Irvine Co. Buys Avco Tower for $45 Million

The Irvine Co. announced Thursday that it has purchased the Avco Tower, a 16-story office building in Newport Center, for about $45 million from two subsidiaries of Avco Financial Services, Balboa Insurance Co. and Meritplan Insurance Co.

Avco Financial Services, a Newport Beach subsidiary of Greenwich, Conn. based Avco Corp., last month agreed to be acquired by Textron Inc. for $1.4 billion. Avco Financial Services, which owns a nationally chartered bank, a Visa credit-card operation, four consumer insurance companies and a worldwide chain of consumer finance offices, will be operated as a subsidiary of Textron once the acquisition is completed.

Avco has seen its profits dwindle in recent years because of fierce competition in financial services. Avco spent most of 1984 trimming its corporate staff, from about 850 persons to 525, and further reducing expenses.

“The sale of our building offers AFS an opportunity to put the money back into our business and use it more productively,” said H. Wallace Merryman, Avco Financial Services chairman, in a statement. “This equity will be used to produce a higher rate of return for AFS than it could as a real estate investment.”

Thomas H. Nielsen, president of the Irvine Co., said in a statement that the company plans to renovate the building’s interior before new tenants move in. The tower, built in 1971, has 235,000 square feet of rental space.