The five-building Irvine office campus that holds the local operations of Google Inc. and others is up for sale, headlining an Orange County office investment market that’s seeing its heaviest activity in over eight years.
The owners of Google Center, a multibuilding campus on Jamboree Road that encompasses 573,000 square feet, quietly listed the property for sale a few weeks ago, according to multiple real estate sources.
The campus—which includes four midrise offices and a restaurant—is expected to fetch more than $250 million, or $450 per square foot, according to the sources.
The local office of Cushman & Wakefield Inc. has the listing, the sources say. Cushman’s brokers declined to comment on the deal.
A sale of Google Center at close to $250 million would mark the largest office transaction in Orange County this year, as well as set a new benchmark for pricing for offices in the airport area—one of several OC office submarkets that now have multiple big properties listed for sale.
Other large, high-end Irvine offices in the airport area have sold for as much $382 per square foot this year.
The Google Center is expected to draw a higher price due in part to its location along the Irvine and Newport Beach city line near the intersection of Jamboree and MacArthur Boulevard. The young age of the campus—its buildings were constructed between 2005 and 2014—also is considered a plus.
The big-name draw of Google, which occupies the newest office under a long-term lease, is expected to help draw potential investors.
The internet giant occupies a glass-sheathed, 140,000-square-foot building at 19510 Jamboree, and also has its name on another office at the campus, which recently was renamed to reflect Google’s presence.
Other notable tenants include homebuilder TRI Pointe Group Inc. and investment management firm PAAMCO, as well as health club Equinox, which has a 30,000-square-foot gym at the site.
The campus was previously known as the Impac Center, after Irvine-based Impac Mortgage Holdings Inc., which has its headquarters at the site and was one of the first big tenants to move to the property upon its opening.
The property has also been referred to as the Scholle Center. Glendale-based Dorn Platz & Co. developed the campus on land previously used by packaging company Scholle Corp.
Newport Beach-based Irvine Company, which owns the nearby two-building Newport Gateway office complex, is considered a potential buyer of the campus, as are a host of larger institutional investors, sources tell the Business Journal.
Most Offerings Since ’07
Google Center looks to be the priciest office property on the market in OC, which is seeing an influx of investor interest amid rising occupancy rates and rents, in addition to pricing that looks affordable in comparison to other core West Coast markets.
There are close to two dozen office properties valued at more than $20 million on the market in OC, according to Paul Jones, senior managing director for the Newport Beach office of Newmark Grubb Knight Frank.
The properties are likely to have a cumulative value close to $1.3 billion, he said.
It’s the busiest market for office sales here since just prior to the last recession. “I haven’t seen it this busy since 2007,” Jones said.
His capital markets team has several notable properties on the market, including the Atrium, a two-building office property on Von Karman Avenue in Irvine that runs close to 300,000 square feet.
That building’s enclosed atrium holds the restaurant Bistango; the property is owned by an affiliate of Massachusetts Mutual Life Insurance Co., which paid a reported $60 million for it in 2000, according to CoStar Group Inc. records.
Newmark also has the listing for Stadium Towers in Anaheim, a 12-story office next to Angel Stadium that has close to 260,000 square feet.
Stadium Towers is one of two notable towers for sale in Central County’s improving office market, along with the 19-story City Plaza building in Orange, home to lender CashCall Inc. and others.
That property, next to the Outlets at Orange shopping center, is owned by a venture headed by Irvine-based Greenlaw Partners, which paid about $56 million for it in 2013. Eastdil Secured has the listing for the tower, the tallest office in Central OC.
Broadcom Ltd.’s potential sale of its under-development office buildings in Great Park Neighborhoods in Irvine adds to the growing list of area properties on the market.
It remains to be seen whether all of those end up trading, noted Jeff Cole, executive director of the capital markets team at Cushman & Wakefield’s Irvine office.
“At the end of the day, whether (the buildings) get the pricing they are expecting will determine how many will trade,” said Cole, whose team has the listings for office properties in the South Coast Metro area of Santa Ana and the airport market in Irvine.
“There’s a lot in the market right now,” he said. As long as OC’s office market continues to show signs of improvement, the area is likely to see deals getting made, he said.