Irvine-based Shopoff Realty Investments wrapped up an active year of investments by buying a midsized office in Newport Beach close to its massive Uptown Newport residential development that it’s preparing to begin construction on.
The real estate investor and developer in late December completed the purchase of 4440 Von Karman Ave., a three-story, 44,434-square-foot building at the Koll Center Newport business park.
The office, near the intersection of Von Karman Avenue and Birch Street, went for a little under $15.4 million, or about $345 per square foot.
Newport Beach-based entity Canopi LLC sold the building. It bought it in 2011 for a reported $12 million. Canopi has ties to Vimpex International, a company that sources, processes, and imports food and other products.
Canopi’s owners used proceeds from the sale to buy a larger building in the Irvine Spectrum at 111 Pacifica in a deal that also closed late last month. They paid about $22.3 million, or $331 per square foot, for the three-story, 67,500-square-foot near the intersection of Pacifica and Barranca Parkway.
Both office sales were brokered by Anthony DeLorenzo, Gary Stache, Doug Mack and Rick Sherburne of CBRE Group Inc.
Busy Year
The deal for the Von Karman office capped off an active year of local and out-of-town investments for Shopoff, said Chief Executive William Shopoff.
“It was a good year for us,” he said, estimating that his firm bought about $230 million worth of land and property last year.
A number of the deals, including the $26.5 million buy of a 29-acre site along the coast in Huntington Beach where it plans a mixed-use development, carry a fair share of risk in terms of entitlement and other issues.
That’s not the case in the latest buy, which is more of a traditional office investment, Shopoff said.
“We saw an opportunity to move rents” on the property, which is more than one-third vacant.
The new owners said they think rents in the area could increase by about a third over the next five years.
Tenants include CommerceWest Bank, DynTek and Johnson Attorneys Group.
Another positive for the buyer: proximity to Uptown Newport, the 25-acre mixed-use development that Shopoff Realty is heading up. The project is on Jamboree Road near the Newport Beach-Irvine city line and about two blocks from the Von Karman office.
Uptown Newport, once home to a number of commercial properties, is being turned into 1,200 homes and apartments in low-, mid- and high-rise buildings.
Shopoff paid a reported $23.5 million for the land in late 2010 and got city approval for the project in 2013 after extensive entitlement reviews.
Construction on the first portion, a nearly 450-unit apartment complex Shopoff is building in partnership with San Juan Capistrano-based Picerne Group, is scheduled to kick off in earnest this quarter. The rental project should open in mid-2018, according to Shopoff.
Shopoff said his company is nearing another deal to sell part of the Uptown Newport land for a number of 12-story residential towers totaling about 200 units. It hasn’t disclosed the buyer.
Shopoff Realty also is in the early entitlement stages for a separate, six-acre site in Koll Center Newport that could hold about 260 homes.
“We are making a larger commitment to the area and believe the redevelopment will be accretive to our other holdings,” Shopoff said.
Shopoff Realty isn’t slowing down its pace of investments as the year kicks off. Shopoff said his firm should complete close to $155 million worth of deals in the first quarter, including an industrial site in downtown Anaheim where a residential development is planned.
The company’s already been linked to one notable deal this year outside of Orange County,
Last week it entered into a sales-leaseback deal with the owners of the Sacramento Bee newspaper for their headquarters building in downtown Sacramento. Local reports put the building’s price at about $51 million; the newspaper will lease back the building for 15 years.
The deal should be completed in the second quarter, according to news reports. It’s about 410,000 square feet and located on 9.5 acres. The building also serves as the national headquarters for The McClatchy Co., the Bee’s parent company.
Shopoff Realty is no stranger to media properties; it was a bidder in last year’s sale of excess land next to the current Santa Ana headquarters of the Orange County Register.
