Capital Is Flooding to the ‘Right’ Office Deals

Capital is flooding to office deals in Orange County. Demand is strong for the “right deals,” says Kevin MacKenzie, executive managing director at HFF, but the deals getting done are a mixed bag, ranging from sub $50 million requests to capital-intensive deals. MacKenzie recently secured $144 million for a four-building office asset in Orange County, along with his HFF colleagues senior director John Chun, director Jamie Kline, and associate Peter Thompson. The three-year, floating rate deal was funded through New York Life Insurance. We sat down with MacKenzie to talk about the capital markets trends for Orange County office and get his advice for borrowers looking to take advantage of the capital dynamics.

GlobeSt.com: What is lender demand like for traditional office product in Orange County?

Kevin MacKenzie: Lender demand is strong for the right office product in Orange County, with an abundance of capital options available across the risk spectrum. In the last 12 months we have been involved in the financing of several larger scale transactions such as The Bridges, The Press, Flight, and most recently Intersect. While those type of transactions tend to attract significant capital, we have also seen high demand for sub $50 million requests as well.  These projects range from vacant buildings or development to fully stabilized assets, and in nearly all cases there has been efficient capital readily available with aggressive outliers typically being identified through the marketing process.