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Through a joint venture, Real Estate Development Associates LLC (REDA) and Archer Property Partners have acquired a 78,000-square-foot office building in Newport Beach.
The two companies revealed plans last month to convert a three-floor structure at 3300 Irvine Ave. into a medical outpatient building, or MOB.
The announcement of the project, dubbed Newport Irvine Medical Center, comes amid strong market demand for medical office space in Orange County.
“We saw a continued void in the market for newer class, more functional medical spaces,” Jason Krotts, co-founder and principal of Newport Beach-based REDA, told the Business Journal.
The site is about two miles south of the new hospital complex at University of California, Irvine and five miles north of Hoag Memorial Hospital Presbyterian, in Newport Beach.
Full building renovations begin this September with an estimated completion time of spring 2026.
Financial terms of the deal were not disclosed.
Low Inventory for Healthcare Projects
The office structure was originally built by The Koll Co. in 1980.
Krotts said REDA and Archer were set to acquire the property in early 2020, but the deal fell out of escrow due to COVID-19. The joint venture then acquired it in late 2023 and received the green light from the Newport Beach Planning Commission this year.
Newport Beach real estate is high in demand for healthcare projects, according to Bryan McKenney, principal at Archer.
“If you look at the inventory that’s out there, especially if you want over 5,000 square feet, there’s very few options,” McKenney said. “And the ones that do exist, several are office medical combos, which presents a whole challenge of problems from the patient experience.”
R.J. Sommerdyke, another principal at Archer, said Newport Beach in particular “is one of the most sought-after locations for medical office space in Southern California.”
“Medical office vacancy in the city is exceptionally low—less than 5%—with a severe lack of large blocks of contiguous space,” Sommerdyke said in a statement. “Currently, there is only one space larger than 10,000 square feet available citywide. Many existing MOBs are aging and no longer meet the needs of today’s providers, making redevelopment projects like this essential.”
REDA and Archer are building a parking deck at the back to increase its parking ratio and allow for full medical uses. Key upgrades they plan to make include a new three-story atrium, enhanced common areas and elevators and the integration of mechanical ventilations systems.
Newport Irvine Medical Center is expected to have a surgery center and imaging center and offer multi specialties ranging from dermatology to elective wellness, according to McKenney who noted that they are in negotiations with “well known entities in the marketplace that want to grow their footprint in Newport Beach” to rent out space in the building.
“Hopefully by the time we start, we’ll have a few leases underway,” Krotts said.
Newport Heights Medical Campus
REDA buys and develops industrial and office properties across Southern California. Archer specializes in owning, operating and developing medical real estate projects.
REDA has done one other medical office project to date, that was another JV with Archer nearly 10 years ago.
Through the joint venture, which also included partners Irvine-based Bascom Group and Westminster Capital LLC in Lake Forest, they developed Newport Heights Medical Campus.
The project broke ground in 2016 and was completed in 2017.
In 2019, the two-building, 60,200-square-foot property was bought by LaSalle Investment Management Inc. for $50.5 million.