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Irvine Company is paring back, yet again, its office holdings in downtown San Diego.
The Newport Beach-based landlord and real estate company continued its refocus in San Diego by selling its fourth downtown San Diego property in less than a year, as it has sold its stake in the 24-story Wells Fargo Plaza high-rise for $40 million to San Diego-based nonprofit Prebys Foundation, representing about a 73% discount compared to what the firm paid for the building in 2004.
The Irvine Co. is reducing its downtown San Diego office holdings to focus its investments 15 miles north to the area of La Jolla and University Center Drive, which is one of the nation’s leading hubs for technology and biotech jobs, according to a spokesman.
The company last summer said it would support the city’s adopted University Community Plan Update that seeks to develop mixed use districts with additional housing in the area.
At that time, the company said its San Diego’s real estate portfolio included more than 70 office buildings, including five downtown, and 15 apartment communities, totaling over 10 million square feet. Over the past five years, the company has reinvested more than $200 million in these properties.
Irvine Co., San Diego’s largest landlord, in 2004 bought Wells Fargo Plaza from California State Teachers’ Retirement System for $148.3 million, or $284 per square foot.
Prebys Foundation said its purchase of 401 B St. in downtown “marks a strategic investment in the future of downtown as a thriving hub for business, the arts, creativity and community engagement.”
“We believe downtowns play a critical role in shaping the identity, reputation, and spirit of a community, and this investment is just one way in which we are signaling our commitment to helping our downtown deliver on its potential,” Grant Oliphant, CEO of Prebys Foundation, said in a statement. “Downtown San Diego stands at a pivotal moment in its story, and with the purchase of 401 B Street, we are embracing the opportunity to help write its next chapter — one defined by innovation, connection, and civic renewal.”
New York-based Eastdil Secured helped facilitate the sale on behalf of Irvine Co., while Prebys Foundation was represented by Matt Carlson, CBRE’s executive vice president and co-head of U.S. capital markets.
Adam Edwards, a managing director at Eastdil Secured, said in an email to the Business Journal that the company engaged in “a competitive process that involved many potential buyers” before closing the deal with Prebys Foundation.
Irvine Co. Continues to Trim San Diego Footprint
In September, Formosa Ltd., the multinational conglomerate headed by Newport Beach executive Joe Wen, bought downtown San Diego skyscraper Symphony Towers from the Irvine Co. for $45.8 million, or $84 per square foot. The value of the sale was a fraction of the high-end building’s pre-pandemic value.
Irvine Co. bought the 34-floor office high-rise, located at 750 B St. in downtown San Diego and three blocks away from Wells Fargo Plaza, in March 2003 for $124.3 million, meaning Wen bought the office property at a 63% discount.
The Southern California landlord also sold office properties it owned at 101 W. Broadway in November for nearly $44 million and 225 Broadway in December for $48 million. Both properties are in downtown San Diego.
The offloading of the San Diego high-rises doesn’t mean Irvine Co. is abandoning the overall office market.
The company still oversees 54 million square feet of office space in Orange County, Los Angeles and San Diego.
Irvine Co. recently secured a $1.5 billion refinancing deal for MetLife Building, the 58-floor high-rise it owns in Manhattan. The landlord also paid off its debt for 300 N. LaSalle, a 60-floor office tower in Chicago’s River North district, in September.
And Irvine Co. announced earlier this month it would pour more than $25 million into renovations at three office properties in San Diego’s northern suburbs: Eastgate and The Plaza in La Jolla, and Canyon Ridge Technology Park in Sorrento Mesa.
“The greater San Diego metropolitan area will continue to be a key driver of Irvine Company’s ongoing success with the new reinvestment projects in La Jolla University Town Center and Sorrento Mesa,” the landlord said in a statement. “As thriving technology and innovation hubs located near leading educational institutions and abundant lifestyle conveniences, both locations are a key amenity for companies looking to attract and retain top talent.”
Corrections
Irvine-based STEC Inc. was founded by Manouch and Mike Moshayedi in 1989. A story in the April 14 issue incorrectly stated the company’s founders. Manouch Moshayedi’s Mx3 Ventures is the buyer of a Yorba Linda retail center. A company box in the story listed the wrong real estate firm.
The CEO of Santa Ana-based First American Financial Corp. was Ken DeGiorgio. The April 14 OC Insider column misspelled his name (see related story page 3).
The tepid commercial real estate market could be attributed to policies out of Sacramento, according to Theresa Louis Wittman, president at Costa Mesa-based PacificWest Asset Management Corp. An April 14 story incorrectly attributed her statement to the wrong person.
The Journal regrets the errors.
Editorial correction requests can be sent to: brennan@ocbj.com or luna@ocbj.com.