Just weeks after Onni Group acquired a Los Angeles office campus, the firm purchased Ocean Plaza, a mixed-use office and retail complex in nearby Orange County, Calif., from Decron Properties for $97.3 million. A Cushman & Wakefield team led by Executive Vice Chairman Marc Renard represented the seller in the transaction.
Located at 17011 Beach Blvd. in Huntington Beach, Calif., the 8.6-acre property encompasses a 207,645-square-foot, 14-story Class A office tower and 108,785 square feet of retail and restaurant space. The property also has a six-level parking garage with 863 spaces.
Decron acquired Ocean Plaza in 2006 and five years later invested $17 million to renovate and reposition the property after occupancy had dropped from 90 percent to less than 60 percent. The firm purchased Ocean Plaza as part of a $66 million portfolio transaction that also included 50,000 square feet of retail space at 17041 Beach Blvd., 43,107 square feet of retail space at 17901 Beach Blvd., 17,918 square feet of retail space at 7862 Warner Ave. and 5,961 square feet of retail space at 17071 Beach Blvd., according to Yardi Matrix data.
At the time of closing with Onni, the occupancy of the office segment of 17011 Beach Blvd. was about 85 percent and approximately 95 percent for the retail component at the building. New office tenants at the multi-tenant property include Ocean Media, which has its name on the building, and UFC Gym.
Decron, a Los Angeles-based privately owned real estate investment firm that invests in multifamily office and retail space in California and Washington, has been divesting some of its commercial office assets. David Nagel, Decron CEO, said the dispositions are part of an ongoing business strategy to pare down its office assets prior to possible changes to California’s Prop 13 that would alter the structure of property taxes for commercial properties. Nagel said the firm has been focusing more on building its multifamily portfolio because cash flow is more consistent and growing at a faster pace than for commercial assets. Since 2015, Decron has reduced its office and retail holdings from 40 percent of its portfolio to what is expected to be 15 percent by the end of 2019.
Last year, Decron invested about $350 million in multifamily properties, increasing its Northern California holdings to 858 units and acquiring its first Pacific Northwest asset with the purchase of a 522-unit apartment community in the Seattle market. The firm currently owns about 8,000 multifamily units and 1.5 million square feet of office and retail space.
Onni’s LA acquisition
In late June, Onni acquired Wilshire Courtyard, a two-asset office campus in the heart of Los Angeles’ Miracle Mile from Tishman Speyer for $630 million. The Class A, six-story LEED Gold-certified buildings are located at 5750 and 5700 Wilshire Blvd. Constructed in 1987, the properties were recently renovated by Tishman Speyer, which had owned the portfolio since December 2012. Tishman Speyer was kept on as the leasing manager and property manager.