Holliday Fenoglio Fowler, L.P. acting by and through Holliday GP Corp. a California licensed real estate broker California License Number 01385740 ( HFF ).
THE OFFERING HFF, as exclusive advisor, is pleased to present the outstanding opportunity to acquire Alton Corporate Plaza (the Property ), a four-building, institutional-quality Class A office campus totaling 323,402 SF located in Irvine, CA. It is a part of Orange County s premier Airport Area submarket in the heart of the Irvine Business Complex (IBC). The Property is 95% leased to an exceptionally strong rent roll with a weighted average lease expiration of 9.3 years. Each building has benefited from substantial recent capital investments to create a contemporary work environment perfectly suited to the market s established and thriving diverse industries. All four buildings are separately parceled offering a flexible exit strategy. Other key features include a 4.0:1,000 parking ratio, lush landscaping, collaborative outdoor common areas, and large flexible floor plates ideal for the growing demand from corporate users. Within two miles of John Wayne International Airport, the site also offers exceptional regional access with proximity to three of Southern California s most important arterials, the Santa Ana (I-5), Newport Beach (SR-55) and San Diego (I-405) Freeways. 2
OFFERING FLEXIBILITY The offering includes two distinct properties. Investors may elect to bid the properties individually or together. 1733 & 1833 Alton Parkway, Irvine CA This property consists of 209,351 SF across two 2-story buildings. 100% of the GLA was recently leased to Rockwell Collins (NYSE: COL, S&P: A-) for 12 years on an triple net basis. The buildings serve as the new regional company headquarters for Rockwell. 16800 & 16802 Aston Street, Irvine, CA This property consists of 114,051 SF across two 2-story buildings. These buildings are 85% leased to a diverse rent roll of Spireon (57% of GLA), Parallon Outsource, ADP Inc. (NASDAQ: ADP), and CAPS (B.Braun). The weighted average lease expiration of this building is 4.9 years. Additionally, this property s vacancy is lease ready with creative office potential. PROPERTY DESCRIPTIONS BUILDINGS % OF TOTAL PROPERTY NRA NRA TENANT(S) % LEASED 1733 ALTON PARKWAY 24.7% 80,088 SF Rockwell Collins 100.0% 1833 ALTON PARKWAY 40.0% 129,263 SF Rockwell Collins 100.0% 16800 ASTON STREET 15.1% 48,943 SF Parallon Outsource, ADP, CAPS 64.6% 16802 ASTON STREET 20.1% 65,108 SF Spireon 100.0% TOTALS/WEIGHTED AVERAGE 100.0% 323,402 SF 94.6% EXECUTIVE SUMMARY 3
PORTFOLIO INVESTMENT HIGHLIGHTS EXCEPTIONAL CREDIT TENANCY 67% of the Property s SF is leased to investment grade companies, including Rockwell Collins (S&P: A-, NYSE: COL) and ADP (S&P: AA, NASDAQ: ADP). The remaining tenant roster consists of established globally recognized companies such as CAPS (a subsidiary of B. Braun Medical, Inc.), Spireon (owned by private equity firm Bertram Capital) and The Outsource Group (a subsidiary of Parallon). CRITICAL MASS IN ORANGE COUNTY S PREMIER AIRPORT AREA OFFICE SUBMARKET The offering presents the exceptional opportunity to own 14.75 acres consisting of 323,402 SF and 1,196 surface parking stalls across four (4) separately parcelled institutionally managed buildings in Orange County s leading office market. EXTENSIVE RECENT CAPITAL IMPROVEMENTS The Property has undergone significant recent improvements totaling approximately $25 million. CENTRAL LOCATION AMIDST AN AMENITY RICH ENVIRONMENT At the heart of the Airport Area s thriving amenity base, the Property s surroundings include over 5.5 million SF of retail amenities located in major lifestyle centers within a five-mile radius of the Property. Furthermore, the density in this region is rapidly increasing with nearly 4
PORTFOLIO INVESTMENT HIGHLIGHTS 9,000 residential units currently under review, approved, or under construction. ROBUST REGIONAL ECONOMY Orange County s job growth is surging, recently surpassing both state and national levels with 2.65% year-over-year growth. The county s diversified employment base bolsters the demand for office space across multiple industries. As a result, the Orange County office market is currently experiencing the strongest rental growth in the nation, providing unparalleled upside to investors. DISCOUNT TO REPLACEMENT COST The Property provides investors the opportunity to acquire an institutional quality asset in a premier location at a significant discount to replacement cost, estimated to be over $400 per SF. TENANT SUMMARY BUILDING INDUSTRY EXPIRATION SIZE (SF) % OF TOTAL CREDIT DESCRIPTION ROCKWELL COLLINS 1733/1833 Alton Pkwy Technology/Defense Nov. 2027 209,351 SF 64.70% S&P: A- SPIREON 16802 Aston Street Technology Feb. 2022 65,108 SF 20.10% Owned by Bertram Capital THE OUTSOURCE GROUP 16800 Aston Street Professional Services Jul. 2020 16,597 SF 5.10% Subsidiary of Parallon ADP, INC. 16800 Aston Street Technology Nov. 2016 8,005 SF 2.50% S&P: AA CAPS 16800 Aston Street Healthcare Oct. 2020 7,019 SF 2.20% Subsidiary of B. Bruan Medical, Inc. TOTAL Weighted Average 9.3 Years Remaining 306,080 SF 94.6% EXECUTIVE SUMMARY 5
1733 & 1833 ALTON PARKWAY IRVINE,CA INVESTMENT GRADE CREDIT TENANT 100% of the buildings GLA was recently leased to Rockwell Collins (NYSE: COL) a leading international aerospace and defense firm with a nearly $12 billion market capitalization and revenues over $5 billion. - Credit Ratings A3 A A- LONG TERM TRIPLE NET LEASE WITH FAVORABLE RENTAL ESCALATIONS Rockwell Collins will lease the buildings for approximately 12 years on a triple net basis in which the tenant is responsible for structure, HVAC, roof, and CAM. The inplace rent will increase by approximately 3% on average annually. SUBSTANTIAL RENOVATION AND CAPITAL INVESTMENT As part of the new lease, current ownership provided $14.2 million in TI allowance with an additional $3.8 million invested by the tenant for a total of over $18 million, or nearly $86 per SF. This capital investment further supports the mission critical aspect of this location. STRATEGIC LOCATION AND MISSION CRITICAL FACILITIES Rockwell Collins selected this site as its new regional headquarters with particular attention to Irvine s vast pool of engineering talent, its proximity to Los Angeles (where much of the company s in-flight entertainment content is produced), and its immediate access to John Wayne International Airport. Over 600 Rockwell Collins employees occupy the space. The Property s large and flexible floor plates can accommodate continued growth and workforce expansion. 6
16800 & 16802 ASTON STREET IRVINE, CA RECENTLY RENOVATED, INSTITUTIONAL QUALITY ASSET The recent improvements totaling more than $5.8 million have modernized the features of this property to Class A standards. This includes $1.8 million for new HVAC units, lobby and exterior renovations, landscaping enhancements, as well as bathroom and corridor renovations. CREATIVE OFFICE POTENTIAL This property offers a low-rise campus setting with multi-access surface parking and shared common area amenities. In addition to the creative office build-out of Spireon, the vacant ground floor suite of 16800 Aston features an above standard slab-to-slab ceiling height of 14 feet with roll-up doors presenting the enhancement opportunity to create a unique,fully functional indoor/outdoor work environment. Renovated restrooms have also been added to the ground floor. Both buildings share a backup generator that fully powers both buildings during power outages. Furthermore, the highly functional second floor vacancy is lease ready with new ceiling grids and lights, renovated restrooms, and a private outdoor balcony. DIVERSIFIED GLOBAL TENANT ROSTER The rent roll consist of a diverse mix of industries including technology, professional services, and healthcare represented by established companies that include ADP Inc. (NASDAQ: ADP), Spireon, The Outsource Group, and CAPS (B. Braun). SIGNIFICANT UPSIDE POTENTIAL With average in-place rents ±20% below market rates and a current vacancy rate of 15%, investors will have the opportunity to capitalize on significant upside potential in the near-term. EXECUTIVE SUMMARY 7
1733 & 1833 Alton Parkway, Irvine CA 16800 & 16802 Aston Street, Irvine, CA TOTAL ACRES 14.75 TOTAL PARKING STALLS 1,220 TOTAL SF 323,402 TOTAL PARCELS 4 8
NEWPORT BEACH PARK PLACE Existing Office INTERSECT Office Reposition IRVINE CONCOURSE Existing Office COSTA MESA SOUTH COAST METRO Existing Office IRVINE FAIRFIELD RESIDENTIAL Multi-Family Development VON KARMAN CORPORATE CENTER Future Redevelopment Center COMMUNITY CORE 123K Acre Mixed Use Proposed Development Linear Park Park Development (Multiple Phases) CORNERSTONE AT TUSTIN LEGACY Office & Retail Development (Multiple Phases) TUSTIN EXECUTIVE SUMMARY 9
INVESTMENT ADVISORS RYAN GALLAGHER Senior Managing Director rgallagher@hfflp.com 949.798.4100 Lic. # 01269918 MIKE MCCANN Managing Director mmccann@hfflp.com 949.798.4138 Lic. # 01912226 DERRECK BARKER Associate Director dbarker@hfflp.com 949.798.4106 Lic. # 01879565 NET LEASE SPECIALIST NICK FOSTER Associate Director nfoster@hfflp.com 949.798.4135 Lic. # 01831851 TIM GEIMAN Director tgeiman@hfflp.com 949.798.4109 Lic. # 01921744 CHELSEA JERVIS Analyst cjervis@hfflp.com 949.798.4127 Lic. # 01964154 LEASING ADVISORS DEBT ADVISORS JOE BEVAN Executive Vice President joe.bevan@am.jll.com 949.885.2993 Lic. # 01749828 WADE CLARK Managing Director wade.clark@am.jll.com 949.885.2992 Lic. # 01192143 KEVIN MACKENZIE Senior Managing Director kmackenzie@hfflp.com 949.798.4126 Lic. # 01173794 PAUL BRINDLEY Senior Managing Director pbrindley@hfflp.com 310.407.2112 Lic. # 01173794 ATLANTA AUSTIN BOSTON CHARLOTTE CHICAGO DALLAS DENVER HOUSTON INDIANAPOLIS LOS ANGELES MIAMI NEW JERSEY NEW YORK CITY ORANGE COUNTY ORLANDO PHILADELPHIA PITTSBURGH PORTLAND SAN DIEGO SAN FRANCISCO TAMPA WASHINGTON D.C. Holliday Fenoglio Fowler, L.P. acting by and through Holliday GP Corp. a California licensed real estate broker California License Number 01385740 ( HFF ). HFF has been engaged by the owner of the property to market it for sale. Information concerning the property described herein has been obtained from sources other than HFF, and neither Owner nor HFF, nor their respective equity holders, offi cers, employees and agents makes any representations or warranties, express or implied, as to the accuracy or completeness of such information. Any and all reference to age, square footage, income, expenses and any other property specifi c information are approximate. Any opinions, assumptions, or estimates contained herein are projections only and used for illustrative purposes and may be based on assumptions or due diligence criteria different from that used by a purchaser, and HFF, its partners, offi cers, employees and agents disclaim any liability that may be based upon or related to the information contained herein. Prospective purchasers should conduct their own independent investigation and rely on those results. The information contained herein is subject to change. 2015 HFF and HFFS (HFF Securities L.P.) are owned by HFF, Inc. (NYSE: HF). HFF operates out of 22 offi ces nationwide and is a leading provider of commercial real estate and capital markets services to the U.S. commercial real estate industry. HFF together with its affi liate HFFS offer clients a fully integrated national capital markets platform including debt placement, investment sales, equity placement, advisory services, loan sales and commercial loan servicing. For more information please visit hffl p.com or follow HFF on Twitter @HFF. HFFLP.COM