A 95,000-square-foot Anaheim office building has sold for a premium over its prior, pre-pandemic pricing, bucking current product type trends.
The office at 1065 N. Link—situated within the Link OC mixed-use campus in the Anaheim Canyon area of the city—sold for nearly $31.2 million, or about $327 per square foot.
That’s almost twice the average price per square foot for current office sales in Orange County, sources tell the Business Journal.
The seller, a joint venture between international real estate investment firm Hines and Oaktree Capital Management LP, acquired the office six years ago, along with the three other buildings at Link OC—previously known as Pacific Center—for $34 million.
The 1065 N. Link building is the largest on the campus, which totals some 143,600 square feet and also includes retail and a hotel. Apartments have been proposed for a portion of the campus but have yet to move ahead.
Easterly Government Properties Inc. (NYSE: DEA), a $2 billion-valued real estate investment trust that leases space to the U.S. government, is the new owner of 1065 N. Link.
The building is 100% leased to the State of California, with occupiers including the Department of Industrial Relations and the Employment Development Department. State agencies have occupied 1065 N. Link since 2009.
The facility is “equipped with court hearing rooms as well as training rooms for furthering employment opportunities,” the buyer said. “The government tenants have demonstrated their need of the space with a lease renewal exercised post-pandemic.”
The building sold at a cap rate of 6.8%, sources indicate.
Cushman & Wakefield’s Jeff Cole, Nico Napolitano, Brad Brandenburg and Kristen Bogler represented the sellers.
“Fully leased to multiple State of California divisions, [this] asset also provides an investor … with long-term stable cash flow,” Cole said in a statement.
Local Portfolio
The 1065 N. Link facility was built in 1991, though the Class A property underwent renovations in 2020 under the Hines-Oaktree joint venture.
It’s the latest OC disposition for the venture, which last month sold the 34-acre Raytheon campus in Fullerton for nearly $77 million, in a deal that could ultimately result in a sizeable commercial or residential redevelopment for one of the larger office campuses in North OC.
The Hines-Oaktree venture currently owns almost 2 million square feet in OC.
OC Expansion
Easterly’s acquisition of 1065 N. Link was the company’s third deal of late.
Last month, Easterly announced its purchase of a 69,276-square-foot outpatient facility in Corpus Christi, Texas, which is leased to the Department of Veterans Affairs. Financial terms of the deal were undisclosed.
Following the acquisition of 1065 N. Link, Easterly said it bought a 97,969-square-foot Department of Homeland Security facility in Atlanta.
The company now counts 89 properties across the U.S. totaling 8.8 million square feet. It currently owns over 200,000 square feet in OC, with other properties in Santa Ana and Tustin.
The firm’s deal-making volume has declined since 2022, when it saw a total of seven acquisitions and two sales.
At press time, shares in Easterly were $11.40 apiece, giving it a $2 billion market cap.
Higher Valuation
The sale of 1065 N. Link marks a bright spot amongst declining office values in OC.
Anaheim Hills Office Plaza, which runs 73,892 square feet, sold last month for $18 million, down half a million dollars from its prior sale in 2014. The property’s new owner, Global Edge Holdings & Management, bought the office building for about $244 per square foot.
The lender of The Heights in Aliso Viejo recently took over the property via foreclosure auction for $70 million. The five-building, 489,817-square-foot office complex previously sold for $157 million in 2018.
In Huntington Beach, One Pacific Plaza traded for $42 million. That price was roughly a third of the 394,000-square-foot property’s 2018 sale of $124.5 million.
