Shorenstein Selling Calif. Offices to Emmes
Emmes Asset Management has agreed to buy a Southern California office complex from Shorenstein Properties for roughly $200 million.
The 656,000-square-foot Main Plaza, in Irvine, was pitched as a value-added play because its occupancy rate is just 76.5% and its rents are nearly 25% below the average asking rate in the vicinity.
Emmes, a New York investment manager, will reap a 4.3% initial annual yield at the $305/sf valuation. Eastdil Secured is brokering the sale for San Francisco-based Shorenstein.
Emmes will seek to boost the occupancy rate closer to the 88.4% average for the surrounding Airport Area submarket, one of Orange County’s strongest. Also, some near-term lease expirations will give the shop an opportunity to raise rents, which average $28.80/sf. The average asking rent in the roughly 25 million-sf submarket was $37.92/sf in the third quarter — 44% higher than three years earlier.
The tenants include Greenlight Loans (50,000 sf at $29.16/sf through April 2019), healthcare REIT HCP (47,000 sf at $26.52/sf until 2024), Sullivan Curtis Monroe Insurance (30,000 sf at $33.36/sf until 2024), Wunderman Worldwide (25,000 sf at $37.20/sf through October) and Propel Media (19,600 sf at $30/sf through September 2018).
The complex has twin 12-story buildings with LEED gold designations. Their triangular design creates more offices with exterior windows, according to marketing materials. The property has terraced balconies, two restaurants (El Torito Grill and McCormick & Schmick’s) and a six-story garage.
Main Plaza was built in 1987 and 1998 by Koll Co. of Irvine. Shorenstein bought it in 2011 from Maguire Properties of Los Angeles for $211.2 million.
The complex is within the 48-acre Irvine Concourse master-planned office park, adjacent to John Wayne Airport.