A 410,920-square-foot tower in downtown Long Beach known as the Shoreline Square has sold for $85.5 million.
Shoreline Square Holdings purchased the 20-story property from Parallel Capital Partners.
Newmark Group Inc.’s Kevin Shannon, Ken White, Rob Hannan and Laura Stumm represented the seller.
“The buyer was attracted to the numerous credit government tenancies in this asset and the attractive cash-on-cash returns produced by a favorable debt market as well as the substantial discount-to-replacement cost,” Shannon said in a statement.
The property is located at 301 E. Ocean Blvd. and was 92% leased at the time of the sale. Of the building occupants, 52% are U.S. government and municipal tenants. More than 10 years of weighted average lease term remains for the tenants.
“Downtown Long Beach has seen over $2 billion in investment over the last decade and has a robust future commercial and residential development pipeline,” Stumm said in a statement. “Corporations and government tenants alike have recognized the relative value that this market provides, as reflected by the tenure of the tenancy at Shoreline Square.”
Parallel Capital Partners had acquired the property in 2014.
“We accomplished what we wanted with this property — including implementing multiple sustainability measures, attaining LEED gold status and renewing GSA’s Department of Homeland Security-Customs and Border Protection for 20 years — ultimately achieving a positive return on our investment,” Matt Root, chief executive of Parallel Capital Partners, said in a statement.
The downtown Long Beach office market, like many office markets in L.A. County, has seen some negative effects during the pandemic. In the fourth quarter, the market saw a vacancy rate of 25.6%, up from 21.8% the previous year and above the county average of 20.2%, according to data from Jones Lang LaSalle Inc.
The Long Beach market is cheaper than the average office market in L.A. In the fourth quarter, JLL reported $2.73-a-square foot asking rates for Class A office product in the downtown Long Beach market, below the county average of $4.13 a square foot.