Laguna Hills-based Muller Co., in a recapitalization deal valued at nearly $232 million, has brought on a new financial partner for three area high-rise offices it owns and operates.
The privately held real estate investment, development and management firm added an affiliate of Cerberus Capital Management to the ownership group of Irvine’s Airport Tower, the Orange Executive Tower in Orange, and Santa Ana’s Main Street Town Center.
The buildings total nearly 846,000 square feet combined.
The New York-based private equity firm replaced Rockwood Capital LLC of Greenwich, Conn., as Muller’s financial partner in the towers, property records show.
The Muller-Cerberus venture paid $70 million for the 17-story Airport Tower in a deal that closed around the start of the month, records show.
The recapitalization deal works out to about $295 per square foot for the nearly 238,000-square-foot tower on Von Karman Avenue across the street from Bistango restaurant and a few blocks from John Wayne Airport.
It’s one of the most distinctive buildings in the airport area due to its circular shape and smaller-than-normal floor plates, which average about 13,800 square feet.
The 16-story Orange Executive Tower, which previously was known as 1100 Town & Country, sold for an additional $115 million, or roughly $296 per square foot.
Main Street Town Center, a 10-story building previously called Lincoln Town Center, sold for $47.5 million, records show, or about $220 per square foot.
The two Central County offices, while in different cities, sit just a few blocks from each other near MainPlace mall in Santa Ana.
The Muller-Cerberus venture took out a $183 million loan with an affiliate of New York-based Blackstone Mortgage Trust Inc. to fund the latest deal, records show.
Cerberus’ portion was acquired through its Cerberus Institutional Real Estate Partners IV LP fund, records show.
The fund is described by the company as an opportunistic real estate fund, which “targets distressed or undervalued real estate deals with a focus in the U.S. and Western Europe.”
The fund had raised $1.8 billion as of January, according to a press release. Its backers include “sovereign-wealth funds, public-pension plans, corporate plans, insurers, endowments, foundations and high-net-worth individuals,” the fund said.
Initial Plan
Muller Co. initially partnered with Rockwood Capital to buy the towers in 2007 in a deal reported at the time to be worth $310 million combined.
That also included excess land near the Central County offices that has since been converted into apartment development.
The buildings were bought from Maguire Properties Inc. in Los Angeles, which acquired them the prior year as part of a larger portfolio of Orange County properties from Equity Office Properties Trust.
Each of the three properties has gotten renovations since the 2007 sales, in addition to new tenant bases. Orange Executive Tower, for example, previously held the headquarters of Ameriquest Mortgage Co., which shuttered operations around the start of the last downturn.
Vacancy rates at the three buildings run between 82% and 87%, according to CoStar Group Inc. records.
