for sale 3330 harbor blvd. costa mesa, ca...1988/05/12 · mesa. this area is one of the primary...

±53,908 SF OFFICE/CORPORATE HEADQUARTERS

FOR SALE 3330 HARBOR BLVD. COSTA MESA, CA

http://voitco.com/

2 / 3330 HARBOR BLVD., COSTA MESA, CA

This confidential Offering Memorandum (this “Memorandum”) is being delivered subject to the terms of the Confidentiality Agreement personally or electronically signed by you (the “Confidentiality Agreement”) and constitutes part of the Evaluation Material (as defined in the Confidentiality Agreement). It is being given to you for the sole purpose of evaluating the possible acquisition of 3330 Harbor Boulevard, Costa Mesa, CA 92626 (the “Property”), and is not to be used for any other purpose or made available to any other party without the prior written consent of the “Owner”, Voit Real Estate Services (“Broker”).

This Memorandum was prepared by the Broker based on information supplied by the Owner and the Broker. It contains selected information about the Property and the real estate market but does not contain all the information necessary to evaluate the acquisition of the Property. The financial projections contained herein (or in any other “Evaluation Material”, including any computer diskettes or files distributed to you via e-mail from Broker are accessible online through Broker’s website) are for general reference only. They are based on assumptions relating to the general economy and local competition, among other factors. Accordingly, actual results may vary materially from such projections. Various documents have been summarized herein to facilitate your review; these summaries are not intended to be a comprehensive statement of the terms or a legal analysis of such documents.

While the information contained in this Memorandum and any other Evaluation Material is believed to be reliable, neither Broker nor Owner guarantees its accuracy or completeness. In consideration of the foregoing and since the Property will be sold on an “As-Is, Where-Is” basis, a prospective purchaser should make its own independent investigations, projections and conclusions regarding the acquisition of the Property without reliance on this Memorandum or any other Evaluation Material. Although additional Evaluation Material, which may include engineering, environmental or other reports, may be provided to qualified parties as the marketing progresses, prospective purchasers should seek advice from their own attorneys, accountants, and engineering and environmental experts.

Owner expressly reserves the right, at its sole discretion, to reject any offer to purchase the Property or to terminate any negotiations with any party at any time with or without written notice. Owner shall have no legal commitment or obligations to any prospective purchaser unless and until a written purchase and sale agreement has been fully executed, delivered and approved by Owner and any conditions to Owner’s obligations therein have been satisfied or waived.

Owner has retained Broker as its exclusive broker and will be responsible for any commission due to Broker in connection with a sale of the Property pursuant to separate agreement. Broker is not authorized to make any representation or agreement on behalf of Owner. Each prospective purchaser will be responsible for any claims for commissions by any other broker in connection with a sale of the Property if such claims arise from acts of such prospective purchaser or its broker.

This Memorandum is the property of Owner and Broker and may be used only by parties approved by Owner and Broker. No portion of this Memorandum may be copied or otherwise reproduced or disclosed to anyone except as permitted under the Confidentiality Agreement.

EXCLUSIVELY OFFERED BY:

TRENT WALKERExecutive Vice President949.263.5342 [email protected]. #00964476

DOCUMENT TYPE VARIABLE / 3

1 EXECUTIVE SUMMARYPAGES 5-6

2 PROPERTY SPECIFICATIONSPAGES 7-14

3 MARKET OVERVIEWPAGES 15-19

http://voitco.com/

• OFFERING PRICE: $16,500,000.00

Voit Real Estate Services, as exclusive listing Broker is offering for sale a fee simple interest in 3330 Harbor Boulevard, Costa Mesa, California (“Property”). The Property consists of a rare ±3.08 acre prime corner parcel site which is improved with a class-A three-story office building containing ±53,908 square feet of net rentable area. The building was completed in 1989 and includes both surface and structured parking totaling 221 stalls.


3330 HARBOR BLVD., COSTA MESA, CA / 5

1 EXECUTIVESUMMARY

HARBOR BLVD

SOUTH C

OAST DR

SUNFL

OWER A

VE

IRVINE

SANTA ANACOSTA MESA

NEWPORTBEACH

SITETHE PRESS- FORMER LA TIMES

THE HIVE

HOME RANCH

FIELD OF

DREAMS


E X E C U T I V E S U M M A RYE X E C U T I V E S U M M A RY

The property is located at the northeast corner of South Coast Drive and Harbor Boulevard in the northern portion of Costa Mesa. This area is one of the primary focus areas included in the City of Costa Mesa General Plan Update. The revised Plan contemplates increases in development density from current 0.2 – 0.3 FAR up to densities in the 0.75 to 1.5 range. The anticipation of the amended General Plan for the City has resulted in the sale and redevelopment of several prime sites in the neighborhood, including: 1) The Former LA Times Site, 2) “Field of Dreams” Little League baseball parcel, 3) The Hive Office Campus, and 4) the Vans Headquarters located along Hyland and the I-405 Freeway. These sites represent a combined redevelopment of ±$1.0 billion in the immediate vicinity of the Property. With the redevelopment of the local neighborhood, Buyers can anticipate higher rents and sale prices throughout the local market.

PROMINENT GREATER AIRPORT AREA LOCATION

Widely-known as one of the nation’s most desirable places to live, work and play, the Greater Airport Area offers highly educated labor pool and unparalleled amenities from corporate tenants and employees. 3330 Harbor Blvd. is located in close proximity to numerous retail and service amenities including the world-renown South Coast Plaza and is just four miles form John Wayne Airport and six miles from the best beaches in Southern California.

HARBOR BLVD

SOUTH C

OAST DR

SUNFL

OWER A

VE

IRVINE

SANTA ANACOSTA MESA

NEWPORTBEACH

SITETHE PRESS- FORMER LA TIMES

THE HIVE

HOME RANCH

FIELD OF

DREAMS


2 PROPERTYSPECIFICATIONS


• High Image 3-story elevator served office building at the corner of Harbor Boulevard and South Coast Drive with 405 Freeway access and identity

• Class A, steel frame construction with granite clad exterior, impressive lobby and elevator access to all floors

• ±3.08 acre site offering expansion or possible retail strip center development

F E AT U R E S


P R O P E R T Y S P E C I F I C AT I O N S

RENTABLE AREA: ±53,908 SF

ACRES: ±3.08

PROPERTY ADDRESS: 3330 Harbor Boulevard Costa Mesa, California 92626

YEAR BUILT: 1989

PARCEL NUMBER: 515-032-36-00-1

STORIES: 3

CONSTRUCTION: Steel Frame

FOUNDATION: Reinforced concrete slab on grade

SLAB TO SLAB HEIGHT: 13.5 Feet

PARKING: The Property contains a total of 221 stalls. The parking consists of a two-level open parking structure (exclusive to & owned by property ownership) to the north of the building and surface parking is provided on the eastern portion of the site.

OFFICE EXTERIORS: Interior offices are paint covered drywall partitions, glass window line, and a mix of exterior-lined enclosed offices and open bay cubicle layout. Floors are concrete covered with commercial grade carpeting and tile throughout.

CEILINGS: Drop acoustic tiles set in T-bar grid system throughout. Mix of 2’x2’ tiles and 2’x4’ tiles along with recessed fluorescent and incandescent lighting systems.

VERTICAL TRANSPORTATION: The building is served by two hydraulic elevators: one “gearny-size” located at the lobby entrance, and the other located a the west end of the building. Fire stairwell exiting and roof access stairs are also located at either the northwest or southeast corners of the building.

ROOF: Steel deck system constructed on top of steel frame members on all three floors of the building. Mineral cap sheets and built up composition covers for the roofs on both balconies and the building-top.

HEATING AND COOLING: No equipment mounted on the 2nd or 3rd floor balcony roofs. The 3rd floor roof includes individual package HVAC units. Additional units and cooling system equipment is located in a concrete-block walled enclosure in the surface parking lot adjacent to the parking structure.

Executive Summary

Cushman & Wakefield of California, Inc., as exclusive advisor is offering for sale a fee simple interest in 3330 Harbor Boulevard, Costa Mesa, California (“Property”). The Property consists of a rare 4.0± acre prime corner parcel site which is improved with a class-A three-story office building containing 53,908 square feet of net rentable area. The building was completed in 1989 and includes both surface and structured parking totaling 221 stalls, or an outstanding parking ratio of 5.5 spaces per 1,000 square feet of usable office area.

PROPERTY FACTS

NRSF: ±53,908 SF

ACRES: ±3.08

PARKING: 221 Stalls

YEAR BUILT: 1989

STORIES: 3

CONSTRUCTION: Steel Frame

OCCUPANCY: 100%

• Future expansion potential• Potential retail along Harbor Blvd

53330 HARBOR BLVD | CUSHMAN & WAKEFIELD


S I T E D E S C R I P T I O N

LOCATION: The Property is prominently located on the northeast corner of Harbor Boulevard and South Coast Drive, just north of the San Diego (I-405) Freeway in the City of Costa Mesa, California. Harbor Boulevard is a major commercial thoroughfare and provides direct access to the freeway and neighboring cities.

PARCEL: 140-041-48

LAND AREA: ±3.08

FRONTAGE: Harbor Boulevard: 250 Feet

South Coast Drive: 550 FeetTOPOGRAPHY: Rectangular shaped and generally flat and level at street grade.

ACCESS: Vehicular access is provided by an entrance drive from Harbor Boulevard to the west and by an entrance drive from South Coast Drive to the south. Both entrances provide direct access to the surface parking and parking structure for the Property. Traffic signals are provided at the intersection at the southwest corner of the site.

SIGNAGE: Square concrete monument sign displaying the company name and address is located on the corner of Harbor Boulevard and South Coast Drive.

LANDSCAPING: The landscaped area surrounding the Property is provided with ground cover, lawn areas, mature trees, and shrubs. Various flowering plants are located at the main entrance to the building and along its perimeter. Planter areas are disbursed throughout the surface parking areas.

EASEMENT: The easterly 51 feet of the property includes a 20 foot-wide easement in favor of the property owner to the north of the site (currently AAA). This easement provides for reciprocal ingress/egress for both property owners and is recorded document 88-221960 as of May 12, 1988.

Site Plan

PARKING DECK

3330 HARBOR BLVD.


S I T E P L A N

Site Plan - Development Possibilities

PARKING DECK

3330 HARBOR BLVD.

3rd Floor Balcony approx. 5,000 SF

2nd Floor Balcony approx. 6,600 SF

Total balcony/potential expansion area 11,600 SF

14,592 SF of development land (potential retail)

173330 HARBOR BLVD | CUSHMAN & WAKEFIELD12 / 3330 HARBOR BLVD., COSTA MESA, CA

S I T E P L A N - E X PA N S I O N / D E V E LO P M E N T P O S S I B I L I T I E S

1 ±22,598 RSF

2 ±18,080 RSF

3 ±13,230 RSF

Floor Plans

1 2

3

153330 HARBOR BLVD | CUSHMAN & WAKEFIELD


F LO O R P L A N

Square Footage Per BOMA Guidelines

Parcel Map - APN 140-041-48

3330 HARBOR BLVD


PA R C E L M A P


3 MARKETOVERVIEW

Orange County Office Market FROM EQUILIBRIUM TO SUPPLY CONSTRAINED At 86.7 million square feet, Orange County is the second largest office market on the West Coast and the 14th largest office market in the U.S. The Orange County office market, divided into five submarkets, is clearly strengthening, with over 446,897 square feet of positive absorption in YTD 2015 and 4.2 million square feet since 2011. Orange County’s 2015 absorption has reduced direct vacancy to 12.2%. Rents are roughly 81% of their peak rate of $2.69 in 2007, representing tremendous upside for Orange County landlords.

Orange County office rents have grown 13.5% over the past 12 months.

Category # of Bldgs

Supply (SF) % of Supply

Direct Vacancy

Overall Vacancy

Rent

GAA 400 37,984,221 43.8% 12.3% 12.7% $32.28

South County 307 17,575,013 20.3% 8.4% 9.0% $26.04

West County 75 4,562,328 5.3% 14.3% 14.3% $23.40

Central County 283 20,083,893 23.2% 15.5% 15.7% $20.16

North County 86 6,531,865 7.5% 10.6% 12.0% $21.96

Total 1,151 86,737,320 100.0% 12.2% 12.7% $26.16

43.8%

20.3%

5.3%

23.2%

GAA South County West County

Central County North County

43.8%

20.3%

5.3%

23.2%43.8%

20.3%

5.3%

23.2%

7.5%

Orange County Office Market - All Classes

VACANCY VS. AVERAGE ASKING LEASE RATE

VACANCY: Total Vacant Space Divided by Total Existing InventoryAVERAGE ASKING LEASE RATE: NNN / SF / Month

0%

3%

6%

9%

12%

15%

18%

21%

$0.00

$0.50

$1.00

$1.50

$2.00

$2.50

$3.00

$3.50

202220212020YTD

2019201820172016201520142013201220112010

11.30%

$2.77

FORECAST

Percent Rate

TRANSACTION VOLUME & NUMBER OF TRANSACTIONS

NUMBER OF TRANSACTIONSSALES LEASES

0M

2M

4M

6M

8M

10M

12M

14M

0

500

1,000

1,500

2,000

2,500

3,000

3,500

2020YTD

2019201820172016201520142013201220112010

467

Square Feet


O R A N G E C O U N T Y O F F I C E R E P O R T Q 1 2 0 2 0

MARKET OVERVIEW It’s too early to predict the statistical impact of the current virus scare on the Orange County office market. First quarter metrics just don’t reflect any change in decision-making, as the shelter-in-place order from the Governor was announced with just two weeks left in the period. However, the Orange County office market has been showing signs of sluggishness for the past year. We have seen an uptick in sublease space and a greater share of occupied space not being used to its full potential. Rent growth and vacancy have both leveled off, but it is important to look at both metrics by building class and submarket to get a clear picture. The last couple of years have also brought a flurry of new Class A deliveries, primarily in the Airport and Spectrum submarkets. Growth of asking rent has been concentrated in those Class A buildings due to their location and premier amenities. Yet, those building owners have seen slower-than-expected activity and they are getting more pushback from today’s more cost-conscious tenants who are increasingly resistant to signing long-term leases at record-high prices.

VACANCY Overall, the vacancy needle has moved up just 12 basis points since the first quarter of 2019, ending the current period at 11.30%. Given all the new deliveries over the course of last year, that rate reflects the fact that the market is not significantly overbuilt. However, new product has contributed to a spike in vacancy as it relates to Class A space, which now stands at 14.50%, versus 9.53% for Class B space and a scant 3.82% for Class C. The South County submarket, which includes Irvine Spectrum, has the highest vacancy rate at 12.98%, mainly due to new deliveries, while North County vacancy stands at just 7.20%. Vacancy in the Central County and the Greater Airport areas is stabilized in the 12% range.

LEASE RATESAcross all building classes, the average asking lease rate grew by just $0.02 in the past year, and with overall demand relatively flat, we may have hit a peak in this cycle, even without factoring in the potential impact of the COVID-19 crisis. Landlords have been pushing hard to meet their coupon rate targets and that has led to an increase in free rent and other concessions. To offset today’s expensive Class A rents, office users are doing everything they can to leverage communications technology and efficient workspace designs to reduce their space footprints.

Orange County Office Market FROM EQUILIBRIUM TO SUPPLY CONSTRAINED At 86.7 million square feet, Orange County is the second largest office market on the West Coast and the 14th largest office market in the U.S. The Orange County office market, divided into five submarkets, is clearly strengthening, with over 446,897 square feet of positive absorption in YTD 2015 and 4.2 million square feet since 2011. Orange County’s 2015 absorption has reduced direct vacancy to 12.2%. Rents are roughly 81% of their peak rate of $2.69 in 2007, representing tremendous upside for Orange County landlords.

Orange County office rents have grown 13.5% over the past 12 months.

Category # of Bldgs

Supply (SF) % of Supply

Direct Vacancy

Overall Vacancy

Rent

GAA 400 37,984,221 43.8% 12.3% 12.7% $32.28

South County 307 17,575,013 20.3% 8.4% 9.0% $26.04

West County 75 4,562,328 5.3% 14.3% 14.3% $23.40

Central County 283 20,083,893 23.2% 15.5% 15.7% $20.16

North County 86 6,531,865 7.5% 10.6% 12.0% $21.96

Total 1,151 86,737,320 100.0% 12.2% 12.7% $26.16

43.8%

20.3%

5.3%

23.2%

GAA South County West County

Central County North County

43.8%

20.3%

5.3%

23.2%43.8%

20.3%

5.3%

23.2%

7.5%

Orange County Office Market - All Classes


TRANSACTION ACTIVITY The total square footage transacted in the first quarter fell sharply on both a quarter-to-quarter and year-over-year basis. Just over 2.4 MSF of space changed hands in the first quarter, compared to more than 4 MSF in the fourth quarter of 2019. This reflects the fact that tenants are increasingly concerned about their occupancy cost, but is also the result of a shortage of office properties offered for sale. Strong buyer demand has been driven by the lowest mortgage interest rates in US history. In March, the SBA 504 debenture rate fell to just 2.876% for a 25-year, fully-amortized owner / user loan.

EMPLOYMENT The unemployment rate in the Orange County market was 2.5% in November 2019, unchanged from a revised 2.5% in October, and below the year-ago estimate of 2.7%. This compares with an unadjusted unemployment rate of 3.7% for California and 3.3% for the nation during the same period. Local job growth was evident across all subsectors but financial services (up 1,200 jobs) and Government (up 2,200 jobs) led the way as the year ended.

Market StatisticsChange Over Last Quarter 1Q 2020 4Q 2019 1Q 2019 % Change Over Last Year

Vacancy Rate UP 11.30% 11.15% 11.18% 1.07%

Availability Rate UP 14.61% 14.26% 14.37% 1.67%

Average Asking Lease Rate UP $2.77 $2.74 $2.75 0.73%

Sale & Lease Transactions DOWN 2,453,322 4,065,134 4,004,203 (38.73%)

Gross Absorption UP 2,239,625 2,156,670 2,423,515 (7.59%)

Net Absorption NEGATIVE (154,301) 167,558 294,525 N/A

NEW DELIVERIES & NET ABSORPTION VS. AVAILABILITY RATE

AVAILABILITY: Total Amount of Space that is Available whether Occupied, for Sublease, or Available at a Future Date

NEW DELIVERIES: New Construction Delivered to the Market

NET ABSORPTION: Changes in the Amount of Occupied Space from One Quarter to the Next

-3M

-2M

-1M

0M

1M

2M

3M

4M

5M

-15%

-10%

-5%

0%

5%

10%

15%

20%

25%

20192018201720162015201420132012201120102009

14.26%

Square Feet Rate


ABSORPTION Net absorption slipped into negative territory in the first quarter, ending the period with a net decrease on occupied space of 154,301 square feet. A single quarter of negative growth is not, in itself, a cause for alarm. Small negative growth quarters are often attributable to a few larger move-outs, as tenants move into first generation space. In the first quarter, we saw Thales USA Inc vacate 53,840 square feet in Irvine Spectrum, and also Gateway One Lending & Finance vacated 39,306 square feet in Anaheim.

FORECAST:

The extraordinary steps being taken to bring the COVID-19 virus under control are impacting all of us. As of this writing, 41 states are under a shelter-in-place order and there’s just no way to ignore the fact that our entire economy is taking a huge hit. The Black Swan now has a name and it will most certainly be driving decision-making in the coming quarters. We are expecting sale and lease activity to drop sharply across all commercial property types, at least through the third quarter. Many of the transactions in progress during the last few weeks of Q1 have been postponed, as buyers, sellers, landlords and tenants all assess their situations and search for a way forward. The truth is, we don’t have enough facts at this point to forecast the breadth, depth and length of the slowdown. One thing we are sure of is that the viability of working from home will finally be rigorously tested, as all business owners look for a way to maintain momentum and productivity.

Federal and State governments, along with the US Federal Reserve and US Department of Treasury, are taking unprecedented actions to offset what is sure to be a major hit to GDP, both here at home and around the world. So far, those efforts have not been enough to shift consumer and business sentiment, but with our activities under such severe restrictions, that is not unexpected. We will do our best to keep you up to speed on how real estate is being impacted.

CONSTRUCTION Total space under construction ended the year at 975,177 square feet. In Costa Mesa, construction is underway at The Press located at 1375 Sunflower Drive. This former L.A. Times printing facility is being converted into more than 300,000 square feet of creative office space to accommodate the current demand from businesses looking to recruit and retain a younger workforce. The Source, located in the Irvine Spectrum, offers a two-building concept with common atrium connectivity and more than 70,000 total square feet of rentable space. Irvine Company’s build-to-suit for Alteryx Inc. at Spectrum Terrace 2 is also in the works. The company will occupy the bulk of the project’s 340,000-square-foot second phase. The first phase is fully leased.


Significant TransactionsSales Property Address Submarket Class Square Feet Sale Price Buyer Seller16842 Von Karman Ave. Irvine A 101,161 $25,400,000 Dayani Partners KBS Growth A Income REIT, Inc.

2406-2445 McCabe Way Irvine A 90,670 $20,000,000 McCabe Group, LLC Swift Real Estate Partners

3150 Bear St. Costa Mesa B 65,652 $25,500,000 EF Education First Alliance South Coast Properties

1400-1420 Bristol St. N. Newport Beach B 42,697 $11,500,000 Buchanan Street Partners Davis Property Management, Inc.

1200 N. Tustin Ave. Santa Ana B 29,047 $9,967,500 OC Employees Retirement System Singh Family Trust

Leases Property Address Submarket Class Square Feet Transaction Date Tenant Owner 12421 E. Dyer Rd. – Renewal Santa Ana B 67,412 Jan–2020 County of Orange, HCA Greenlaw Partner

2742 Dow Ave. – Sublease Tustin B 51,588 Feb–2020 Kingdomway USA Memorial Care Medical Group

1100 Town & Country Rd. Orange A 48,477 Jan–2020 Kimley Horn & Associates Mullrock Executive Tower

165 Technology Dr. Irvine Spectrum B 43,920 Jan–2020 Microchip Technology, Inc. The Irvine Company

333 City Blvd. W. Orange A 38,269 Jan–2020 SPACES KBS Realty Advisors

Licensed as Real Estate Salesperson by the DRE. The information contained herein has been obtained from sources we deem reliable. While we have no reason to doubt its accuracy, we do not guarantee it. ©2020 Voit Real Estate Services, Inc. All Rights Reserved. Lic. #01991785

2020 Main Street, Suite 100, Irvine, CA 92614949.851.5100 • 949.261.9092 Fax www.VoitCo.com

EXCLUSIVELY OFFERED BY:

TRENT WALKER Executive Vice [email protected]. #00964476

FOR SALE 3330 HARBOR BLVD. COSTA MESA, CA

http://voitco.com/

for sale 3330 harbor blvd. costa mesa, ca...1988/05/12 · mesa. this area is one of the primary...

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