Pacific Oak Strategic Opportunity REIT has sold City Tower in Southern California to New York-based Opal Holdings for $150.5 million. The 435,000-square-foot office property is located in the City of Orange. The transaction is one of the highest priced deals to close so far this year in the market.
Pacific Oak had completed $3 million in property upgrades, including adding a fitness center, conference center, lobby and building entrance. During its ownership, it increased the building occupancy by 15%. At the time of the sale to Opal, the total occupancy was 90%. The building tenants include UC Irvine Medical Center, Enterprise Rent-A-Car, Sedgwick and Spaces.
Orange County's office market has performed well, despite the pandemic and the subsequent recession. Along with Los Angeles, the market outperformed the national office market. Los Angeles and Orange County had only a 28% decreased in large office transactions compared to a 45% decrease nationally.
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Michael P. Zietsman, principal at ZPG, told GlobeSt.com, "Southern California has a resilient economy with a diversity of industries to counter balance those that are in recession. Social media, gaming and technology companies continue to expand their office space in L.A. and will help this economy recover faster than other major markets."
In Orange County specifically, the financial services industries have shined. Research from JLL shows the financial services industry is responsible for 27% of large block leasing activity this year. Mortgage companies have benefitted from increased refinancing business due to low interest rates, and they are expanding.
At 20 stories, City Tower is the fourth tallest building in Orange County. It has a LEED Gold certification, and it located near Angel Stadium, Honda Center and Disneyland.
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Kelsi Maree Borland
