3 Prime O.C. Office Towers Change Hands

AEW Capital Management L.P., trying to unload its portfolio of non-industrial properties, said Thursday it sold three trophy properties in Orange County for $181 million.

The Boston-based real estate investment firm sold two 12-story office towers in Costa Mesa to McCarthy Cook & Co. of Los Angeles and Blackstone Real Estate Advisors of New York City for $91 million.

AEW also sold the Wells Fargo Tower in Irvine, a 16-story building near John Wayne Airport, to the State Teachers Retirement System of Ohio for $90 million.

Thomas McCarthy, principal of McCarthy Cook, said he believes Orange County is a magnet for new companies and residents.

“We’re attracted to the property by its location,” McCarthy said, noting that the buildings are next to major freeways, the airport and residential neighborhoods. “We think it’s going to grow.”

McCarthy and his partner, Edward W. Cook III, formed their company three years ago. Working in conjunction with Blackstone, the two firms have acquired more than 3 million square feet of office space worth roughly $500 million.

Earlier this year, McCarthy and Blackstone acquired Wilshire Courtyard, a 1-million-square-foot complex in Los Angeles whose primary tenants are Spelling Entertainment and Variety magazine. McCarthy and Blackstone also own buildings in San Diego and San Francisco.

AEW manages the former Copley Investors Limited Partnership, which primarily owns industrial properties, as a result of a merger two years ago. AEW is selling off residential and commercial properties, hoping to garner high prices in the booming real estate market.

So far this year, AEW said it has sold $2 billion worth of property including The Resorts, an apartment and townhome complex in Aliso Viejo, for $198.6 million. The price, averaging $123,000 per unit, is considered one of the highest prices ever paid for an Orange County residential property, analysts said.

After stagnating for much of the decade, commercial properties have surged recently. For those in prime locations such as the airport, asking rents have jumped to about $2.50 a square foot, the highest in the county, according to Grubb & Ellis Co., a commercial brokerage.

Meanwhile, several projects have been announced this year, the first new construction in nearly a decade.

“Now that prices are back again, we’re seeing sales that might have occurred in earlier years happening all at once,” said George Economos, senior vice president at Grubb & Ellis. “We’re seeing several years of sales in one year.”

The Costa Mesa buildings that McCarthy and Blackstone acquired are at 535 and 575 Anton Blvd., across from the giant South Coast Plaza shopping center. Combined, the buildings contain 490,000 square feet and house major tenants such as U.S. Sprint, Bozell Worldwide Inc. and PriceWaterhouseCoopers.

Included in the purchase price is a 46-year land lease, and the rights to develop 25 additional acres that are partially vacant, McCarthy said.

He said the companies plan to build a 400,000-square-foot low-rise office building on the parcel. Two destination restaurants also are planned, along with two smaller food vendors such as Starbucks or a juice establishment, and a parking structure.

The companies are in negotiations with several possible tenants, but no agreements have been reached, McCarthy said.

The Wells Fargo building, at Main Street and MacArthur Boulevard in Irvine, contains 350,000 square feet. The sale price included a majority interest in an adjacent seven-level, detached parking structure. Built in 1990, the building is 98% leased, AEW said.