IRVINE, CA—GlobeSt.com has learned exclusively that global medical-device manufacturer Masimo Corp. has purchased a 213,430-square-foot office building at 52 Discovery here from Nikken Inc. for $56 million. The sale is being hailed as the largest owner-user transaction in Orange County in recent memory.
Kurt Bruggeman, SVP, and Jay Mast, VP, with Lee & Associates Irvine, represented the seller, which has owned the building since constructing it in 1998. Oliver Ternate and Mark Zuvich of Zuvich Corporate Advisors represented Masimo. The transaction was the result of an off-market listing and was all cash.
52 Discovery, one of Orange County’s high-profile office buildings, was used as a filming location for several feature films including “Dodgeball,” “Ironman” and “Elizabeth Town” as well as many TV commercials, according to Lee & Associates. Masimo plans to remodel and occupy the property as its corporate headquarters.
“There aren’t too many buildings of this size and caliber in the greater Airport area or even in South Orange County,” Bruggeman tells GlobeSt.com. “It’s a beautiful building occupied by one company for the past 15 years. Nikken had bought the land from Irvine Co. and built it as a corporate headquarters.”
Thanks to operational efficiencies, Nikken was able to do business without as many employees, so it decided to move to a smaller owned building in Irvine and sell 52 Discovery, outsourcing its distribution component to a third-party logistics provider, Bruggeman says. Before the property was up for sale, Masimo had approached Nikken a few years ago with an initial offer. After some time had passed, Masimo came back with a stronger offer, and once Nikken countered in early 2013 at $56 million, the parties agreed on the major purchase terms and have been working hard for the past 12 months to complete the transaction.
“Masimo had been leasing space in the area for years and had been seeking a place that could house most of their employees and provide a corporate environment its employees could take pride in,” Bruggeman says. “Most of the time, sales this size are investment deals. A lot of $50-million investment deals go down in Orange County, but not many are companies buying properties all-cash for that dollar amount.”
One of the improvements Nikken had made to the property was the installation of a 700KW solar system on the roof of 52 Discovery in 2011 for approximately $3.2 million, which has provided significant solar energy and savings of 22 cents per kilowatt to the firm—roughly a $25,000-per-month rebate check from the utility company—over the past three years. Bruggeman tells GlobeSt.com that he was involved in negotiating this savings deal via the California Solar Initiative. The system will continue to provide solar-energy production for the life of the improvements and savings for Masimo in addition to generating rebate revenue for a few more years, he adds.