The Sepulveda Center, a shiny blue tower in Palms emblazoned with the TrueCar Inc. logo, has been sold to San Francisco real estate investment firm Swig Co. Seller KBS Realty Advisors, based in Newport Beach, said the 12-story building was purchased for $68.2 million, about $380 a square foot.
The acquisition was meant to help Swig boost its portfolio in Los Angeles, where it owns five properties, said Tomas Schoenberg, its executive vice president of investments.
“L.A. has myriad drivers,” he said. “We like that diversity, whereas San Francisco is so heavily reliant on tech and software.”
The sale came after Swig sold a data and telecommunications center in San Francisco and wanted to reinvest the proceeds. Schoenberg said Swig homed in on the Sepulveda Center because it is 85 percent leased and well-situated near the juncture of the 405 and 10 freeways.
“We talked to the tenants and to a single tenant they all mentioned the location,” Schoenberg said. “It allows them to draw employees and talent from a broader geography.”
Swig might do light upgrades on common areas at the 180,000-square-foot site, where the biggest tenants are marketing firm Patriot Communications and software company ISBX Corp. TrueCar has a small office there but its headquarters is in Santa Monica.
Schoenberg said Swig is on the lookout for other L.A. properties, particularly undermaintained sites that it can acquire in partnership with international investors.
“We very much like the L.A. market,” he said. “We’re really trying to follow the ripples of economic expansion that come out of the power hubs of Playa Vista, Santa Monica, and Hollywood.”
HFF’s Andrew Harper, Ryan Gallagher, Michael Leggett, and Tim Geiman represented KBS, while Farella Braun + Martel’s Tony Ratner and Quinn Arntsen represented Swig.
Torrance Trade
A 26.7-acre campus in Torrance that is home to space and defense products supplier L-3 Communications Holdings Inc. was picked up by Kansas City, Kan.-based Mariner Real Estate Management for $67 million. The 573,167-square-foot site, sold by RREEF Americas REIT III Corp., includes a mix of office and industrial buildings – useful to L3’s electron technologies division, which occupies 60 percent of the property. The Torrance Memorial Medical Center takes up 10 percent.
Newmark Grubb Knight Frank’s brokers Kevin Shannon, Scott Schumacher, and Ken White represented RREEF along with local market leasing brokers Tim Vaughan and Dave Smith of CBRE.
Industrial Pursuit
A new industrial property in one of L.A.’s tightest industrial markets – the San Gabriel Valley – sold for $29 million to AFL-CIO Building Investment Trust, based in Pittsburgh.
The 168,000-square-foot site was built last year by Newport Beach-based seller CT Realty Partners, which purchased the site in 2013 for $6.2 million. The property was then home to McConnell Cabinets Inc., but is now leased to an e-commerce company through 2021.
CBRE Vice Chairman Barbara Emmons, who brokered the sale with Vice Chairman Darla Longo, said the fresh construction was attractive to the buyer because it would help ensure a higher lease rate. With the San Gabriel Valley’s industrial vacancy rate below 1 percent, developers are likely to continue switching out aging facilities for new versions.
“It’s happening more and more because there’s more demand for state-of-the-art buildings,” she said. “You’re forced to tear stuff down because there’s no land left.”
Creative Spin
A creative office developer is the latest company to plan a transformation for an aging downtown building. West L.A.’s Urban Offerings Inc. purchased the Norton Building, a five-story office on Los Angeles Street built in 1914, with plans to do a drastic redesign. The price of the deal has not been disclosed, but the asking price was $21.5 million, according to CoStar records.
Renderings by Lynch Eisinger Design Architects available via CoStar show a geometric façade in white and gray as well as interiors with concrete pillars and large skylights. The 81,200-square-foot building, sold by limited liability company Safir, is home to mostly garment and manufacturing companies.
CBRE’s Senior Vice Presidents Chris Caras and Phillip Sample represented the buyer and seller. Caras said Urban was looking for redevelopment opportunities just as Safir, a longtime owner, decided to sell. The building is just a couple of blocks from the retailers and restaurants popping up on the south side of Broadway, anchored by the trendy Ace Hotel.
“We feel that this particular location is ripe for change. It’s not going to happen overnight, but little by little as these buildings start transitioning, more will follow,” Caras said.
Urban did not return a call seeking comment.
Staff reporter Daina Beth Solomon can be reached at [email protected] or (323) 549-5225, ext. 237.
