JV Acquires SoCal Twin Towers for $107M
- Oct 24, 2018
In a $106.5 million deal, The Ruth Group and its capital partner Roxborough Group have acquired the Gateway Towers, a 443,517-square-foot Class A office property in Torrance, Calif., from Equity Office Properties.
The two nine-story buildings are 91 percent leased by anchor tenant Herbalife International of America, along with other professional service firms and financial institutions including Humana Dental Insurance and Bayen Group, a company providing consulting, technology, marketing and staffing solutions. Located at 970 and 990 190th St. in the South Bay submarket of Los Angeles County, the property has been owned by Equity Office, an affiliate of the Blackstone Group, since 2012.
Newmark Knight Frank handled the transaction. Co-Head of U.S. Capital Markets Kevin Shannon, Executive Managing Director Ken White, Senior Managing Director Scott Schumacher and Senior Associate Guillermo Boisson represented the seller. NKF Vice Chairman David Milestone and Senior Managing Director Brett Green represented the buyer in securing debt.
“The Ruth Group plans to develop the land parcel located between the tower with cool restaurant amenity spaces, as well as creative office. The project and the immediate area are ripe for these amenities, which will create a unique competitive advantage for Gateway Towers,” Schumacher said in a prepared statement. “Herbalife recently expanded within the project, executing a 16-year renewal and underscoring the strong tenant loyalty at the property due to its terrific regional access and exposure.”
The property has immediate access and visibility from the 405 and 110 freeway interchange, which has a daily traffic volume of approximately 1 million cars. The submarket is seeing migration from major tenants in nearby areas seeking better regional freeway access and lower occupancy costs.
“This market is primed for future rental growth given current Class A asking rents of $2.65 FSG at the project versus asking rents ranging from $3.25 to $4.00 FSG in the nearby central Torrance and El Segundo submarkets respectively,” Shannon added.
Rents are rising in the South Bay market, according to Colliers International’s recent Greater Los Angeles Basin office market report, which stated first-quarter rents “continued to rebound with positive growth for the 17th time in 18 quarters.”
The sale comes nearly two weeks after Equity Office sold the leasehold interest in the land and improvements at San Francisco’s historic Ferry Building, an iconic mixed-use property at 1 The Embarcadero, to Hudson Pacific Properties and Allianz Real Estate for $291 million. The waterfront property has 192,532 square feet of office space and 75,486 square feet of retail.
In October 2017, The Ruth Group, a Los Angeles-based full-service real estate company, sold The Knox, a two-building office park, also in Torrance, to Wilshire Capital Investments for $21.6 million. The 108,000-square-foot property was 98 percent occupied at the time of the sale. Shannon and White of NKF, along with Managing Director Michael Moore represented The Ruth Group in the transaction.
Image courtesy of Newmark Knight Frank