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Tuesday, Sep 26, 2023

Culver City Office Site Secures $110 Million Loan

The Symantec Southern California Campus in Culver City has received a $110 million loan.

The nearly 288,000-square-foot office property located at 900 Corporate Pointe sold this summer for $120 million.

Northwood Investors purchased the site from Tempe, Ariz.-based NortonLifeLock Inc., formerly Symantec Corp.

The company’s name change came last year after the Symantec brand was sold to Broadcom Inc. in a $10.7 billion deal.

The Culver City campus was 33% leased at the time of the sale, according to CoStar Group Inc.

The loan, which came from Blackstone Group Inc., was arranged by Cushman & Wakefield’s Rob Rubano.

Arranging the loan was challenging, according to Rubano, but not necessarily just because of the pandemic.

“You had a corporate seller, Symantec, and they were doing a partial sale-leaseback leasing back 30% of the building for a short period of time. It is a transitional loan,” he said.

In sale-leaseback agreements, the seller continues to use the building as a lessor but gets the financial benefits of selling the property. The buyer, meanwhile, has guaranteed income during the time of the leaseback and can line up new tenants or make changes to the property while still earning money.

Rubano said that despite Covid-19, he found multiple interested lenders.

Part of what made it an appealing loan, he said, was that Northwood already owns an adjacent property, “so this was a very strategic purchase for them. Lenders felt comfortable that it was a strategic acquisition for them.”

Because the Culver City market remains strong, Rubano added, lenders expect the company would be able to lease the property.

In the second quarter, when the property sold, the Culver City office market had vacancy rates of 11.8%, down from 17.5% the previous year, according to data from Jones Lang LaSalle Inc.

The asking rate for Class A office space in the market during the second quarter was $4.44 a quarter, up 4 cents a year.

The area is home to several large-scale office projects. Roughly 983,000 square feet of office space was under construction in the city in the second quarter.

This isn’t the only loan Rubano has worked on lately. He also helped deliver a $167 million construction loan for AVA Arts District, a 475-unit multifamily project, which will also have commercial space. The project is located at 668 S. Alameda St.

Rubano said the AVA loan came from a syndicate of banks led by Bank of America.
And there have been other big loans recently across Los Angeles County.

In September, Jones Lang LaSalle Inc. announced it had arranged a nearly $57 million loan for a multifamily portfolio on the Westside, comprised of four properties located in West L.A. and Beverly Hills.

The 10-year Fannie Mae loan carried a 2.29% fixed-rate. The borrower was not disclosed.

In August, Tauro Capital Advisors Inc. said it had secured $50 million in loans for three developers for triple net lease properties. These property types have been highly desirable for investors looking for hands-off management opportunities with strong tenants signing long leases. 

Also in August, CBRE Group Inc. announced $26.8 million in financing for office properties at 11925 Wilshire Blvd. in Brentwood and 2200 Pacific Coast Highway in Hermosa Beach. Together, the buildings span nearly 71,000 square feet.

CBRE arranged the financing for Vectra Management Group.

And Santa Monica-based WS Communities received a $150 million loan for a portfolio of six multifamily assets from Madison Realty Capital. The properties are in Santa Monica and the San Fernando Valley and a development site in Santa Monica.

Hannah Madans Welk
Hannah Madans Welk
Hannah Madans Welk is a managing editor at the Los Angeles Business Journal and the San Fernando Valley Business Journal. She previously covered real estate for the Los Angeles Business Journal. She has done work with publications including The Orange County Register, The Real Deal and doityourself.com.

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