By Carrie Rossenfeld
ALISO VIEJO, CA—GlobeSt.com has learned exclusively that Bixby Land Co. has added another project to its investment portfolio with the purchase of 26880 Aliso Viejo Pkwy. here from Harsini AVP Holdings LLC for $11.6 million. The acquisition is the fifth project the firm has purchased over the last two years in Orange County, including its most-recent $44.25-million buy of the Kawasaki headquarters building in Irvine, CA, last month.
The 53,115-square-foot office building is located in Town Center Corporate Park and was 69% vacant at the time of sale. Bixby will invest new capital into interior building upgrades and tenant finishes, along the lines of the redevelopment work the firm has performed on several properties throughout California over the last five years.
According to Mike Severson, SVP of investments for Bixby, “The demand for office space has shifted toward designs promoting collaboration and a progressive work environment. We’ve seen demand pivot toward contemporary space throughout the state, and the speed with which these properties lease continually reinforces our investment strategy.”
For this project, Bixby will focus its efforts on the lobby and tenant spaces since the project, built in 2000, requires little exterior work. The firm has been more widely known for undertaking projects that require significant development to be converted to creative office.
Aaron Hill, SVP of operations for Bixby, says, “We were attracted to the upside opportunity in this building against the backdrop of strong market fundamentals and the inadequate supply of creative-office options to meet demand.”
According to CBRE, the Aliso Viejo market had a 3.2% office vacancy rate at the end of Q1 2015, with no new office projects under construction. This figure is even tighter than the South Orange County vacancy rate of 6.8% at the end of the quarter.
Harsini was represented in the transaction by Doug Matthews and Gary Allen at Newmark Grubb Knight Frank, while Bixby represented itself. Matthews and Allen have also been retained to represent leasing for the building, which is targeted toward tenants seeking between 7,000 and 19,000 square feet of space. The building improvements are scheduled to be completed in the fourth quarter of this year.
As GlobeSt.com reported in April, true creative space won’t work in every building or in every market, according to Bill Halford, CEO of Bixby. Halford told us exclusively that areas where tenants are focused on competing for talent are better candidates for true, amenitized creative-office space.