TA Associates Sheds Class A Tower for $52M

LOS ANGELES-Those who follow @GlobeStcom on Twitter and @GlobeStLIVE may have seen a post teasing the announcement, but GlobeSt.com has learned that TA Associates has sold its 291,711-square-foot South Bay Tower in the South Bay submarket of L.A. for $52 million. Bixby Land Co., the buyer based in Orange County, CA, purchased the eight-story class A property at $178 per square foot and plans to invest an additional $6 million to improve the lobby, common areas and landscaping. 

“Bixby’s acquisition of South Bay Tower represents a strategic value add investment in one of the highest quality office buildings in the submarket,” explains Bill Halford, president and CEO of Bixby Land Co., in a prepared statement. “The building quality provides a unique option for companies seeking high identity office space in the South Bay market.”

The investment follows a surge of activity from the buyer over the past 60 days. Bixby has completed approximately 400,000 square feet of newly renovated office space in two Silicon Valley properties during that time, one of which is already fully leased in a transaction valued at $25 million. In the case of Bixby’s Silicon Valley value add investments, Halford says the firm is capitalizing on strong market fundamentals due to tech sector growth over the past two years.

According to a prepared statement, “Bixby’s investment strategy continues to position the firm’s 6 million-square-foot portfolio of office and industrial properties with more value add opportunities.” While Bixby could not disclose a number to GlobeSt.com in terms of investment for the year, Halford points out that the firm is looking in major California markets like L.A., Orange County, Inland Empire, San Diego, and Silicon Valley.

According to Halford, the firm continues to “improve the value of our portfolio holdings through the strategic acquisition of properties that provide significant upside in value.” In other words, he says that they look to acquire well located buildings that are fundamentally sound yet may be underperforming due to several factors, such as a strained capital structure, vacancy or the need for physical refurbishment.

And Bixby isn’t just buying property. As GlobeSt.com just recently reported, the firm sold  a three-building office portfolio located at 26110, 26140 and 26160 Enterprise Way in Lake Forrest, CA for $22 million, a project they owned since 2000.

South Bay Tower was built in 1988 and is considered one of the top office buildings the South Bay market, according to a prepared statement. Located on 6.2 acres at 21250 Hawthorne Blvd. in Torrance, CA, the LEED-certified and Energy Star-rated building caters to professional service firms. Major tenants in the building include Bank of America, Wells Fargo Insurance, Morgan Stanley Smith Barney and the Daily Breeze. The purchase price is roughly 50% of replacement cost estimates. The building is currently at 63% occupancy and provides floor sizes that range from 24,000 square feet to 47,000 square feet.

According to the firm, it is “infusing new capital to create make-ready office suites in the 2,000 to 10,000-square-foot range.”