Newport Beach, Calif. – Bixby Land Company has purchased Mission Heritage Center, a four-story office building in Mission Viejo, California. Bixby has acquired the 70,948-square-foot Class A building for $15.6 million, or $220 per square foot, from New York Life Real Estate Investors. Bixby Land represented itself in the transaction, while New York Life was represented by Kevin Shannon, Paul Jones and Blake Bokosky at CBRE.
The acquisition represents a value add opportunity to return the project to stabilized occupancy in a tight South Orange County submarket. The building was 59 percent leased at the time of sale, compared to submarket occupancy of 92.5 percent in the immediate area at the end of Q3 2015, per CBRE.
“The building can accommodate tenant needs up to 11,000 square feet. The shortage of spaces of this size in the market has already spurred strong tenant interest in the building,” said Aaron Hill, senior vice president of operations at Bixby Land Company.
Mission Heritage Center offers good corporate identity, with interesting architectural features and high glass lines. Bixby will invest $5 million into the project for common area improvements, construction of move-in ready spec suites on the second and fourth floors, and leasing costs.
“The building is in great condition and requires little in the way of capital improvements, a departure from our ongoing investment strategy of repositioning buildings with significant capital outlays to deliver innovative work environments,” added Mike Severson, senior vice president of investments at Bixby. “We are focusing our efforts on the completion of several move-in ready suites to meet immediate demand in a supply-constrained market.”
The project is located at 27401 Los Altos, adjacent Crown Valley Parkway and less than one mile from the San Diego I-5 Freeway. The Shops at Mission Viejo and Kaleidoscope shopping centers are nearby, as is Mission Hospital.
This latest acquisition is Bixby’s fifth in Orange County over the last two years. The firm most recently purchased the US headquarters for Kawasaki in Irvine, with plans to redesign the 260,000-square-foot building into exciting high-volume creative space for larger tenants. That project is expected to begin construction mid-2016.
Bixby completed the development of AERO in San Diego this past October, and is finishing a 400,000-square-foot project in Santa Clara, Quad at Tasman. Bixby is also completing 33.7 North in Tustin, and will begin development on The Oberlin in Sorrento Mesa in the first quarter of 2016.
“We continue to seek out acquisitions where we can utilize our design and development experience to build the kind of highly amenitized projects in demand by today’s progressive tenants,” added Hill.