The value of a recently sold Newport Beach office building on Von Karman Avenue near John Wayne Airport has spiked in a little more than two years.
An affiliate of Bergener Mirejovsky, a California personal injury law firm, closed on the purchase of 4220 Von Karman Ave., a two-story, 27,446-square-foot office across the street from the Pacific Club.
The firm, which already occupies space there, paid nearly $17.2 million for it, or nearly $626 per square foot.
That’s the highest per-square-foot price paid this year for an Orange County office larger than 20,000 square feet, according to records from real estate market tracker CoStar Group Inc.
Most midsize and large airport-area offices have traded this year in the $300 to $400 per square foot range.
Newport Beach-based Burnham-Ward Properties sold the property, which it acquired in mid-2015 for a reported $7.4 million, or $264 per square foot. It bought it from Miami-based LNR Property Corp., one of the country’s largest managers of distressed commercial loans, after the property was given back to its lenders by the prior owners.
It was nearly empty at the time of the 2015 transaction. Shortly afterward the law firm, then known as Bergener & Associates, leased about half of it from the new owners and moved its headquarters there. The property is now fully leased.
The firm has seven other offices in California, including a Laguna Hills location, according to its website.
That stretch of Von Karman Avenue has a variety of small and midsize offices that house professional services firms and local real estate companies, among other tenants.
Buildings in the area between Birch Avenue and MacArthur Boulevard in the Koll Center Newport office campus often fetch premium prices, especially per square foot. A few brought as much as $800 per square foot in earlier years.
4220 Von Karman is near the rear of Uptown Newport, a residential development under construction that fronts Jamboree Road. The project is being overseen by Irvine-based Shopoff Realty Investments.
Shopoff is in the midst of seeking approvals for a separate residential project on Von Karman that’s part of the Koll Center business park. Three 13-story condo towers called the Koll Center Residences have been proposed for a 13-acre site.
Steadfast Sale
Irvine-based Steadfast Cos., which operates a number of funds that buy apartments and other properties, is selling a large stake in one of its portfolios to an affiliate of private equity firm Blackstone Group.
The company’s Steadfast Income REIT Inc., a nontraded real estate investment trust that owns 63 apartment complexes in the U.S., said it will sell a 90% stake in 20 of the properties to New York-based Blackstone Real Estate Income Trust Inc.’s fund.
The deal involves 4,584 apartments in Austin, Dallas and San Antonio, Texas, and in Nashville, Tenn., and Louisville, Ky.
Blackstone is paying $460.8 million in cash and debt assumptions. Steadfast said it will continue to own the remaining 10% of the rental complexes and will provide property management duties.
Steadfast said it paid $436 million for the 20 properties between August 2011 and May 2014. The recently announced transaction values them at $512 million, a 17% premium on Steadfast’s initial investment, according to regulatory filings.
The transaction “validates our investment thesis, wherein we seek to add value through the acquisition of stable, income-producing and value-add apartment communities in targeted regions of the United States,” said Ella Neyland, president of the Steadfast REIT, in a statement.
The deal is being completed in two separate transactions, the latter scheduled to close next March.
