As Big Ticket Sales Stall, Mid-Range Deals Still Drawing Interest, Funding
- May 27, 2009
The big-ticket office deals are few and far between these days, even in the leading markets, but properties with more palatable price tags, like a 200,000-square-foot office complex in the Los Angeles area, are finding buyers. Real estate and entertainment law firm Greenberg Glusker has snapped up just such a property in El Segundo, Calif., on behalf of a client for $26.6 million, relying on $22 million in financing from Bank of America N.A. to facilitate the acquisition. Greenberg Glusker released limited details about the transaction, but the firm did note that the financing was restructured six days in advance of the closing date. Located in the South Bay area just south of Los Angeles International Airport, El Segundo is considered part of Los Angeles’ beach cities submarket, where the office vacancy rate is presently 11.3 percent, according to a first quarter report by real estate services firm Grubb & Ellis Co. The overall average office vacancy rate climbed to 13.8 percent for Los Angeles and 15.6 for the nation. Yet, despite rising vacancies and the nearly impenetrable credit market, office deals are still being done–although on a much smaller scale. Two years ago, sales well over the $200 million mark were practically commonplace; today, transactions well, well under $100 million are making the news. Recently, Dividend Capital Total Realty Trust Inc. secured a $36.5 million seven-year, fixed-rate loan with a national life insurance company for the acquisition of a $63.6 million premier 125,900-square-foot office building in Washington, D.C. Just last week, news emerged that The JBG Cos. and Buvermo Properties Inc. had gotten their hands on $32 million in financing for the purchase of a 228,000-square-foot property in North Rockville, Md. As per numbers from Real Capital Analytics, only 53 office asset sales over $5 million closed during the first two months of the year.