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Healthcare Investor Pays $80M for Brea Offices

288K SF; more medical tenants eyed

Healthcare Property Advisors (HPA) has acquired a Brea office campus that houses its headquarters for $80 million, marking the priciest office transaction reported for North Orange County in 2022.

The healthcare property-focused commercial real estate investor, property manager and consultant bought the four-building office campus at 915-975 W. Imperial Highway and 950 Mariner St. from AdelFi, a Christian credit union that’s also based out of the Brea campus.

AdelFi—which changed its name in February from Evangelical Christian Credit Union—had owned the 288,058-square-foot complex since it was developed in phases between 2002 and 2008. It sold the property for nearly $278 per square foot.

The offices, located at the intersection of Imperial Highway and Puente Street, about a mile west of the Orange (57) Freeway, were about 89% occupied at the time of the sale.

Medical Repositioning

HPA already acted as the property manager for the Brea campus; following the sale, the company is planning a minor repositioning to better accommodate healthcare and medical companies as existing tenants either downsize or relocate.

“The underlying zoning of the property allows for medical tenancy,” JLL Senior Director Blake Bokosky told the Business Journal.

JLL’s Bokosky, Louis Tomaselli and John Chun represented AdelFi in the transaction. HPA was unrepresented in the deal, and JLL’s Chun, Sam Godfrey and Anthony Sardo represented HPA in securing acquisition financing.

“The office market has been difficult to finance, so it took a bit of creativity to close the deal given the current debt markets,” Bokosky said.

The zoning also allows for an industrial redevelopment, Bokosky said; HPA isn’t
currently exploring that option, but it represents “a downside protection,” according to Bokosky.

St. Jude Medical Center, whose affiliated hospital in the city is a few miles away, occupies about 77,000 square feet at the campus. Other tenants include business-process outsourcing provider Alta Resources and marketing agency Acosta Inc.

AdelFi has been downsizing at the campus in recent years, with a current footprint of approximately 12,000 square feet, records indicate. It employs about 110 in OC, according to Business Journal data.

Seller to Buyer

The purchase is HPA’s first in Orange County after several years of being on the seller side.

Last year, the company sold a 104,662-square-foot medical office at 2727 E. Imperial Highway in Brea to Duke Realty Corp. for $35.4 million. Duke, which was acquired last year by Prologis Inc. (NYSE: PLD), is planning an industrial redevelopment at that site.

HPA previously sold the building next door at 2767 E. Imperial Highway in 2019 to LaSalle Investment Management for $37.7 million. That building is used by St. Jude’s Center for Rehabilitation and Wellness.

HPA is backed by La Palma-based The Innovation Institute, and is jointly owned by several health systems, including St. Joseph Health and Orange’s CHOC Children’s.

AdelFi

AdelFi, meanwhile, will redeploy capital proceeds from the sale into its lending services, which includes personal, business and nonprofit loans.

The company saw its assets decline 9% in the year ending June 30 to $563 million, according to Business Journal research. It was the eighth-largest credit union based in Orange County based on assets last year.

Brea Buys

The transaction was among tops for Orange County office deals in 2022, according to property records, and was the priciest for the city of Brea last year.

The largest office portfolio transaction in Orange County last year was the $235.3 million sale of Intersect, a four-building creative office campus in Irvine spanning 453,975 square feet. That deal closed in June and works out to about $518 per square foot.

In the past 18 months, JLL has been involved in four Brea office deals totaling $153.6 million in sales volume. The company was involved in the sale of Brea Corporate Plaza, 330 E. Lambert Road and 2727 E. Imperial Highway as well as last month’s Imperial and Mariner deal.

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