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Hines, Oaktree Purchase of Beckman Campus Sets Local Record, Spotlighting Surging Demand in Brea, California

Biggest Brea Deal of 2018 Reflects Competition for Property Near Los Angeles, Orange County and the Inland Empire
July 11, 2018
Hines and Oaktree-managed funds have been especially active in Orange County, with the Beckman Coulter campus marking their 10th acquisition in the North Orange County submarket alone. Image Credit: Hines.

Hines, a Houston-based investment firm, completed the largest real estate deal this year in the surging North Orange County market of Brea, California, buying the 34-acre Beckman Coulter Campus office and industrial center for $115.25 million amid climbing commercial rents in the city.

The five-building purchase, which CoStar data says totals $200.01 per square foot, was the 10th acquisition in the North Orange County submarket with funds managed by downtown Los Angeles-based Oaktree Capital Management LP and Hines. The deal overtakes the purchase of a 329,000-square-foot industrial manufacturing facility at 300 East Cypress St. in March for $50 million for the record as the biggest deal this year in the city of Brea, according to CoStar data.

As Orange County’s most northern submarket, Brea draws workers from Orange County as well as Los Angeles and the Inland Empire, said Anthony DeLorenzo, senior vice president at CBRE Capital Markets.

"It really services three markets, and that’s why it’s been so successful," said DeLorenzo, who is based in the Newport Beach office.

The commercial real estate demand is just the latest source of economic growth for the city of about 40,000 about a half-hour southeast of Los Angeles. Brea got its start with crude oil production and later became known for growing citrus. Today, its property popularity has led to local retail development, including the Brea Mall and a redeveloped downtown.

Brea also benefits from "no new construction, and absorption has been robust," DeLorenzo said. "There’s lower vacancy, so rents have moved upward dramatically in Brea."

Tight vacancies have led developers to deliver almost 1 million square feet of new inventory in Brea in the past three years, according to CoStar Market Analytics. Annual rent growth has also been healthy in recent years, and vacancies have retreated below their long-term average where they're forecasted to remain, according to CoStar Market Analytics.

The 576,234-square-foot Beckman Coulter Campus, at 250 South Kraemer Blvd., will remain 100 percent leased to Beckman Coulter, a biomedical device producer.

The property includes 1,642 surface parking stalls, outdoor common areas, fitness centers, on-campus dining and community living space.

The campus, which is designed to support manufacturing, research and development and product training, has served as Beckman’s headquarters since it was built more than 30 years ago, according to Hines.

Hines Director Drew Huffman said Brea's location is supporting demand that's leading to "attractive yields."

The net leased portfolio for Hines in Orange County totals about 1.5 million square feet, according to Huffman. Hines' portfolio with Oaktree of area properties includes a Raytheon campus in Fullerton, PacSun campus in Anaheim and Volt Information Sciences campus in Orange.

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