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7/29/21
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Opal Holdings, a New York-based real estate investment firm, has acquired City Tower, a LEED Gold certified, trophy office tower totaling 435.2k sf in the City of Orange. It was sold by Pacific Oak Capital Advisors.
Although we don’t have the sales price in this deal, we can tell you that KBS Capital Advisors, a related entity of the seller, paid $147.25 mil for the asset in early 2018.
Located at 333 City Blvd, the 20-story building was 90% leased at the time of sale to prominent tenants including UC Irvine Medical Center, Enterprise Rent-A-Car, Sedgwick and Spaces. City Tower is a high image, Class A building featuring distinctive architectural design, expansive window line, contemporary interior finishes, a dual-elevator lobby and abundant parking.
The property recently underwent a $3 mil renovation that included upgrades to the lobby, a state-of-the-art fitness center, conference center and building entryway. Situated in Central Orange County, the property presents a corporate prominence with direct freeway visibility from the Orange, Santa Ana and Garden Grove Freeways.
Newmark’s Co-Head of U.S. Capital Markets Kevin Shannon, Executive Managing Directors Paul Jones, Brunson Howard and Ken White and Senior Associate Brandon White represented the seller in the transaction. According to Newmark, the sale achieved the highest price for an office property sold in OC so far this year.
“City Tower is the premier high-rise office tower in Central Orange County,” said Jones. “Its strong tenancy and WALT, coupled with below market in-place rents, provides the buyer with a secure, income producing asset with limited future capital improvements.”
The Central County submarket has experienced office rent growth of over 24% in the last ten years and is Orange County’s third-largest submarket, with roughly 16.5 msf of office stock, according to Newmark Research. A significant portion of Orange County’s current vacancy stems from leased new construction that tenants have yet to occupy. Elevated vacancy levels will decrease in time, and deal activity will likely ramp up in the second half of the year, along with absorptions gains.
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