Orange County Office Complexes Sold

An affiliate of Muller Co. purchased two office complexes in Orange County from longtime owner Bentall Capital for nearly $75 million.

Muller bought the two-building One Pacific Plaza complex in Huntington Beach and the former Bentall Executive Centre (now Tustin Centre) in Santa Ana in a venture with Greenwich, Conn.-based investment-fund manager Rockwood Capital Corp.

The properties include a total of about 480,000 square feet of leasable space and have an occupancy rate of about 95%. The new owners are asking about $25.80 per square foot annually for space at the 10-story Tustin Centre and as much as $28.80 at the Huntington Beach complex, which includes six- and 12-story buildings.

Muller principal Steve Muller said the firm’s typical strategy is to purchase suburban office buildings and industrial parks in good locations and sell them five to seven years later. The Laguna Hills-based company has invested in ventures with a variety of financial partners, and currently owns about $800 million worth of properties throughout California and in Arizona.

Funds managed by Rockwood Capital, which has an office in San Francisco, have invested in partnerships with various local real estate operators around the country.

The Huntington Beach complex should remain one of the best-performing commercial properties between John Wayne Airport and Long Beach, Muller said. He plans to develop another office building on the Santa Ana property and perhaps a health club as well.

Bentall had listed the Orange County properties for sale through Lazard Freres & Co. Independent local broker John Gillespie and CB Richard Ellis also participated in the transaction.

Sales of Orange County office buildings have tailed off with the economic slowdown. Research group Delta Associates said the dollar volume of such sales during this year’s first six months was about half the average seen over the previous two years.

However, Orange County commercial property values apparently haven’t fallen much, according to Delta. The average price paid during the first half was about $132 per square foot, down 6% from the year-earlier period.

The price Muller-Rockwood recently paid was about $156 per square foot.