The top two executives of Corona-based Monster Beverage Corp. are about to add a trophy office in Newport Beach to their rapidly growing commercial real estate portfolio in Orange County.
Monster Beverage’s Rodney Sacks and Hilton Schlosberg, both among Orange County’s wealthiest residents, are part of an investment group that’s under contract to buy 4400 MacArthur Blvd., a nine-story office less than a mile from John Wayne Airport, real estate sources tell the Business Journal.
The investment group, which also includes Irvine-based real estate investor Greenlaw Partners, is scheduled to close on the purchase in mid-August.
The building will likely sell for about $58 million, according to multiple sources familiar with the impending deal. That’s a little more than $380 per square foot for the 152,400-square-foot building between the Duke Hotel (formerly Fairmont Newport Beach) and the Pacific Club on MacArthur Boulevard.
The black glass-sheathed office’s tenants include Bank of the West and a number of other financial services companies. It’s about 93% leased, according to CoStar Group Inc. data.
The property is owned by a unit of Boston’s TA Associates, which paid a reported $64.3 million for it in 2007 near the peak of the last real estate cycle.
The local capital markets group of Newmark Knight Frank has the listing. Brokers there declined to comment on the sale’s status.
$400M+ in Buys
The purchase would be the latest notable office buy in OC for Sacks and Schlosberg, each of whom the Business Journal estimates to have a fortune of $2.25 billion.
The duo, both with homes in the area, are ranked as the 10th-richest people in OC, according to this week’s Business Journal listing (see stand-alone Special Report).
They made their fortunes with Monster Beverage, a maker of the revved up Monster Energy drinks and other products. The company was known as Hansen Natural Corp. and based in Anaheim when they acquired it in 1992.
Sacks is chairman and chief executive, Schlosberg vice chairman and president.
Monster Beverage’s market value is about $30 billion. Coca-Cola paid $2.15 billion for 16.7% of the company in 2015.
The duo’s combined holdings in their main line of business are now worth nearly $4 billion, based on Monster’s latest proxy statement in April.
In addition to other domestic and international investments, Sacks and Schlosberg have put a significant portion of their fortunes into commercial real estate, particularly in OC over the past few years.
They’ve quickly built up a portfolio that ranks among the area’s largest for private investors of commercial real estate. Factoring in the impending Newport Beach purchase, the two have been involved in local office purchases valued at more than $420 million over the past two and a half years, according to Business Journal data.
Several of their most recent deals, including a few high-end buys in the airport area, have been made in ventures with privately held Greenlaw, one of the area’s most active commercial property investors and developers.
In their last known deal together, they partnered with Greenlaw about three months ago for the buy of 18301 Von Karman Ave., an 11-story office a few blocks from the airport in Irvine. The $87.4 million deal, like their impending transaction, was in the $380 per square foot range.
Their other office investments are in Orange, Santa Ana, Lake Forest and Yorba Linda.
Newport Rarity
Large office transactions in Newport Beach are a rarity because the area’s dominant investor, Irvine Co., doesn’t sell its holdings.
Only eight large trophy office properties in the city aren’t owned by the Newport Beach-based firm, which holds the bulk of Newport Center, according to data from the Irvine office of Cushman & Wakefield Inc.
Three of those, all in the airport area, are on the market and could sell soon, notes Cushman Executive Director Jeff Cole.
Cushman’s team has the listing for 4100 Newport Place Drive, a nine-story office about a quarter of a mile from 4400 MacArthur. The 90%-leased office is anchored by U.S. Bank.
Also nearing a sale: Newport Beach’s 4000 MacArthur, a two-building office complex near the intersection of Jamboree Road and MacArthur Boulevard. The Business Journal reported in early July that Goldman Sachs was under contract to buy the complex, whose two 10-story buildings hold operations for auto finance company Hyundai Capital America and other tenants.
The deal, expected to be in the $180 million range, should close any week now, sources tell the Business Journal.
