Space Investment Partners has made its first area acquisition since it launched in Irvine a little less than a year ago.
Ryan Gallagher and Mark Moshayedi, who founded the commercial real estate operating company last May, have chosen a shopping center along the Back Bay area of Costa Mesa to kick off dealmaking in its backyard.
It recently closed on Back Bay Center, a 53,665-square-foot office and retail complex along Irvine Boulevard, a few blocks south of Bristol Street.
Space Investment paid $24.2 million for the buildings, which works out to about $450 per square foot.
The company will invest several million more in the property, with plans to add value, up rents and attract new tenants that better suit “the affluent demographic,” said Gallagher.
Current tenants include Irvine Ranch Market, which recently signed a lease to stay in its 18,000-square-foot space for another decade.
The off-market property was previously owned by Huntington Beach-based Capital Investment Network Inc. for about 17 years.
“We are very excited about repositioning and renovating the property, and turning it into a very high-end, dynamic, family-oriented center,” Gallagher said.
This includes attracting “new and interesting tenants” like a high-end coffee shop, juice bar and fast-casual food concepts, he said.
Ready Capital National Bridge provided $20.1 million in financing for the sale.
Prior to launching Space Investment Partners, Gallagher was a senior managing director and co-head of the Orange County office of commercial brokerage HFF, which was purchased last month by JLL for $2 billion (see commercial brokerage list, page 28).
Moshayedi, a co-founder of Santa Ana-based Stec Inc.—now part of Western Digital Corp.—has built a large real estate portfolio since selling the storage device maker in 2013, and with family members has invested heavily in the Mariners Mile area of Newport Beach, just a few miles from Back Bay Center.
Several of his real estate assets, initially bought under the MSM Global Ventures name, are now operated by Space Investment, which is in a building he owns near John Wayne Airport.
Space is looking to “aggressively expand” its portfolio, targeting “well-located assets that have either a millennial or STEM appeal,” said Gallagher.
This includes commercial and residential properties, provided it is in the right location. For Space, that means in Southern California, Seattle and Portland.
Platinum Triangle Office Up for Sale
An Anaheim office building is on the market as part of a larger portfolio sale from Providence St. Joseph Health.
The Washington-based health system, which runs Hoag Memorial Presbyterian in OC, among other large health systems, has partnered with the Newport Beach-based healthcare brokerage office of Newmark Knight Frank to sell a 16-building portfolio located across Alaska, Washington, Oregon, Montana and California.
Providence St. Joseph is making the real estate move as part of a larger plan to streamline and modernize its corporate-wide operations, according to Newmark officials.
It plans to shed about 300,000 square feet of its portfolio in the proposed sale, which includes one building each in Los Angeles, Long Beach and Anaheim.
“Every asset has been carefully analyzed to determine whether or not it meets the criteria of noncore or nonstrategic asset, in determining whether it should be monetized for redeployment of capital for key initiatives,” said Garth Hogan, a Newmark Knight Frank managing director who is marketing the portfolio alongside colleagues Sean Fulp and Mark Schuessler. “This is a smart decision to take that capital and reinvest it back into technology.”
Expect more Providence properties to hit the market later this year, Hogan added.
The 85,000-square-foot Anaheim property at 1515 Orangewood is in the Platinum Triangle area near the Santa Ana (5) Freeway.
Providence occupies about 75% of the four-story building, but plans to vacate in the next year.
A call for offers has been set for May 1, with “a lot of inquiries from potential owner/users,” Hogan said.
The healthcare company bought the building in 2007 for $22.5 million, about $265 per square foot. It had been a tenant since 2001.
An asking price hasn’t been listed, but the building and the “high level of interest in the Platinum Triangle area” could bring in a higher price tag, according to the brokerage.
The company also owns a 200,000-square-foot office building in Irvine, and may relocate its Anaheim operations there.
