Lincoln Property Co. is buying a large office next to Angel Stadium of Anaheim in the latest sign of an improving office market in Central Orange County.
The local office of Dallas-based Lincoln is expected to pay a little more than $68 million—about $250 per square foot—for the six-story, 273,000-square-foot Stadium Gateway at 1900 S. State College Blvd.
The deal—the largest office sale in Central OC so far this year—was expected to close July 17, after the Business Journal went to press.
Beverly Hills-based Kennedy Wilson is selling the Anaheim office, which it bought for $56 million in 2012.
Stadium Gateway was about 30% vacant at the time of the 2012 sale; now the building is about 98% leased, according to Kevin Hayes, executive vice president for the Irvine office of Lincoln Properties.
Tenants
Large tenants include Konica Minolta Business Solutions, Turner Construction, and Toyota Motor Credit Corp.
Locally based CashCall Inc. has the largest lease of any company at the building, but the lender subleases all of that space to other tenants, according to Hayes.
The improving leasing fortunes for Stadium Gateway mirror much of what’s being seen at better buildings across Central OC, which Hayes said has slowly recovered from the recession and mortgage meltdown.
The class A office market in Central OC—which runs about 10 million square feet—had 33% vacancy rates at the nadir of the last recession.
“It was the epicenter of the economic downturn” for Orange County’s commercial real estate market, Hayes said.
Vacancy rates for those higher-end buildings run closer to 13% now, with plenty of room for additional improvements, as well as increases in lease rates, he said.
Monthly rents for class A buildings in the market are now about $2.53 per square foot, up about 25% since the recession, according to recent data from Voit Real Estate Services.
The market’s recent growth has been “sneaky and relatively organic,” with tenants from a variety of industries, particularly healthcare, snapping up space that once was largely filled by area mortgage companies, according to Hayes.
The variety of new tenants in the area should make the market more resilient and less apt to suffer another downturn similar to the last mortgage crash, he said.
Stadium Gateway shares parking space with the Los Angeles Angels of Anaheim. It’s also just down the street from a now-vacant, 14-acre property where Hong Kong-based LT Commercial Real Estate Ltd. is planning a massive project featuring a condo tower, luxury hotel, and shopping center, among other features.
Hayes said his company is keeping a close eye on LT Commercial’s proposal, as well as the city’s lease negotiations with the Angels.
Projects
Stadium Gateway is one of three notable projects surrounding Angel Stadium that Lincoln Property is involved in. The company owns and develops its own projects and also manages properties for other owners.
It is the property manager for the Anaheim Regional Transportation Intermodal Center, the $188 million transportation hub between Honda Center and Angel Stadium.
Artic, which opened last year, has about 13,000 square feet of retail space.
Lincoln Property also is handling the redevelopment of the Anaheim Corporate Office Plaza, a five-building business park on Orangewood Avenue next to the Santa Ana River. The company is getting close to starting work on an estimated $10 million makeover of the property, which totals about 300,000 square feet, into a creative-office project called Axis.
The campus is owned by Southfield, Mich.-based Seligman & Associates Inc.
