COVINA, CA-Davenport Partners and Buchanan Street Partners have acquired a vacant office building of nearly 90,000 sf in a value-added play, with Buchanan investing $3.4 million and arranging a $16.8 million loan. The two companies, both based in Newport Beach, see upside in leasing up the five-story class B building at 800 S. Barranca Ave.
Davenport and Buchanan acquired the property from Limar Realty Group in a transaction that was brokered by Mark Perry, Carlene O'Neil and Kevin Duffy of CB Richard Ellis. Buchanan invested the $3.4 million in equity via its Buchanan Fund V, with Davenport investing 20% equity.
The sales price was not disclosed, but the Davenport-Buchanan venture is believed to have paid slightly more than $14.15 million for the property. The $16.8 million loan that Buchanan arranged was with Wrightwood Capital.
The additional funding beyond the purchase price includes the cost of repositioning the building into a multitenant property from its former single-tenant status. The total capital expenditure budget for renovation and leasing is more than $6 million.
Robert Brunswick, president and CEO of Buchanan Street Partners, cites the "minimal supply of large block space available to tenants," along with the location of the building and other features of the property that appealed to the buyers. Following renovations, Davenport and Buchanan anticipate leasing the space over about 18 months to both large-block and small tenants. The renovated building will offer suites from 800 sf to nearly 21,0000 sf.
Built in 1981, 800 S. Barranca is situated on nearly an acre of land and is a block north of the Interstate 10 Freeway as well as within five miles of four other major Los Angeles freeways. The building offers one of the highest parking ratios in the market, 4.8 parking spaces per 1,000 sf, compared with a typical ratio closer to 3.8 spaces per 1,000 sf.
The new owners have already started the renovations, which will include upgrades to the lobbies, elevators, corridors and parking structure appearance. Although the building was originally designed as a multitenant project, the County of Los Angeles leased 100% of the building for 16 years. But the county needed larger premises and relocated before the close of escrow.
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