Kennedy Wilson Buys Anaheim Office Building for $56M
- Jul 16, 2012
Stadium Gateway, a 273,000-square-foot Class A office building in Anaheim, Calif., has just come under the ownership of Kennedy Wilson. The company acquired the asset from joint venture partners MPG Office Trust Inc. and Beacon Capital Partners L.L.C. for $56 million. Kennedy Wilson bought the property at a significant discount to the $71.1 million MPG paid for the property in 2005.
Located across from Angel Stadium at 1900 State College Blvd., Stadium Gateway opened its doors in 2002 at a cost of $44 million. Today, the six-story office building is 70 percent leased, but the big hole in the tenant roster does not deter Kennedy Wilson. “There are a number of large tenant requirements in the market and this building is ideally suited to accommodate them,” John Prabhu, president of KW Commercial Investment Group, told CPE.
Changing conditions in the market may also work to Stadium Gateway’s advantage. The vacancy rate in Anaheim has dropped from about 21.3 percent to 18.2 percent year-over-year, as Voit Real Estate Services Inc. recently reported.
Additionally, absorption in Orange County has been positive over the last eight quarters. “We are strongly optimistic that this encouraging momentum and steady recovery, in concert with Stadium Gateway’s intrinsic benefits and desirable characteristics, will combine nicely in our efforts to stabilize the asset,” Prabhu noted.
Office vacancy and investment sales volume are both down in Orange County. Approximately 589,000 square feet of office space traded in the second quarter, compared to 922,000 square feet in the second quarter of 2011. Six buildings sold, all of which were Class B assets.