Foxborough Apartments, a 90-unit apartment complex in Orange has been bought by Advanced Real Estate in Irvine for $41.5 million, according to property records.
The seller was UDF Woodland Group LLC out of Littleton, Colorado.
The transaction closed Nov. 14, at which time the new owners rebranded the property to “Grove House” in a nod to the land’s previous distinction as orange groves.
The property at 501 E Katella Ave. includes 23 garden-style apartments built in 1964. Amenities at Grove House include detached garage parking, two swimming pools, a fitness center, storage space and a grilling area.
Apartments, which run 1,200 square feet and include woodburning fireplaces, dishwashers, washers and dryers, rent for $2,925 to $3,175, according to Apartments.com.
Advanced said it has plans for “extensive” additions and renovations, including adding central air conditioning, new windows, new cabinetry, flooring, appliances, upgraded landscaping and pool enhancements.
“This is a strategic purchase for us as the property is located one block from a very similar complex we have owned for about 20 years,” said Richard Julian, CEO of Advanced. “With this acquisition, we will be able to enjoy operational efficiencies between the two properties.”
What’s next for commercial property?
As word of commercial deals dwindles in our inbox, let’s review what some local commercial real estate analysts are saying about the Southern California landscape.
Coming off a torrid pace of sales in the pandemic, signs of easing are hitting all segments of the CRE. The following is a brief summation of market reports from industry insiders.
Apartments
Rising supply, seasonal swings and economic uncertainty have pulled the apartment market “back down to Earth,” says John Burns Real Estate Consulting.
After a flurry of deals noted in our roundup this year, Burns confirms that apartment sales have “almost come to a full stop as buyers wait on the sidelines.”
Slowing rent growth won’t deter investors in 2023, Burns predicted. In the real estate investment trust category, apartment executives “remain bullish … because they see both the financial strength of their renters and the numerous headwinds facing their competition: the for-sale housing market,” the Nov. 23 report noted.
Office space
Demand for office space has “hit a pause,” NAI reports, as tenants reduce their footprint.
NAI Capital’s third-quarter report on office space shows available sublease space in Southern California continued to rise, up 19.3% year to date. Available office sublease space in Orange County saw a 26.6 percent increase from last year as direct office space, over the same period, got a mere 4-tenths percent increase.
“Mainly tenants reducing their office footprint via subleases resulted in the surge of available office space,” the report states.
In turn, office developers are cutting construction projects, which are down 42.1% year over year. Orange County’s overall square feet under construction is down 30% year over year, NAI said.
Industrial
Available space in the region has grown in the third quarter as rents and sales prices soared by double digits, NAI reported last month.
With 20.1 million square feet of new industrial construction added to the Southern California market, the availability rate is up 4.3% in Q3. Developers are taking note, with new projects decelerating to just 0.6% quarter over quarter, NAI said.
In Orange County, available industrial space is up 20.7% from last year, the report said, while asking rent climbed 27% to a market average of $1.46 per square foot.
The county also has the highest sales prices per square foot for industrial space in the region with a median of $350 per square foot, up 22.5% year over year.
Knight-Swift signs industrial lease in Brea
A logistics company has signed a lease for a large warehouse facility in Brea, according to JLL.
Knight-Swift Warehousing & Fulfillment will occupy a 126,681-square-foot site at the Imperial Distribution Center at 1225 W. Imperial Highway. Terms of the lease were not disclosed by the brokerage.
The Phoenix-based company will use the space for expansion of its third-party logistics business, JLL said.
The landlord, Clarion Partners, was represented by Cushman & Wakefield.
“Even with the current economic uncertainty, demand for warehouse space in suburban markets like Orange County has remained strong,” said Garrett McClelland, a vice president at JLL. “Orange County is a very desirable market, and has the population, job growth and income to be a top industrial market for years to come.”
Kingsbarn buys Laguna Hills office campus
Kingsbarn Realty Capital has bought HERE at Laguna Hills, a low-rise office campus at the intersection of Mill Creek Drive and Ridge Route Drive.
Terms of the deal were not disclosed.
The campus was built in 1988 and renovated in 2016 and 2017, according to the Las Vegas-based firm. The property has 233,974 rentable square feet on 15.97 acres.
“This is a very unique property with exceptional access to amenities, executive housing, the Irvine Spectrum, and the I-5 and I-405 freeways,” said Kingsbarn CEO Jeff Pori.
The facility, which has outdoor lounges, a fitness facility and conference centers, is adjacent to the Veeh Reservoir. Tenants include Centercode Inc., SpineArt USA, and MemorialCare Home Health.
Kingsbarn said it has partnered with the Kelemen Group, as a management and development partner for any future redevelopment.
Real estate transactions, leases and new projects, industry hires, new ventures and upcoming events are compiled from press releases by contributing writer Karen Levin. Submit items and high-resolution photos via email to Business Editor Samantha Gowen at sgowen@scng.com. Please allow at least a week for publication. All items are subject to editing for clarity and length.
