Brea office clears at $205 a foot, vacancy included

Fairway Center II sold for $27.8 million, and the number worth pausing on is buried inside the headline one. The 135,308-square-foot building at 675 Placentia Ave. in Brea was 70.5% leased when CBRE closed the trade — the County of Orange on a long-term lease for more than 61,000 square feet, under half the building — which works out to roughly $205 a foot, with debt collateralized by a public agency's rent roll and about 40,000 square feet of empty space riding along for whoever wants it.

CBRE's Anthony DeLorenzo, of the firm's National Office Properties group, worked the sale with Sammy Cemo, Bryan Johnson and Jackson Marlow; Shaun Moothart and Andrew Post, from CBRE's Debt & Structured Finance practice, arranged the buyer's financing. The buyer is The Whittier Comstock, LLC, a subsidiary of MW Investment, LLC and, per the coverage, owned by Matt Waken.

DeLorenzo told Connect CRE the property drew multiple competitive offers from a range of buyer profiles and went to a private investor within the first 30 days of marketing. A building nearly a third vacant, anchored by government income covering less than half the rent roll, cleared in a month — and the winner was not an institution.

Office is finding its clearing price, and that price is being set by leasing outcomes and the credit of the tenancy rather than by cap rates. Brea is a small confirmation with a sharp edge: the County of Orange lease is what made the asset financeable, while the vacancy — the piece that actually determines what the building is worth in five years — went to a private balance sheet. The seller's willingness to award inside 30 days suggests it preferred a near-term exit to funding a lease-up campaign of its own, which is the trade now: not a wager on recovery, but a transfer of duration from an owner with a mandate to a buyer with patience and debt.

Near-identical pricing showed up earlier this month in Williamsburg, where the Dime's commercial pieces sold for $28.5 million and its office base cleared at $216 a square foot. Different coast, similar band, both trades underwritten on in-place income rather than a view on rents — Fairway's roughly $205 sits just below it. Two data points do not make a market, but they do suggest where the bid lives for commodity office with a credit tenant in place, and it sits with private buyers rather than institutions paying for optionality.

Watch the lease-up of those remaining 40,000 square feet, because the next Brea comp will be priced off it and off whatever rent the space eventually signs.