One of the largest offices in downtown Anaheim has sold at a big markup to its prior valuation, the latest sign of revitalization for the area around Anaheim’s city hall.
The eight-story 200 Center St. building, previously the local operations hub of AT&T Inc. but now fully leased to an affiliate of Orange-based hospital operator St. Joseph Health System, last week sold for about $58.9 million, according to multiple real estate sources familiar with the deal.
That works out to about $307 per square foot for the 191,556-square-foot building, which was purchased by a venture that includes Irvine-based real estate investor and developer Greenlaw Partners.
The sale includes a six-story parking structure.
The building was sold by an investment group headed by another Irvine-based real estate firm, PRES Cos., which bought it in early 2014 for $18 million, or about $90 per square foot, without a long-term tenant in place.
AT&T moved out after the sale to PRES Cos. in order to relocate employees to other regional offices.
PRES Cos. then landed St. Joseph Heritage Healthcare, a primary care medical group of more than 300 physicians and medical providers, to occupy the entire building in a deal struck in late 2014. The tenant’s lease runs through 2027.
St. Joseph pays about $2.23 per square foot in monthly rent, or about $427,000, according to marketing material from the capital markets team of brokerage Newmark Grubb Knight Frank, whose Paul Jones, Kevin Shannon, Ken White and Blake Bokosky listed the building for sale last year.
The office has had more than $15 million worth of renovations and tenant improvement work in recent years, according to Newmark Grubb’s marketing materials.
Upgrades to the St. Joseph space include “high-end creative buildouts including open ceilings, collaborative work spaces, state-of-the-art conference rooms, interactive break rooms and a fitness center,” according to the marketing materials.
The office sits next to the Center Street Promenade, a multiblock area that’s home to downtown Anaheim’s weekly farmers market and several food and retail businesses overseen by Shaheen Sadeghi’s LAB Holding LLC in Costa Mesa.
Sadeghi’s best-known retail property in the city, the two-story Anaheim Packing House food hall, is a few blocks away. The 42,000-square-foot property opened in 2014 and is one of the most prominent recent additions to downtown Anaheim, where multiple infill residential development projects have been built, and additional apartment investments and land deals have been struck in the past few years.
Other recent notable investors in the area include Irvine-based Shopoff Realty Investments, which this year closed on a 21-acre industrial site in downtown Anaheim where it plans a development of more than 500 homes, townhomes and apartments.
Another former AT&T site a few blocks from the 200 Center building is being turned into an apartment complex by Trammell Crow Residential.
Hotel Tower, Too
The 200 Center St. buy is the second notable Anaheim project that Greenlaw Partners has been reported to be involved with in recent weeks.
The May 15 issue of the Business Journal reported that the privately held firm filed plans with the city to build a 14-story, 300-room hotel and a parking structure at 1601 S. Anaheim Blvd., an unused site just east of the Santa Ana (5) Freeway in the Anaheim Resort District.
The proposed four-diamond hotel would be a little less than a mile from Disneyland Resort on the opposite side of the 5. It’s one of five proposed AAA, four-diamond hotels in the 1,100-acre resort area, which includes Disneyland and Anaheim Convention Center.
Greenlaw Partners bought the 200 Center St. property in a venture with wealthy San Diego County investor Jeff Mayer.
Mayer and Greenlaw have worked on other Orange County deals together; the two were partners in a venture that in March sold an office to Chapman University that’s in the Irvine Spectrum next to Chapman’s Harry and Diane Rinker Health Science campus.
The building sold for about $15.3 million, CoStar Group Inc. records show. The sellers put proceeds from the transaction into the Anaheim office deal, according to sources familiar with the sale.
