A three-story, executive office building in Hermosa Beach has sold for $19.5 million.
Newmark Group Inc. Private Capital Group’s Vice Chairman Sean Fulp and Managing Directors Ryan Plummer and Mark Schuessler in partnership with Executive Managing Directors Geoff Ludwig and Eric Lastition represented the seller, Vectra Management Group, in the transaction. The buyer was C3 Development Group.
“South Bay beach cities office product is amazingly resilient,” Plummer said in a statement. “In addition to a lease up strategy, the recent approval for medical tenancy is up to 75% of the building, presenting further upside for the buyer.”
The 37,692-square-foot office building, at 2200 Pacific Coast Highway, was 75% leased at the time of sale to 24 tenants. Building features include an open-air central courtyard, subterranean and surface parking, ocean views, skylights and high ceilings.
The property is near five major freeways and has easy access to Los Angeles and Orange County. The Beach Cities submarket experienced strong office demand as the highest vacancy rate in over a decade was in 2010 at only 8.3%, according to Newmark Research.
The vacancy rate for the Beach Cities submarket was 23% during the second quarter, compared to 21.1% countywide, according to data from Jones Lang LaSalle Inc. The vacancy rate is lower than the South Bay’s average vacancy rate of 24.4%, JLL found.
Asking rent for Class A office space in the Beach Cities stayed consistent quarter over quarter at $4.21 per square foot, which is higher than the $4.13 average rate across the county and $3.56 in the South Bay. The Beach Cities’ average asking rate for Class A office space was up, however, 2 cents year over year.