The owner of the Santa Ana building that holds Powerwave Technologies Inc.’s headquarters said there are “multiple prospective tenants” that could take over the bankrupt telecom equipment maker’s sizable office space, if and when the company opts to leave the property.
AGNL Antenna LP, an affiliate of New York-based private equity company Angelo Gordon & Co., said it has an opportunity to find a replacement tenant for the 367,045-square-foot building that holds Powerwave’s headquarters but has thus far been thwarted from doing so by the company’s legal maneuvers.
Powerwave, a maker of cellular base-station gear for wireless networks, filed for bankruptcy protection in January after falling behind on debts of nearly $400 million.
Plan, P-Wave
The company currently is working to finalize a court-approved liquidation plan that would allow it to sell most of its hard assets and intellectual property to three different firms, including P-Wave Holdings LLC, an affiliate of L.A.-based private equity firm Gores Group.
P-Wave is one of the company’s largest secured creditors and has pressed for a liquidation of Powerwave’s assets since the onset of bankruptcy.
The sales, as now structured, would bring in less than $20 million and would leave little money for the company’s unsecured creditors, according to a recent courtroom report by legal journal Law360.
Powerwave also is figuring out an exit strategy for its local real estate holdings, according to court documents.
The company sold its headquarters at 1801 E. St. Andrew Place to AGNL in late 2011 in a bid to raise cash for operations.
The sale of the property, which is a few blocks from Edinger Avenue and the Costa Mesa (55) Freeway, was valued at $49.6 million and was one of the larger office transactions in the county in 2011. It included a leaseback provision and called for Powerwave to pay a little less than $4 million a year in rent at the start of the deal, which was slated to run for 15 years and had two 10-year extension options, according to regulatory filings.
It doesn’t appear likely that those extension options will come into play; the landlord is expecting Powerwave to leave the building in the not-too-distant future, according to court filings.
Powerwave is currently behind on its April rent, according to mid-May court filings from AGNL, which objects to the pace the tenant is taking to make up its mind about whether to remain in the building or use the bankruptcy proceedings to reject the lease.
The landlord asked Delaware’s federal bankruptcy court to deny a recent Powerwave request to extend for three months the company’s period for assuming or rejecting its lease.
“Opportunity”
“In the event that (Powerwave) decides to reject the lease, which it has indicated is its intention, AGNL currently has an opportunity to find a replacement tenant, an opportunity that will not be available in 90 days,” the landlord said in court filings this month.
“AGNL is aware of multiple prospective tenants that are currently seeking to rent space in the same location as the premises and desire a building that is virtually identical (to the Santa Ana building),” the company’s court filings said.
The landlord didn’t disclose prospective tenants.
In addition to Powerwave, the building’s tenants currently include Deutsche Bank. The bank subleases 109,777 square feet from Powerwave in a deal that runs through mid-2014, according to CoStar Group Inc. records.
The building would be one of the largest empty offices in the county if it was completely vacated.
Large area tenants said to be currently in the market for office space in the 100,000- to 400,000-square-foot range include Union Bank, MemorialCare Health System and Masimo Corp., according to data from the Irvine office of brokerage Jones Lang LaSalle.
Powerwave was estimated to employ about 250 people in Santa Ana as of a couple years ago, but state employment records show about 180 of the company’s local employees were let go in April.
The recent departures included President and Chief Executive Ronald Buschur, who announced his resignation last month. Khurram Sheikh, previously the company’s chief technology officer, replaced Buschur.
