Orange County's commercial real estate market has shown significant activity recently, with several key properties changing hands and new developments reaching completion. This includes a major office building sale in Brea, a Starbucks-anchored retail center transaction in San Juan Capistrano, and the lease of a large industrial facility in Orange.
Key Takeaways
- A 79,528-square-foot Class A office building in Brea sold for $19.5 million.
- Rancho Ortega Plaza, a Starbucks-anchored retail center, traded for $9.2 million in San Juan Capistrano.
- A 48-year-old 7-Eleven property in Newport Beach fetched $5.24 million.
- Dermody completed two LogistiCenter industrial buildings in Irvine, with one already leased to Hyundai America.
- Pacific Aerodynamic Inc. secured a 51,998-square-foot industrial lease in Orange.
Brea Office Building Attracts Major Investment
A significant transaction in the Orange County market involved a 79,528-square-foot office building located near the Brea Mall. This Class A property, situated at 120 South State College Boulevard, recently sold for $19.5 million.
The building, originally completed in 1985, underwent a renovation in 2015. It is part of the Brea Place complex and hosts six tenants, including the county, CareFusion, Whittier Filtration, HdL Cos., and Yellow Box Corp.
"This offering presented a fantastic opportunity to acquire a well-leased, secure, low-rise office building in one of the strongest investment markets in the nation," stated Anthony DeLorenzo, vice chairman at CBRE, the brokerage representing the seller. "The property's strong tenant roster and long weighted average lease term provide new ownership with significant security and minimal rollover risk."
The identities of both the seller and the buyer were not disclosed by CBRE.
Quick Fact
The Brea office building is a Class A property, indicating high quality construction, prominent location, and robust tenant amenities.
Starbucks-Anchored Retail Center Sells Swiftly
In San Juan Capistrano, the Rancho Ortega Plaza, a two-story, 23,122-square-foot strip center, was sold for $9.2 million. The property is anchored by a Starbucks location, a key draw for many investors.
This transaction was notably fast, closing in a seven-day escrow period. The buyer was a 1031 exchange investor, a common strategy for deferring capital gains taxes on real estate sales.
Understanding 1031 Exchange
A 1031 exchange allows an investor to defer capital gains taxes when selling an investment property and reinvesting the proceeds into a similar property within a specific timeframe. This strategy is popular in commercial real estate.
Hanley Investment Group Real Estate Advisors represented the seller. The Los Angeles-based buyer was represented by Asarch Commercial Endeavors. The center, built in 2001, was 89% occupied at the time of the sale.
Kevin Fryman of HIG highlighted the speed of the deal: "We generated an offer from a private 1031 buyer within one day of launching marketing and closed escrow within 30 days, including a two-day due diligence period. We structured seller financing to support the expedited closing timeline."
Long-Standing Newport Beach 7-Eleven Property Changes Hands
A property housing a 7-Eleven convenience store in Newport Beach, operational for over 48 years, recently sold for $5.24 million. The 3,651-square-foot building, completed in 1975, is located at 1920 W Balboa Boulevard on the Balboa Peninsula, just south of Pacific Coast Highway.
SRS Real Estate Partners managed the sale, with Vice President Kevin Held representing the California-based family trust that sold the property. The buyer's identity was not disclosed.
Market Insight
Properties with long-term, high-credit tenants like 7-Eleven often attract investors seeking stable, passive income, especially in prime locations with high barriers to entry.
Held emphasized the unique nature of the offering: "This was a rare opportunity for an investor to own a property occupied by a high-credit, long-term tenant in one of the top beach city locations in the nation. This area has extremely high barriers to entry for retailers and rarely any triple-net retail for sale."
Dermody Completes Irvine LogistiCenter Campus
Dermody has finished construction on its two-building LogistiCenter campus in Irvine. The first facility to be completed, LogistiCenter at Irvine II, measures 91,600 square feet and was leased earlier this year to Hyundai America.
Hyundai America plans to use this facility for its Technical Center, focusing on research and development. CBRE represented Dermody in this lease, while JLL represented Hyundai.
The larger facility, LogistiCenter at Irvine I, spans 133,320 square feet. This Class A building includes 10,000 square feet of office space, split between a ground floor and a mezzanine. It is currently available for lease, with CBRE handling the marketing.
Aerospace Firm Leases Industrial Space in Orange
In Orange, Pacific Aerodynamic Inc., an aerospace component manufacturer, has leased a 51,998-square-foot industrial property. The facility is located at 2390 N. American Way.
Rexford Industrial, the landlord, signed a 62-month lease with Pacific Aerodynamic Inc., valued at $5.27 million. The lease term began on October 1.
- Lee & Associates in Orange represented Pacific Aerodynamic Inc.
- Daum represented Rexford Industrial.
- The lease agreement includes options for extension.
This lease highlights continued demand for industrial space in Orange County, particularly from specialized industries like aerospace manufacturing.
