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Tuesday, May 24, 2022

IPOs

ELIZABETH HAYES

Staff Reporter

Looking to reduce its U.S. real estate portfolio, Nissan Real Estate Corp. has sold its twin office towers in Torrance to Carlyle Realty for about $53.5 million.

The Gateway Towers encompass 432,000 square feet of space on the 190th Street corridor, which is home to the North American operations of several Japanese auto manufacturers including Nissan North America, whose parent owned the buildings.

“The 190th Street market is really picking up. We expect to see class-A vacancies below 10 percent shortly and large blocks of space to disappear,” said Bill Bloodgood with CB Richard Ellis in Torrance, who helped broker the Nissan deal.

Nissan North America occupies half of the west tower, while the east tower houses multiple tenants, Bloodgood said.

The acquisition includes 4.5 acres of land, some of which is a park and some of which is surface parking for the buildings.

Nissan sold the buildings for a bit less than it paid for them in the late ’80s. The company was prompted to dispose of them now because of the Asian economic crisis and the fact that L.A. real estate values have been recovering.

“They thought the market conditions were right to sell and the exchange rate between the yen and the dollar was favorable,” Bloodgood said.

The nearby campus is not for sale. Nissan originally bought the twin buildings because it didn’t have enough room at its campus, and it plans to continue to occupy three floors in one of the towers for the next 10 years.

Rents in the area are a relative bargain at $1.70 to $1.85 per square foot per month, versus $2.25 in neighboring El Segundo.

“That’s one of the real strengths of the asset,” said Bloodgood, who also worked with CB’s Bill Peters on the deal.

Newport Beach-based Carlyle is a subsidiary of the Washington, D.C.-based private equity investment firm Carlyle Group. With access to more than $400 million in pension and endowment funds, Carlyle is said to be looking for more investments in Los Angeles and Orange counties.

“They already have investments in Orange County,” said Bob Smith, who helped broker the deal with CB. “They will continue, I’m sure, to look for more opportunities.”

Since opening Carlyle’s only office outside the nation’s capital three years ago, the Newport Beach operation has invested more than $750 million in West Coast properties, mostly in Northern California.

Orange County Business Journal Staff Reporter Murray Coleman contributed to this report.

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