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Kearny Real Estate Buys Santa Ana Buildings for $34.8M

January 23, 2018
While Santa Ana, CA may not be the most active submarket in Orange County, it is still attracting investors due to its location and affordability, as evident in the sale of 3100 - 3130 Harbor Blvd.

Kearny Real Estate Company purchased the office campus from the Colton Family Trust for $34.77 million, or about $173 per square foot.

The 36-year-old campus, known as Elevate@Harbor, consists of two mid-rise buildings totaling 201,404 square feet on 6.5 acres.

Hoonie Kang, a partner at Kearny Real Estate Company, said the property was an ideal purchase for the firm.

"The campus has everything we look for in an investment: great bones, great basis and great location," Kang said. "We are commencing a significant capital improvement program that will transform Elevate into a more modernized, amenitized office campus in anticipation of our largest tenant vacating in early 2019. At our cost basis, we will still be able to offer competitive rental rates."

Kearny plans to invest approximately $15 million to reposition the campus, according to Kang.

Nearly an acre of open space was created during the construction with the three- and five-story glass curtain wall buildings being built on top of one level of podium construction.

There is also a planned redesign of an outdoor area as well as dining options, including an upgraded café, shared indoor and outdoor conference areas and meeting spaces.

Bob Smith and Anthony DeLorenzo at CBRE represented both parties in the sale.

Please see CoStar COMPS #4109103 for additional information on this latest transaction.

Kearny has retained Carol Trapani and Allison Kelly with CBRE's Orange County office to oversee the leasing for Elevate@Harbor.

Santa Ana may not have office fundamentals that are as dynamic as neighboring Costa Mesa, South Santa Ana or the Civic Center area, but it has its own strengths, according to Joshua Ohl, senior market analyst with CoStar Market Analytics.

"It’s a foundationally-sound submarket supported by a backbone of government tenants and the service industry," Ohl said. "Santa Ana’s proximity to those areas does provide it the opportunity to siphon tenants interested in cheaper rents without sacrificing location."

DeLorenzo said another thing the submarket has going for it is the fact it’s on the cusp of Costa Mesa, where a lot of exciting things are happening in office. This includes the Chargers new headquarters at the Hive, located at 3333 S. Susan St.

"It creates a nice ability to buy in a market performing well at a cost that’s attractive from a basis standpoint," DeLorenzo said. "It’s getting more interest as the market tightens."

For example, Kearny Real Estate and Tribune Media Company in November sold The Press, a 24-acre redevelopment project less than a mile away at the corner of Harbor Blvd. and S. Coast Dr. in Costa Mesa, CA to Steelwave LLC and Invesco for $64.75 million, according to CoStar data.
See CoStar COMPS #4056859.




Karen Jordan, Los Angeles Market Reporter  CoStar Group   
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