MetLife and PGGM have just closed the biggest office deal in Orange County this year, buying a nearly 500,000-square-foot office campus in Irvine for $235 million.
Hines sold the four-building creative office campus, called Intersect, according to JLL, which represented Hines and secured financing on behalf of the buyers.
Allianz Real Estate provided a 10-year, fixed-rate acquisition loan totaling $118 million. Public property records show the deal closed in mid-June, just two days after the U.S. Federal Reserve raised interest rates by three-quarters of a percentage point.
Hines bought the campus in 2015 for $121.5 million through a joint venture with Pimco, and then spent an additional $27 million to renovate the campus.
The firms have been looking to sell the office property since 2019, when it was put on the market for $260 million. In June 2020, the firms scored a $182 million refinancing package on the property, keeping it in their hands. MetLife was actually the lender on that three-year, interest-only loan.
The campus, located at 17877 Von Karman Avenue, is currently 85 percent leased — slightly better vacancy than the overall Irvine market. About 17 percent of all office space in Irvine was vacant in the first quarter, according to JLL, with average monthly asking rents at $2.87 per square foot.
But larger tenants are still weary about signing new leases. About 60 percent of office leases signed across Orange County in the first quarter were for less than 10,000 square feet, showing demand from smaller tenants.
Other office campuses across the county have been put up for sale, though none have closed at a price point even close to the Intersect deal.
In February, Greenlaw Partners and Walton Street Capital put a 350,000-square-foot office that’s entirely available for lease on the sales block, with a price tag of $100 million.
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