Newport Beach-based MIG Real Estate LLC this month paid $33.3 million for Mission Viejo Business Center in the second local purchase this year for the real estate investment offshoot of the Merage family office.
Mission Viejo Business Center, a six-building industrial property, spans 100,295 square feet across 7.7 acres at 23811 to 23891 Via Fabricante. The deal worked out to about $329 per square foot.
The property, located about a mile north of the Santa Ana (5) Freeway, near Alicia Parkway and Jeronimo Road, is 99% leased to 43 tenants, including O’Reilly Auto Enterprises, Goodwill Industries of OC and State Farm Insurance, at the point of sale.
The seller, Los Angeles County Employees Retirement Association, was represented by Cushman & Wakefield’s Jeff Chiate, Bryce Aberg, Jeff Cole, Rick Ellison, Mike Adey and Zach Harman.
The government agency bought the industrial complex in 1991 for nearly $6.6 million.
“We had a lot of buyers pursuing Mission Viejo Business Center,” Chiate, Cushman & Wakefield executive chair, told the Business Journal. “Mission Viejo is one of Orange County’s only areas with this product type.”
Buyer Background
Mission Viejo Business Center includes several features that cater to midsize industrial tenants, such as 10- to 16-foot clear height, grade and dock-high loading doors and concrete truck courts.
MIG intends to continue operating the park as is, without any plans for upgrades.
The firm’s first reported OC investment this year took place in June, when it paid $61.1 million for Newport Palms, a 138-unit complex in Westside Costa Mesa at 1850 Whittier Ave. That deal worked out to roughly $442,000 per unit.
It was the largest multifamily investment for the city in over a year at the time of its sale, according to brokerage data.
MIG Real Estate is headed by University of California, Irvine benefactor Paul Merage’s nephew, Greg Merage.
Paul Merage, along with his brother David, co-founded Chef America Inc., a frozen foods company that sold in 2002 to Nestlé for $2.6 billion.
After the sale, he also started MIG Capital, which has nearly $2 billion in assets and is managed by his son Richard Merage.
Multi-Tenant Park Boom
Demand for properties like Mission Viejo Business Center is on the rise, while interest has been down for Class A industrial product, according to brokers that worked on the deal.
“It’s counterintuitive to what we usually see,” Chiate said. “Normally, if there’s softening in the market, it will start in these multi-tenant parks and work its way up to Class A.”
The deviation from the typical trend can be attributed to declining inventory and increasing lease rates, which are rising faster for Class A properties than for industrial parks, Chiate noted.
The number of multi-tenant parks around OC remains limited, as many were torn down to make room for warehouses and life science space. The county also hasn’t seen a new multi-tenant park in over two decades, according to Chiate.
Today’s high construction costs are further deterring developers from creating more coveted product.
“That’s why the buyer pool for these parks has been very robust,” Chiate said. “We have several parks in the state that are currently in escrow.”
