, making him OC’s wealthiest person by a wide margin.
And the commercial real estate markets the company operates have been strong for years—single-digit vacancy rates in all segments, and rents, especially apartment rents, at or near record levels.
SkyPark Business Center’s relatively modest stature, especially when compared to Irvine Co.’s high-end office properties in and around the airport area, appears to be the cause for the sale.
Irvine Co.’s website for the property notes that it “provides an economical alternative for businesses within the sought-after airport area.” Asking rents for space are listed at $2.25 per square foot per month.
That’s the cheapest asking rent of any airport-area office that Irvine Co. owns, according to the landlord’s website. Other Irvine Co. buildings in the vicinity of the airport have listed monthly rents as high as $3.70 per square foot.
Rents for space in the airport area now average about $2.89 per square foot per month, according to Newmark Knight Frank’s data.
Irvine Co.’s marketing materials say that SkyPark is ideal for “service-oriented companies.” Existing tenants include Pacific Enterprise Bank, Advanced Depositions and Fuller Theological Seminary. The property is 95% leased, according to marketing materials.
Newmark Knight Frank’s marketing materials note that a new owner has the potential of upgrading and repositioning the five-acre campus, in particular the property’s central park, which offers the potential addition of outdoor amenities now seen at numerous area creative-office type properties.
Three Apartment Sales
Sales of Irvine Co. commercial properties are few and far between, especially for buildings in its office portfolio, which now tops 150 properties and 500 offices in California, where it’s the state’s largest office landlord, plus four skyscrapers in Chicago and New York.
The last time Irvine Co. was reported to give up ownership of any local office buildings was in 2013, when it swapped a handful of offices near Fashion Island with Newport Beach-based Burnham USA.
That deal was made in part to give the company more flexibility with the development of its new 520 Newport Center office tower, which was next to some of the buildings that traded hands.
The past nine months has seen a few other sales transactions, with Irvine Co. offloading a trio of local apartment complexes—in Placentia, Santa Ana and Tustin—for about $200 million.
The three apartment deals represented some older, noncore apartment properties that Irvine Co. took over in 2013 as part of a portfolio deal of apartment properties formerly owned by Archstone Co. in OC and San Diego.
The landlord isn’t adverse to holding onto and renovating older office properties, though, as evidenced by its April purchase of Alton Plaza, a 19-building property in the Irvine Spectrum area.
The collection of one- and two-story offices totals about 216,000 square feet, and was built in the late 1980s. It’s scheduled for major renovations by Irvine Co., which paid a reported $58 million for the campus.
Across the street from the entrance to John Wayne Airport, Irvine Co. recently began a major upgrade to its Airport Business Center, a four-building site at the intersection of Michelson Drive and MacArthur Boulevard.
Those properties, built in the 1970s, are being rebranded as The Launch, and are being renovated with a number of creative-office flourishes.
