This article originally appeared in The Orange County Register.
January 11, 2023
Buchanan Street Partners has paid $28.1 million for a 120,354-square-foot office property in Laguna Hills, with plans to convert it into a medical office facility.
The deal marks the real estate investment firm’s third local acquisition in about six years, and will be the company’s second office conversion in the works locally.
The Newport Beach-based investor and lender paid about $234 per square foot for the Oakbrook Plaza office from the local office of Lincoln Property Co. (LPC) and investment manager Angelo Gordon.
Lincoln Property Co. sold the office for about the same price it paid for it in 2016; however, the recent price does not include a transaction Lincoln made last year, in which it traded a portion of the site to the California Department of Transportation for $4.9 million.
The office has also been well occupied over the past six years, generating consistent rent flow to the local ops of the Dallas-based real estate investor, according to LPC Executive Vice President Parke Miller.
Situated on a 7-acre lot at 24422 Avenida de la Carlota, just off the Santa Ana (5) Freeway, between El Toro Road and Los Alisos Boulevard, the office was built in 1983 and last renovated in 2003.
It was nearly 70% occupied at the time of sale, with a tenant roster including the Orange County Eye Institute, Saddleback Family Medicine and Harvest Small Business Finance LLC.
The office is less than a mile from MemorialCare Saddleback Medical Center, the eighth-largest hospital in Orange County, as well as a large cluster of medical offices surrounding the hospital.
Newport Beach
Buchanan Street has also received approvals to begin work on its first Orange County medical office conversion, in Newport Beach.
In 2020, prior to the pandemic, Buchanan bought a two-building office property along Bristol Street in Newport Beach for $11.5 million. The 42,697-square-foot office project at 1400 & 1420 Bristol St. North is about 2 miles from John Wayne Airport, and a few blocks from Jamboree Road.
The company has the green light to convert the buildings into medical office condos, though a timeline has not been set.
The property is down the street from Buchanan’s headquarters and is even closer to the company’s other Newport Beach holding: The Jetty, a multibuilding complex next to Newport Beach Golf Course.
Buchanan bought that six-building office project in 2014 for $15.5 million, or $175 per square foot.
The company has since converted the project into office condos and has sold off the buildings in individual transactions.
Apartment Push
Buchanan’s acquisition signals bullishness on Orange County for the real estate investment firm, which has been focusing its expansion outside of the state in recent years.
Its last OC acquisition was in 2021, when it paid $24 million for the E405 Euclid Shops, a showroom retail complex just north of the San Diego (405) Freeway on 4.9 acres.
The company has been most active on the multifamily front in recent months.
In November, Buchanan assisted Costa Mesa-based Arnel & Affiliates in its acquisition of a 354-apartment complex in McKinney, Texas. Buchanan counts a growing apartment portfolio in the state topping 1,600 units.
The deal was Buchanan’s fifth multifamily property in Texas, where the investor also owns commercial properties including office and industrial.
Buchanan returned to the Texas multifamily market in October 2020 with the purchase of the 351-unit Waters Edge in Grand Prairie. Prior to last month’s sale, its most recent acquisition in the state was for the 387-unit Jameson at the Bluffs, which closed in November 2021.