Whatever ineptitude you may see among fellow CRE pros in the private markets can’t hold a candle to some of the goings-on in government-owned portfolios. When there are no constraints (time, returns, shame) on an entity, truly bizarre things can happen. And a recently concluded sale of the OC’s biggest boondoggle makes for a superb case study.

The Promote has been accused (fairly tbh) of somewhat neglecting SoCal in our behind-the-deal specials (see here, here & here for some vintage NYC & SF examples). So when the deal for the Ziggurat in Laguna Niguel finally came together, we knew it was time for redemption. Enough preamble, let’s go.

⌛Late ‘60s: North American Aviation sees a need for a new facility in the OC to meet the demands* of the military-industrial complex, and chooses the master-planned community of Laguna Niguel. NAA then merges w/ Rockwell, which buys 1,300+ acres from developer Cabot, Cabot & Forbes and taps architect William Pereira’s firm to build a show-stopper. What it comes up w/ is an ode to a Babylonian temple, a Ziggurat that would span ≈1M sf and house 7,500 workers. An $18.5M contract is awarded to build what would become the OC’s largest single structure.

*Per a report prepared for the GSA on the building’s historical pedigree: By 1959, one out of nearly every fifteen working Californians was being supported by the Cold War.

⌛‘70s/80s: The building is complete, but Rockwell no longer has use for it. The aerospace industry is facing headwinds, and Rockwell pitches a trade to the govt.: Take the Ziggurat, and we’ll take 2 plants elsewhere in SoCal (plus some machinery). The govt. bites, and by ‘74 the deal is done. The GSA doesn’t really have a plan, though: After the property sits vacant for several years, some agencies move in. In the 80s, the GSA takes its first crack at selling the thing, but no 🎲. So, it decides to renovate.

⌛Early 2020s: After decades of carrying an underutilized building, the GSA decides in ‘22 that it will put the 90-acre property up for sale, via a March ‘23 auction. All a buyer needs to be considered is $300K for the deposit and a bit o’ pluck. But there’s one fatal caveat: a buyer must create a “preservation easement” for 26 acres that includes the terraced building, guard stations, and parking. Basically, the buyer will have to keep the Ziggurat in place, making a proper redevelopment of the site close to impossible. Yeah, good luck w/ that 👇

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The results flow in, and they're not great. Zero bids come in at the suggested starting price of $70M (“that was what the market dictated,” a govt. rep told the OC Register, adding that several bidders did take the tour ). The Laguna Niguel city manager at the time, Tammy Letourneau, hints that the city might be flex on zoning for the right buyer. “Nothing is set in stone,” she says.

The Feds run it back. Crucially this time, the preservation mandate is out, so there is actual redevelopment potential. But it seems like the GSA didn’t actually bother to get an appraisal that reflected the removal of that restriction, b/c the auction kicks off w/ that same floor price - $70M. Now, the OC office market is in a bad way at this time, but we’re still talking 90 acres. The process was unusual, and reportedly included a “soft close” provision – any new high bid would restart the 24h clock. In this manner, the auction runs for 5 months, attracting a total of 157 bids made by 3 parties. The GSA announces that Bidder #02 has won it, at a price of $177M, or under $2M/acre. .

⌛Late ‘24/Early ‘25: The winning bidder is revealed, and it’s the closest thing the West Coast has to a Jacob Garlick: Cameron Hildreth, a 33 YO construction engineer (also a principal at GC Helot) marking his first big deal as a principal of Hilco Development. Hildreth, who shares a cover page of the bid acceptance letter w/ the press, confirms he’ll tear the thing down.

Now, a whippersnapper finding a deep-pocketed partner and breaking into the GP game is nothing new – many great careers kicked off this way. But you don’t normally cut your 🦷 🦷 w/ a megaproject of 11/10 complexity. And the partner, when revealed, comes as just as big a shock: Jeff Pintar, a man who made his money buying distressed SFHs. Hildreth & Pintar go hard w/ a $17.7M (10%) nonrefundable deposit, and then set out to raise the rest. The problem: WTF are they raising for?

The partners push the city to allow for resi use, which they frame as a must for them to be able to raise the requisite capital. They put out a bat signal in the press for partners in late ‘24, telling the OCBJ that demolishing the building would cost up to $35M. Pintar channels FUBU, saying they’re looking to create something “for the community, by the community.” The statements don’t exactly convey domain expertise – Hildreth, for example, says that the site “has real interesting topography,” adding that “we felt it was a great project for us on a larger scale. It’s a level up.” (Note: Potential LPs don’t typically coo at talk like this.)

Enter Hoag: The Newport Beach-based cash 🐮 of a hospital system is chaired by local investment bigwig Robert Brunswick, and has long eyed an expansion into southern OC. It sues the GSA in Nov. ‘24, alleging improprieties in the auction process. Hoag claims that Pintar reached out several times during the auction to see if the parties would like to “work together instead of against each other.” This amounted to collusion, per Hoag, and should have DQ’d Pintar.

In March, the GSA terminates its deal w/ Hilco. The agency tells them, “hey, here’s your deposit, you can walk away,” said one OC player who tracked the process. “A miracle of all miracles – this was way out of their league.” Soon after, the GSA awards the site to Hoag, which by now has of course dropped its lawsuit. The GSA provides no explanation for its decision, at least in public.

Now, Hilco is the one up in arms. It threatens to mount a legal challenge to the GSA’s decision. At the same time, we start seeing signs of a house divided at the JV. “Hilco was the winning bidder – not Pintar,” a Hilco rep tells the OCBJ.

⌛May ‘25: The auction is off! The GSA announces that it will re-list the property. Imagine a private entity getting away w/ such theatrical incompetence.

⌛Feb ‘26: We’re back. This time the GSA has adult supervision, in the form of ex-Cushman bigwig Ed Forst. It hires CBRE (Local vet Anthony DeLorenzo & public institutions specialist Brian Hutcherson) to run a real process. Given the shonda of the auction, CBRE takes the extreme opposite tack here: specific touring dates, zero gatekeeping – “the brokers were basically like tour guides,” is how one observer put it. The priority is ensuring there’s not even the whiff of gamesmanship, and that there is no drama from contract to close – buyers must do the deal as-is, and there’s no DD period. The OM states that the site is primed for healthcare, defense and tech use. Some cutesy GPT action in here: (“The Ziggurat at Laguna Ridge isn't just property - it's the spark for Laguna Niguel's next era of excellence.”). As for preservation, the buyer can either sign a full or partial preservation easement, or kick in $2M into a mitigation fund and find a qualifying nonprofit to run it.

⌛June ‘26: Hoag – who else could it be? – ties up the deal w/ a $207M ($2.3M/acre) offer – $30M more, remember, than Hilco & Pintar’s auction-winning bid. Hoag CEO does a photo op outside the Ziggurat, in front of a podium that says: “From Vacant to Vibrant.”

One quirky condition of the sale, per the PSA: The buyer has to donate the scale model of the building to the local historical society, and is responsible for all costs associated w/ that endeavor 👏 👏 🗼

Brookfield is gunning to buy a 10% stake in a 6.2M sf, 13-building portfolio in Manhattan’s Hudson Square that would value the joint at $3.5B (≈$560/ 🦶 ). The AUM Gobbling ™ behemoth would take over as operating partner as part of the deal, per WSJ. The venture is owned by Trinity Church (215 acres bequeathed by Queen Anne in the 1700s 🤲 ) and Norges, the Norwegian SWF that bought in just over a decade ago. Though the Journal’s piece doesn’t mention them, we’d imagine that any Brookfield deal would mean that Hines, which came in as operating partner and took a 🍕 in ‘16, is out. The area is a TAMI darling, w/ names such as Google, Disney, PayPal, and most recently Anthropic in the mix.

As struggling office REIT (Who among us?) Brandywine moves to dispose of at least $300M in assets this year, we’re seeing a fun crop of players stepping up to take them on. On Monday, Hines announced it was buying an Austin tower at 405 Colorado from the REIT for $151M (≈$730/ 🦶 ). We’re now getting word that Brandywine is finalizing a sale of 2 adjacent buildings in tony Fairfax County, VA to Jay Lobell’s JSB Capital.