An Alaska Native Corporation made its first move into Orange County with the acquisition of a controlling interest in an Irvine Concourse office building.
Bethel, Alaska-based Bethel Native Corp. said this month it has bought a controlling interest in 2100 Main Street, a 90,000-square-foot office building near John Wayne Airport.
The building’s just off Von Karman Avenue, next to the Crown Plaza Hotel.
Terms of the transaction weren’t disclosed. The purchase price for the majority stake is believed to be slightly more than $200 per square foot, according to parties familiar with the deal.
That would place the building’s value at about $18 million.
It’s the only office that Bethel Native, which is based about 400 miles west of Anchorage in the southwestern part of the Alaska, owns in California, according to the company’s Web site.
It might not be the last, as the company could be looking for other acquisitions in what it feels is a bottomed-out market.
Bethel Native also may be the first Alaska Native Corporation to have invested in the OC office market, according to Al Beaudette, chief executive of Irvine-based Attentus Advisors.
Alaska Native Corporations, which were established by the U.S. government in the 1970s, are controlled by Alaska natives through privately owned shares of stock.
Attentus, a real estate management consulting company, acted as an adviser for Bethel Native in the deal and is helping it identify other potential deals.
There’s more than 200 Alaska Native Corporations that were created to provide economic benefits to Alaska’s native people. Bethel Native bills itself as the sixth largest of those.
In the 2100 Main Street deal, the company bought the interest of the property’s general partner as well as two limited partners in a trio of transactions. One of the primary sellers is believed to be an affiliate of Newport Beach-based Saunders Property Co.
Irvine’s Morgenstern Property Co., another partner in the property since early 2008, still is part of the ownership of the office and will act as the operating partner.
The four-story 2100 Main Street building, which is said to be about 95% full, serves as the headquarters for SullivanCurtisMonroe Insurance Services LLC.
Irvine Concourse
It’s the second sale of an Irvine Concourse office to take place of late.
About a block away from the 2100 Main Street building, the new office tower built by Phoenix-based Opus West Corp. is believed to be wrapping up a sale for about $177 per square foot.
Newport Beach’s Greenlaw Partners and Westbrook Partners of San Francisco are expected to close on the building, at 2050 Main Street, shortly. That tower is about 70% empty.
Financial adviser Attentus expects 2050 Main Street to worth closer to $300 per square foot when it’s leased up.
Bethel Native could be on the look out for other deals. The company explored other properties in California, Utah, Nevada and Arizona before making the Irvine acquisition, according to Chief Operating Officer Tom Kennedy.
The company, which also will be renting some space in the OC office, concluded “that the Irvine office market appears to be at or close to the bottom, and consequently will start to turn the corner next year,” Kennedy said in a statement.
Real estate acquisitions aren’t the only reason Bethel Native is eyeing OC.
The company counts a number of construction, environmental remediation and engineering subsidiaries, and it is hoping to grab a large chunk of work coming on line at Marine Corps Base Camp Pendleton in the next few years.
Potential Work
As much as $4 billion is expected to be spent in the next several years improving and expanding the 125,000-acre base just south of San Clemente in northern San Diego County.
Projects on tap include a 500,000-square-foot Naval hospital project valued at more than $560 million, according to Defense Department figures.
Due to their federal status, Alaska Native Corporations have received billions of dollars in government contracts in the past decade, much of them in no-bid deals.
The corporations are also able to receive contracts of any size from a federal agency as part of a Small Business Administration program—called SBA 8(a)—for minority and disadvantaged small businesses.
