Palo Alto-based real estate investor Menlo Equities LLC has reached a deal to buy Quintana, the largely empty Irvine office campus that once served as the local hub of Washington Mutual Inc.
Menlo received court approval to buy the four-building, 415,000-square-foot campus on Thursday, according to brokers who worked on the deal.
A sale is expected to close this week. Terms weren’t immediately disclosed.
This summer, sources not involved in the deal estimated the campus could sell for $65 million to $75 million, or roughly $170 per square foot.
Office building prices have moved up slightly since then with interest and some recent buys by big real estate investors, according to local market watchers.
At the peak of the market a few years ago, the campus—at Main Street and Von Karman Avenue—likely would have traded for close to $125 million, if not more, said Jeff Cole, executive director at the Irvine office of Cushman & Wakefield Inc.
With expectations of a “rapidly improving” market, Quintana could get back to that level in the next few years, Cole said.
“This was a great opportunity (for Menlo) to buy an irreplaceable office campus,” said Cole, who marketed the property for sale along with Cushman’s Marc Renard, Ed Hernandez and Rick Kaplan.
The building was sold out of receivership. A court hearing was held last week in Superior Court in Los Angeles to approve the sale.
Quintana received about 30 offers after it was put on the market earlier this year, according to Cole. The sales process took longer to complete than expected because of tax issues, plus the fact that the campus never was foreclosed on by its lenders, he said.
It’s the latest disposition of an Orange County building previously owned by Los Angeles-based Maguire Properties Inc., which now goes by MPG Office Trust Inc.
Once No. 2 Landlord
At the peak of the market, Maguire was OC’s second-largest office landlord after Irvine Company. Now MPG Office’s local holdings run less than 1 million square feet, not including about 2.5 million square feet of distressed properties, most of which are expected to be sold.
MPG Office had a 20% stake in Quintana, with Macquarie Office Trust, part of Australia’s Macquarie Group Ltd., owning the rest.
Maguire went into default on the campus last year after it stopped making payments on a $106 million mortgage.
A fifth building at the campus sold earlier this year in a separate deal with Los Angeles private equity firm Oaktree Capital Management LLC.
Quintana has seen plenty of changes in the past few years.
WaMu
In 2004, Seattle-based Washington Mutual occupied four buildings at the campus, largely for its mortgage operations.
WaMu peaked at about 3,500 OC workers, with many of them in Irvine. The mortgage downturn that started in 2007 brought a series of cuts to the Irvine operation, leaving the campus less than 40% full a year ago.
JPMorgan Chase & Co. inherited the campus when it acquired Washington Mutual in late 2008. It moved the remaining local offices to a different Irvine office campus earlier this year, leaving Quintana gutted.
Quintana’s low-rise buildings now are about 15% full, according to Cole. There’s been interest from prospective tenants about taking up some space once a sale was completed, he said.
A few tenants are rumored to be interested in buying individual buildings at the campus from Menlo, to use for their own operations, according to sources.
Menlo
Quintana, which includes a seven-story parking structure, is set to be the largest building in Menlo’s OC portfolio.
The company’s believed to own two other local properties, according to Menlo’s website and recent data.
In August, Menlo made a $20 million buy of nearby Cartwright Corporate Center, a five-story, 143,165-square-foot building just off Main Street between Jamboree Road and Von Karman Avenue.
That building was reported to be 70% full at the time of its sale.
Menlo, founded in 1994, is said to have acquired or developed about $1.4 billion of property.
