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9/24/14
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A 118k sf office property in the Irvine Business Complex sold for $26.5 mil ($225/sf). Located at 17000-17040 Red Hill Ave, east of the 55 Fwy at the intersection with the 55 Fwy, the property was sold by Red Hill Covenant Group LLC.
Photo: Costea Photography, Inc. |
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The property—previously an old manufacturing facility—is primarily leased to Pacific Dental Services LLC, which has occupied the building since the completion of construction 18 months ago. The building and site went through a complete renovation, and now features numerous characteristics of creative office properties, including: an indoor/outdoor patio amenity, indoor plants and trees, extensive use of natural light from skylights and solar tubes, high ceilings, an open, collaborative design and all-surface parking.
"This is one of a very few large, creative office buildings located in the IBC," said Scott Read, executive managing director in NGKF's Newport Beach office, who represented the seller, along with Michael Kane, executive managing director in NGKF's Los Angeles office. "It's a state-of-the-art creative office building with a secure, primary tenant, which makes it an attractive asset to own in this marketplace; consequently, we received strong interest from numerous potential buyers.”
"The area is poised for growth after adding 22,600 new jobs last year, generating long-term demand for space," said Kane. "Combining that with limited speculative office development in the pipeline creates tremendous upside for investors in the area."
The Orange County office market has experienced an influx of institutional investors as the market fundamentals continue to strengthen. The market in the second quarter posted 1.1 msf of positive net absorption, the most since the third quarter of 2005. The vacancy rate dropped to 13.3 percent from 13.6 percent in the first quarter, and Class A rents in the Airport submarket where Irvine is located recorded a 6.2-percent increase year-over-year.
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