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Newly formed Five Point JV picks up Broadcom campus for $443M

A newly formed joint venture between Five Point Holdings and two other members acquired about 73 acres of commercial land in the Great Park neighborhoods in Irvine, Calif., from a Broadcom Ltd. subsidiary for roughly $443 million.

The joint venture funded the Aug. 10 acquisition with capital contributions and roughly $339 million of nonrecourse borrowings. Five Point paid $106.5 million for a 75% stake in the joint venture, which was formed Aug. 4.

The Broadcom campus contains two completed buildings and two more that are about to be finished. The buildings total just over 1 million square feet.

Two of the buildings spanning about 660,000 square feet will be leased back to Broadcom for 20 years under a triple-net lease. About 135,000 square feet of office space in one of the buildings will be leased by a Lennar Corp. unit and a Five Point subsidiary for 10 years under full-service gross leases.

Five Point, which recently went public, said it expects about $27 million in annual stabilized net operating income from the campus.

In April, Five Point's operating unit obtained a $50 million senior unsecured revolving credit facility, with a two-year term and two one-year extension options. The facility contains an accordion feature that could further increase the maximum aggregate amount to $100 million. Borrowings under the facility carry an interest rate equal to the London Interbank Offered Rate, plus a margin range of 1.75% to 2.00% based on the operating unit's leverage ratio. The unit has not drawn funds on the facility to date.