Hines, Oaktree Sell 405K SF Raytheon Office Campus
Largest campus to trade in Orange County this year goes to family investor.
A joint venture of Hines Interests and Oaktree Capital Management has sold the 405K SF Raytheon Campus in Fullerton, CA to a local family investor for $76.5M.
In terms of its size, the deal for the Raytheon Campus was the largest office trade in Orange County since the beginning of 2023. Cushman & Wakefield represented the seller.
The partners had owned the campus since 2012, when they acquired the 34-acre complex—which dates back to 1986—for $50M. The campus includes two three-story buildings with Defense contractor Raytheon the single tenant since the complex opened.
Raytheon Campus is located at 1801 Hughes Drive in North Orange County in proximity to Interstate 5 and the Brea Mall.
Driven by long-term commitments from government and medical device tenants, Orange County experienced a surging 80% increase in quarter-over-quarter office leasing volume in the second quarter—the first quarterly spike in leasing activity since 2022, according to JLL’s Q2 2023 market report.
Out of the total square footage signed in Q2 in Orange County, 80% came from new leases and 56% was contributed by larger leases on spaces of more than 10K SF.
“These figures indicate a potential demand recovery for offices in Orange County,” JLL’s report said.
According to the report, the county government and several large tech tenants took space in North County and South County in the second quarter, driving net absorption in those two submarkets into positive territory for the first time since early 2022.
Sublease availability in Orange County totaled over 4M SF, JLL said, noting that overall sublease additions notably decelerated due primarily to declining sublease availability in the city of Irvine. Sublease signings of leases more than 10K SF in Irvine totaled 188 SF in Q2.
“Looking ahead, increased leasing volume, fewer sublease additions and a growing number of conversions are pointing to a promising outlook for Orange County,” JLL’s outlook said.
The report said that office employment in the county grew by more than 16,000 employees in the first five months of 2023, led by government and business services. The growth in employment fueled office leasing activity and absorption.
“Additionally, continued conversions of office to other property types will further balance the market in Orange County,” JLL’s report said.