FOOTHILL RANCH, CA-GlobeSt.com has learned exclusively that private investor Pinnacle Asset Management Group LLC has purchased a 203,749-square-foot office asset here for $40 million from Equity Office/Blackstone. The property is located at 26632-26642-26672 Town Centre Dr.
Built in 2000, the office building is 100% leased to tenants that include loanDepot, PepsiCo. and Arrow Electronics. Ryan Swanson and Kurt Bruggeman of Lee & Associates Irvine represented the buyer, while the seller was represented by Ryan Gallagher, Tim Geiman and Derreck Barker of HFF.
The property offers some unique amenities for tenants. Bruggeman tells GlobeSt.com, “This property has rare reciprocal parking that allows for 12:1 parking in the retail center that is adjacent, thereby making it very attractive for high-parking office requirements. Additionally, the retail center next door has a great food court, allowing employees at Town Centre to walk next door for lunch and other amenities.
According to Lee, Pinnacle purchased the property 100% leased; however, several tenants’ leases are expiring in the next two years with below market rents, which will allow the buyer to create value by raising those rents to market. The asset sold at a price well below replacement cost at $197 per square foot; overall rents in place are below market, and this value per square foot is lower than competing properties that traded in the submarket for $235 per square foot.
In Southern California, where most people drive to work, parking is hugely important to office tenants. As GlobeSt.com recently reported, Bixby Land Co. has sold AERO, a 92,463-square-foot office building at 9797 Aero Dr. in the Kearny Mesa submarket of San Diego, to AVID Center for $30 million after a $5-million inventive redesign that included garage parking.