One of the few large office campuses near John Wayne Airport with a significant amount of vacancy is up for sale and expected to draw plenty of interest from investors looking to take advantage of Orange County’s improving office market.
Quintana, a four-building, 415,000-square-foot campus in Irvine that once served as the local hub of Washington Mutual Inc., is expected to trade hands in the next few weeks, according to multiple real estate sources.
The property at the intersection of Main Street and Von Karman Avenue was put up for sale this year by Palo Alto-based real estate investor Menlo Equities LLC, which paid a reported $69.2 million, or about $170 per square foot, for it in 2010.
This time, a sale approaching $300 per square foot, or $125 million, is possible, say sources familiar with the transaction.
A deal topping $120 million would make it Orange County’s largest office sale of the year so far.
A likely buyer has not been disclosed. Brokers with the local offices of Cushman & Wakefield Inc. and HFF LP have the listing for the property but declined to comment on the potential sale.
A nearly 75% price markup since the last sale reflects a much healthier local office market than in 2010, although the improving market isn’t reflected in Quintana’s occupancy rates.
Menlo bought the campus out of receivership when it was only about 30% leased, following the 2008 departure of Washington Mutual as a tenant during the mortgage industry’s implosion.
Menlo has since tried to land a large company to take over much of the empty space but has failed to do so.
Only one of the four buildings it owns there remains leased, a 54,000-square-foot office occupied by Irvine-based healthcare software maker StrataCare Inc.
Hyundai Capital America Inc., which this year signed a 178,000-square-foot lease at the 4000 MacArthur office campus in Newport Beach that subsequently was sold for an estimated $120 million, was once rumored to be a potential occupant at Quintana, as was St. Joseph Health, which ended up leasing nearly 200,000 square feet at the Park Place campus in Irvine in 2012.
New Quintana owners are likely to be aggressive in their asking rents, considering the lack of other large blocks of space available to tenants in the market.
There are no office buildings in Irvine with a block of available space larger than 100,000 square feet besides Quintana and the 200 Spectrum tower under construction in the Spectrum area, according to Costar data.
StrataCare’s offices are in a two-story building at 17838 Gillette Ave. The remainder of the buildings on the campus are four or five stories.
The StrataCare building was initially listed for sale by itself, but Menlo changed course and listed the other three empty buildings it owns at Quintana after getting interest about the entire portfolio, sources said.
A fifth building at the campus, the 151,000-square-foot 18885 Von Karman Ave. office, is owned separately by an affiliate of Los Angeles-based private equity firm Oaktree Capital Management LP, which paid a reported $20 million for it in 2010.
The five-story building, which is nearly fully occupied, is also on the market for sale and is likely to trade hands after the larger Quintana portfolio sells, real estate sources said.
