IRA Capital Buys Single-Tenant OC Office Building for $103M

IRA Capital has acquired a single-tenant office building in Irvine, California, for $103 million. The 9-acre office campus is fully leased to Anduril Industries, a growth-stage defense contractor with a valuation of $4.6 billion.

Located at 2722 Michelson in the Irvine Business Complex, the property is the former headquarters of St John Knits and was fully renovated in 2019. The property features 24-foot ceilings, a light-filled open plan that encourages collaboration, multiple meeting spaces, a fitness center, landscaped courtyards and a well-equipped kitchen and cafeteria.

This is the latest in a flurry of investment activity involving IRA Capital this year. The firm has been actively acquiring and selling properties for the past six months. In August, it sold its medical office portfolio for $700 million. Nuveen US Cities Office Fund and an institutional capital partner acquired a portion of the portfolio for $462.9 million.

In the transaction, Nuveen acquired 27 properties totaling 747,000 rentable square feet in 13 states, including Arizona, California, Florida, Illinois, Michigan, North Carolina, New Jersey, New York, Pennsylvania, Texas and Wisconsin.  Twenty of the 27 properties are located in areas where local governments require an extensive approval process to prove that there is a need to develop new healthcare facilities. This process means there are high barriers to entry and regulatory restrictions around new supply. The portfolio is 99% occupied by 38 tenants.

Then in September, IRA Capital acquired The Post for $153 million. Live Nation occupies the majority of the building as its headquarters, while the US Post Office occupies the remaining 8% of the property. Located at 325 North Maple Drive, in Beverly Hills, the four-story building totals 102,500 square feet with an open floor plan featuring 22-foot ceilings and outdoor patios for work and collaboration and it has a LEED certification. In 2019, the previous ownership completed a $44 million renovation.

Single-tenant office buildings have become popular following the pandemic as s hedge against downside risk and uncertainty in the office sector. According to a report from Colliers earlier this year, “investors continue to chase security in the office market, with single-tenant asset sales nearly doubling from year-ago figures. This represents the largest jump of the three major asset types.”