The cash-flush duo that runs Corona-based Monster Beverage Corp. is looking to provide a boost of energy to a high-profile office tower in Orange they’ve just bought.
TriCentre, a 10-story office at the intersection of the Santa Ana (I-5) and Orange (57) freeways, traded hands earlier this month for an estimated $41.5 million, according to brokerage data.
The buyers were Rodney Sacks and Hilton Schlosberg, the top two execs at energy drink company Monster Beverage, along with Irvine-based real estate investment and management firm PRES Cos.
The purchase was for the private investment portfolio of Sacks and Schlosberg and is not going to be used for Monster Energy’s operations, according to Brad Schroth, president and chief executive of PRES, which also operates under the name Professional Real Estate Services Inc.
PRES will act as the managing partner of the tower, which now is about 75% leased, Schroth said.
Large tenants currently at the building, which is a mile south of Angel Stadium, include Farmers Insurance and lender Konduar Capital Corp., among others.
The new owners are planning a redesign of the property’s indoor and outdoor areas, with a goal of attracting law firm and technology tenants and getting the building close to fully occupied over the next year or so, Schroth said.
The property was sold by a fund managed by Boston-based TA Associates and was marketed for sale by Jeff Cole and Ed Hernandez, who are with the Irvine office of Cushman & Wakefield.
The building, which runs about 212,000 square feet, traded hands for an estimated $196 per square foot, according to market tracker CoStar.
“It’s a trophy asset,” Schroth said. “It hit at a price point that made sense for us.”
The purchase of TriCentre could mark the beginning of a new wave of area real estate investments for Sacks and Schlosberg, whose company made waves last year by selling a 16.7% stake to Coca-Cola Co. for nearly $2.2 billion.
The two Orange County denizens bought the beverage company—then known as Hansen Natural Corp., and based in Anaheim—in 1992 for $1.7 million, plus the assumption of another $12 million in debt, according to reports.
Sacks serves as chairman and chief executive of Monster Beverage, while Schlosberg is the company’s president and chief operating officer.
The company, best known for its caffeine-fueled Monster Energy drink, is now valued at $27 billion.
Sacks’ and Schlosberg’s wealth is estimated at $1.1 billion each, according to the Business Journal’s August listing of OC’s wealthiest people.
The two have worked with PRES on real estate deals for their private portfolio for about a decade, starting with an investment in San Clemente that nearly doubled its value in about a year, according to Schroth.
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Other deals involving the two Monster execs have included smaller properties in Irvine and Newport, according to brokerage data.
The TriCentre purchase is believed to be the most notable one for the execs.
The buy “sets the stage for what they’re looking for” in Southern California, Schroth said. “They’re looking to upgrade their portfolio.”
Along with TriCentre’s quality and prominent location at the intersection of two of OC’s main freeways, one thing that attracted the Monster Beverage execs to the building was its similarity to another area office that was bought by PRES last year, Schroth said.
PRES last year paid $18 million for 200 Center St., one of the largest buildings in downtown Anaheim.
The Monster Energy execs were not reported to be part of that purchase.
The eight-story Anaheim tower previously served as the local operations hub for AT&T Inc. but was purchased as the telecom giant was vacating the building, with no tenants signed to replace it.
The building was full again by the end of 2014, after PRES signed St. Joseph Heritage Healthcare, a primary care group of more than 300 physicians and medical providers, to lease all of the office space at the building.
200 Center St. is now going back on the market and is expected to fetch a price that could top $60 million, thanks to the long-term tenant now in place at the building. CBRE Group Inc. has the listing for that property.
