Barings Sells OC Trophy Office Tower

By Barbra Murray

The Atrium

With the assistance of NKF Capital Markets, Barings Real Estate has wrapped up the disposition of The Atrium, an approximately 302,900-square-foot trophy office tower sited on six acres in Irvine, Calif. Kelemen Co. paid roughly $106.8 million for the Orange County asset.

The Atrium, situated at 19100 and 19200 Von Karman Ave., last traded in 2000, when Barings picked it up from The Minato Bank for $59.9 million. The 10-story building made its debut in 1986 and has since retained its luster through upgrades, including a notable $5.3 million renovation completed in 2015. Today, the property, which also features 10,000 square feet of ground-level retail space, is 90 percent leased.

“We were able to achieve very strong recent leasing, which well-positioned the property for sale, and allowed us to successfully exit the asset, completing our investment plan,” John Kennedy, a managing director for Barings Real Estate’s equity group, said in a prepared statement. In a move to capitalize on higher rental rates, new owner Kelemen will submit the property to additional upgrades.

Kelemen relied on internal representation in the transaction. The NKF Capital Markets team representing Barings included Kevin Shannon, co-head of U.S. Capital Markets, Executive Managing Directors Paul Jones, Ken White and Brunson Howard, as well as Blake Bokosky, a managing director.

The Orange County appeal

The Orange County office market continues to be a competitive arena for investors. “Orange County is viewed by capital, both domestic and foreign, as an attractive basis market compared to other West Coast markets—Seattle, San Francisco, Portland and West Los Angeles,” Paul Jones told Commercial Property Executive. “The fundamentals here are still strong, with limited new development, and Orange County is a great place to live and work.”

The change in ownership of The Atrium marks the fourth Orange County office trade exceeding $100 million since the first quarter of 2018. All told, NKF Capital Markets has had a hand in three of those four transactions. The commercial real estate advisory firm arranged the $147.3 million sale of City Tower, an approximately 430,000-square-foot building in Orange, as well as the disposition of the 498,000-square-foot Summit Office Campus in Aliso Viejo, which commanded $157 million.

Office investments sales in Orange County during the first half of 2018 totaled roughly $1 billion, according to a report by commercial real estate services firm CBRE, which had handled leasing at The Atrium under Barings’ stewardship.

Image courtesy of NKF