New Owners Refi Griffin Towers for $62M

SANTA ANA, CA-The new owners of Griffin Towers have refinanced the 547,000-square-foot office complex for $62 million in a deal arranged by the Debt & Equity Finance Group of CB Richard Ellis. The new financing comes near the same time as CBRE brokered the $22.25 million sale of the 98,551-square-foot building 999 Town & Country Road office building in the City of Orange to Los Angeles-based REIT Kilroy Realty.

Lincoln Property Company and Angelo Gordon & Co. bought the Griffin Towers complex of two 12-story office towers for $90 million in March of this year. According to CBRE’s Chapin Hunt, who handled the recent refinancing on behalf of the joint venture ownership, the new financing is with New York State Teachers Retirement System, a New York State pension fund.  The seven-year deal includes $50 million in initial funding on day one, and structured future funding of $12 million for costs associated with lease-up and stabilization.

Despite the continuing challenges facing the Orange County office leasing market, the financing opportunity for Griffin Towers created a highly competitive bid process, according to Hunt. “We began the sale and debt marketing processes simultaneously to allow the borrower ample time to survey the re-emerging debt capital base in what continues to be a challenging yet improving debt market," Hunt said. Given the current weaker fundamentals in Orange County, CBRE and the borrower were "very pleased" with the new financing, he said. 

The sale of Griffin Towers to Lincoln Property Company and Angelo Gordon in March represents one of the largest office sales in Southern California thus far in 2010.  The lender, RBS, sold the property in conjunction with the owner, Los Angeles-based MPG Office Trust.  In addition to Hunt, CBRE’s Kevin Shannon and Ken White of the Torrance office, and Bob Smith, Paul Jones and Karen Scholte of the Newport Beach office handled the transaction on behalf the sellers.  Following the sale, CBRE was awarded the exclusive leasing assignment for the property. Dean Chandler and Justin Hill are handling the listing.

In the sale of 999 Town & Country Road, CBRE reports that the property is 100% leased to a single tenant, Aecom, a global provider of professional technical and management support services to a broad range of markets, including transportation, facilities, environmental, energy, water and government. Aecom, which recently completed extensive renovations and improvements to the building, occupies it on a lease that expires in 2018 and includes two five-year options to extend.

The seller was not disclosed, but sources indicate it was TA Realty of Boston. Both the buyer and the seller were represented by CBRE’s Shannon, Smith, Jones, Scholte and Gary Stache.

The total site area of the property is six acres, with excess land entitled for future medical office development. The property’s location is close to regional medical centers including St. Joseph’s and Children’s hospitals.