Financial services company Manulife Financial Corp. has added another office to its real estate investment portfolio near John Wayne Airport.
The Toronto-based company, best known in the U.S. for its John Hancock Life Insurance Co. division, this month closed on the purchase of 17911 Von Karman Ave., a five-story office in the Irvine Concourse office complex on Main Street between MacArthur Boulevard and Von Karman Avenue.
The 103,620-square-foot building was 88% occupied at the time of the sale. Tenants include KTGY Group, Lineage Logistics, General Electric and Bosch Home Appliances.
Financial terms of the transaction weren’t immediately disclosed. Other high-end offices in the airport area recently have been trading in the $325-per-square-foot range, which would put an estimated sales price for 17911 Von Karman at $33.7 million.
It’s the fourth big airport-area office purchase over the past four years for the real estate investment arm of Manulife. Those deals have closed for more than $500 million combined, according to property records.
It also owns the 12-story Oracle Tower at the 48-acre Irvine Concourse campus that’s next door to its latest purchase. It paid a reported $94.2 million in 2013 for the high-profile tower at 17901 Von Karman Ave.
“This was a strategic acquisition for Manulife as it owns Oracle Tower next door and can benefit from economies of scale from management, leasing and parking perspectives,” said Paul Jones, senior managing director with the Newport Beach capital markets team of Newmark Grubb Knight Frank.
Jones brokered the deal with colleagues Kevin Shannon, Blake Bokosky and Robert Griffith.
Birch Street
It’s Manulife and its affiliates’ first local office buy in nearly a year. The last was 5000 Birch St., a two-building office complex in Newport Beach about a mile from John Wayne Airport.
Those offices total 306,000 square feet and sold for $104.5 million, or about $341 per square foot.
An affiliate of Manulife also owns the 19-story Michelson office tower, a trophy property that’s part of the 2.5-million-square-foot Park Place mixed-use campus in Irvine, about a mile away from the Irvine Concourse.
It paid a reported $277 million for the 536,000-square-foot Michelson tower in 2012 in what’s believed to be the priciest single-building office sale ever in Orange County.
Manulife in May packaged the Michelson tower, along with the 865 S. Figueroa St. office tower in Los Angeles and another office in Atlanta, into a new real estate investment trust whose shares are listed on the Singapore Exchange, or SGX.
The Manulife US REIT took nearly a year to complete but now is the first-ever REIT listed on an Asian exchange that focuses exclusively on U.S. properties.
The Michelson tower is the most valuable building in the SGX offering; it was appraised at $324 million and carried principal debt of about $121 million at the time of the IPO, according to regulatory filings.
The 35-story Figueroa tower is valued at $296 million.
The REIT has a market value of about $516 million, roughly the same as what the offering was worth at the time of the IPO.
Second Sale
The deal with Manulife represents the second sale of the 17911 Von Karman office in as many years.
It last traded hands in the summer of 2015 as part of a large portfolio sale of office buildings in OC and other markets that had been operating under the banner of Los Angeles-based Arden Realty Inc.
A division of New York-based private-equity giant Blackstone Group bought the portfolio, whose OC assets were estimated at about 1.7 million square feet, in a deal that national news reports put at more than $3 billion.
The 17911 Von Karman office is the first local building involved in the deal that Blackstone—which runs its local office properties under the name Equity Office Management LLC—is known to have re-sold.
A few other properties could trade hands before the end of the year.
Newmark Grubb’s capital markets team has another Blackstone property listed for sale, the three-story, nearly 77,000-square-foot Newport Irvine Center on Irvine Avenue in Newport Beach.
The three-building Towne Centre Plaza office complex that Blackstone and its affiliates own in Foothill Ranch also is listed for sale. The local office of brokerage HFF LP has the listing for the 205,626-square-foot complex.
