More OC Office Assets To Hit Sale Block

IRVINE, CA—There will be a significant number of office properties coming to market over the next two years as owners who acquired value-add investments over the past few years and implemented their business plan begin to sell, JLL's G. Ryan Smith tells GlobeSt.com. Smith, an industry veteran who has more than 22 years of real estate experience, was recently hired as an EVP based in Orange County and will be a key member of JLL's capital-markets team in the southwest region, led by Michael Zietsman. We spoke exclusively with Smith on his view of the Orange County office-investment market.

GlobeSt.com: How will the next couple of years in the Orange County office investment market differ from the past two years?

Smith: There will be a significant number of properties coming to market over the next two years as owners that acquired value-add investments over the past few years and have successfully implemented their business plan begin to put these properties up for sale. Also, just within the last 12 months, Orange County has seen significant fundamental market improvement (lease rates, occupancy, etc.), which will allow investors to maintain a positive outlook for the foreseeable future.

GlobeSt.com: What challenges to do you see in the Orange County office investment market?

Smith: The biggest challenge is the ability for investors to deploy capital in the market. Despite the projected increase in transaction volume, the combined amount of capital available and desirability of the Orange County office market will limit the number of opportunities in which to invest.

GlobeSt.com: How would you describe the state of foreign office investment in Orange County?

Smith: Orange County not only takes advantage of being part of the greater Los Angeles metro area, and thus a major "gateway" market, but also has a very internationally diverse population itself. Foreign capital has recently been very active throughout Orange County, but will primarily focus on higher quality product in the Airport Area. A large portion of this foreign capital is coming from individuals, with institutional foreign capital beginning to put Orange County more actively on their radar screen.

GlobeSt.com: What investment advice would you give current owners of office properties in Orange County?

Smith: If you have office properties that may be in need of capital improvements, now is the time to invest capital to better position your asset for the anticipated continued growth in the leasing market. Furthermore, if you acquired an office property with a value add strategy and have already executed your business plan, now would be a good time to liquidate given the overall demand for investors to place capital in Orange County.