Creative-Space Conversion Aids Office Deal

IRVINE, CA-Converting a former industrial building into  creative-office space may have helped 16752 Armstrong Ave. here sell. The recent deal was transacted after the owner completed the renovation and repositioned the asset.

As GlobeSt.com reported exclusively last week, Griffin Capital Corp. purchased the recently reconstructed, 82,645-square-foot, class-A creative-office building on behalf of Griffin Capital Essential Asset REIT Inc. The property, located in the Irvine Business Complex adjacent to the master-planned Tustin Legacy development, was acquired from a partnership between Penwood Real Estate Investment Management and Shubin Nadal for $27.2 million.

Scott Read, executive managing director in Newmark Grubb Knight Frank's Newport Beach office, partnered with CBRE's Bob Smith, Paul Jones and Kevin Shannon to reposition and sell the property on behalf of Shubin Nadal. Having brokered the sale of the property to the sellers in December 2011, NGKF continued to work with Shubin Nadal as the ownership executed the conversion. In addition, as the owner's leasing representative, NGKF negotiated a 15-year lease with Fox Head Inc., a sports-accessories and apparel company serving the motocross industry, to take the entire space.

“Shubin Nadal Realty Investors' efforts with this property present an excellent case study of how to effectively create value with this product type,” says Read. “In less than two years, Shubin Nadal acquired and transformed a well-located but obsolete industrial building into a progressive, class-A creative-office building complete with a well-established local tenant in place, and completed its exit strategy with the sale to Griffin Capital.”