EQ Office Sells Orange County Campus for $82M

Griffin Towers. Image courtesy of Barker Pacific Group

Barker Pacific Group (BPG) and Kingsbarn Realty Capital have paid $82 million for Griffin Towers, a two-building office campus in Santa Ana, Calif., totaling 560,000 square feet. According to CommercialEdge data, the seller was EQ Office, a subsidiary of Blackstone. Newmark represented the seller and procured acquisition financing from Western Alliance Bank, public records show.

The asset’s current price tag was 36.4 percent lower than the one of its previous acquisition. CommercialEdge reveals that EQ Office had purchased the property for $129 million in 2014.

Griffin Towers marks the second partnership between Kingsbarn and BPG in the Orange County office market. In 2021, the two firms acquired Fullerton Towers, following a similar value-add strategy.

A recently renovated Orange County office campus

Completed in 1987 as Orange County’s first Wired-certified project, the twin 13-story office buildings were recently renovated. A fitness center, conference center and outdoor bocce court with seating areas, as well as a six-story parking structure with four EV charging stations are among the amenities at the property.

UKG, Michael Baker International, Psomas, Nation’s Direct Mortgage, HNTB and the Ayn Rand Institute are among the buildings’ existing tenants. A CBRE team, comprising Senior Vice Presidents Dean Chandler and Justin Hill, as well as First Vice Presidents Peter Wells and Taylor Friend, handle leasing at the campus, while BPG is responsible for the on-site property management duties.

Located at 5 and 6 Hutton Centre Drive, the campus provides connectivity to freeways 55 and 405, with John Wayne Airport and the University of California Irvine some 3 miles away. Retail centers, such as South Coast Plaza, Fashion Island and Irvine Marketplace, are also nearby.

Newmark Co-Head Kevin Shannon, Executive Managing Director Paul Jones and Director Brandon White represented EQ Office in the transaction, while Vice Chairman David Milestone and Associate Director Henry Cassiday assisted the buyers in securing the acquisition loan.

A closer look at the Santa Ana office market

According to a recent Newmark report, Santa Ana had office inventory of around 5.5 million square feet at the end of this year’s first quarter. The submarket’s vacancy rate stood at 22.8 percent, 510 basis points higher than the one recorded in Orange County.

Although there has been a temporary increase in vacancy rates during the first quarter of this year, the current average in Orange County is still lower than the peak of 20.8 percent that was observed during the Global Financial Crisis, the same source reveals. As companies are imposing a return-to-office policy, they are gaining more bargaining power and making decisions regarding real estate that are likely to have long-term implications.