A pair of multibuilding office complexes in Lake Forest—including buildings that hold sizable operations for Oakley Inc. and Panasonic Avionics Corp., the city’s two largest employers—have traded hands in separate deals for a combined $81 million.
The larger of the two deals was the sale of Pacific Vista, a five-building office park totaling 322,262 square feet, was bought by Hartford, Conn.-based Cornerstone Real Estate Advisers for $59 million. The sale works out to a price of about $183 per square foot for Pacific Vista, which records show was sold by a real estate equity fund managed in part by Seattle-based Bentall Kennedy LP.
The multitenant campus is about 88% leased. Notable tenants include eyewear maker Oakley, which has its headquarters located about 2 miles away in the Foothill Ranch section of the city and is Lake Forest’s largest employer with more than 2,000 workers. Other tenants at the office park include the City of Lake Forest, Viant Inc., Aurora Bank FSB, and US Real Estate Services.
The Pacific Vista deal is the highest-priced office sale in Orange County reported so far this year, according to brokerage data.
Brokers from the Newport Beach office of CBRE Group Inc. working on the deal said that signs of strong leasing momentum in South OC of late helped push up pricing in the deal.
“There was a long list of quality capital chasing this deal,” said CBRE’s Paul Jones, who worked on the sale with colleagues Bob Smith, Kevin Shannon and Karen Scholte.
Also in Lake Forest, Irvine-based real estate investor Bixby Land Co. sold a trio of buildings it owned in the Pacific Commercentre office park, totaling about 145,500 square feet, for $22 million.
That works out to a price of about $151 per square foot for the three buildings, which are 90% leased to Panasonic Avionics, an in-flight entertainment system manufacturer and a unit of Secaucus, N.J.-based Panasonic Corp. of North America.
Panasonic Avionics is Lake Forest’s second-largest employer with more than 1,200 workers.
The buyer’s name in the Pacific Commercentre deal wasn’t disclosed, but Palo Alto-based Menlo Equities LLC—an active buyer of buildings in Irvine and Aliso Viejo the past few years—last week listed the three buildings on its website as a new acquisition.
Bixby officials said they’d be looking to use the money from the sale of the fully occupied buildings, which it had owned for over a decade, to buy other underperforming assets at good prices.
“This sale further aligns Bixby’s goal of disposing non-strategic assets for reinvestment into value-add opportunities consistent with our current objectives,” said Bill Halford, Bixby’s chief executive.
“Committed”
“We remain committed to growing our portfolio and continue to seek attractive value add investment opportunities throughout California,” Halford said.
Bixby and Menlo were represented in the sale by Eastdil Secured brokers Adam Edwards, KC Scheipe, Michael Kathrein and Jay Boyle.
The Pacific Vista and Pacific Commercentre properties are located about half a mile from each other along Bake Parkway, near the Foothill (241) Toll Road.
The two recent sales, each closing this month, cap off a banner stretch of office investment sales in Lake Forest, with a total of $109 million in area buildings trading hands.
In June the Lake Forest headquarters of Panasonic Avionics, totaling about 145,000 square feet, sold for $28.3 million, or about $195 per square foot in a deal brokered by the Irvine office of Cushman & Wakefield Inc. An affiliate of Cornerstone Real Estate Advisers also bought that building, located at 26200 Enterprise, bringing its Lake Forest spending total to $87.3 million in the past month.
Johns Creek, Ga.-based Piedmont Office Realty Trust Inc. sold the two-story 26200 Enterprise building, which recently saw Panasonic renew its lease under a long-term deal.
Panasonic Avionics leases space in six Lake Forest buildings that total close to 440,000 square feet. The six buildings are owned by a handful of different landlords.
Lake Forest’s office market totals about 2.1 million square feet, with a vacancy rate of about 22% at the end of June, according to quarterly data from Newport beach-based brokerage Voit Real Estate Services Inc.
Alcon
A sizable portion of the city’s vacant office space is set to be filled next year by eye-care company Alcon Research Ltd., which earlier this year inked a reported 184,500-square-foot lease to move its research and development operations from Irvine to Lake Forest.
Alcon will be taking up space previously used by disk drive maker Western Digital Corp., which moved its headquarters from Lake Forest to Irvine in 2010.
