Strength of Life Science Industry Lifts Office Performance in Region

Private real estate investor BPM Real Estate Group bought a four-story office in Aliso Viejo, California, for $59 million, the priciest office sale on record in the south Orange County, California, master-planned community.

AEW Capital Management, based in Los Angeles, sold the 111,391-square-foot One Enterprise building on 7.3 acres at 1 Enterprise Drive to Portland, Oregon-based BPM Real Estate Group, according to CoStar.

One Enterprise in Aliso Viejo, California has been fully occupied since it was built in 1999. (CoStar)

The price works out to about $530 per square foot, which is almost 50% higher than the $356 per square average paid for the highest-quality assets in the area, according to CoStar Analytics. One Enterprise, built in 1999 and recently renovated, is fully occupied by semiconductor provider Microsemi Corp. and biotechnology firm Ambry Genetics.

The total sale price exceeds the previous record for office sales in the Aliso Viejo and Laguna Hills area set in 2015, when Dallas-based investment manager Invesco Advisers paid $54.5 million for a building at 15 Enterprise.

It also amounts to about 52% more than the $38.8 million AEW paid for the 1 Enterprise property in September 2013, during the early stages of Orange County’s recovery from the recession, when many of the country’s largest subprime lenders went out of business and left huge blocks of vacant office space.

South Orange County has seen several years of occupancy demand combined with healthy rent growth in recent quarters. The building has been fully occupied by one or two tenants since it was built 20 years ago.

South County’s thriving life science industry has helped boost occupancy, rent growth and investment sales in the area in recent years. Office sales prices have continued to rise in the broader Orange County market, with the largest sales often being renovated value-add properties.