Demand in the Orange County office market is beginning to pick up, and recent sales activity in the region is proof of that. In a recent transaction, Boyd Watterson Asset Management Group purchased 1 MacArthur Place, a 208,142 square-foot building, for $45 million, or $216.20 per square foot, according to a third quarter market report from Kidder Mathews.
Located in Santa Ana, the Class A creative office building reaches nine stories and contains a café, fitness center, conference space, and structured parking, according to Ocean West, which sold the property. The company acquired the property in 2019 and prior to selling, upgraded the building’s lobby, corridors, elevators and restrooms in renovations totaling $2.5 million.
The new owner of the property, Boyd Watterson, is an asset management firm, which was founded in 1928 before forming its real estate group in 2009. The company focuses on investing in commercial properties office, warehouse and flex space properties across the U.S. and currently manages more than $7.6 billion in commercial real estate assets.
The sale of 1 MacArthur Place is just one of many recent transactions to occur in Orange County’s office market. Most prominently, City Tower, located at 333 City Boulevard in Orange, was recently sold to Opal Holdings for $152 million, or approximately $349 per square foot. The transaction was the largest to date in the region, with several others following behind. Most recently in Santa Ana, Khoshbin Company acquired a 66,652 square-foot office property for $22 million, or approximately $330 per square foot. In addition, a Santa Ana office property totaling 53,574 square feet was sold by Meridian in September for $29.9 million, or approximately $558 per square foot.
According to Kidder Mathews, sales activity is anticipated to pick up even more as workers head back into office spaces. Vacancy is currently down nearly 20 percent since the same time last year. The report showed direct vacancy rates in the third quarter of 2021 were at 11.6 percent, while in the third quarter of 2020, they were at 9.7 percent. Regardless, sales volume in the region has picked up nearly 80 percent as many investors are expecting a rebound in Orange County’s office market. In the third quarter of 2021, Kidder Mathews reported 2,192,330 square feet of office property sold, while at the same time in 2020, only 1,204,665 square feet of office space was sold.
