City Plaza, a 19-floor office building in Orange County, has sold for quite the discount.
Surlamer Investments, a Newport Beach-based firm owned by Fariborz Maseeh, bought the office tower from TPG Capital for $18.5 million, the Orange County Business Journal reported. It amounts to $51.51 per square foot, likely making it one of the cheapest deals in recent years in Orange County.
The building was only 14 percent leased at the time of sale, according to CoStar. TPG Capital acquired City Plaza in foreclosure proceedings early last year after previous owners Greenlaw Partners and Walton Street Capital defaulted on $64.2 million of debt at the property. Surlamer’s purchase from TPG was reportedly a deed in lieu of foreclosure.
City Plaza spans 369,134 square feet on an 11.3-acre parcel next to The Outlets at Orange mall. The office building was built by City Development Company in 1969 and renovated in 1999.
Current tenants at City Plaza include Core Law Group, Courier Insurance Services and United American Insurance Company. The presence of firms like these align with Avison Young’s mid-year office market outlook for Los Angeles and Orange County. While tech and entertainment companies were on a lease-signing spree between 2021 and 2023, in the past two years, so-called traditional entities like law firms and financial services companies have become the leaders of the office market in Greater Los Angeles.
Last quarter, law firms Callahan & Blaine and Kirkland & Ellis and financial services and insurance firm Supreme Warranty were among the top 10 biggest lease transactions in the O.C. by square footage, according to Savills’ second-quarter report. Callahan & Blaine relocated to 44,789 square feet at 19900 MacArthur Boulevard in Irvine, around the corner from Irvine Company’s University Research Park development; Kirkland & Ellis moved to a new 28,641-square-foot office space at 695 Town Center Drive in Costa Mesa. Supreme Warranty relocated to 22,842-square-foot digs at 5 Hutton Centre Drive in Santa Ana.