Harbor Buys LA Office Asset for $44M
- Oct 10, 2019
Harbor Associates has bought a Class A office building in Los Angeles for $43.5 million. Newmark Knight Frank represented the seller, Jupiter Holdings, which had purchased the building in 2013.
Located at 222 W. Sixth St. in the San Pedro neighborhood of Los Angeles, the 292,540-square-foot office stands 11 stories tall and includes an adjacent seven-story parking structure and 13,244 square feet of retail space. Known as Topaz, the building was constructed in 1990 and had been home to information technology defense contractor Logicon for many years. After the company was acquired by Northrop Grumman, the tenant ended their lease with Topaz in 2010, leaving it empty until Jupiter purchased the building in January 2013.
Jupiter invested more than $10 million in renovations that included lobby improvements, elevator modernization, new restrooms and spec suites, according to NKF. Currently, the building has a vacancy rate of 22.6 percent and is home to flexible workspace provider Regus, car rental company Hertz and other legal and healthcare tenants, according to Yardi Matrix data.
In selling their office tower, Jupiter was represented by NKF’s Kevin Shannon, co-head of US Capitals Markets, Ken White, executive managing director, and Scott Schumacher, senior managing director.
According to Schumacher, Topaz also has room for more development as portions of the property can be converted into residential use and the existing parking structure has unused air rights. Schumacher added that the property was located in a qualified opportunity zone and that Harbor Associates could benefit from the tax incentives of developing in such zones.
In April, Harbor also purchased an office park in the suburbs of Los Angeles for $48 million.
The shift to live-work-play
NKF’s Shannon said that Topaz would benefit from San Pedro’s ongoing transformation into a live-work-play neighborhood as there are several anticipated projects. Specifically, Topaz would stand out as it is currently San Pedro’s only Class A office tower, according to Shannon.
Nearby Topaz, a joint venture of Holland Partner Group and Starwood Capital Group is constructing 550 Harborfront, a 375-unit mixed-use development with an expected completion date of spring 2020. Another major project that’s expected to break ground early in 2020 is the $150 million redevelopment of the Ports O’ Call Village into the 42-acre San Pedro Public Market that will include restaurants, shops and event space.
And according to Daily Breeze, AltaSea recently received a $2.1 million grant to pursue their state-of-the-art research facility project called Center of Discovery, which will be located further south of the San Pedro Public Market.