SteelWave LLC has upped its presence along Red Hill Avenue with the purchase of The Landing, a three-building Costa Mesa office complex.
A few blocks from John Wayne Airport, the low-rise campus recently traded hands for $72 million, property records indicate.
It’s the largest local buy to date for SteelWave, a San Francisco-based real estate investor that previously operated under the Legacy Partners Commercial name.
It’s the company’s third deal along Red Hill Avenue this year, following a pair of mid-year deals. It’s spent about $121 million for properties along the heavily trafficked street this year.
It paid about $314 per square foot for the 229,093-square-foot complex, whose buildings are at 2955, 2975 and 2995 Red Hill Ave. near The Lab in Costa Mesa’s Sobeca district.
The new owner indicates it plans to spend millions more on upgrades to the campus. It’s not known whether SteelWave brought on a financial partner for the purchase; it has done so for other deals it has made in Orange County.
More Renovations Planned
Chicago-based Equity Office Management LLC, a unit of New York-based Blackstone Group LP, sold the campus. It’s one of several larger-sized Orange County properties it has shed over the course of 2019; those deals have approached $300 million combined.
The office landlord put the project on the market earlier this year with a price tag of $80 million, according to prior reports.
Equity Office paid $50.5 million in 2014 for the property, which includes three two-story buildings situated on about 11 acres.
Over the next two years, Equity invested in an overhaul of the property, converting it into a creative office project and renamed it The Landing, a nod to its proximity to the airport.
SteelWave appears to have plans to add on to those upgrades.
The “strategy for redevelopment is to add to the previous renovations, essentially picking up where the previous owner left off and making select additions to elevate the project even further,” the company said on its website.
This includes new landscaped areas paired with new and existing trellis structures to create “unique outdoor rooms”; a boutique coffee shop in the central courtyard; and new paintings and art.
The three buildings average about 91% occupancy, according to data from real estate market tracker CoStar Group Inc.
Red Hill Assets
About 4 miles north of The Landing, SteelWave added a pair of notable Tustin office projects earlier in the year.
In May, the privately held developer was part of a venture that paid nearly $49 million for two adjacent buildings at the intersection of Red Hill and Bell Avenue, near the Tustin Legacy development, totaling about 223,000 square feet of space.
This includes the $23.5 million buy of 33.7 North, a 103,000-square-foot creative office building at 15771 Red Hill Ave. that’s been rebranded as AirSpace.
Major upgrades are underway at the project, which this year secured a notable tenant, Tricon American Homes, a company that leases out single-family homes. It will relocate its headquarters there next year.
Records show that SteelWave, together with Chicago-based real estate investor GEM Realty Capital Inc., also closed on the purchase of 1382 Bell Ave., a flex industrial manufacturing and distribution next to the 33.7 building.
It plans to fully convert the Bell Avenue building to creative office use, according to the company’s website, with the two buildings repositioned “into a state-of-the-art, low-rise, creative office campus.”
Pressing On
Steelwave’s buy of The Landing is its largest reported deal in Orange County, topping its 2017 purchase of the former Los Angeles Times printing facility in Costa Mesa.
The company partnered with Dallas-based Invesco Real Estate for that deal, which was for about $65 million.
Redevelopment of the Costa Mesa project, now called The Press, is expected to result in a nearly 430,000-square-foot creative office campus, which will feature a 40,000-square-foot food hall from Shaheen Sadeghi’s Lab Holding LLC. A 2020 opening for a portion of the site is possible, officials have previously stated.
SteelWave also redeveloped the former Emulex Corp. campus next to The Press into a creative office project called the Hive; the Los Angeles Chargers use the campus as its headquarters.
The campus was sold by SteelWave to a venture between Invesco and Goldman Sachs last year for $84 million.
