Hines Team Pitches Repositioned Calif. Offices
A joint venture between Hines and Pimco is marketing an office complex in California’s Orange County that recently was transformed into “creative” space.
The 452,000-square-foot Intersect campus, in Irvine, is valued at about $575/sf, or $260 million, according to market pros. JLL has the listing.
The four-building complex, still in its lease-up phase following the sweeping renovation, is 74% occupied by 21 tenants, including Aon, Arcules, Conduent, JLL, Marriott and Mazda. The weighted average remaining lease term is 7.5 years.
The pitch is that the leases would provide income while a buyer finishes stabilizing the repositioned property. At the estimated value, the stabilized capitalization rate would be 6.5%.
The surrounding Airport Area submarket’s 42.3 million sf of office space is 86.6% leased. However, just 1.5 million sf of it, or 3.5%, is “creative” office space, which commands a 30% rent premium over traditional offices, according to marketing materials. Investors are being told they could capitalize on a recent influx of technology companies seeking space in Orange County, particularly near John Wayne Airport.
The Hines team’s $27 million renovation included a redesign of a two-acre courtyard and upgrades to lobbies, corridors, restrooms and mechanical systems in all the buildings.
One of its most unusual new features: a shipping container converted into a beer garden. Other amenities include a coffee shop, a game pavilion, fire pits, food trucks, a chicken coop and a bird aviary. There is also a 4,200-sf fitness center with Peloton bikes. There are two surface parking lots, a seven-story garage and underground parking.
Intersect is at 17838 and 17872 Gillette Avenue and 17877 and 17875 Von Karman Avenue. In 2015, when the occupancy rate was just 13%, Houston-based Hines and Pimco took a gamble, buying it for $121.5 million, or $288/sf. Cushman & Wakefield and HFF jointly advised the seller, Menlo Equities of Menlo Park, Calif.
The property was previously called Quintana Campus and Washington Mutual Campus.