ORANGE, CA-Stamford, CT-based GE Asset Management has acquired the 386,011-sf Orange City Square office and retail development, with Birtcher Anderson Realty of San Juan Capistrano acting as investment adviser. Terms of the deal were not disclosed, but industry sources peg the price at $130 million.
Bob Anderson, chief executive officer for Birtcher Anderson, tells GlobeSt.com that Birtcher Anderson, in addition to acting as the investment adviser and underwriter for the acquisition, will provide asset, property management and leasing administrative services under an incentive management contract. The property, one of the largest single office and retail assets to come onto the market in Orange County recently, attracted multiple offers.
The four-building Orange City Square property is located off the 22 Freeway at 750, 770, 790 and 840 the City Dr. South in Orange. The complex, which is visible from the 22 Freeway, is composed of three mid-rise class A office buildings totaling 373,619 sf and a support retail pavilion totaling 12,392 sf.
Anderson describes Orange City Square as a well located high-quality asset in the heart of Central Orange County that the new ownership is targeting for a mid- to long-term hold. “It is unusual to see an asset of core quality and scale with so much upside potential,” Anderson says.
Anderson explains that the upside arises from a number of factors. The center is in excellent physical condition, he points out, and it is located in a submarket characterized by low vacancy and lack of available sites to develop competitive property, with in-place rents substantially below prevailing market rates.
In addition, the center offers upside in filling the 14% of the space that was vacant at the time of escrow. Anderson notes that in recent years, Central Orange County has shown strong rent growth, a decline in vacancy in the submarket to the current 7.5% level and a lack of new construction.
Built in 1988, the center is situated on nearly 14.2 acres and is occupied by a tenant roster including Walt Disney Attractions, JP Morgan, Zenith Insurance and J.D. Power and Associates. Orange City Square's retail pavilion includes a gym, an auto detailing service, a florist and gift shop as well as a variety of restaurants. The property is adjacent to the Block at Orange, an 806,000-sf outdoor dining, shopping and entertainment center with more than 114 retailers.
GE Asset Management acquired the center from Springfield, MA-based Massachusetts Mutual Life Insurance Co., with the seller and the buyer both represented by Dan Broderick, Adam Edwards and Kevin Crummy of Eastdil Secured. Birtcher Anderson Properties, the property management arm of Birtcher Anderson Realty will provide asset, property and leasing management services for the new owner.
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