Best-in-Class South Bay Office Building for Sale

Thursday, May 4, 2017

Update: HFF announced the closing of this sale on October 16, 2017. Click here to view our Property Search page to see the current list of available commercial real estate properties.

Holliday Fenoglio Fowler, L.P., (HFF) is exclusively marketing for sale Pacific Center, an eight-story state-of-the-art and newly remodeled building, boasting the best amenities, concierge service and coastal access in the South Bay. Originally built in 1988 and extensively renovated in 2017, this 306,765-square-foot office building is currently 91 percent leased to a diverse mix of regional and national tenants, with credit tenancy accounting for more than 28 percent of the leased premises. 

Pacific Center is located at 21250 Hawthorne Boulevard in Torrance at the corner of major thoroughfares Hawthorne and Torrance Boulevards. The building is ideally situated proximate to a variety of amenities; it is across the street from the 2.3 million-square-foot Del Amo Fashion Center, which recently underwent a $450 million renovation and expansion that has completely changed the dynamics of this market. Del Amo Fashion Center is the third most visited mall in the United States and boasts more than 200 high-end retailers and restaurants. Old Town Torrance, which includes 30 restaurants, 13 entertainment venues, 11 cafes, 16 fitness and yoga studios, three breweries and a sushi-making school, is only five minutes away. Torrance provides a unique 18-hour atmosphere for millennials in the greater Los Angeles area. The property capitalizes on the surrounding market by providing a shuttle service to its tenants. Additionally, the affluent neighborhoods of Palos Verdes, Rancho Palos Verdes, Rolling Hills Estates, Hermosa Beach and Manhattan Beach are nearby. The direct access to a large executive workforce is a driving reason the property has consistently outperformed the market in terms of rate and occupancy.

Office Building for Sale Investment Highlights

  • Best-in-Class-Asset:  As one of the South Bay’s highest quality office buildings, the property will be the first beneficiary of the coastal market’s continued growth. Pacific Center’s best-in-class status already commands the highest quality tenancy and premium rental rates. To continue its best-in-class position, ownership has invested more than $6 million into renovating the lobby, upper-floor common areas and a lively indoor/outdoor space for the tenants and visitors.
  • Rapidly Escalating South Bay Market Fundamentals:  Historically known as a hub for manufacturing and aerospace, Torrance and the South Bay are home to stable tenants and an impressive unemployment rate of 3.7 percent. Additionally, as rents have rapidly increased southward from Santa Monica through Playa Vista and El Segundo, new upstart tech tenants have begun migrating to the South Bay. These fundamentals, coupled with the property’s historic ability to pull best-in-class tenants from all of the South Bay will provide Pacific Center with significant long-term growth demonstrated by the in-place rents that are currently 25 percent below market.
  • Durable Rent Roll with More Than 28 Percent Credit Tenancy:  The property is diversified among multiple industries and sectors that thrive in the coastal vibrancy. Industries represented include technology, finance, legal and healthcare as the diverse tenant mix mitigates the exposure to industry-specific declines. The durable cash flow benefits from an impressive lineup of credit tenants including Bank of America (Baa1), Hyundai Corporation (Baa1), Wells Fargo (A2), All Nippon Airways (JAC1: A), Sumitomo (Baa1), and Morgan Stanley (A3), with credit tenancy representing 28.6 percent of NRA.
  • Attractive Relative Value:  The commercial property for sale presents a relative value when compared to best-in-class coastal opportunities in other gateway markets in the Western United States. When compared to recent core office trades in West LA (Santa Monica, Playa Vista, El Segundo and Culver City) trading between $700 and over $1,400 per square foot, the coastal Torrance market offers an attractive relative value. Best-in-class assets providing strong income are very hard to find, which positions the asset as an especially attractive investment opportunity.

For more information on Pacific Center or other office properties for sale, please contact Ryan Gallagher or Andrew Harper. For financing and debt placement questions, please contact Kevin MacKenzie. Click here for our real estate investment sales search page.

Holliday Fenoglio Fowler, L.P., acting by and through Holliday GP Corp., a real estate broker Licensed with the California Department of Real Estate, License Number 01385740.

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