COMMERCIAL
A midsize Irvine building, once eyed as much for its parking as for its office space, has traded hands in a $12 million bank-driven sale.
Irvine’s Great Far East Inc., a commercial real estate buyer whose funding largely comes from Chinese investors, recently closed on 18831 Von Karman Ave., a 66,000-square-foot building near John Wayne Airport.
Wells Fargo & Co., which took over the property about a year or so ago, sold the building.
The sale works out to about $182 per square foot. Tenants include Sun Healthcare Group Inc. and Digital Map Products Inc., which are based in the building.
The building last sold in 2005 for a reported $15 million. The buyer then was a unit of Los Angeles-based homebuilder West Millennium Homes Inc.
West Millennium had eyed the building’s large parking lot for a potential parking structure for a condominium project it was building across the street.
West Millennium filed for bankruptcy in mid-2009. Its partially built condo project, on the corner of Dupont Drive and Von Karman, now is being turned into apartments by Palo Alto-based Essex Property Trust Inc., which bought the property early this year.
For Great Far East, the acquisition of the four-story office building is its third and largest deal in Irvine since 2007, according to Rich Pincott, vice president for the Newport Beach office of CB Richard Ellis Group Inc., which represented the investor.
The new owner isn’t planning any development at the office site and is focused instead on leasing up a few smaller spaces at the building. Sun Healthcare is the largest tenant, taking up about a third of the building. It recently renewed its lease there for another eight years.
Great Far East is looking for more deals in its backyard, according to Pincott. The investor is “well capitalized” and is looking for “for additional opportunities in Orange County at this stage in the market cycle,” he said.
San Diego Sale
Another week, another acquisition for Newport Beach’s KBS Realty Advisors.
The uber active real estate investor this month snapped up an office complex in San Diego County—Torrey Reserve West office park in Del Mar Heights.
The 118,030-square-foot office park, about 20 miles north of downtown San Diego, sold for $27.3 million or about $231 per square foot.
KBS reportedly paid $10.3 million in cash and assumed a $17 million loan.
The seller was a unit of San Francisco-based RREEF Funds LLC, according to local reports.
The three-building complex, built on a 7.1-acre plot of land, is about 90% full. Tenants include Via Telecom Inc., Xifin Inc. and Mir3 Corp.
The latest acquisition increases KBS’ holdings in California to 15 properties totaling more than 2 million square feet, according to the company. KBS buys real estate on behalf of pension funds and individual investors.
The San Diego buy comes after the company’s KBS Real Estate Investment Trust II Inc. fund—which bought the San Diego buildings—closed on the $208 million Union Bank Plaza office tower in Los Angeles, the city’s biggest office deal in a few years.
When I reported on that impending deal a few weeks ago, KBS said it still was looking for a loan to help finance the deal. The company since has gotten a $119.3 million, five-year mortgage from Wells Fargo.
Another KBS fund recently bought $14.4 million worth of nonperforming commercial mortgage loans from Heritage Bank of Commerce for about $6 million.
RESIDENTIAL
Crown Acquisitions Inc., an Aliso Viejo-based apartment investor that focuses on small and midsize properties in urban areas, said it closed on its 35th deal to date.
The company’s latest deal was in San Diego’s City Heights submarket, where it paid $1.5 million for a 27-unit complex, or about $58,000 per apartment. The company’s planning to put in another $300,000 for renovations of the three-story building, which is Crown’s fourth purchase within the past year.
Crown focuses on deals in Southern California and Arizona and has spent some $25 million buying properties totaling about 500 apartments in the past seven years. It’s also invested an additional $5 million renovating the properties.
The company, founded by Chief Executive Chris Mitchell, targets older apartments in urban areas that other investors sometimes shy away from, according to officials.
Officials at Crown said they look for apartments “that have potential, where other buyers may see risk, high startup costs and other barriers to entry.”
Crown said it “strives to turn C-properties into B-properties” that are usually running at less than 10% vacancy.
