Owner-users snap up office deals for discount prices in OC

Four of the top five sales this year went to future tenants, who paid as little as $149 psf

Owner-Users Snap Up Office Deals for Discount Prices in OC
MicroVention Terumo's Carsten Schroeder with 45 Enterprise (LinkedIn, Google Maps, Getty)

Office tenants in Orange County are eager to buy distressed office deals.

Four of the top five office sales in OC this year were by owner-users, or buyers who plan to occupy their new buildings, the Orange County Business Journal reported.

The biggest deal was by MicroVention Terumo, which last month bought an office building in Aliso Viejo for $44 million, or 45 percent less than its asking price.

The locally based medical device maker picked up the nine-story, 242,700-square-foot building at 45 Enterprise.

The seller was Pacific Life Insurance, based in Newport Beach, which vacated the property during the pandemic during a shift to remote work. The price works out to $181 per square foot.

Pacific Life bought the building in 2007 for $15 million, or $62 per square foot. The property, part of the 16-building Summit Office Campus, was built in 2008 next to the current headquarters for MicroVention Terumo at 35 Enterprise, off the 73 Freeway.

Orange County offices, before office demand fell during the pandemic, typically traded between $300 and $350 per square foot.

Sign Up for the undefined Newsletter

In February, the owners of New American Funding bought a 208,300-square-foot office tower in Santa Ana for $31 million — or $23 million less than what it traded for five years ago.

A limited liability company led by New American’s co-founder Rick Arvielo bought the nine-story building at 1 MacArthur Place. The seller was TPG, based in San Francisco, which sought $33 million. The deal works out to $149 per square foot.

New American Funding, a mortgage lender based in Tustin, will move its headquarters into its seventh and eighth floors.

The remaining two of the top five office sales were both smaller owner-user deals, which traded at a much higher per-square-foot basis than other OC offices.

The only investment deal in the top five office transactions this year was the sale of the Wells Fargo Building in Santa Ana for $18.6 million. The buyer, Core Development Group, paid $154 per square foot for the 120,560-square-foot office, which was 48 percent leased. 

“In a ‘normal-ish’ market, about 10 percent of the buyer pool for the office sector comprises owner-users,” Anthony DeLorenzo of CBRE Capital Markets told the Business Journal.  “Last year, we saw that about 33 percent of trades went to owner-users.”

— Dana Bartholomew

Read more