REAL ESTATE : Foreign Investors Scouting Around for Office Buildings in Orange County

With many of the best office buildings in big U.S. cities already snapped up by investors, foreign buyers have begun looking farther afield for good investments. And they’re looking especially hard at thriving areas such as Orange County.

Recently, Shuwa Investments in Los Angeles, the U.S. subsidiary of Japan’s Shuwa Corp., bought the former Crocker Tower in Irvine for more than $40 million from MDC Realty.

Earlier this year, Shuwa bought the 64,000-square-foot Irvine Commercial Center from National Capital Corp. of San Francisco for $10 million.

Shuwa made its first purchase in Orange County several years ago when it bought an industrial building in Cypress. But most of the buildings Shuwa has purchased in the United States have been in the downtowns of major cities such as Boston, New York and Los Angeles.

“The fact is they’re running out of property to buy” in those cities, said Clifford Ujiie, who arranged the two recent Shuwa purchases as a senior marketing consultant for commercial real estate broker Grubb & Ellis. “Although if they find another building in L.A., they’ll buy it.”

Shuwa, one of the pioneers of condominium development in Tokyo, has moved into buying office buildings both in this country and Japan.

Shuwa likes to buy buildings that are fully occupied, according to Grubb & Ellis. The 155,000-square-foot Crocker building in Irvine is occupied by two securities firms, Merrill Lynch and Shearson Lehman/American Express.

Why Orange County? Even though the office vacancy rate is now more than 20%, local office space has still been leasing fairly rapidly. The proximity to Los Angeles and the suburban life style also appeal to the Japanese, Ujiie says. And the Japanese feel comfortable in Orange County because many Japanese companies already have operations here.