The Foothill Ranch office complex that holds the headquarters of mortgage lender LoanDepot Inc. is the latest notable area commercial property to be bought by a wealthy local investor.
Towne Centre Plaza, a three-building office campus next to the Foothill Transportation Corridor (241) toll road, traded hands this month for about $40 million, according to property records and real estate sources.
The three-story buildings at the complex total close to 204,000 square feet, putting the sale at roughly $196 per square foot.
LoanDepot is the largest tenant at the fully leased property and has its headquarters at its 26642 Towne Centre Drive building.
The privately held company, which is among the largest nonbank mortgage lenders in the U.S., leased 131,267 square feet, according to regulatory documents.
Its lease runs through 2023, according to CoStar Group Inc. records.
LoanDepot also has close to another 100,000 square feet of office space in other buildings in the area for its direct-lending operations, according to brokerage data.
Sakura Paper
The seller was an affiliate of New York-based private-equity giant Blackstone Group, which acquired Towne Centre Plaza in 2015 as part of a large portfolio sale of office buildings in OC and other markets that had been operating under the banner of Los Angeles-based Arden Realty Inc.
Blackstone, whose Equity Office division is one of the area’s largest landlords, has been shedding some of the former Arden assets in Orange County over the past few months.
The buyer of Town Centre Plaza was listed as Pinnacle Asset Management Group LLC by the brokers who worked on the deal.
Ryan Gallagher, Tim Geiman and Derrick Barker with the Newport Beach office of brokerage HFF LP represented Blackstone, while Lee & Associates’ Kurt Bruggeman and Ryan Swanson represented the buyer.
Real estate sources not directly involved in the deal said the buyer of the Foothill Ranch office complex is Joe Wen, a local businessman who heads up Sakura Paper Inc., a Cypress-based provider of high-end paper products.
Pinnacle Asset has the same address as another building owned by Wen, according to state records.
Affiliates controlled by Wen have made a number of investments in area commercial properties over the past few years, according to property records.
Newport Beach-based Olen Properties sold McFadden Centre, a 184,737-square-foot business park in Santa Ana, to a venture backed by Wen for a reported $31.7 million in 2014.
A year before that, a real estate entity with ties to Wen and Sakura Paper bought 1683 Sunflower Ave. in Costa Mesa, a 345,000-square-foot property along the San Diego (405) Freeway next to the South Coast Collection shopping center.
That property traded hands for a reported $37 million. The owners have discussed a potential redevelopment what’s known as the Robinson Pharma site into a mixed-use project featuring residential development.
Wen’s most prominent real estate property in Orange County is a home. He’s been building a multilot mansion over the past few years in Newport Beach’s Crystal Cove community.
The 52,000-square-foot Villa de Formosa, is believed to be the largest in Orange County.
Wen and his family have roots in Taiwan, as does LoanDepot Chief Executive Anthony Hsieh.
Institutional Void
Wen’s purchase is the latest example of a wealthy area investor buying OC offices for personal investment.
A five-story Irvine office at 18401 Von Karman Ave. and the two-building Tustin Centre complex in Santa Ana were sold last month to an investment group backed in part by Rodney Sacks and Hilton Schlosberg, the top two executives at Corona-based energy drink company Monster Beverage Corp.
Those two properties sold for about $120 million on a cumulative basis, and brought the OC office buys involving Sacks and Schlosberg past the $275 million mark since 2015, according to Business Journal data.
About two months ago, the five-building office campus in Irvine that holds the local operations of Google Inc. and others was sold to Jack Dangermon, a billionaire in the Inland Empire.
That transaction, at nearly $255 million, is the largest office deal reported in Orange County in several years.
Dangermon founded digital mapping company ESRI in Redlands in San Bernardino County, and has a fortune estimated by Forbes magazine at $3.3 billion.
Wealthy individuals have recently picked up the slack in the local investment market, notes Jeff Cole, managing executive director of the Irvine office of Cushman & Wakefield Inc.
“Despite the reticence of many institutional investors to acquire suburban office buildings in 2016, capital market deal volume actually increased in Q4 due to the significant appetite from private high net worth investors for class A office product in Orange County,” Cole said in recent year-end market commentary.
“The hesitation on the part of institutional investors, however, did not stem from a conviction that the fundamentals of the OC office market were askew, rather, it partially stemmed from a fear of being unable to secure tenants at necessary lease rates to justify investments in what is now the seventh year of a long recovery,” Cole said.
The results of the presidential election seem to have brought a boost, and “institutional investors appear to be more bullish perhaps since they now expect lawmakers and policymakers to legislate a more pro-business tax/regulatory environment,” Cole said.
