Hines, Oaktree JV Acquires 230 KSF Office Building in Santa Ana, Calif.
- Jun 11, 2014
Hines has entered into a joint venture with a real estate fund managed by Oaktree Capital Management, L.P. to acquire and lease back 1750 E. Fourth St., a 229,989-square-foot, Class A office building situated on 2.8 acres in Santa Ana, Calif., from State Compensation Insurance Fund.
The price of the acquisition was not disclosed.
According to the details of the deal, State Compensation Insurance Fund will lease back nearly 50 percent of the square footage via a long-term lease, with the remaining 50 percent of the square footage available for lease immediately.
“As an experienced developer, owner and property manager, Hines is committed to providing the highest level of quality, service and value to its clients and investors,” Ray Lawler, Hines’ managing director, who leads the firm’s Orange County development and investment office, told Commercial Property Executive. “Through the acquisition of 1750 East Fourth, we identified the opportunity to invest in a high-quality asset, add value through our expertise in construction and leasing, and provide superior property management to a credit tenant through its leaseback.”
Completed in 1994, the eight-story building is located within the Orange County submarket and has convenient access to the Los Angeles, Orange County and Inland Empire employment hubs. It also has immediate access to the 5 and 55 Freeways.
According to Lawler, Hines is committed to a comprehensive renovation plan to maximize tenant satisfaction.
“Our planned strategic capital improvements include upgrades to the restrooms, elevator cabs, balconies, locker room/showers, building and HVAC systems and numerous exterior improvements (landscaping, parking garage, common areas, etc.),” he said. “In line with Hines’ commitment to sustainability, we will pursue LEED certification for this building.”
Frequent partners, Hines and Oaktree also teamed in May on 825 Stewart Drive, a 75,350-square-foot office building in Sunnyvale, Calif. for $12 million, and the reported $60 million acquisition of Triton Towers located on a 19-acre site in Renton, Wash. on the southern shore of Lake Washington.
“We are happy to begin a long-term relationship with State Compensation Insurance Fund, and we look forward to adding 1750 E. Fourth St. to our Orange County real estate holdings,” Ambrose Fisher, Oaktree’s managing director, said in the release. “This is our 10th project with Hines in Orange County and our 18th with Hines globally.”
Hines has assumed on-site property management responsibilities on behalf of the joint venture.
State Compensation Insurance Fund was represented in the transaction by Rob Bickel, Patrick Inglis and Thomas Maloney of JLL.