A local building changed hands in a sign that not all offices are getting big haircuts.
J&R Group LLC sold a five-floor, 143,000-square-foot office tower at 2525 Main St. in Irvine for $37.6 million.
Dana Point-based Pacific Tree Capital LLC, a commercial real estate advisory firm founded in 2003, was the buyer.
The building’s $37.6 million price tag was 39% more than what the office building sold for in 2017, when 2525 Main St. exchanged for $27 million and $189 per square foot.
Cushman & Wakefield Executive Vice Chairman Jeffrey Cole said significant renovations after the previous sale helped drive the price of the building upwards.
Irvine-based J&R Group sold 2525 Main St. for $262 per square foot, which is significantly higher than two nearby buildings that were recently sold in the John Wayne Airport area.
The 16-floor building at 2600 Michelson Drive sold for $42 million, about $135 per square foot. It was a 65% haircut from 2017 when CBRE IM paid $386 per square foot.
New York Life Real Estate Investors sold the 11-floor office tower at 18201 Von Karman Ave. for $37 million, nearly $158 per square foot, representing a 55% cut from what it paid for the building in 2015.
Transaction Proof
Cushman & Wakefield, the brokerage company that represented J&R Group in the transaction, said in a statement that the sale of 2525 Main St. was “among the highest price per square foot achieved for a multi-tenant office building of over $20 million countywide, post-pandemic.”
“This transaction is proof that a well thought out modern repositioned office asset can attract discerning tenants in a challenging office market,” Cole said. “The exceptional common areas focused on tenant amenities along with the future use optionality on the flex portion of the site make for a rare and very attractive investment opportunity in the premier submarket of Orange County.”
2525 Main St. was built in 1982. J&R Group launched a three-phased renovation of the building in 2015.
The building’s tenants, according to CoStar data, include AG International, Arkham Technology and OSI Digital.
J&R Group, which finances, develops and revitalizes commercial, mixed-use and residential properties, was represented by Cole, Nico Napolitano, Jason Kimmel and Kristen Schottmiller of Cushman & Wakefield.
“We witnessed extremely high buyer demand, primarily from the foreign and private high-net-worth buyer type,” Napolitano, a senior director with Cushman & Wakefield, said.
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