Watermarke Properties has picked up two office buildings in South Santa Ana for $36.3 million, with plans to replace them with apartments.
The Corona-based apartment developer bought the pair of eight-story towers at 200 and 201 East Sandpointe Avenue, in the city’s South Coast Metro district, the Orange County Business Journal reported. The seller was Cress Capital, based in Newport Beach.
The deal for the 317,000-square-foot properties came out to $115 per square foot. Cress paid $52.7 million for the buildings in 2017, or $164 per square foot. The most recent sale represents a 31 percent discount compared to the 2017 deal.
The white concrete office buildings, built in 1981, include a parking garage and parking lot that make up 8.3 acres of the 46-acre, mixed-use Hutton Centre at MacArthur Boulevard and the 55 Freeway. They are 51-percent occupied by such firms as Partners Capital Group, Universal Electronics and Ducommun.
Watermarke wants to demolish the tower at 200 East Sandpointe — and possibly its twin next door — and replace them with an unspecified number of apartments.
No zoning change is required, and approvals are expected to take more than a year, according to brokers.
Newmark represented Cress Capital in the deal.
“Sandpointe is yet another example of re-adaptive use of older office campuses,” Newmark’s Kevin Shannon told the Business Journal.
It’s the second such deal for Watermarke, which in April bought City Centre I, a 150,200-square-foot office building in Orange for $22.5 million. It plans to also redevelop the 6.8-acre site into 360 apartments.
Santa Ana had the ninth-biggest rise in apartments of any city in California last year, with 1,900 units built, according to May estimates from the California Department of Finance.
The privately held Watermarke, led by Jeff Troesh, was founded in 2007. The company teamed up with San Diego-based Wermers Properties in 2019 to develop The Metro, an urban retail village with nearly 900 homes off the 91 Freeway in Corona.
Watermarke and Wermers just completed the Park on First, a 603-unit complex on First Street in Santa Ana.
— Dana Bartholomew
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