Hines and Partner Sell Premier Office Building in California for $103.2M
- Jun 28, 2010
June 28, 2010
By Barbra Murray, Contributing Editor
Houston-based international real estate firm Hines and Fort Worth-headquartered Crescent Real Estate Equities Co. have just sold the 271,556-square-foot office building at 2211 Michelson Drive in Irvine, Calif., to Los Angeles’s Kilroy Realty Corp. Despite having constructed the building during the height of the real estate market in 2007, the partners are not taking a huge hit with the sale; just months before construction completion, Crescent had projected a total $103.6 million development cost for the property.
The 12-story office building at 2211 Michelson, designed by architect Paul Danna of DMJM Design, is located in Orange County’s John Wayne Airport submarket. In addition to its premier office space, the property features an adjacent six-level parking facility. Also, 2211 Michelson holds the distinction of being the first building on the West Coast to achieve LEED Silver Design Core & Shell certification.
Perhaps as a testament to 2211 Michelson’s status as a highly desirable property in a premier location, its occupancy level climbed to 95 percent in February. Reaching near maximum capacity during a time when the area’s office market is struggling is no small feat; during the first quarter, the average office vacancy rate was 26.9 percent in Orange County and 29.2 percent in the Airport submarket, according to a report by real estate services firm Grubb & Ellis Co.
Eastdil Secured represented Hines and Crescent in the transaction, while Kilroy relied on internal representation. Hines, which will relinquish leasing and management responsibilities for 2211 Michelson to the new owner, plans to use the proceeds from the disposition to reinvest in the Orange County market. “We’re looking at all sorts of acquisition types,” Kim Jagger, Director of Corporate Communications with Hines, told CPE.