A struggling Cerritos office property changed hands earlier this month for $30.5 million.
Koll Co. of Irvine, in partnership with Miami’s Rialto Capital Management, bought the nine-story Cerritos Tower at 18000 Studebaker Road from Winthrop Realty Trust for $167 a square foot. The price was a steal compared with the average for the Mid-Cities market the property sits in, which is $186 a square foot, according to CoStar. It traded for less than it did in 2006, when Jamison Services Inc. bought the property for $49.3 million, or $268 a square foot. Jamison, amid a downturn-fueled disposition spree, sold it to Boston-based Winthrop in 2012 for an undisclosed amount.
The reason for the current discount is clear: the 184,200-square-foot Class A office tower is only 74 percent leased. Tenants include Premier Business Centers, Freemont College and Sun West Mortgage Co. And that rate, significantly lower than the 90 percent occupancy average in the submarket, according to CoStar, is actually an improvement.
Winthrop invested $1 million over the past 18 months to improve the property, which created more leasing activity, said Paul Jones of CBRE Group Inc., who represented the seller along with Kevin Shannon, Ken White and Blake Bokosky.
The sale is part of Winthrop’s plan to exit Southern California altogether, Jones said.
Koll was attracted to the property because it was below peak pricing, said Scott Meserve, executive vice president of the firm.
Koll and Rialto will fix it up further, reposition it and push rents, Jones said.
Average rent at the property is $2.18 a square foot a month, which is roughly in line with area averages.
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