IRA Capital Buys 450K sf Office Campus in Irvine for $102M

IRA Capital has bought a 450,000-square-foot office campus in Irvine for $102.4 million.

The Irvine-based commercial real estate investor bought the VKCC, a nine-building campus at 16715-16969 Von Karman Avenue, the Orange County Business Journal reported. The seller was EQ Office, based in Chicago.

The deal works out to $230 per square foot, or $90 per land foot for the 24-acre property.

“The value of this property is in the land,” Amer Kasm, co-founder and principal of IRA, told the Business Journal. “It’s rare to come across a contiguous parcel of this size in Irvine. We saw the opportunity to reposition it in the long-term into its highest and best use.”

The offices were 60 percent leased at the time of sale. Its large tenants include Westcliff University and Consumer Direct.

IRA is looking to potentially redevelop the offices into life science labs or multifamily use, but the short-term goal is to “continue to own and operate the asset as is and make sure existing tenants are happy,” Kasm said. “It’s a long-term play for us.”

EQ Office, a unit of New York-based Blackstone, acquired VKCC as part of a portfolio deal in 2015. It then embarked on a creative office conversion two years later.

VKCC contains wellness and fitness features, concierge services and restaurants.

A drop in demand for offices from both investors and tenants since the pandemic has prompted a surge in conversion and redevelopment projects.

“The office market has been hit significantly, and many are questioning the long-term viability,” Kasm said. “There’s a tremendous opportunity to look at sites where there’s a higher need than a traditional office.”

IRA, founded in 2010, owns 8 million square feet of real estate in 30 states, of which nearly 70 percent is made up of healthcare and medical offices, with the balance in traditional office, retail and multifamily.

Its latest purchase comes more than a year after the firm bought Anduril Industries’ former headquarters in Irvine for $103 million. The 154,400-square-foot building at 2722 Michelson Drive is two miles from VKCC.

IRA is now redeveloping the office at Jamboree Road and Michelson into a mixed-use apartment complex.

Last March, IRA Capital bought a 250,000-square-foot office campus in Las Colinas, Texas, north of Irving, for an undisclosed price. IRA aimed to make $1.5 billion in new investments last year.

— Dana Bartholomew