Parallel Acquires 384 KSF LA Area Office Tower for $102M
- Apr 04, 2014
Sunny Southern California is a bright spot in Parallel Capital Partners Inc.’s eyes. The real estate investment and operating company just completed the $101.7 million purchase of Shoreline Square in Long Beach, Calif., marking its second office acquisition in the region in just two weeks. Parallel bought the 383,700-square-foot Class A property from Guggenheim Real Estate.
Price tags tell the story about the health of the Southern California office market. Shoreline Square, which sits at 301 E. Ocean Blvd. within a mixed-use development in downtown Long Beach, last changed hands in 2005, when Guggenheim snapped up the asset from Trizec Properties for $87.4 million. The days when the economic collapse whittled away property values are over.
“The investment sales market is very efficient today,” Matt Root, CEO of Parallel, told Commercial Property Executive. “The lack of opportunities is impacting pricing more than underlying fundamentals.”
Certainly, there was competition for Shoreline Square, which commercial real estate services firm CBRE Group marketed on behalf of the seller. The 20-story tower is a unique office destination, as it boasts a location in the only waterfront central business district in the Los Angeles area, and holds the distinction of being Long Beach’s first LEED Silver-certified structure. (It is positioned to achieve LEED Gold certification later this year.)
And Shoreline Square has been kept in prime shape since it was erected in 1988, having most recently undergone a renovation in 2008. The proof is in the numbers; the building, presently 90 percent leased, has maintained an average occupancy level of more than 90 percent for the last eight years.
Parallel’s purchase of Shoreline Square is preceded by the company’s acquisition of Wateridge Plaza in suburban San Diego’s Sorrento Mesa submarket in late March. Parallel joined forces with Sam Zell’s Equity Group Investments to buy the nearly 280,000-square-foot office campus for $72.5 million.
Landing two highly coveted office assets in the region within just weeks is no simple feat. “There is a tremendous amount of capital pursuing premier properties–especially in Southern California,” Root added.
The Southern California real estate market is hard to resist, but Parallel doesn’t have a one-track mind. The company is looking for acquisition opportunities this year in Dallas and Phoenix, two cities where it already has a presence, as well as Denver and Seattle.