The new owner of Emulex Corp.’s headquarters in Costa Mesa is planning a creative-office redevelopment of the existing three-building campus, with additional ground-up development on excess land at the property a possibility.
SteelWave, a Foster City-based investor and developer of commercial, residential and mixed-use properties, last week closed on the purchase of the Emulex campus at 3333 S. Susan St.
The property, which encompasses about 180,000 square feet of space spread over three buildings and 3.2 acres of adjacent land, sold for nearly $50 million, according to real estate sources.
The deal is the first in Orange County for SteelWave under its current name and ownership structure.
The Bay Area company previously operated as Legacy Partners Commercial but changed its name this year following a corporate restructuring.
SteelWave partnered with Goldman Sachs to purchase the Costa Mesa property, according to multiple real estate sources familiar with the transaction.
The last large area commercial property that Goldman Sachs is known to have bought is an office building at 895 Dove St. in Newport Beach that it acquired about two years ago for about $38.8 million.
Move in Store?
Emulex, a networking equipment maker that was acquired this year by Singapore-based Avago Technologies Ltd., has consolidated its local operations into one of the three existing buildings at its campus just north of the San Diego (405) Freeway near the Ikea shopping center.
The company will lease back the building from the new owners for at least the next two years, according to marketing materials from the local office of CBRE Group Inc., whose Paul Jones, Kevin Shannon, Blake Bokosky, Gary Stache and Anthony DeLorenzo had the listing for the property.
The company will ultimately relocate to the new office campus of chipmaker Broadcom Corp., which is in the early stages of development on land near Orange County Great Park, say real estate sources.
The first phase of the Irvine campus, which is scheduled to open by late 2017 or early 2018, should run about 1.1 million square feet.
Broadcom announced in late May that it was being acquired by Avago for about $37 billion in a deal expected to close early next year. Avago completed the $660 million acquisition of Emulex in early May.
A move to the Irvine campus would bring together Broadcom and Emulex several years after a combination was first proposed.
Emulex rebuffed a $912 million takeover offer by Broadcom in 2009.
SteelWave plans to immediately redevelop the two vacant buildings at the Emulex campus, which total about 84,000 square feet, into buildings with creative-office features, such as open floors and indoor and outdoor meeting spaces, say real estate industry sources.
The excess 3.2 acres at the 14-acre campus is zoned to allow about 65,000 square feet of commercial space.
Another office is possible for the land, as is noncommercial development, depending on city feedback on other redevelopment projects in the area, according to sources.
The Emulex campus sits across the street from a 24-acre site owned by a subsidiary of Chicago-based Tribune Media Co. A large portion of the land previously served as a Los Angeles Times office and printing plant.
Tribune Media is working with Kearny Real Estate Co., a Los Angeles-based real estate investor, to figure out the best redevelopment plan for the site. A mixed-use development most likely featuring apartments is a potential use for the site but would require rezoning by the city.
The Emulex campus sale is the second big office site transaction in the vicinity of the Ikea center in recent months.
In June, an affiliate of apparel company Vans Inc. paid $52.3 million to buy 1588 South Coast Drive, an empty, 180,000-square-foot office building about half a mile from the Emulex campus.
Vans, the skate shoe and apparel division of Greensboro, N.C.-based VF Corp., will move its local offices from Cypress to the Costa Mesa building.