62.9 F
Laguna Hills
Wednesday, Jun 12, 2024
-Advertisement-

PacLife Seeks $80M+ For Aliso Viejo Office

Pacific Life Insurance Co. is looking to offload its nearly 250,000-square-foot office in Aliso Viejo, which has been left vacant by the provider of life and retirement insurance because of the pandemic.

The Newport Beach-based company is eyeing a price tag topping $80 million for the office at 45 Enterprise that was built in 2008 for the company. PacLife has been the sole occupant of the property—developed as the next-to-last building at the Summit Office Campus—ever since, though it relocated its operations from the building during the pandemic to its headquarters at Newport Center in Newport Beach.

The company also owns that 350,000-square-foot landmark building, across the street from the Fashion Island shopping center, and is expected to maintain ownership of that property.

PacLife confirmed to the Business Journal it plans to sell the Aliso Viejo building “due to the merger of our life and annuity business.”

“We have greatly enjoyed our time as an employer in the city of Aliso Viejo since 2008 and it is with great fondness that we will remember the convenience, hospitality, and beauty it provides,” Steve Chesterman, assistant vice president of communications at PacLife, said in an email to the Business Journal.

Newmark Group Inc. has the listing for the Aliso Viejo tower alongside the San Joaquin Hills (73) Toll Road; sources indicate the brokerage is scouting an owner-user to take the keys from PacLife for $80.1 million, or roughly $325 per square foot.

Such a goal may leave the property on the market for longer than usual; companies looking for office space larger than 100,000 square feet in Orange County are few and far between, and recent office transactions in the region have placed valuations below $200 per square foot.

Office brokers tell the Business Journal that a buyer may take the form of a life science company relocating from San Diego, but should PacLife find few takers, Newmark is expected to take the offer to the investment market, which would likely lower the sales price.

Cash Flow

The Class A office tower was last renovated in 2022 with upgrades to the executive floors that have been unused over the past year as PacLife workers went remote following the pandemic and never returned to the Aliso Viejo property.

The company paid about $15 million for the 5.5-acre vacant site in 2007 and contracted Parker Properties to develop the office, among the newest at the Summit campus. The nine-story building is the tallest at the Summit campus.

PacLife no longer needs the building, sources indicate, and a sale would help generate a bottom-line boost amidst ongoing economic uncertainty for the insurance industry.

Despite market headwinds, PacLife, which has been in business since 1868, has survived the recent era of low interest rates that have decimated competitors in the sectors.

Adjusted operating income rose 1% last year to $992 million, and the company ranked No. 3 on the Business Journal’s list last week of the largest private companies with headquarters in Orange County; see the June 12 print edition for more on the company.

The firm employs 4,048, with almost 40% of them in Orange County.

Chief Executive and President Darryl Button told the Business Journal earlier this month the firm “definitely” plans on staying in Orange County and retaining its headquarters in Newport Beach.

Owner-User Deals

Strong financials have likely enabled the firm to be patient in its sale of the Aliso Viejo property.

In a recent owner-user office deal, Finfare Inc., an up-and-coming fintech in the Spectrum area of Irvine, paid $16.9 million for 17900 Von Karman, a 70,964-square-foot office located a block from Main Street along Von Karman Avenue, about a mile from the airport.

The buyer paid about $238 per square foot for the three-story office that’s part of the Main Corporate Center.

It was the largest office sale in the airport area since January, according to data from real estate market tracker CoStar Group Inc.

The building was empty at the time of the sale and had been on the market for nearly three years, sources indicate.

Summit Hub

PacLife’s building is the only office at the Summit Office Campus up for sale.

The master-planned office complex counts 1.7 million square feet of 16 low to mid-rise office buildings and amenities on 70 acres developed in several phases between 2000 and 2017.

The first five-building phase—65-101 Enterprise—has been rebranded as The Heights, while a pair of other offices at 15 and 25 Enterprise are under renovation by owner Harbor Associates LLC and will be renamed Parkline.

Harbor Associates in 2021 paid $92 million for the two buildings totaling 295,000 square feet.

The last building at the campus, next to the PacLife tower, was built for a medical device maker, MicroVention Inc.

That company, now known as MicroVention-Terumo, has expanded operations in the area beyond that 205,000-square-foot building.

Want more from the best local business newspaper in the country?

Sign-up for our FREE Daily eNews update to get the latest Orange County news delivered right to your inbox!

-Advertisement-

Featured Articles

-Advertisement-
-Advertisement-
-Advertisement-
-Advertisement-

Related Articles

-Advertisement-
-Advertisement-