ARA Buys Building Near O.C. Airport
Institutional investors advised by Glendale investment manager American Realty Advisors have acquired a nine-story office building in Orange County’s John Wayne Airport commercial district for a price estimated in the low $40-million range.
ARA’s purchase of 4100 Newport Place in Newport Beach is the third major sale in the district in the last few months. Newport Place was sold by another institutional group, an Advent Realty fund managed by Boston pension fund advisor TA Associates Realty, which had owned the property since 1992.
The 183,000-square-foot building was built in 1990 and is 90% leased.
Tenants include various financial institutions, professional service firms and technology companies.
Commercial property investment broker Robert S. Smith of CB Richard Ellis said the buyer and seller agreed to keep the sale price confidential, but that 17 interested buyers submitted bids.
Smith, who brokered the sale with CB colleagues Michael Kane and Karen Scholte, said Newport Beach’s so-called Greenlight initiative should limit future competition for the building.
The measure subjects development proposals exceeding the city’s general plan parameters to a citywide vote.
ARA’s purchase follows other significant airport-area deals. In November, real estate investment trust Glenborough Realty paid nearly $27million for the Newport Plaza complex on Dove Street. And in January, an institutional fund managed by Prudential Real Estate Investors bought the new 12-story Opus Center Irvine I for about $70 million.
Although tenant demand for Orange County office space fell sharply with the technology sector decline and the general economic recession, the airport vicinity remains the county’s most active market. And Newport Beach remains the county’s most prestigious--and expensive--address.
Brokerage Cushman & Wakefield reports that Newport Beach’s office vacancy rate (including space available for sublease) is 13.4%, compared with 17.5% for the airport vicinity and 17.8% countywide.
Landlords are asking an average rental rate of about $33.50 a square foot annually for available Newport Beach offices. The airport-area average is $30; the countywide rate is $26.
