An eight-story building near Anaheim’s City Hall that previously served as the local operations hub for AT&T Inc. has been leased to a growing integrated-care medical group affiliated with Orange-based hospital operator St. Joseph Health System.
St. Joseph Heritage Healthcare, a primary care medical group of more than 300 physicians and medical providers, signed a lease to occupy all of the office space at 200 Center St., one of the largest buildings in downtown Anaheim.
The 191,556-square-foot lease is the largest to be completed in Orange County so far this year, according to brokerage data.
St. Joseph Heritage will use the now-vacant building about a mile from Disneyland Resort for its administration services. It plans to move in the summer of 2015.
The doctors’ group will consolidate operations from a handful of smaller offices across Orange County that sources say total about 150,000 square feet.
Terms of the long-term lease weren’t disclosed. JLL senior vice presidents George Thomson and James Estrada represented the building’s owner, Irvine-based PRES Cos., in the lease, and Kevin Leonard with Healthwest Realty Advisors represented the tenant.
The deal is a big win for PRES Cos., which bought the office in January for $18 million, or about $90 per square foot, without a tenant in place.
The building previously served as a regional headquarters for AT&T but was sold and vacated by the telecommunications giant as part of a plan to relocate employees to other offices in the region.
Marketing, Upgrade
PRES had been working with the Irvine office of JLL to market the building to companies looking for new corporate headquarters; schools; and other potential tenants. The new owner also upgraded the building’s lobby and common areas in preparation for landing an occupant.
“We were able to reposition this property and work with St. Joseph Heritage Healthcare to create a more efficient workspace for their consolidation,” said David Bonaparte, managing principal with PRES, which also operates under the name Professional Real Estate Services Inc.
St. Joseph Heritage is a statewide physicians practice organization that works with doctors practicing in large multispecialty groups and with small independent practices.
It includes St. Jude Heritage Medical Group, St. Joseph Heritage Medical Group, and Mission Internal Medical Group.
Integrated-care groups are designed to improve service quality and cut costs for doctors who are in practice for themselves or are in group practices by giving them greater access to clinical and technology resources, personnel and hospitals.
AT&T employed a little more than 1,000 people at the Center Street building at its peak a few years ago.
The new tenant would become Anaheim’s 10th biggest employer if St. Joseph Heritage moves a similar number of administrative employees to the building, according to city data.
The new lease will add an extra element of life to an increasingly revitalized downtown Anaheim.
Shaheen Sadeghi’s 40,000-square-foot Packing House food hall opened this year near City Hall, and the retail developer plans a related expansion at an adjacent building near the intersection of Anaheim Boulevard and Santa Ana Street.
Homebuilder Brookfield Residential opened a new development called The Domain this year across the street from the Packing House. The home development has had strong sales from local employees, among others, according to John O’Brien, vice president of Brookfield’s Southern California operations.
More Deals on Way
The purchase of the AT&T building is one of several local deals for PRES Cos. this year.
The privately held company closed on the purchase of the three-building Brea Park Center and the single-building Brea Corporate Plaza in July, offices located about a mile east of the Orange (57) Freeway on Imperial Highway.
The four buildings, which total about 290,557 square feet, sold for about $42 million.
Also this year, PRES picked up a nearly 40,000-square-foot office on Lincoln Avenue in Orange, as well as a 67,601-square-foot building in the Irvine Spectrum.
Bonaparte said, “We continue to selectively pursue value-add opportunities in key California markets and plan to acquire several more projects in the coming months.”
