PGIM Sells SoCal Office to Ocean West, Rockwood Capital
By Greg Cornfield November 5, 2021 2:30 pm
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A joint venture between Ocean West Capital Partners and Rockwood Capital acquired a 10-story Class A office building in Orange County for $64 million, or about or $298 per square foot. This deal comes at a loss for seller PGIM, which acquired the property from Metropolitan Life Insurance Company for $72.3 million in 2015, property records show.
The building at 1301 Dove Street in Newport Beach was originally built in 1980, according to Newmark (NMRK), which represented the seller and announced the deal. The property underwent an $11.5 million renovation plan in 2018, including tenant upgrades, the addition of electric vehicle charging stations, and more.
With the known upcoming vacancy of a lease with Alliant Insurance, the multi-tenant property is 49 percent leased. Ryan Tucker, a principal with Ocean West, said the company plans to complete additional renovations, including a new tenant fitness center and a 7,000-square-foot outdoor patio.
There’s more than 8.7 million square feet of office space in Newport Beach, with a 12.5 percent vacancy rate, according to Newmark’s third-quarter office report. Orange County’s total current vacancy rate is 16.1 percent, which is its highest point since late 2012. The average asking rent for Class A space in Newport is about $3.47 per square foot, higher than the overall county average of $2.78 per square foot, per Newmark data.
According to the brokerage, the Orange County office market is poised for a post-pandemic recovery given its strong demographics, growing tech base and diverse occupancy pool. Sublet availability in the market has likely peaked, and leasing fundamentals are expected to improve into 2022 as employees return to the office on a more full-time basis.
Newmark’s Kevin Shannon, Paul Jones, Brunson Howard, Ken White and Brandon White represented the seller.
Gregory Cornfield can be reached at gcornfield@commercialobserver.com.
