Local real estate investor Greenlaw Partners has added another high-end office tower in Irvine’s airport area to its portfolio, at a steep discount to its last, pre-pandemic sale.
Irvine-based Greenlaw this month closed on the purchase of the 2050 Main Street building, marking the priciest sale for an office tower seen in the area around John Wayne Airport this year.
Property records indicate that the privately held company paid about $57.5 million for the 13-story building, which is part of the Irvine Concourse, the 48-acre collection of offices, hotels and restaurants running along Main Street, between Von Karman Avenue and MacArthur Boulevard.
The deal works out to a price of about $183 per square foot for the 315,000-square-foot tower, whose tenant roster includes Sunwest Bank, which has its name atop the building.
Sunwest provided a $31 million loan for the building’s purchase, property records indicate.
The building is about 72% leased, according data from real estate market tracker CoStar Group Inc.
$51M Decline
The latest sales price is well below the $108.5 million that an affiliate of Boston-based institutional investor AEW Capital Management paid for the office in 2011, the last time the building traded hands.
That deal, coming out of the Great Recession and working out to a price of about $345 per square foot, was the first Irvine office to sell at a price topping $100 million in nearly 18 months.
Higher-end offices in the airport area had subsequently sold at prices well above $300 per square foot prior to the pandemic, but are now seeing valuations in decline amid lower occupancy rates and ongoing work-from-home trends.
Substantial hits in valuations to OC offices are also taking place outside the airport area.
4 Hutton Centre, a 10-story office in the South Coast Metro area of Santa Ana, sold in February for $25 million and $115 per square foot, less than half its last sales price in 2019.
One Pacific Plaza, a 394,000-square-foot office campus along the San Diego (405) Freeway in Huntington Beach, sold last month for $42 million and $107 per square foot, well below the $124.5 million, or nearly $315 per square foot paid for the campus in 2018.
Joe Wen, the founder of multinational conglomerate Formosa Ltd. and an OC resident, bought both 4 Hutton Center and One Pacific Plaza properties.
2nd Stint
The purchase of 2050 Main is the second time that Greenlaw Partners has owned the building, which was built in 2007, just prior to the Great Recession.
The real estate investor linked with Westbrook Partners LLC of New York and Walton Street Capital LLC of Chicago to buy the office in 2009 for $56 million. The office was reported to be about 30% leased at the time; the group bought the building at a price well below its construction cost from the lenders of the office’s developer, Opus West Corp.
The Greenlaw partnership boosted occupancy to around 80% by 2011, when they sold the office to AEW Capital for $108.5 million, marking a more than $50 million boost in valuation for the property.
The Irvine tower isn’t the only office that AEW’s reported to have taken a hit in 2023; earlier this year it was part of a venture that handed over the keys to an office in downtown San Francisco that they paid $84 million for in 2019.
Growing Collection
Greenlaw Partners, which has primarily focused on large industrial opportunities outside OC in recent years, counts a sizeable office presence in Irvine’s airport market.
On the opposite side of the 405 Freeway as the Irvine Concourse, the real estate investor owns a bulk of the buildings at the Von Karman Towers office complex.
Many of those buildings are owned in ventures with the two top executives of Corona-based Monster Beverage Corp. (Nasdaq: MNST), Rodney Sacks and Hilton Schlosberg.
Sacks and Schlosberg also own the 2040 Main Street building in the Irvine Concourse that holds the headquarters of law firm Knobbe Martens, but were not part of the just-completed deal for 2050 Main.
The duo’s purchase of 2040 Main, by comparison, totaled nearly $130 million in 2019.
