Orange County office investment brokers are seeing signs of increased activity in the foreign investor pool.
“You’re going to start to see more foreign investors showing up in Orange County,” said Newmark Executive Managing Director Paul Jones, whose brokerage team is among the most active in the region.
A recent office deal points to that returned demand from overseas buyers, as China-based Henghou Investment Holding recently spent $42.8 million for a six-building office complex in Santa Ana.
The 188,714-square-foot low-rise property, called AD/6, sold for almost $227 per square foot.
The property is on East Deere Avenue, close to Red Hill Avenue. It’s a block away from the bulk of Edwards Lifesciences Corp.’s (NYSE: EW) sprawling headquarters campus, which counts an Irvine address.
Newmark’s Jones brokered the deal on behalf of the seller, Los Angeles-based Preylock Holdings, along with colleagues Kevin Shannon, Sean Fulp, Mark Schuessler and Brandon White.
Repositioning
The sale marks a 30% premium over the prior deal in 2017 when Preylock paid $32.8 million for the complex, then called Alton Deere Plaza.
The owners previously invested several million in a repositioning that upgraded interiors and exteriors at the complex that was first built in 1990.
It was about 87% leased at the time of sale to a broad mix of tenants, including marketing, technology, healthcare and professional service firms, according to CoStar Group Inc. records.
First OC Buy
The deal is the first reported Orange County buy for Henghou Investment, which will continue to operate the complex as a multi-tenant office park. Elsewhere in Southern California, the buyer is reported to be involved in a development project in Riverside County’s San Jacinto.
“AD/6 is a stable, incoming-producing property that is well positioned for the buyer to capitalize on growth-oriented companies looking for space at an attractive market rent,” Jones said. “This sale is indicative of notable increase in foreign capital.”
The deal was in part financed by a loan from Wells Fargo.
“Financing is still readily available, especially for well-capitalized buyers,” Jones notes.
Returned Demand
A return in investment interest from foreign buyers marks a new vote of confidence for OC’s office market; sales here have been largely stalled in the wake of the pandemic as companies rethink their space needs.
“We probably won’t have a clear understanding on that until late this year, or early next,” Jones said.
Expect additional deals to be led by foreign buyers in the coming months, Jones added.
