MetLife, PGGM Buy Irvine Creative Office Campus for $235M
Acquisition of the 453K SF complex is the largest creative office deal so far this year in Orange County.
MetLife Investment Management and PGGM have acquired Intersect, a 453K SF, four-building creative office campus in Irvine from Hines for $235.2M in one of the largest and most-lucrative office deals in Orange County this year.
Hines acquired the property, which currently is 85 percent leased, in 2015 from Menlo Equities for $121.5M.
A JLL advisory team secured a $117.6M 10-year, fixed-rate acquisition loan for the deal through Allianz Real Estate for the buyers. JLL was involved in the sale of the campus to Hines in 2015 and refinanced Hines’ acquisition in 2019.
MetLife also provided a $182.1M bridge loan for the asset in 2020, with a maturity date of 2023.
The price of the deal, which translates to about $518 per SF, is among the highest recorded this year in Orange County. An estimated 2.5M SF of office space has been traded this year in the county, generating $811M in sales, with investors paying an average of $382 per SF, according to CommercialEdge data.
In terms of square footage, the Intersect acquisition surpasses the purchase by a joint venture of TriGate Capital and LPC West of a 420K SF office campus, known as The Square on Main, from WCB Properties for $97.2M in March.
The Square on Main is located in the St. Joseph Center submarket of Orange County. Capital One Bank provided a $69.6M loan for the deal.
The Intersect campus was upgraded with more than $27M in renovation. The property features a two-acre courtyard with a game pavilion, a farmer’s market and fire pits. The Hangar 24 Brewery opens onto the courtyard, featuring indoor and outdoor dining and live music.
The four buildings in Intersect’s 15-acre complex in the Irvine Business Complex submarket were built between 1989 and 2004, with building sizes ranging from 55,350K SF to 166,442K SF. The property is within proximity of Interstate 405 and about three miles from john Wayne Airport.
In a statement, MetLife said the acquisition fits the company’s investment goal of pursuing differentiated assets within their competitive markets.
As of May, the average vacancy in the Irvine Business Complex submarket was at 16.7%, down 50 basis points month-over-month. Orange County’s overall vacancy was 15.4% as of May.