(EDITOR’S NOTE: According to sources with knowledge of the transaction details, the property was sold for $152 million, or approximately $349 per square foot. The property was last purchased in 2018 by KBS for $147.25 million, or approximately $338 per square foot.)
Irvine, CA — Newmark Knight Frank (“Newmark”) announces it has arranged the sale of City Tower, a LEED Gold certified, trophy office tower totaling 435,177 square feet in Orange, California. The transaction is the largest office sale in Orange County year-to-date.
Newmark’s Co-Head of U.S. Capital Markets Kevin Shannon, Executive Managing Directors Paul Jones, Brunson Howard and Ken White and Senior Associate Brandon White represented the seller, Pacific Oak Capital Advisors. The buyer was Opal Holdings, a New York based real estate investment firm.
Located at 333 City Boulevard, the 20-story building was 90% leased at the time of sale to prominent tenants including UC Irvine Medical Center, Enterprise Rent-A-Car, Sedgwick and Spaces. City Tower is a high image, Class A building featuring distinctive architectural design, expansive window line, contemporary interior finishes, a dual-elevator lobby and abundant parking.
“City Tower is the premier high-rise office tower in Central Orange County,” said Jones. “Its strong tenancy and WALT, coupled with below market in-place rents, provides the buyer with a secure, income producing asset with limited future capital improvements.”
Shannon added, “This is yet another example of a family office with a long-term hold strategy buying a high-quality Orange County office asset. We have seen private capital like Opal more aggressively price office assets compared to institutional buyers in Orange County recently.”
The property recently underwent a $3 million renovation that included upgrades to the lobby, a state-of-the-art fitness center, conference center and building entryway. Situated in Central Orange County, the property presents a corporate prominence with direct freeway visibility from the Orange, Santa Ana and Garden Grove Freeways.
The Central County submarket has experienced office rent growth of over 24% in the last ten years and is Orange County’s third-largest submarket, with roughly 16.5 million square feet of office stock, according to Newmark Research. A significant portion of Orange County’s current vacancy stems from leased new construction that tenants have yet to occupy. Elevated vacancy levels will decrease in time, and deal activity will likely ramp up in the second half of the year, along with absorption gains.
About Newmark
Newmark Group, Inc. (Nasdaq: NMRK), together with its subsidiaries (“Newmark”), is a world leader in commercial real estate, seamlessly powering every phase of the property life cycle. Our comprehensive suite of services and products is uniquely tailored to each client, from owners to occupiers, investors to founders, growing startups to leading companies. In 2020, Newmark generated revenues in excess of $1.9 billion. Newmark, together with London-based partner Knight Frank and independently owned licensees, operates globally from approximately 490 offices with 19,300 professionals.
