By Jon Peterson
An entity associated with Boston-based UpperCross Partners has placed on the market for sale the two-building 109,457 square-foot office property in Orange located at 2100 and 2200 Orangewood Avenue. The asking price on the asset is $28.9 million, or roughly $264 per square foot, according to information that appeared in the asset’s offering document.
The property owner has chosen the CBRE private capital markets team in Southern California to be the listing agent on the sale. Those working on the transaction include Anthony DeLorenzo, vice chairman of capital markets, and Gary Stache, executive vice president. Both of them work out of the company’s office in Newport Beach. CBRE did not respond to phone calls seeking comment for this story.
The current owner has held title to the property for over four years. The last time the asset traded hands was in November 2018, when UpperCross paid $18.65 million for the asset, according to public records.
There have been some improvements made to the property since the acquisition, according to the offering document; the investment totaled $3.4 million. The most significant portion of the improvement was $1.2 million that was spent on interior common area improvements. Another $726,000 was invested in an upgrade to the HVAC system in the property, $248,000 was spent on ADA improvements, and $173,000 was invested in upgrading the elevator in the property.
If the asking price on the sale of the property is achieved, it will deliver an in-place cap rate of 7 percent, which is based on the asset’s current net operating income. The three-year cap rate on the property is projected to be 7.39 percent, and a 10-year leveraged IRR on the sale is forecast for 11.08 percent.
The office asset in Orange is located on a total land size of 194,461 square feet or approximately 4.46 acres, and the current occupancy of the property is 91.4 percent. The tenants in the property are a mixture of a diverse group of regional and national professional office users. Lease expirations in the property do not exceed more than 20 percent in any given year.
The Orangewood Avenue property is in an area known for a lot of activity. It is located near Angel Stadium, the UC Irvine Medical Center, Chapman University, Honda Center and Disneyland.
The low-rise office market in Orange County remains strong. Through the third quarter of 2022, the direct vacancy for this type of space was 7.8 percent, according to sources that track this information. This puts the vacancy in the submarket well below the rest of the office market in the region.
