IRVINE, CA—CBRE has completed the sale of 17885 Von Karman in Irvine. The 153,664 square foot building marks the first stabilized core office sale in Orange County since 2012. CBRE vice chairman Kevin Shannon, along with Paul Jones, Ken White, and Blake Bokosky, represented the seller, funds managed by Oaktree Capital Management, L.P. & Hines, in the sale.
“Orange County continues to be an attractive basis market compared to West Los Angeles, Seattle and the San Francisco Bay Area. This sale is still below peak pricing and replacement cost for Orange County unlike core deals in those other coastal gateway markets,” said Shannon. “The leasing momentum in Orange County Airport submarket has continued to the point where new speculative office space is warranted similar to those other coastal markets as well. Southern California in general has experienced a slower market recovery but is definitely starting to catch up in this cycle to the San Francisco Bay Area and Seattle.”
“Capital continues to be very optimistic on the rent growth in Orange County and the market is moving very quickly,” said Jones. “We anticipate pricing to continue to climb and expect class A rental rates to eclipse $3.00/SF FSG by the end of the year—numbers we have not seen since pre-recession.”
In addition, Jones notes that over 1.0 MSF of spec office development is planned in the Greater Airport Area over the next 18-24 months. 17885 Von Karman is one of Orange County's newest class A buildings, completing construction in 2008 at the start of the recession. It was 95% leased at the time of the sale.
This is the second office sale for the CBRE team to close in the last two weeks—they also completed the sale of Pacific Center, a value-add office campus in Santa Ana.
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David Phillips
David Phillips is a Chicago-based freelance writer and consultant with more than 20 years experience in business and community news. He also has extensive reporting experience in the food manufacturing industry for national trade publications.
