PCCP Funds $128M for OC Office Portfolio Purchase

The senior loan went to a joint venture of Angelo Gordon and Lincoln Property Co. for their recent acquisition of four properties totaling 540,000 square feet in Newport Beach and Irvine, Calif.
Redstone Plaza
Redstone Plaza

PCCP has provided a $128 million senior loan to a joint venture of Angelo Gordon and Lincoln Property Co. for the acquisition of four office properties totaling 540,000 square feet in eight Orange County, Calif., buildings. The portfolio includes:

  • the two-building Redstone Plaza—181,000 square feet
  • 1201 Dove St.—83,000 square feet
  • the three-building Inwood Park—163,000 square feet
  • the two-building Newport Summit—112,000 square feet

The first two assets are in Newport Beach and the others are in Irvine. Finance, marketing, tech, food and beverage, legal, health-care and real estate industries tenants occupy the portfolio in Orange County’s John Wayne Airport submarket. The partnership plans to carry out a capital improvement plan to take advantage of the strong leasing and rent growth in the submarket and lease up any remaining vacancy.

Equity Office Management LLC was the seller that received $160 million for all buildings, according to a story about the sale earlier this month in the Orange County Business Journal, which also reported that overall, the portfolio is about 82 percent occupied. The publication pegged the deal as the biggest office transaction in Orange County so far this year.

Jonathan Firestone, J.P. LeVeque and Greg Stampley of Eastdil Secured arranged the financing. PCCP was unable to provide additional information, Angelo Gordon declined to comment on the transaction and Lincoln Property Co. did not respond to Commercial Property Executive’s request for additional information.

In August, Lincoln Property Co. and an undisclosed joint venture partner bought 1500 Quail in Newport Beach for $32.1 million from New York Life. The seven-story building totals 95,435 square feet.

A strong, active market

The Orange County office market is characterized by low unemployment and stable net absorption, though the office space pipeline is more than ample—especially in Irvine. Average overall vacancy rose to 13.9 percent, according to a Marcus & Millichap second-quarter report.

Transactions are down somewhat, but the report notes: “Precipitous NOI growth is boosting returns substantially, which will likely prompt higher asking prices per square foot over the coming years.”

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