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TUSTIN, CA-Radius Investments LLC of Santa Barbara has acquired the 85,340-sf Tustin Financial Center for approximately $21.8 million, buying below replacement cost in one of the country’s strongest office markets. The center is a two-story office project at 14511 Myford Rd. that at one time was home to Texas Instruments as a single-tenant building but is now a multi-tenant property.

Radius principals tell GlobeSt.com that the immediate business plan for the Tustin Financial Center is to complete the retenanting to a multi-tenant office building. They note that 90% of the building was leased at the time of the sale and that 57% of the space will be coming available for lease in the second quarter of 2008.

The Tustin Financial Center was originally constructed as a single-tenant building in 1978 for Texas Instruments. It was extensively renovated in 2006 to convert it to a multi-tenant, institutional quality office building, which benefits from its central location in the Tustin/Irvine marketplace at the intersection of Myford Road and Walnut Avenue, one block off Jamboree Road.

Rhonda Henderson, executive vice president and one of the founding partners of Radius, cites the historically low vacancy rates in the Orange County office market, which has consistently been one of the top-performing office markets in the country in recent years. She adds that the acquisition follows the Radius strategy of “buying very well-located multi-tenant office buildings where we can add value with our repositioning experience.”

At the time of acquisition, the building was leased to seven tenants. Some 57% of the space is leased to publicly traded Assurant, a New York City-based firm that provides a broad range of insurance products. Other tenants include Fantastic Sams hair care, health and wellness products provider Diamond Tree and electronics component distributor TTI Inc.

Radius execs tell GlobeSt.com that the company competed against a number of bidders for the deal, which generated numerous offers on the initial bid and a select number of potential buyers included in the second round. The company, which typically holds properties for five to seven years, says that its hold for the Tustin Financial Center will depend on market conditions.

Radius acquired the Tustin property from a Southern California-based private investor in a transaction that was brokered by Gary Stache, Pat Scruggs and Anthony DeLorenzo of the CB Richard Ellis private client group in Newport Beach, who represented both the buyer and the seller. Bill Chiles and Scott Peterson of CBRE Melody’s San Diego office, the debt and equity placement division of CBRE, secured the funding for the transaction through Cigna Investments Inc.

With the acquisition of Tustin Financial Center, Radius Investments and its affiliates have assembled a portfolio valued in excess of $130 million since the company’s founding in 2003. Its other assets are located in Los Angeles, Ventura and San Diego counties.

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