ACORE Capital is the new owner of a five-building Orange County office complex purchased at a foreclosure auction.

The nearly 500K SF Aliso Viejo property traded hands for $70M, a steep discount from the $157M Boston-based Rockpoint paid for it in 2018, the Orange County Business Journal reported. The latest sale works out to about $143 per SF for the property.

ACORE provided the financing for Rockpoint’s purchase five years ago. Lenders often have an advantage in auctions where they have foreclosed because outstanding debt on a property can be used as credit on their bid, The Real Deal reported. There was nearly $132M of unpaid debt tied to the property when ACORE foreclosed, the OCBJ reported.

Called The Heights, the office property retains a number of big-name tenants, including Microsoft, medical tech company Vialase, medical supplier NuVasive and the General Services Administration. Another major tenant, coworking provider Industrious, has left, the OCBJ reported.

ACORE will continue on the course that Rockpoint had charted but will bring on Lincoln Property Co. to manage and operate the complex.

Scores of office landlords across the country have to face down not only maturing debt on their properties but expiring interest rate caps.

Office properties in Orange County have been selling at a discount. In April, Barker Pacific Group and its JV partner, Kingsbarn Realty Capital, purchased Santa Ana’s Griffin Towers for $82M, a deep markdown from the $129M Blackstone paid Lincoln Property Co. and Angelo Gordon & Co. in 2014.

Some owners are also exploring different uses for their offices. Earlier this month, Orange County-based Greenlaw Partners and Chicago's Walton Street Capital moved forward on a plan to add industrial space to a Santa Ana office park.

Office leasing activity in Orange County totaled 1.9M SF in Q3, a 23% increase over the previous quarter, according to Savills, which summed up the overall market pace as "slow."