Newport Beach-based real estate investor and developer Olen Properties Corp. has made its largest local purchase in nearly three years, buying a 15-building office park near John Wayne Airport.
It paid $44.8 million to buy Main & Redhill Business Center, a 17-acre property in Irvine whose low-rise buildings are near the intersections of the San Diego (I-405) and Costa Mesa (55) freeways.
The buildings—a mix of single-story office and flex, and one two-story office—total about 204,000 square feet. They were nearly 97% occupied at the time of the sale.
The purchase works out to nearly $220 per square foot for the campus, which was sold by affiliates of Newark, N.J.-based Prudential Insurance Co. of America.
The deal is the second largest reported office sale in the airport area this year, trailing only the $66 million sale of 1901 Main St. in Irvine, a deal that closed last week (see story, page 3).
It’s also Olen’s largest office purchase in OC since the privately held company paid $73.5 million to buy the Irvine Oaks Executive Park, a 16-building office park in the Irvine Spectrum, in mid-2013.
Many of the company’s acquisitions since then have been for out-of-state apartment complexes. It’s spent close to $400 million since late 2014 buying rental properties in Arizona, Florida and Georgia.
Prior to the just-completed acquisition, its biggest reported area purchase since the Irvine Oaks deal was last September, when it paid a little more than $17 million for Pacific Park, a six-building complex in Aliso Viejo that totals about 100,000 square feet.
Olen’s president, Igor Olenicoff, is a longtime member of the OC50, the Business Journal’s annual listing of the local business community’s most influential members (see special insert for profile, related stories on pages 1, 3).
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.
The Business Journal estimates Olenicoff’s wealth at $3.5 billion, making him OC’s second wealthiest resident behind Irvine Company Chairman Donald Bren, another OC50 entrant.
‘Fantastic Investment’
Main & Redhill Business Center includes 15 buildings running between 8,330 square feet and 23,105 square feet, according to marketing materials from the Newport Beach office of HFF LP, whose Ryan Gallagher and Mike McCann worked on the deal.
“It’s a sizeable piece of real estate in the Airport Area, and we see it being a fantastic investment for years to come,” said Natalia Ostensen, Olen senior vice president.
Ostensen, Olenicoff’s daughter, has been taking on a more prominent role with the company in recent years, heading up many of its recent acquisitions.
The deal was an all-cash transaction, according to Ostensen.
“There was considerable acquisition interest in this project by both investors and several condo-conversion developers,” she said.
The property—whose offices were built starting in the early 1980s—had been marketed by HFF as a potential site for a creative-office conversion project.
Ostensen said that Olen doesn’t have plans to redevelop the project in the foreseeable future, although the company could reconsider its plans at a later time.
“There is absolutely opportunity for different types of redevelopment on this site in the years ahead,” she said. “That is part of what attracted us to this property.”
Panama Pushback
Olen’s local purchase comes a few weeks after Olenicoff garnered some international attention; his name surfaced as one of the first Americans listed in the so-called Panama Papers, the leaked documents from Panamanian law firm Mossack Fonseca that have linked a variety of government, business and wealthy individuals to offshore business entities.
Olenicoff’s name was linked in national reports through his purported involvement in a shell company registered in Panama called Olen Oil Management Ltd. Additional details tying him to the shell company were not disclosed in the leaked documents.
Olenicoff denies involvement with the oil company and said he believes it is a case of mistaken identity.
“It is sheer made-up fantasy,” Olenicoff said. “Olen has never been in the oil business, and I have not been a shareholder of such a corporation.”
In 2007, Olenicoff paid $52 million in back taxes to settle a long-running dispute with the Internal Revenue Service over his use of offshore bank accounts.
That settlement had national publications assuming the worst when his name surfaced last month in the leaked documents, Olenicoff said.
“It was convenient for some news media to jump to the conclusion that it was somehow me,” he said.
