A joint venture between an undisclosed global investment management firm and Hines has acquired $144 million in financing for Intersect, a four-building, mid-rise, Class-A office campus totaling 452,203 square feet in Irvine, California. The HFF debt placement team representing the borrower included executive managing director Kevin MacKenzie, senior director John Chun, director Jamie Kline, and associate Peter Thompson.
The team secured a three-year floating-rate loan with extension options through New York Life Insurance. Loan proceeds will be used to retire existing debt and fund the remaining lease-up of the property. The HFF investment advisory team assisting in the transaction included Michael Leggett and Dereck Barker.
Intersect comprises Buildings A, B, C, and D, located at 17875 and 17877 Von Karman Avenue and 17872 and 17838 Gillette Avenue, respectively, in the core Airport-area submarket of Orange County. The 15.05-acre site is situated at the high-profile intersection of Main Street and Von Karman Avenue in the Irvine Business Complex two blocks north of Interstate 405.
Intersect is surrounded by retail, restaurants and entertainment offerings, including Irvine Concourse directly across the street, Park Place, South Coast Plaza, The District, Fashion Island, and the Tustin Legacy project currently under development. Since 2015, the property has undergone a complete renovation with improvements to the interior and exterior, as well as the addition of a new state-of-the-art restaurant and the addition of micro-retail shipping containers that will serve grab-n-go coffee, juice, and food throughout the day.
Additional amenities at Intersect include indoor and outdoor workspaces, a 6,000-square-foot indoor/outdoor gym, private tenant terraces, a 100-plus-seat stadium-style conference center, a 20-plus-person board room, and an outdoor game pavilion. Intersect also features a parking ratio of 4.4 spaces per 1,000 usable square feet through a combination of surface parking, a 1,583-space structured parking garage at 17892 Gillette Avenue, and a 177-stall subterranean parking facility.
MacKenzie described the deal as “a great example of a sponsor strategically managing their business plan to take advantage of capital-market dynamics. By working together with our investment-advisory team to establish value and then structuring the financing offer properly based on current metrics in the debt markets, the sponsor was able to partially recapitalize the asset mid-way through the business plan while significantly reducing their cost of capital.”