Ares Management Corp. remains bullish on the OC market.
The Los Angeles-based investment firm this month paid $64 million, or about $248 per square foot, for a 258,506-square-foot distribution building in Westminster.
The facility, located less than a mile from the San Diego (405) Freeway and about 2 miles from the Garden Grove (22) Freeway and Beach Boulevard junction, was 72.6% leased at the time of the sale.
The only tenant at the building, located at the 7400 Hazard Ave., is pedicure chair maker Lexor Inc.
Its seller was New York-based asset management firm Clarion Partners, which paid $26.7 million for the property in 2013.
Cushman & Wakefield’s Jeff Chiate, Jeff Cole, Rick Ellison and Matt Leupold represented Clarion.
“This is an institutional quality industrial asset with a superior infill location combined with desirable distribution features and functionality,” Chiate said in a statement.
The OC industrial market last year ended with a vacancy rate of 2.7%, the lowest in Southern California, according to data from the brokerage.
Last month, Ares took the wraps off the Irvine Commerce Center, a new industrial development less than a mile from John Wayne Airport; see the April 8 print edition for more on that project.
Gas Company Tower In LA Faces Foreclosure
A Los Angeles office tower, whose $465 million debt is largely lent by Newport Beach investment management firm, Pimco—one of the world’s biggest money managers—may soon face foreclosure, according to Bloomberg.
The 50-story building, dubbed the Gas Company Tower, last year saw its owner, an affiliate of Brookfield Asset Management Ltd., hand back the keys to the property.
Pimco is the largest holder of the building’s most senior debt—$167 million of the tower’s $350 million in commercial mortgage-backed securities. The tower also has two mezzanine mortgages of $65 million and $50 million, according to Bloomberg.
Public records indicate a foreclosure sale may take place as early as late June.
The 1.3 million-square-foot property, located at 555 W. 5th St., is one of many casualties of the troubled office market. Building values for office towers, especially those located in cities, have plummeted since the pandemic, as remote work and high rates of crime and homelessness have pushed people away from such dense areas.
The Gas Company Tower, once appraised in 2020 at $632 million, now sits at a valuation of around $200 million, according to Barclays.
The Brookfield affiliate acquired the tower in a $1.9 billion four-property deal in 2013.
The portfolio buy included a pair of skyscrapers a block from the Gas Company Tower as well as a 52-story building on South Figueroa Street, called the 777 Tower.
The Gas Company Tower is currently 85.6% leased, according to data from real estate tracker CoStar Group Inc.
Tenants at the building include utilities company SoCalGas, Deloitte, Latham & Watkins LLP and consulting firm Cornerstone Research.
