Newport Beach-based Olen Properties Corp. has closed on a big loan for its largest local property—a mixed-use development it owns in Brea—and is close to putting some of the proceeds from that and other recent financing deals into an apartment complex it plans to buy outside Orange County.
The privately held real estate owner and developer recently completed a funding deal for its Olen Pointe Brea campus near the intersection of the Orange (57) freeway and East Lambert Road.
The campus includes six offices totaling close to 720,000 square feet, plus The Pointe, a 260-unit apartment complex.
It’s the largest commercial property that Olen owns in Orange County. Olen’s portfolio totals more than 7.5 million square feet of commercial real estate, much of it in OC, plus more than 12,000 apartments.
Olen said it got a $185 million loan this month for the Brea project, which had been debt free.
AIG Insurance Co. provided the loan, which carries an interest rate under 4%, Olen President Igor Olenicoff said last week.
The loan was made with a lender’s appraisal of 60% loan-to-value, so the campus is conservatively worth about $335 million, according to Olenicoff.
Olen Pointe Brea “was free and clear for some time now,” said Olenicoff, who said he’s expecting interest rates to start moving up.
“In short, we took timely advantage and recapitalized Olen’s cash reserves at very favorable rates, and before the latest rate move occurred,” he said.
The Business Journal estimates Olenicoff’s personal fortune at $3.5 billion, making him OC’s second wealthiest resident behind Irvine Company Chairman Donald Bren.
The deal is the latest in a series of refinancing deals for Olen Properties; Olenicoff said his firm has placed more than $830 million in debt over the past year on about 20 properties it had owned free and clear.
A number of the other properties are in Orange County and include the company’s two-tower Century Centre office complex near John Wayne Airport.
Newport Beach-based Curtis Group Real Estate helped arrange the recent flurry of loans, according to Olenicoff.
Lenders the company has worked with besides AIG include Newport Beach-based Pacific Life, Aegon USA Realty Advisors LLC, and M&T Realty Capital Corp.
Expect to see Olen buy more properties, now that the funding deals are in place.
“Our intent is to continue to utilize our liquidity and growing cash flows from operations to better Olen’s future through construction of new projects and acquisition of existing projects,” Olenicoff said.
One deal in Arizona is said to be close to completion. Olenicoff said his company is nearing a deal to buy Scottsdale Highlands, a 272-unit apartment complex about 10 miles northeast of downtown Phoenix.
The complex is owned by a unit of Bascom Group in Irvine, which paid a reported $36.7 million for the 13.3-acre property four years ago. It has upgraded the site, whose apartments run about 900 square feet on average.
A price tag for the latest deal has not been disclosed. The Highlands deal looks likely to push Olen’s apartment acquisition in the Scottsdale region over the past two years close to $200 million, based on other reported deals it has made in and around the city over that time.
The company’s also eyeing rental acquisitions in other areas where it already owns property, including Orange County, South Florida and Las Vegas, Olenicoff said.
“All of these locations have recently been selected within the top 10 locations in the country for multifamily growth and appreciation,” he said. “We have certainly enjoyed that growth in the past five years.”
