Investors have remained interested in the area, which, Church said, didn’t experience the “massive impact on the market” people had anticipated when Nestlé left.
“The Tri-Cities market, because of its reliability and consistency, continues to attract institutional investment despite the occasional blip in vacancy,” said Bill Boyd, an executive vice president at Kidder Mathews.
Still, Scott Unger, a senior vice president at Kidder Mathews, added that despite interest there haven’t been many sales in the Tri-Cities market this year.
Pasadena sets pace
The biggest office building sale in the Tri-Cities so far this year was the Pasadena Collection, according to data from CoStar Group Inc. and Kidder Mathews.
The property, a nearly 517,000-square-foot portfolio, sold to Swift Real Estate Partners for $193 million.
Also in Pasadena, Graymark Capital Inc. and Eightfold Real Estate Capital purchased the roughly 219,000-square-foot Eaton Canyon Tech Center.
“There’s a lot of capital vying for product in the Tri-Cities,” Church said.
Many of the other major sales were for medical office buildings.
In Pasadena, Healthcare Realty Trust Inc. purchased the Cotton Medical Center from Meridian Property Co. for $61.1 million. In Glendale, Welltower Inc. purchased the Lee Hughes Medical Building as part of a $1.25 billion purchase of 55 medical office and outpatient facilities.
“The best thing about owning a medical building is that doctors don’t move, and the worst thing about owning a medical building is that doctors don’t move,” Unger said. “A lot of investors are attracted to long-term tenants.”
“There is investor demand for these medical buildings. They are seen as a little bit more stable than a traditional office building,” Unger added.
Looking forward, Unger said he expects to see even more interest in the area as more entertainment companies move in.
There are a handful of buildings being marketed in the area, including 101 S. Marengo, which was formerly occupied by Bank of America, according to Unger.
Bazarevitsch said she expects to see more building trades in the Tri-Cities in 2020 and higher asking rents “because of these capital infusions from investors putting money into assets.”
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