As Los Angeles continues to struggle with high rates of office vacancies and a growing demand for more housing, a 12-story building in San Pedro is one of the latest victims falling to the area’s growing office-to-housing conversion trend. A 294,000-square-foot office structure, dubbed Topaz Tower, will soon be transformed into 244 multifamily rental units.

Florida-based investment firm BH3 Management and Beverly Hills-based real estate private equity firm F2 Capital recently provided a $17.5 million bridge loan to its developers, Forbix and Urban Stearns, to help catapult the project.

“There’s a big craze right now in metro markets for office to housing conversions, but few projects have gotten done,” said Jonathan Fhima, chief executive of F2.

Once repositioned, the property will offer 244 units of housing, with floorplans ranging from studios to two-bedroom apartments, averaging 839 square feet. 

“The location and market conditions in San Pedro make this an attractive project,” Fhima said. “Additionally, we’ve had a long-standing relationship with BH3 and had been looking for the perfect deal to collaborate on.”

“Our firm is excited by the opportunity to provide capital to this innovative adaptive reuse project in a booming market,” added Gregory Freedman, cofounder and co-chief executive of BH3 Management. “Alongside F2 Capital, which has a long record of success in this market and seasoned developers like Forbix and Urban Stearns, we’re happy to be a part of this highly anticipated development.”