$98M back-up plan on Santa Ana office sale
Ocean West, Angelo Gordon saw prior deal for state-leased property fall through
Two MacArthur in Santa Ana has traded hands for $98 million, adding nearly 20 percent to its pre-pandemic price tag thanks to a long-term deal with a steady tenant.
Boyd Watterson Asset Management purchased the 220,000-square-foot property near John Wayne Airport from Ocean West Capital Partners and Angelo Gordon & Company, according to the Orange County Business Journal.
The JV purchased the property in 2019 for $83 million from Blackstone Group and last year had lined up an $86 million sale to Korea Investment & Securities Company –– a deal that fell through, according to the OCBJ.
Ocean West will continue to manage the property under Boyd Watterson’s ownership.
Ocean West also owns a sister tower next door, One MacArthur, together with Angelo Gordon, but isn’t currently planning to sell the property, which is undergoing a $2.5 million renovation that includes upgrades to the lobbies, restrooms, and other common spaces.
Two MacArthur is 100 percent leased to the State of California, with offices for a handful of government agencies, including the Department of Industrial Relations, the Department of Health Care Services, and the Employment Development Department.
The lease runs through 2039 –– the sort of long-term commitment that’s been a lifesaver for property owners in the post-pandemic era. Leasing has been slow since coronavirus took over daily life last spring and availability has been up in Orange County and recently hit a 10-year high in Los Angeles County.
Boyd Watterson specializes in commercial properties leased to government agencies and invests in properties across the country. Among its holdings is an office building in Royal Palm Beach, Florida leased to the U.S. Citizenship and Immigration Services. The firm has around $7.6 billion in assets.
The Two MacArthur deal is the sixth-priciest single-building office deal in Orange County this year, according to OCBJ.
The priciest single-building deal of the year was the $150.5 million sale of City Tower in Orange.
In September, LBA Realty sold a two-building office campus in Irvine for $159 million that’s entitled for another 91,500 square feet of new construction.
[OCBJ] — Dennis Lynch