Milan Capital Management, an Anaheim-based commercial real estate investor, has bought an office tower in Long Beach and sold an office in its hometown in two deals topping $50 million together.
The privately held company this month completed the purchase of Park Tower, a seven-story office building on Pacific Coast Highway in Long Beach about 2 miles from the Orange County line.
The 119,517-square-foot building traded hands for an estimated $26 million, or nearly $220 per square foot, in a deal brokered by the Irvine and Long Beach offices of Cushman & Wakefield Inc.
The seller was an affiliate of New York-based private-equity firm Investcorp, which paid close to $20 million for the office in 2011.
The property’s at the intersection of Pacific Coast Highway and Anaheim Street near the campus of California State University-Long Beach. Tenants include Childnet, Argus Medical Management and Omya/Lipscomb Chemical.
The deal is among the largest purchases involving Milan Capital since 2008, when it paid about $72 million for the three-building Orange Financial Center complex in Orange.
The Park Tower is its only current investment in Long Beach, although it has owned buildings there in the past, including the downtown nine-story Ocean View Tower that once was used by Verizon. It was entitled for a condominium project with more than 80 units and sold last year.
The city’s office market recently has been on the upswing. Vacancy rates for offices in the suburban areas of Long Beach have fallen from 25.6% to 16.1% over the past three years, according to Cushman & Wakefield’s marketing materials for the property.
Vacancy rates should fall below 10% in its office market as early as next year, according to the marketing materials.
“Based on Milan Capital’s experience in the Long Beach office market, the building’s diverse tenant profile, and 93% occupancy to 20 tenants, Park Tower was a perfect fit for the buyer’s Southern California office portfolio,” said Ed Hernandez, a director for the capital markets team of Cushman & Wakefield.
Hernandez worked on the latest deal with colleagues Jeff Cole, Nico Napolitano, Robert Garey, Bob Alperin and Kimball Wasick.
Wincome Buy
Milan Capital’s purchase comes a few weeks after it sold one of its more prominent office properties in Orange County, a five-story office near Disneyland Resort in Anaheim.
The 888 Disneyland Drive building was sold to an affiliate of Wincome Group, a Hong Kong-based real estate owner with a substantial investment portfolio and development pipeline in the city, according to property records.
The 99,692-square-foot office sold for about $26.5 million, or $265 per square foot, according to CoStar Group Inc. records. It sits alongside the Santa Ana (I-5) Freeway a block north of Ball Road and is the first office in Anaheim that Wincome Group and its affiliates are known to own.
The privately held investor also owns the Anabella Hotel and the Anaheim Plaza Hotel & Suites in the city.
Wincome plans to build a $208 million, 580-room hotel on Harbor Boulevard across from Disney California Adventure after it demolishes the Anaheim Plaza Hotel.
It also plans a $225 million, 630-room hotel on Katella Avenue next to the Anaheim Convention Center after it demolishes the Anabella Hotel.
There’s been no announcement of plans being filed with the city for additional development at 888 Disneyland Drive. Wincome is reportedly considering plans for the property, though in the near term it will use a portion of the office space for its operations.
Milan still has other investments in Anaheim following the latest sale. It paid about $7 million in March for a 50,000-square-foot office near Anaheim City Hall.
