Sumeet Parekh, managing partner, HP Investors, told GlobeSt.com, “This is a ‘market’ price in today’s world; however, in today’s world, it is also a fraction of what it would cost to replace with new construction. In the long term, we believe we will look back and say that this was acquired at a bargain price.

“There are several office buildings for sale at reduced values (as compared to say 2019) however, what makes this building unique is the high-quality location and value of existing improvements – i.e. other buildings being sold at reduced prices are often in need of material capital improvements and/or are not located in ideal neighborhoods.”

There are challenges in today’s environment, including finding capital to acquire these types of buildings, given the risk (or perceived risk) of buying office buildings.

“We were able to find an equity partner, Realm LP, based in Nashville, that was willing to purchase the property on an all-cash basis (i.e., with no debt),” Parekh said. “Additional risks include finding tenants to lease space, which were able to be overcome by using our local relationships to bring new tenants to the building and renew & expand existing tenants.”

HP Investors secured favorable pricing and the strategic timing of the acquisition in the current office market cycle, positioning HP Investors to create value through their planned multi-million-dollar capital improvement program and rebranding to Axis 1450, according to Bess Wakeman, JLL executive vice president.

“Axis 1450 stands apart with its prime Mission Valley location, abundant walkable amenities, convenient access to multiple freeways, and exceptional building quality,” Wakeman told GlobeSt.com. “HP Investors' strong capitalization and execution readiness uniquely position the firm to respond swiftly to emerging market demands.”

Mission Valley has proven to be an attractive area, with major employers in the submarket including Eaton, Paychex, United Technologies, Kaiser, UnitedHealth Group and Verizon. Its inventory of new housing, upscale retail, and quality schools has also driven many businesses to the area.

Wakeman notes that several key factors have impacted office space demand since the pandemic.

“Companies are reevaluating their space requirements, have faced challenges with return-to-office implementation, experienced rising interest rates that have constrained real estate capital allocation, AI adoption changing workspace needs, and geopolitical uncertainties,” she said.

“This is affecting business planning—all creating a market where well-positioned properties like Axis 1450 stand out as a strategic investment.”